Infosys and Cognizant

Both are software companies. Both have been growing extraordinarily rapidly for several years. Their future looks equally bright. Both operate out of India, but their customers and markets are in the US. They epitomise the new India – leaders in software, excellence in quality and delivery, professional management and a global perspective in whatever they do and plan to do.

The two companies are Infosys and Cognizant. The first is much bigger in turnover and profits. But both standout uniquely in India’s crowded software sector for their business models and combination of growth and quality, proving one need not be at the expense of the other.

This is not about their relative prospects or balance sheets or valuations. On the other hand, the two companies are (surprisingly) good case studies in contrast of the benefits and costs of foreign investments in general and portfolio investments in particular.

Infosys’ and Cognizant’s operations are almost entirely India-centric. Software development is done at (comparatively) low cost in this country and delivered to their global customers. All their investments in facilities, infrastructure and manpower are in India.
Big difference

The big difference is that Infosys is a purely Indian company and made its IPO in the domestic stock market. With the liberalisation of foreign portfolio investment and the spectacular performance of the company, FIIs have flocked in to invest in it. Plenty of foreign (and domestic) investors have earned three digit returns on their investments in Infosys’ rupee shares.

What it tantamounts to is that the economy has serviced the foreign investment inflows in Infosys at rates exceeding 100 per cent in many cases and is equivalent to borrowing dollars at these interest rates.

Cognizant, on the other hand, is not an Indian company at all. It was incorporated in the US, although its operations, as stated earlier, are in India. The company is listed on the NASDAQ and has given investors the same order of returns as Infosys.

With one big difference – they are dollar returns on dollar investments in a NASDAQ stock. India is nowhere in this equation.

This means the domestic economy reaps all the benefits of Cognizant’s (direct) investments in terms of employment, exports, etc., but without the usurious costs to the economy of the high returns on portfolio investments in Infosys’ stock.

(Of course, Infosys is in no way to blame for this. Its ADR issues do partly segregate foreign and domestic investments in its shares. And the same argument applies to any domestically-listed company).

Two similar companies with identical multiplier effects on the real economy, but varying impact through the financial sector.

Enough to rethink some assumptions about unfettered offshore flows into our stock markets.

Hexaware Technologies, Reliance Industries, Reliance Energy, Larsen Tourbo, Biocon

Hexaware Technologies

Reliance Industries

Reliance Energy

Larsen Tourbo

Biocon

Tilaknagar Industries

Tilaknagar Industries

Grey Market Premium - Omaxe,HDIL, Everonn, Central Bank

Omaxe Ltd. 265 to 310 60 to 65

OMNI Tech Info 90 to 105 170 to 175

Zylog Systems 330 to 350 310 to 315

Refex Ref. 65 4 to 5

Central Bank Of India 85 to 102 27 to 29

Alpa Labs 62 to 68 1 to 1.50

Everon Sys. 140 370 to 375

Simplex Projects 170 to 185 140 to 150

Allied Digital 190 140 to 145

Spice Communication 46 11 to 13

Surychakra Power 20 2 to 3

H.D. Infra 500 25 to 27

Sundaram Clayton, Genus Power, JM Financial

Sundaram Clayton
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,350
Current market price: Rs835

A subdued quarter

Result highlights

• Sundaram Clayton Ltd's (SCL) Q1FY2008 results were below expectations because of a slower than expected growth in the top line. The net sales grew by just 6.1% year on year (yoy) to Rs201.4 crore, mainly due to a slower growth in its domestic brake business.
• The company was able to maintain its operating profit margin (OPM) despite cost pressures, primarily because of its excellent cost management and continuous efforts to save costs. Consequently, the OPM rose by 60 basis points yoy to 15.2% as the operating profit rose by 10.1% to Rs30.6 crore.
• Higher interest and depreciation charges due to the capital expenditure (capex) incurred by the company during the quarter led to a marginal 1.4% growth in the profit to Rs18.2 crore.
• The company had also recently announced its de-merger and would be spinning off its brake division into a subsidiary. The new entity will be called WABCO-TVS and will be listed on stock exchanges. We believe that the demerger would help both the companies to focus on their core areas and benefit SCL in the long run.
• The performance of SCL is largely dependent on the performance of its key clients in the commercial vehicle (CV) sector. Considering the buoyancy in the economy, the long-term outlook for the CV industry remains positive. We view the current slowdown as just an aberration and expect the demand to pick up in the second half of the fiscal, with the start of the festive season. Consequently, we expect the next quarter to be subdued but growth should pick up from the third quarter of the fiscal.
• However, due to the current slowdown and the lacklustre performance of the first quarter, we are downgrading our sales estimates for FY2008 and FY2009 by 7.8% and 1.8% respectively. Consequently, we are reducing our earnings estimate for FY2008 by 9.8% to Rs53.3 and that for FY2009 by 1.2% to Rs73.6.
• At the current market price, the stock is trading at 11.4x its FY2009 earnings and an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 8.7x. We maintain our Buy recommendation with a price target of Rs1,350.

Genus Power Infrastructures
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs450
Current market price: Rs370

Price target revised to Rs450

Result highlights

• Genus Power Infrastructures has announced its Q1FY2008 results. The net sales for the quarter grew by 63.7% to Rs83.5 crore with revenues kicking in from the new facility in Uttranchal. The net earnings grew by 86.5% to Rs6.9 crore.
• The operating profit for the quarter grew by 67.1% to Rs13.2 crore, the operating profit margin (OPM) for the quarter improved by 30 basis points to 15.8% as against 15.5% in Q1FY2007.
• The interest expense for the quarter increased by 57.7% to Rs4.1 crore
• The order book of the company stood at around Rs370 crore at the end of the first quarter.
• With effect from March 31, 2007 the company's name has been changed to Genus Power Infrastructures Ltd (GPIL).
• GPIL, a leading manufacturer of tamper proof electronic energy meters (EEMs), has been growing at a robust pace. The healthy growth is expected to continue on the back of the large investments being made in the transmission and distribution sector, and the replacement of old meters with new EEMs by various state electricity boards (SEBs).
• At the current market price of Rs370 the company is discounting its FY2008E earnings by 9.8x. We maintain our Buy recommendation on the stock with a revised price target of Rs450, keeping the target multiple of 12x FY2008E earnings.

