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Wednesday, August 01, 2007

Sensex suffers third biggest fall ever

Local share prices suffered severe setback today, 1 August 2007, on global meltdown. After opening weak, influenced by US markets, the market kept on declining further on intense selling pressure. Weak Asian and European markets dampened the sentiment further. The BSE 30-share Sensex declined below the physcological 15,000 mark and the Nifty fell below 4,400.

All the sectoral indices on BSE tumbled with shares from the real-estate pack suffering the most. Everonn Systems India posted strong show on day 1, settling at 242% premium over issue price. Turnover on BSE surged in today's market fall.

The 30-shares BSE Sensex plunged 615.22 points or 3.96% to settle at 14,935.77. This was the third biggest single day point fall in Sensex ever. It opened with a downward gap of 207 points at 15,344.02 and kept on falling to touch a low of 14,910.52 at 15:12 IST on intense selling pressure. As per market talks, a lot of margin calls may have accentuated fall. Margin selling emerges when there are leveraged positions.

The S&P CNX Nifty slumped 183 points, or 4.04%, to 4,345.85. The Nifty August 2007 futures settled at 4,301.05, a steep discount of 44.80 points as compared to spot closing.

The Sensex’s biggest single day fall of 826 points had occurred on 18 May 2006. Fears that a possible change in taxation laws on sale of shares would raise tax-liability for FIIs had triggered sharp fall on that day when margin calls had accentuated the decline.

The second biggest fall of 617 points took place on 2 April 2007 following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007.

Turnover surged in the last hour of trade on BSE today. The total turnover on BSE crossed Rs 6,000 crore and was at Rs 6267 crore as against Rs 5,298 crore on Tuesday, 31 July 2007

The turnover in NSE’s F&O segment amounted to Rs 55,904.92 crore as against Rs 49,276.21 crore on Tuesday, 31 July 2007

The market breadth was weak on BSE with 2,147 shares declining as compared to 533 shares that advanced, while 41 remained unchanged. BSE Small-Cap index lost 294.73 points or 3.6% at 7,775.90. BSE Mid Cap index lost 256.62 points or 3.8% at 6,461.46. This means large caps took a much more severe beating compared with mid-caps and small caps.

The market saw heightened activity in the past few days. Firm global markets had led the Sensex to surge 290 points on Tuesday, 31 July 2007, as the market shrugged off a 50 basis-point hike in CRR by RBI announced on that day. The market also took solace in that RBI had kept interest rates steady. On Monday, 30 July 2007 Sensex rose 26.34 points after seeing high volatility

All this came after the black Friday’s, 27 July 2007 sharp 542-point plunge caused by setback in global equities. Stocks tumbled in Asia and the US on that day as an avalanche of concerns over the US credit and housing markets spilled into other areas of the financial sphere and prompted investors to reduce risk.

All the 30-members of the Sensex pack ended in the red today.

India’s second largest cement producer ACC plunged 9.62% to Rs 958 on 3.44 lakh shares. It was the top loser from the Sensex pack.

Reliance Energy (down 7.11% to Rs 737), Ranbaxy Laboratories (down 5.33% to Rs 369.10) and Mahindra & Mahindra (down 4.83% to Rs 693.90) were the other major losers from the Sensex pack.

India’s largest truck maker Tata Morors slipped 4.65% to Rs 666.80 after it reported a 22.2% rise in net profit to Rs 466.76 crore in Q1 June 2007 over Q1 June 2006. Sales moved up 4.7% to Rs 6056.82 crore in Q1 June 2007 over Q1 June 2006.

Bajaj Auto, the country’s second biggest two-wheeler manufacturer, shed 2.76% to Rs 2295 after its vehicle sales fell 7% to 1,85,890 units in July 2007 over July 2006.

Reliance Industries, the country’s largest private sector enterprise, lost 5.25% to Rs 1793 on 15.84 lakh shares. As per reports, RIL is among the 11 winners for oil and gas exploration blocks announced by the Australian government. RIL won the bid for an exploration licence in part of the Bonaparte Basin, off northern Australia. It proposes to spend A$29.8 million over the next six years. This includes the cost of drilling one well. Australia awards oil and gas exploration permits depending on the amount of work bidders pledge to carry out.