JM Financial
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,352
Current market price: Rs1,080

Price target revised to Rs1,352

Key points

• Morgan Stanley (MS), the world's second largest securities broker and investment bank, has decided to set up its own shop in India and hence it has decided to end its current joint venture with the JM Financial (JMF).
• MS and JMF operated in all the spheres of the capital market through two unlisted private companies named JM Morgan Stanley Pvt Ltd (JMMP) and JM Morgan Stanley Securities Pvt Ltd (JMMSP).
• JMF will sell its 49% holding in JMMSP (engaged in institutional broking, largely foreign institutional investor [FII] business) to MS for $445 million (Rs1,970 crore). Simultaneously, MS will also sell its 49% holding in JMMP (engaged in investment banking [IB] business) for $20 million (Rs90 crore) to JMF. This will make MS the 100% owner of the securities business and JMF the 100% owner of the IB business.
• Some regulatory approvals have been pending and the finalisation of the deal is expected by mid-July 2007. The beauty of this deal lies in the fact that Nimesh Kampani has been able to sell the institutional broking business at a cost far higher than what he had paid for the IB business. However the profit contributions from both the businesses were roughly similar in the previous fiscal. The securities business contributed about 48% while the IB and retail brokerage businesses together contributed 51% of JMF's consolidated earnings in FY2007.
• JMF has adopted the strategy of growing both organically and inorganically to expand its current businesses. The same, we feel, is a well thoughtout policy that would compensate for the loss in the revenues (after the split with MS) and make proper utilisation of the huge cash pool that would be available at JMF's disposal post-sale.
• JMF has already acquired a 60% stake in ASK Securities, which is engaged in institutional equity broking business, for Rs58 crore and is looking at buying a stake in a global boutique investment bank, which will offer advisory services for global mergers and acquisitions (M&As).
• We feel JMF would need some time to restructure its operations; hence we have not based our valuation on FY2008E earnings but looked at FY2009E earnings, which we feel would reflect the earnings potential of the company in a much better way as the exit of MS is bound to have its implications on the FY2008E revenues.
• We feel tie-ups with investment banks having global reach would help to bridge the gap created after MS' exit. The retail broking and distribution business should continue to grow with its thrust on expanding the retail branch network. The margin funding and IPO funding business is expected to double with its huge pool of cash and increased reach. Other nascent businesses like the commodities, private equity and mutual funds businesses are expected to contribute to the consolidated PAT going forward. Considering the above developments our 12-month price target—based on the FY2009E earnings using the sum-of-the-parts (SOTP) model—works out to Rs1,352. At its current market price the stock is trading at 25.2x FY2009E earnings per share (EPS) and 1.2x FY2009E consolidated book value (BV) which provide a decent 25% upside from the current price of Rs1,080. At our target price the company would trade at 32x FY2009E EPS and 1.5x FY2009E consolidated BV. The price/earnings (P/E) multiple looks a bit on the higher side mainly due to the negative contribution from some of the nascent businesses. The valuations are attractive from the BV perspective.

Sundaram Clayton, Genus Power, JM Financial

India stock index futures reflect correction fears

he discount on India's benchmark stock index futures to the cash market widened on Wednesday, as traders expecting a correction from the current record levels went short on the underlying, analysts said.

The long interest seen in recent days was unlikely to continue, they said.

"It looks overbought," said Amit Hiremath, fundamentals and derivatives analyst of IDBI Capital. He pointed to the rising cost of carry on index futures, currently at 19.4 percent, as a case in point.

Another analyst said the options market presented more evidence of an impending correction, with the implied volatility in index puts going up and reaching 20.4 percent on Wednesday.

This is an indication of the degree by which investors expect the market to swing.

"A certain imbalance has been created. Both these factors taken together indicate that there will be either a correction or a fall," Siddharth Bhamre, an analyst at Angel Broking, said.

He, however, ruled out a Nifty fall of more than 150 points and said the index could see support at 4350 levels.

The near month contract closed with a discount of 18.25 points at 4,481.30 points, compared with a discount of 15.5 points in the previous session.

The benchmark 50-share NSE index closed up marginally at 4,499.55 points.

Spice Communications shares to list Thursday

Shares of Spice Communication will list on the Bombay Stock Exchange Thursday. Issue price of the recently concluded initial public offering was fixed at Rs 46 per share.

The company raised Rs 520 crore through its IPO of 11.3 crore equity shares of face value Rs 10 each.

The IPO was subscribed 37 times, receiving bids for 425.38 crore shares.

Qualified institutional buyers' portion was subscribed 57 times. Retail and non-institutional investors portion was subscribed 3 times and 19 times respectively.

Telekom Malaysia holds 49% in Spice Communications.

The company is the second largest cellular services provider in Punjab and fifth largest cellular services provider in Karnataka with an allocation in the 900 MHz spectrum in both these states.

Proceeds from the IPO will be mainly utilized towards repayment of debt, payment of license fee for national long distance and international long distance services and related capital expenditures

Genpact firms up IPO plans

One of India's largest BPOs, Genpact, has registered its initial public offering of 35.3 million shares at an estimated price of 16-18 dollar a share.

According to a filing with the US Securities and Exchange Commission (SEC) on Tuesday, the Gurgaon-based third party outsourcing service provider said it would offer about 17.6 million shares in the listing on the New York Stock Exchange (NYSE), while some stockholders would offer the remaining shares.

Genpact hopes to raise nearly 600 million dollars through its IPO, and looks to become the third Indian BPO firm to list in the US after rivals WNS Holdings and EXL Service Holdings, which have been trading there since last year.

According to the amendment filed by the company with the SEC, GE Capital will see its stake fall to 23.2 per cent from 28.5 per cent following the IPO, while the combined holdings of General Atlantic and Oak Hill will drop to 51.8 per cent.

There is a Greenshoe option to sell an additional 5.29 million new shares, which could increase the maximum deal size by 15 per cent to 730.6 million dollars. The company, which is incorporated in Hamilton, Bermuda, and operates in cities including Hyderabad and Bangalore, had said it would use the proceeds of the share sale to repay debt and for general corporate purposes, including potential acquisitions.

Genpact is believed to be the front-runner in the race for acquiring Citigroup's BPO.
The IPO values Genpact between 29 and 32 times its next year’s earnings, says a London-based analyst, which is 8.5 times for WNS and 25.5 times for EXL. ''This premium is seen warranted, however, as Genpact is the market leader and has much greater scale,'' he said.

Based on the mid-point of the range, Genpact would have a market capitalisation of about 3.9 billion dollars, compared with 1.1 billion dollars for WNS and 522 million dollars for EXL, he adds. As on Tuesday, its close peers WNS Holdings and ExlService Holdings were currently trading at a price to earnings (P/E) of 43.92 and 27.74 respectively.

Last week the company was ranked as India's largest provider of BPO and ITeS in terms of revenues for the second year in a row by the National Association of Software and Service Companies. The company began in 1997 as an India-based unit that assisted GE’s finance division.

Later, GE sold 60 per cent of the unit, formerly known as GE Capital International Services, for 500 million dollars to buyout firms General Atlantic Partners and Oak Hill Capital Partners in 2004. Fairfield, Connecticut-based GE, the world’s second-biggest company by market value, owns about a third of Genpact and accounted for almost three quarters of the company's 613 million dollars in 2006 sales.

As far as the company’s numbers are concerned, the topline of Genpact has been growing at a compounded annual growth rate (CAGR) of 15.8 per cent. In 2006, it grossed 613 million dollars in revenue clocking a growth of 24.6 per cent over the previous year's revenue.

One of the highlights of its topline performance is its growing revenue stream from clients other than General Electric. In 2006, more than a quarter of its revenue came from other clients compared to that of 5 per cent in 2004. Its net profit more than doubled to 39.8 million dollars.

Morgan Stanley, Citigroup Global Markets and JP Morgan Securities are serving as lead underwriters for the offering, while Wachovia Capital Markets, Merrill Lynch, Banc of America Securities, Credit Suisse Securities, Deutsche Bank Securities and UBS Securities are also listed as underwriters. The company plans to list its shares on the NYSE under the symbol 'G'.

Analysts' picks

Bajaj Hindusthan
CMP: Rs 161.60
Target price: Rs 147

HSBC Global Research has maintained an underweight rating on Bajaj Hindusthan, reducing the target price from the earlier Rs 200 to Rs 147. “We reduce our earnings forecast for Bajaj Hindusthan as we believe that sugar realisations are likely to remain under pressure, and alcohol sales volumes should be lower than we had estimated.

This should lead to losses, as high fixed costs are likely to erode EBITDA margins,” says the brokerage in a note to its clients. HSBC has reduced EBITDA forecasts by 68% and 30% for FY07e and FY08e, respectively, due to high staff cost and other expenditures.

“We expect the company to incur losses for FY07e and thus reduce our EPS forecast by 115% and 45% for FY07e and FY08e, respectively,” it adds.

Incidentally, sugar realisation for the first half of FY07 for Bajaj Hindusthan was Rs 15,587 per tonne, which was 11.5% lower than the FY06 full year average realisation of Rs 17,576 per tonne.


SAIL
CMP: Rs 153.45
Target price: Rs 180

UBS has initiated coverage on SAIL with a buy 2 rating and has set a 12-month price target of Rs 180. The rating is based on the company’s ambitious capacity expansion plans and internal funding of the proposed expansion.

“SAIL’s $9.5-billion capacity expansion will be funded internally with no equity dilution. After completion, it will have the potential to expand margins for the business,” notes the report.

While the company is self-sufficient in iron ore and is in the process of negotiating and leasing new coal mines to feed the expanded capacity, according to UBS, SAIL’s key challenges include managing the impact of higher cost coal, for which it is dependent on third-party suppliers. “SAIL trades at 4.6x FY08E EV/EBITDA compared with the sector benchmark of 6.4x EV/EBITDA,” says the report.

However, UBS has not factored in any possible margin expansion at SAIL. “If SAIL receives mining lease approval from state governments for planned expansion, we think there is a possibility of higher operating margins.

SAIL will also upgrade its product mix, which should also deliver better operating margins,” adds the report

Cummins India
CMP: Rs 347.55
Target price: Rs 463

Credit Suisse has initiated coverage on Cummins India with an outperform rating after factoring in the MNC parentage, its strength in technology and leadership position in the Indian back-up power market. Cummins India is a 51% subsidiary of Cummins, USA.

Cummins India is the leading maker of diesel engines (in the 205-2,365 hp range), catering to the power generation, industrial and automotive markets. It also caters to the growing market for gas and dual fuel engines.

“We believe Cummins should be able to sustain at least a 25% CAGR in revenue and a 30% CAGR in net profit due to strong demand, especially in the domestic market. This is likely to be on the back of improving margins in the overall business mix,” says the foreign brokerage.

Credit Suisse has arrived at a valuation of Rs 463 based on a PE of 20 times FY09 based on the company’s consolidated earnings per share of Rs 23.2. “This is at a 15% discount to front-line engineering stocks such as BHEL and L&T,” adds the report.


Apollo Tyres
CMP: Rs 365.10
Target price: Rs 468

Religare has maintained a buy rating on Apollo Tyres on account of a major expansion programme aimed at enhancing its passenger car radials capacity. The company is also setting up an off-the-road speciality tyre facility.

While the total capital outlay for the expansion is estimated to be Rs 6.50 billion over the next four years, the company generates enough cash to meet this requirement.

“We expect the company’s expansion plans to keep revenue growth intact in the long term. We thus reiterate our buy call on the stock with a target price of Rs 468, representing an upside of 35%,” said the report in a note to its clients.

Incidentally, the company is setting up a Rs 4.50-billion radial tyre plant in Tamil Nadu and has already signed an MoU with the state government for the same. The plant is expected to go on stream by the second half of FY09.

Wild Picks - Rama Paper

After Ashish Chugh took 5 min to explain why Rama Paper would be a multibagger, one of the popular operator website is bullish on it - targets of 60 in 1 month

Neyveli Lignite, HPCL, Omaxe, Crompton Greaves

Neyveli Lignite, HPCL, Omaxe, Crompton Greaves

Gateway Distripaks, Jubliant Organosys

Gateway Distripaks, Jubliant Organosys

TCS

TCS

Last minute buying lifts market.

While majority of the Asian markets took a sharp dip today, the domestic indices shrugged off the intra-day volatile moves and registered decent gains at close. Earlier, the Asian market’s fall was led by the Japanese Nikkei 225, which crashed by 1.14% or 207 points at 18,010, followed by the Hang Seng Index (down 0.42% or 97 points at 22,960) and the Jakarta Index (down 0.32% or 7.46 points at 2,293).

Back in the domestic market, the Sensex moved six points up, above its previous close to open at 15,296 and advanced further to touch an intra-day high of 15,326 in the early trades. After displaying sideways movement for a while the Sensex drifted into the red. It tumbled sharply in the early noon trades to touch the day's low of 15,160, down 130 points from its last close.

The last hour of the trading session witnessed hectic activity, before selective buying saw the Sensex end in the green with a gain of 11 points at 15,301. The Nifty, too, after a mixed outing, moved up three points to close at 4,500.

However, the broader market was positive. Of the 2,705 stocks traded on the BSE, 1,480 stocks declined, 1,151 stocks advanced and 74 stocks ended unchanged.

The BSE Reality index led the surge in the sectoral indices and rose 1.62% at 8,078. The BSE CD index, the BSE Auto index, the BSE Teck index and the BSE Metal index were the other notable gainers while the BSE CG, the BSE FMCG index and the BSE Oil & Gas index ended weak.

Buying was led by Hindalco, which notched up gains of 3.22% at Rs184. Among the other gainers Bajaj Auto advanced 2.85% at Rs2,282, Bharti Airtel added 2.29% at Rs883, Grasim Industries moved up 2.09% at Rs2,915, ACC jumped by 2.03% at Rs1,133, RCOM gained 1.14% at Rs567 and TCS was up 1.09% at Rs1,164. However, L&T, ONGC, Reliance Energy, Satyam, ITC, Dr Reddy’s and HDFC were down 1% each.

A sharp rally was witnessed in realty stocks today. DLF soared 5.78% at Rs645, Akruti Nirman scaled up 4.34% at Rs539, Sobha Developers surged 2.71% at Rs930 and Mahindra Gesco moved up 2.50% at Rs558. Penland, Anant Rajin and Parsvanath also ended at a higher level.

Hectic buying was seen in pharma stocks as well. Zee News, Himachal Futuristic, Bharti Airtel, VSNL, HT Media, Idea Cell, Financial Technologies, IOL Broadband and Sasken Communication flared up 1-19% each.

Over 2 crore RNRL shares changed hands on the BSE followed by KS Oils (1.04 crore shares), Mangalore Chemical (90.30 lakh shares), IDBI (89.75 lakh shares) and IFCI (75.03 lakh shares).

Value-wise, DLF registered a turnover of Rs375 crore on the BSE followed by India Bulls Reality (Rs226 crore), GMR Infra (Rs165 crore), RIL (Rs126 crore) and Akruti Nirman (Rs125 crore).

Sensex settles just above 15,300

The market settled with marginal gains, characterised by volatility right from the opening bell, which turned intense in last hour of the session.

The Sensex struck intra-day high and intra-day low in the last one hour of trade. A sharp fall triggered by profit booking after the recent rally was reversed by short covering and value buying. Asian and European markets were subdued.

Real-estate stocks were in action, led by developer DLF. Shares from metal, cement and auto also logged decent gains. However, capital goods, FMCG and sugar stocks saw profit booking.

The BSE 30-share Sensex gained 11.35 points to 15,301.17. It was extremely choppy, hitting intra-day high and intra-day low in the last one hour of trade. It opened slightly up at 15,296.06, but was not able to sustain at higher levels and, hence, soon succumbed to selling pressure. It touched a low of 15,160.27 at 14:33 IST. From a low, it staged a solid recovery to hit an intra-day high of 15,325.78 at 15:23 IST

The S&P CNX Nifty settled with a gain of 2.80 points to 4,499.55. Nifty July 2007 futures settled at 4491.10, a discount of 8.45 points as compared to spot closing

The total turnover on BSE amounted to Rs 5,720 crore as against Rs 6,099.87 crore on Tuesday, 17 July 2007. The turnover in NSE’s F&O segment amounted to Rs 45052.64 crore as against Rs 45837.68 crore on Tuesday, 17 July 2007.

The market breadth, which indicates the overall health of the market, was negative on BSE, with 1,496 shares declining as compared to 1,158 that advanced, while 89 remained unchanged. The breadth was positive in the morning session.

The BSE Mid-Cap index was down 0.20% to 6,776.19 while the BSE Small-Cap index lost 0.29% to 8,184.11

From the Sensex pack, 16 gained, while the rest slipped.

Aluminium and copper major Hindalco Industries surged 4.62% to Rs 186.80 on 14.59 lakh shares. It was the top gainer from the Sensex pack. It saw intense volatility, swinging in the range of Rs 173 – Rs 187.90.

Tata Steel (up 0.52% to Rs 684) and Sail (up 1.60% to Rs 155.90), were the other gainers from metal sector

Telecom pivotals Reliance Communications (up 1.62% to Rs 569.90) and Bharti Airtel (up 3.45% to Rs 893.10) saw strong buying interest. Both the firms had reported robust subscriber additions in the month of June 2007.

Bharti Airtel today awarded a $2 billion contract to Sweden's Ericsson for network expansion in the world's fastest-growing cellular market.

Two-wheeler major Bajaj Auto advanced 3.24% to Rs 2,291. Recently, there were reports that the company is looking for a big-ticket acquisition in the European motorcycle market, and that bike companies Ducati Motor Holding of Italy and Triumph Motorcycles of the UK are among the possible targets. The BSE Auto index rose 0.68% to 5,051.90.

Cement stocks, quiet for most part of the day, suddenly firmed up in the last one hour of trade. ACC (up 2.74% to Rs 1141), Grasim (up 2.10% to Rs 2915), and Birla Corporation (up 3.06% to Rs 303.10), gained from the cement pack.

Shares from capital goods sector took a breather after the recent rally, with the BSE Capital Goods index declining the most among the sectoral indices on BSE. The index shed 1% to 12,675.13. Engineering and construction major L&T slumped 2.20% to Rs 2340, on 2.44 lakh shares. It was the top loser from the Sensex pack.

Bharat Bijlee (down 2.96% to Rs 2330), Alstom Power (down 2.85% to Rs 814) and Punj Lloyd (down 1.56% to Rs 268.50), were the other losers from the capital goods space.

Reliance Energy (REL) slipped 1.35% to Rs 689.15 despite reporting a net-profit rise of 25.45% to Rs 221.56 crore in Q1 June 2007 as against Rs 176.61 crore in Q1 June 2006. Total income rose 49.62% to 1983.93 crore (Rs 1325.97 crore). The results were announced during market hours today.

ONGC (down 1.72% to Rs 892), ITC (down 1.57% to Rs 153.25) and Satyam Computers (down 1.38% to Rs 481.55) slipped on profit booking.

Reliance Industries (RIL) declined 0.89% to Rs 1,811.10 on 6.89 lakh shares on profit booking after hitting an all-time high of Rs 1,849 earlier during the day. The company had announced after market hours yesterday, 17 July 2007, that it had hit gas in the first well in the Cauvery deep-water basin off the east coast of India.

The deep-water block, located in the Cauvery Basin in an area of 14,325 square kilometers, was awarded to RIL under the bidding round of NELP III. RIL holds a 100% participating interest in this block. Rumours about the company’s oil & gas find were floating in the markets since pre-market hours on 17 July 2007, with the stock surging 2.86% on that day itself.

Real-estate major DLF vaulted 6.34% to Rs 648.85 on bagging a Rs 6,000-crore project from the Delhi Development Authority for design, development and operation of an international convention centre, proposed to be developed in Sector 24, Dwarka, New Delhi.

Shares from the real-estate sector surged on momentum buying after KV Kamath, Managing Director and CEO of ICICI Bank, said on Tuesday, 17 July 2007, that interest rates seem to have peaked and should come down soon. The Reserve Bank of India (RBI’s) quarterly monetary policy review is due on 31 July 2007.

Parsvnath Developers (up 1.10% to Rs 369), Sobha Developers (up 2.71% to Rs 929.80), Akruti Nirman (up 4.11% to Rs 538) and Orbit Corporation (up 2.26% to Rs 345.75), advanced from the real-estate pack. The BSE Realty index advanced 1.67% to 8,077.67, and was the top performing sectoral index on BSE.

Sun Pharma Advanced Research Company (SPARC) was locked at 20% upper circuit at Rs 87.15 over the base price of Rs 72.65 on BSE on the day of its debut today, 18 July 2007. About 3.84 lakh shares changed hands in the counter on BSE. Stock exchanges had set Rs 72.65 as base price for the purpose of calculating the daily circuit filter of 20% for the first day of trading.

The listing of the company follows a scheme of arrangement at Sun Pharmaceutical Industries (SPIL). The research division of SPIL was demerged and vested with SPARC on a going-concern basis.

Zee News (up 20% to Rs 59.20), Basant Agro (up 10.48% to Rs 58), BF Utilities (up 10% to Rs 2142.85), Kewal Kiran Clothing (up 15.71% to Rs 226.50), and Agro Tech Foods (up 10% to Rs 162.80), surged from the small-cap and mid-cap packs.

K S Oils clocked high volumes of 1.04 crore on BSE after it went 10:1 stock split from today. The stock settled at Rs 59.70

CESC spurted 4.80% to Rs 500. It has fixed a meeting of shareholders on 27 July 2007, for considering the scheme of amalgamation of Pathik Foods with itself

Pidilite Industries gained 4.72% to Rs 155.35. On 10 July 2007, The company said it entered into an agreement for acquisition of plant, machinery, technology, patent and trademark of an international specialty chemical company.

Kotak Mahindra Bank galloped 3.54% to Rs 707.45 ahead of its June 2007 quarterly results on 24 July 2007.

ICRA jumped 6.06% to Rs 1078 after it signed an agreement with state-run Indian Bank to assign ratings to small-scale industries and enterprises that are borrowers of the bank. The company made the announcement during market hours today, 18 July 2007.

Plethico Pharmaceuticals rose 1.67% to Rs 397 after reporting a 40.65% rise in net profit in Q3 June 2007 to Rs 32.66 crore as against Rs 23.22 crore in Q3 June 2006. Sales moved up 51.17% to Rs 122.50 crore (Rs 81.03 crore). The company declared the results during market hours today, 18 July 2007.

Himatsingka Seide rose 1.30% to Rs 132 on media reports that the textile firm is close to buying a US-based bed-linen brand. The US bed-linen brand that the company is targeting to acquire has annual sales of about $50-60 million. The report hit the market during trading hours today, 18 July 2007.

IDBI declined 3.35% to Rs 115.35 on reporting a marginal 1.69% rise in net profit in Q1 June 2007 to Rs 153.12 crore as against Rs 150.57 crore in Q1 June 2006. Operating income rose 31.4% to Rs 2193 crore (Rs 1668.34 crore). IDBI announced the results during trading hours today, 18 July 2007

Hexaware Technologies tumbled 11.89% to Rs 143.45 after the company’s net profit declined 28.06% in Q2 June 2007 on a sequential basis to Rs 18.92 crore as against Rs 26.30 in Q1 March 2007. Sales dropped 4.69% to Rs 112.61 crore in Q2 June 2007 compared with Rs 118.16 crore in Q1 March 2007. The company declared results during market hours today, 18 July 2007.

Rajesh Exports rose 1.36% to Rs 559.50 after the jewellery maker said it got an order worth Rs 272 crore to supply gold jewellery to Lazorde Jewellery of Kuwait. The order would be completed by 15 November 2007.

Gitanjali Gems jumped 10.81% to Rs 265.50 after 4.03 lakh shares changed hands in a block deal at Rs 243.50 per share on BSE. The block deal constituted 0.7% of the company's equity.

Sun Pharma was down 0.24% to Rs 999.95 on 6.33 lakh shares, after 3 block deal of 1.50 lakh shares each were struck on the counter on BSE in opening trade at average price of Rs 1015.50 per share

GMR Infrastructure slumped 3.48% to Rs 866 following NSE's ban on fresh contracts in the derivatives market as its derivative contracts crossed 95% of the market-wide position limit.

Biocon advanced 0.54% to Rs 463.10 following a 63% surge in net profit in Q1 June 2007 to Rs 44.86 crore as against Rs 27.57 crore in Q1 June 2006. Sales moved up 23.78% to Rs 227.4 crore (Rs 183.7 crore). The company announced the result during market hours today, 18 July 2007.

KPIT Cummins Infosystems lost 1.96% to Rs 135 after its wholly owned BPO subsidiary KPIT Cummins Global Business announced partnering with Cummins Inc to deliver finance and accounting (F&A) services to Cummins entities worldwide. GBS revenues from this partnership are expected to be $1 million in the first year with a potential to grow into a $15-million BPO business annually in 48-60 months.

KPIT Cummins Infosystems' net profit rose a massive 160.5% to Rs 15.81 crore in Q1 June 2007 as against Rs 6.07 crore in Q1 June 2006. Sales rose 53.4% to Rs 102.61 crore in Q1 June 2007 compared to Rs 66.89 crore in Q1 June 2006. The results were announced on 17 July 2007 after trading hours.

All the Asian markets moved lower today, 18 July 2007, with Japanese shares declining sharply following the powerful earthquake in northern Japan on Monday, 16 July 2007. Japan's Nikkei tumbled 1.11% to 18,015.89.

Hong Kong's Hang Seng (down 0.93% at 22,841.92) and Singapore's Straits Times (down 1.84% at 3,583.97) also edged lower.

However, Shanghai Composite was an exception, advancing 0.87% to 3,930.06.

All the European indices were trading weak, except Spain’s Madrid General which rose 0.26%.

Shares surged on Wall Street on Tuesday, 17 July 2007, with the Dow hitting 14,000 for the first time as several blue-chip companies reported better-than-expected quarterly earnings. The Dow Jones rose 20.57 points, or 0.15%, to close at 13,971.55. Broader stock indicators ended mixed. The Standard & Poor's 500 index slipped 0.15 points, or 0.01%, to 1,549.37 having set its own record highs in recent sessions. The Nasdaq Composite index rose 14.96 points, or 0.55%, to 2,712.29.

Oil prices edged up on Wednesday, 18 July 2007, after two days of losses, as traders awaited the release of US weekly inventory data for further proof that recovering refinery operations had lifted gasoline supplies. London Brent crude for September 2007 rose 12 cents to $75.65 a barrel. US light crude for August delivery rose 23 cents to $74.25 a barrel

Fundmentals, Technicals, Derivatives

Fundmentals, Technicals, Derivatives

Daily Market Outlook - July 18 2007

Daily Market Outlook - July 18 2007

Trading Calls

Buy Guj Ambuja Cement cmp Rs. 136

Eagle Eye & Derivative Info Kit - July 18 2007

Eagle Eye & Derivative Info Kit - July 18 2007

Zee Entertainment, Tata Tea, LIC Housing Finance, Gateway Distripaks, Reliance Industries

Zee Entertainment, Tata Tea, LIC Housing Finance, Gateway Distripaks, Reliance Industries

Market to consolidate at higher level

The Market is expected to consolidate at higher levels after a recent rally. The BSE 30-share Sensex lost 21.40 points, or 0.14%, to 15,289.82, on Tuesday, 17 July 2007. It surged to strike an all-time high of 15,440.20 on that day.

Asian markets moved lower today, 18 July 2007, with Japanese shares declining sharply on electricity producer Tokyo Electric Power Co. and insurers such as Mitsui Sumitomo Insurance Co. in the wake of a powerful earthquake that hit northern Japan on Monday, 16 July 2007. Japan's Nikkei tumbled 1.14% or at 18,009.91.

Hong Kong's Hang Seng (down 0.55% at 22,931.44) and Singapore's Straits Times (down 0.38% at 3,637.29) also edged lower. However, Taiwan's Taiwan Weighted gained 0.45%, or 42.57 points, to 9,552.30.

Shares surged on Wall Street on Tuesday, 17 July 2007, with the Dow hitting 14,000 for the first time as several blue-chip companies reported better-than-expected quarterly earnings. The Dow Jones rose 20.57 points, or 0.15%, to close at 13,971.55. Broader stock indicators ended mixed. The Standard & Poor's 500 index slipped 0.15 points, or 0.01%, to 1,549.37 having set its own record highs in recent sessions. The Nasdaq Composite index rose 14.96 points, or 0.55%, to 2,712.29.

As per provisional data, foreign institutional investors (FIIs) bought shares worth a net Rs 359.06 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 164.93 crore on Tuesday, 17 July 2007.

Daily Call - July 18 2007

Daily Call - July 18 2007

KPIT Cummins

KPIT Cummins

Morning Call - July 18 2007

Market Grape Wine :

In House :

Nifty at a support of 4474 & 4450 levels with resistance at 4521 & 4541 levels .

Sell : Mphasis below 278 target 270 s/l of 282

Buy : HDFC above 1213 target 1240 s/l of 1198

Out House :

Markets at a support of 15015 & 15151 levels with resistance at 15393 & 15454 levels .

Buy : IciciBank & SBIN at dips

Buy : RIL & RelCap

Buy : IndiaInfo & Aptech

Buy : Bhel & Tatapower

Buy : Century

Buy : Sterlite

Buy : Sail & Kotakbank

Buy : DLF , IBulls & IbullReal

Dark Horse : IBulls , IndiaInfo ,Sterlite , SBIN , REL , Ibullreal , Aptech & Skumar

Bullet for the Day : IbullRealty & Murudeswar & Aban with strict stop loss

Chennai Petroleum Corporation Q1FY08 Result Update (Accumulate)

Higher GRM boosts profitability

Chennai Petroleum Corporation Ltd. (CPCL) reported a sizeable growth in operating profit of 23% YoY and 47% QoQ, on the back of buoyancy in international refining margins and operating efficiencies, in spite of supply constrains. GRM of US$8.76/bbl for Q1FY08 is more than 30% higher than, US$6.64/bbl in Q1FY07 and US$6.42/bbl in Q4FY07. The stock is trading at EV/EBITDA of 4.3x and PER of 6x FY08E, a significant discount to its domestic and international peers. We believe global refining margin will remain buoyant due to tight demand-supply situation for petroleum products, which will eventually benefit the company. We recommend ‘Accumulate’ rating on the stock.

Chennai Petroleum Corporation Q1FY08 Result Update (Accumulate)

TCS Q1FY08 Result Update (Accumulate)

Robust demand environment; valuation looks expensive

Tata Consultancy Services Ltd’s (TCS) Q1FY08 results were in line with its peer Infosys’ Q1FY08 results, with revenue in line with estimates, but higher than estimated net income on account of higher forex gains and tax write-back. During the quarter, TCS reported 1.1% sequential increase in revenue and net profit to Rs52.03bn and Rs11.85bn respectively. EBITDA margin fell 280bps sequentially in Q1FY08 on account of rupee appreciation and salary hikes.

On account of better than expected Q1FY08 and higher yield on investments, we are increasing our FY08E and FY09E EPS estimates by 6% and 2% to Rs51.7 and Rs60.1 respectively, a two-year EPS CAGR of 19.3%. Our FY08E and FY09E estimates are based on Rs/USD rate of Rs40.5 and Rs40.0 respectively.

TCS, like its peers have underperformed the indices in the last few months on account of sharp rupee appreciation. The company is currently quoting at FY08E and FY09E PER of 21.8x and 18.8x respectively. This is at 10% discount to Infosys’ FY08E and FY09E PER.

Though the demand environment looks robust, we believe that with EPS growth slowing down (19.3% in case of TCS), the company and its larger peers don’t deserve higher valuations. Further, with these companies required to pay full taxes from FY10E onwards, three-year EPS CAGR would be lower. We therefore downgrade TCS from ‘Buy’ to ‘Accumulate’ with a price target of Rs1,130, 5% discount to our targeted Infosys PER. At our target price, TCS would be quoting at 21.8x and 18.8x FY08E and FY09E earnings. However, we would revisit our recommendation if the rupee starts depreciating from the current levels.

TCS Q1FY08 Result Update (Accumulate)

Emkay - Morning Notes, TCS

Emkay - Morning Notes, TCS

Sideways movement may continue

The market is likely to witness sideways movement on the back of a strong intra-day volatile moves. Stocks across sectors along with heavyweights may gyrate sharply. Overnight weakness in the US indices and mixed Asian markets in mornings trades may further dampen the investors' sentiment. On the technical side, the Nifty has a stiff resistance at 4525-4550 levels and the downside strong support at 4470-4450, while the Sensex could test higher levels of 15370 and has a likely support at 15190.

Among the major results, Biocon, IL&FS Investment Managers, Reliance Natural Resources, Tanla Solutions and Austin Engineering Company and many more are expected to announce their quarterly numbers.

US indices ended higher on Tuesday, with the Dow Jones gaining 21 points to close at 13972 and the Nasdaq ended 15 points higher at 2713.

Most of the Indian ADRs fell on the US bourses. Reiff was the biggest loser and dropped over 7% followed MTNL declined 3%, while ICICI Bank, VSNL, Patni Computer Tata Motors and HDFC Bank were down around 1% each. However, Infosys soared over 1% while Satyam, Wipro and Dr Reddy's gained around 1% each.

Crude oil prices in the US market edged lower, with the Nymex light crude oil for August delivery down by 13 cents to close at $74.02 per barrel. In the commodity segment, the Comex gold for August series dropped by 40 cents to settle at $665.90 an ounce.

US Market closes mixed but at new highs

Lower crude price weighs on overall market as Dow falls a little shy of 14,000 mark

US Market closed at new highs today, Tuesday, 17 July, 2007, but closed mixed and Dow just fell a little short of touching the 14,000 mark while going into close. Though Dow crossed the 14,000 mark thrice during intra day trading, a drop in crude prices weighed on the Energy sector and the broader market later in the session.

The Dow Jones Industrials closed higher by 20.57 points at 13971.55. Tech heavy Nasdaq gained 14.96 points to close at 2712.29. Yahoo and Intel pushed the index higher ahead of their earnings report which was due after close. But S&P 500 closed marginally lower by 0.15 points 1549.37.

Sixteen out of the thirty Dow stocks closed in green today. Intel, American Express, Microsoft were the top most three Dow winners today.

Johnson & Johnson beat forecasts and backed its full-year profit outlook but lowered its 2007 sales growth guidance. Coca-Cola also checked in better than expected but continued weakness in North American sales weighed on the stock today. Lack of participation from both stocks inspite of beating forecasts failed to push the indices further higher.

The Dow and the Financial sector got an added boost from American Express. It was up nearly 4% after Goldman Sachs upgraded the stock to Buy.

The Producer Price Index unexpectedly fell 0.2% in June, its first decline since January. Market had been expecting a rise of 0.2%.The core PPI, which excludes volatile food and energy prices, rose 0.3%, higher than the 0.2% rise economists had expected. The increase was due in part to rising car and truck prices.

Producer Price Index slips for the first time in five months

When market opened in the morning, stocks open modestly higher as solid earnings reports and more deal making helped investors deal with mixed economic data. The indices extended their reach to the upside as the bulk of key industry leadership remained positive. Of the seven sectors trading higher, Materials paced the way.

Better than expected earnings from Dow components Johnson & Johnson and Coca-Cola and broker Merrill Lynch lent additional proof that Q2 earnings growth will not be as poor as previously thought.

But weakness in Financial sector was noticed after constituent Merrill Lynch shares slipped a bit. Though the share opened up more than 2% after posting a 31% jump in Q2 profits, its CFO later saying the market for subprime debt has yet to stabilize has prompted a reversal in the shares.

Intel and Yahoo, both disappoint Wall Street

After the close, Intel came out with its second-quarter earnings and disappointed investors. Intel said it earned 22 cents in the quarter on revenue of $8.7 billion. Intel shares were almost 4% down during after hours trading. Wall Street wasn't too happy with Yahoo earnings report either. Yahoo said it earned 11 cents a share, down slightly from a year ago and in line with Wall Street estimates.

Crude oil futures were steady today after rising to 11 month highs since the past couple of days. Though crude crossed $75 mark today during intra day trading, it fell in closing hours as gasoline futures slipped to their lowest levels in one month. Crude-oil futures for light sweet crude for August delivery closed at $74.02/barrel (lower by $0.13/barrel or 0.18%) on the New York Mercantile Exchange. Futures retreated from $75.35 reached earlier in the session. Prices are up 21% this year.

Trading volumes showed 1.4 billion shares exchanging hands on the New York Stock Exchange and 2.2 billion on the Nasdaq. Declining issues outpaced gainers by 18 to 13 on the NYSE, while gainers outpaced decliners by 15 to 14 on the Nasdaq.

A host of earnings report and Inflation report from CPI data will help set the tone of trading tomorrow. at 8:30 ET will be June Housing Starts and Building Permits. Energy Dept.'s weekly inventories report at 10:30 ET will also attract some added attention. On the earnings front, Dow components Altria, JP Morgan Chase, Pfizer, and United Technologies will be tomorrow’s headliners.

Intraday Stock Ideas

NIFTY (4497) Supp 4466 Res 4527

BUY Titan (1300) SL 1290
Target 1325, 1335

BUY Gail (326) SL 322
Target 334, 337

BUY HCL Tech (337) SL 332
Target 345, 348

SELL Aurobindo Pharma (725) SL 731 Target 714, 710

SELL Tata Tea (821) SL 827
Target 811, 808

Asian weakness could dampen opening

Make up your mind to act decidedly and take the consequences. No good is ever done in this world by hesitation.

Weakness across Asian markets this morning could cause hesitation at open. High crude oil prices are another source of discomfort. Locally, there is very little to worry about. Concerns of valuations and seemingly over-leveraged positions in the F&O segment are often brushed aside with liquidity coming in. The undertone continues to be positive on the back of strong liquidity and robust economic fundamentals. If you are not leveraged, ride the short-term volatility by staying invested in sound counters. But be careful while making fresh purchases at this stage as it is time to get very choosy.

In the near term, quarterly results will drive the action. Investors will keenly watch the RBI's review of annual monetary policy at the end of this month. We do not expect the central bank to go for any further tightening though it may keep all its options open. A stable interest rate environment or some softening in borrowing costs will only add to the bullishness. However, there may be some cooling largely due to technical factors. Today, we see a slightly lower opening, but things may turn around later in the day.

On Wall Street, the Dow Jones Industrial Average notched up another record for the fourth straight session after having pierced the 14,000 mark for the first time ever. A benign inflation report and several strong earnings reports pushed the key stock indices higher.

Exxon Mobil and Chevron declined after crude oil prices fell from a 11-month peak. About six stocks declined for every five that gained. Energy companies were the biggest drag on the Standard & Poor's 500 Index.

The Dow rose 20.57 points, or 0.2%, to 13,971.55. It had climbed as high as 14,021.95. Year-to-date, the blue-chip US index is up 12.15% and has notched 31 record closes so far. The S&P 500 finished flat at 1549.37. The Nasdaq Composite Index added 14.96, or 0.6 percent, to 2712.29.

Oil prices turned lower, after reaching an 11-month high. US light crude for August delivery lost 10 cents to $74.05 a barrel on the New York Mercantile Exchange. The front-month contract was quoting slightly higher at $74.19 a barrel in the extended trading in Asia.

Treasury prices fell, with the yield on the benchmark 10-year note rising to 5.07% from 5.04% late on Monday. The dollar held near a record low against the euro and was steady against the yen. COMEX gold for August delivery slipped 40 cents to $665.90 an ounce.

European shares declined, led by rate-sensitive financial shares. Industrial and auto shares lost ground as the dollar stayed near recent record lows against the euro. The pan-European Dow Jones Stoxx 600 index slipped 0.5% to 397.63. The German DAX fell 0.8% to 8,038.21. The UK's FTSE 100 closed down 0.6% at 6,659.10 and the French CAC-40 gave up 0.4% to 6,099.21.

In Latin America, Brazilian share prices closed at a fresh record. The benchmark Bovespa stocks index rose 285 points, or 0.5%, at 57,660. In Mexico City, the IPC index of 35 most-traded stocks fell 287 points, or 0.9%, or 31,979.14.

Key Asian markets were down this morning. The Nikkei in Tokyo was down nearly 200 points at 18,017 while the Hang Seng in Hong Kong dropped 24 points to 23,032. The Kospi in Seoul added 2 points to 1951 and the Straits Times in Singapore dipped by 10 points to 3641.

Canon and Nintendo led Japanese exporters lower as the yen strengthened against the dollar. BHP Billiton led mining companies lower after copper prices fell. Posco slid as some investors shrugged off the company's highest quarterly profit in two years and took recent gains as an opportunity to sell.

The Morgan Stanley Capital International Asia Pacific Index lost 0.6% at 11.54 a.m. in Tokyo. All markets open for trading in the region fell except Taiwan, Malaysia and the Philippines.

Three day winning streak came to an end as market lost ground led by fall in the heavy weights like Reliance Communication, Tata Steel, Bharti Airtel, BHEL and SBI. Further weak European markets also dampened the sentiments of the traders on Dalal Street. After staying strong till afternoon trades key indices pared all its early gains as all round selling dragged the market down. Finally, the 30-share Sensex declined 21 points to close at 15290. NSE-50 Nifty slipped 15 points to close at 4497.

Reliance Industries gained 3% to Rs1827 on news of a new gas discovery in the Cauvery basin. The scrip touched intra-day high of Rs1838 and a low of Rs1780 and recorded volumes of over 6,00,000 shares on NSE.

RPG transmission slipped 1.6% to Rs284. According to reports the group has announced that to invest Rs120bn in Power. The scrip has touched intra-day high of Rs308 and a low of Rs281 and has recorded volumes of over 32,000 shares on NSE.

MTNL declined by over 2% to Rs164. The company announced that they would pay 10% dividend. The scrip touched intra-day high of Rs170 and a low of Rs164 and recorded volumes of over 11,00,000 shares on NSE.

R Com slipped by 2.3% to Rs560. The company announced that they would spend Rs160bn on expansion this year, also yesterday announced that it has purchased Yipes Communication for $300mn and added 20mn users in last one year. The scrip touched intra-day high of Rs579 and a low of Rs559 and recorded volumes of over 17,00,000 shares on NSE.

Jubilant Organosys has gained by 1.8% to Rs314 after the company announced its Q1 result with net profit at Rs1.43bn (up 210%) and revenue at Rs5.4bn (up 31%). The scrip has touched intra-day high of Rs322 and a low of Rs307 and has recorded volumes of over 98,000 shares on NSE.

Banking stocks were also on the receiving end led by fall in the heavy weight SBI declined by over 1.8% to Rs1583, HDFC Bank was down 1.5% to Rs1199 and OBC declined by 1.5% to Rs256.

Select Realty stocks managed to hold on to its gains. IB Real Estate surged by over 6% to Rs592 and Akruti advanced by 5% to Rs516. However, DLF was down by 0.2% to Rs610 and Parsvnath declined by over 3.5%t o Rs365.

IT stocks recorded smart gains despite strengthening rupee. TCS surged by over 2.5% to Rs1154 after the company yesterday announced its Q1 result with net profit at Rs11.8bn (up 37%) and revenues at Rs52bn (up 26%), Satyam Computer gained by 1.6% to Rs489 and Infosys added 0.3% to Rs1938.

Metal stocks witnessed profit booking. JSW Steel slipped by 3% to Rs699, Sterlite industries dropped by over 4.5% to Rs633, Tata Steel was down by 2% to Rs681 and SAIL lost 3% to Rs153.

Auto stocks were in reverse gear as US light crude for August delivery added 22 cents to $74.15 a barrel on the New York Mercantile Exchange. Bajaj Auto dropped 1.5% to Rs2223, Tata Motors was down by 1.5% to Rs748 and Maruti edged lower by 0.5% to Rs824.

Results Today:

Alembic, Anant Raj Industries, Areva, Biocon, Four Soft, HEG, Hexaware, IDBI, IL&FS Investment Managers, Infotech Enterprises, Plethico, Polaris, Reliance Energy, RNRL, Sona Koyo, Tamil Nadu Newsprint & Papers, Tanla, Texmaco, Themis Medicare and Wipro.

Fund Activity:

FIIs were net buyers of Rs3.59bn (provisional) in the cash segment on Tuesday. On the other hand, local institutions were net sellers at Rs1.65bn. From the F&O segment, FIIs pulled out Rs875.3mn.

On Monday, FIIs poured in Rs16.6bn in the cash segment. Mutual Funds were net sellers of Rs3.72bn.

Major bulk Deals:

Credit Suisse and Kotak have sold Celestial Labs; CLSA and Crown Capital have picked up McDowell Holdings; HSBC Financial has purchased Nitco Tiles; Macquarie Bank has sold SB&T International; Prudential ICICI MF has picked up Solectron Centrum while Fidelity has sold the stock and Morgan Stanley has sold Sujana Metal.

Insider Trades:

ANG Auto Limited: Funds under the management of FMR Corp and its direct and indirect subsidiaries and Fidelity International Limited and its direct and indirect subsidiaries has purchased from open market 198019 equity shares of the company on 10th July, 2007.

Lower Circuit:

ESS DEE Aluminum, Radha Madhav and Prism Cement

Upper Circuit:

Noida Toll, Goldstone Tech, Crisil, Yashraj Containers, Vyapar Industries, Pearl Global, IID Forgings and Jaybharat Textiles.

Delivery Delight (Rising Price & Rising Delivery):

Bank of Baroda, HCL Tech, ICICI Bank, Satyam and Titan Industries.

Abnormal Delivery:

Sadbhav Engineering, Bank of Baroda, HCC, Mahindra Gesco, Mangalam Cement, BPCL, APIL, Canara Bank, TCS and Cipla.

Major News & Announcements:

RIL confirms gas discovery in Cauvery basin

R Com to spend Rs160bn on expansion this year

L&T bags another order worth Rs9.8bn from Tata Steel

Confidence Petro plans to raise $30mn overseas

Tata Tea Q1 profit at Rs430mn (down 3.5%) and revenue at Rs2.9bn (up 14.1%)

Satyam gets 4 major deals from Singapore, Australia & Gulf

RPG group to invest Rs120bn in power - Reports

Jubilant Organosys Q1 profit at Rs1.43bn (up 210%) and revenue at Rs5.4bn (up 31%)