India's largest aluminium maker Hindalco Industries tumbled 6.41% to Rs 159.20 after said its net profit in the first quarter remained flat at Rs 602.9 crore due to a sharp fall in alumina prices and a customs duty cut that made imported products cheaper. Hindalco’s revenue rose 9% to Rs 4,677.9 crore in Q1 June 2007 over Q1 June 2006. Hindalco is expected to invest Rs 30000 crore over the next five years in various greenfield and brownfield expansion projects, including the Utkal Alumina project in Orissa.

India’s top small-car maker Maruti Udyog lost 2.13% to Rs 825. The company today, 1 August 2007, reported an 18% rise in sales in domestic market to 52,839 units in July 2007 over July 2006. It exported 5,070 units, up from 1,755 units in July 2006.

FMCG and pharma shares, considered as defensive sectors in times of steep market correction, though they declined, the fall in their prices was relatively low. Dr Reddy’s (down 1.85% to Rs 621.80), ITC (down 2.17% to Rs 167), Hindustan Unilever (down 2.47% to Rs 201), and Cipla (down 3% to Rs 184) edged lower.

Even as the market corrected sharply, Everonn Systems India settled at Rs 478.45 on BSE, a 241.75% premium over the offer price of Rs 140. The huge premium on listing was due to 131.47 times subscription of the IPO. The issue received total bids for 52.58 crore shares compared to total issue of 40 lakh shares.

The Everonn Systems India scrip debuted at Rs 245 on BSE and touched a high of Rs 560 and a low of Rs 245 during the day. About 71.77 lakh shares were traded on the counter on BSE. Everonn Systems India is a fully integrated knowledge management, education and training company.

Real-estate stocks were the worst hit in today’s fall. The BSE Realty index declined 521.54 points or 6.6% to 7,332.51. Unitech (down 7.36% to Rs 517.70), DLF (down 4.42% to Rs 584.65), Orbit Corporation (down 9.12% to Rs 317.30), Indiabulls Real Estate (down 9.22% to Rs 501.25), Parsvnath Developers (down 9.13% to Rs 325), Mahindra Gesco Developers (down 4.77% to Rs 551.50) and Ansal Infrastructures (down 4.98% to Rs 256.90) edged lower.

Among other sectoral indices, the BSE Metal index tumbled 559.64 points or 4.8% at 11,071.28. BSE Capital Goods index lost 624.37 points or 4.69% at 12,697.41. BSE Oil & Gas index tanked 357.85 points or 4.4% at 7,772.65.

PSU banks lost ground. The top losers among PSU banks were Bank of India (down 8.33% to Rs 237), Union Bank of India (down 9.03% to Rs 141.60), Indian Overseas Bank (down 3.5% to Rs 123), and Allahabad Bank (down 6.54% to Rs 89.30).

The hike in CRR of 50 basis points means effective increase in cost of deposits for banks. The deceleration in credit offtake implies that banks have to rollback high deposit rates being offered on tenures of one year and above. Banks now have to maintain 7% of their deposits with the RBI. On these CRR deposits, banks will receive interest only on 3% of the deposits at `bank rate’, which is 6%. No interest is paid on the balance 4%. As RBI does not pay any interest on the 4% deposits, banks’ margin is impacted to that extent.

The major losers among small-cap and mid-cap shares were Shah Alloys (down 18% to Rs 62.45), Sanghi Industries (down 13% to Rs 69.95), Sical Logistics (down 12% to Rs 245), RK Forgings (down 11% to Rs 182.20), Indus Fila 9.98% to Rs 195.25, Time Technoplast (down 15% to Rs 513.50), India Infoline (down 11.9% to Rs 662), Entertainment Network India (down 11% to Rs 462), Teledata Informatics (down 10% to Rs 64.65), and NIIT (down 9% to Rs 980.35).

Select stocks survived the fall. United Phosphorus (up 4% to Rs 319.50), Ingersoll Rand (up 2.2% to Rs 345), Kansai Nerolac Paints (up 2.8% to Rs 719.95), 3M India (up 2.6% to Rs 1858), and IPCA Lab (up 1.7% to Rs 715) edged higher.

Nestle India rose 0.61% to Rs 1196.55 after posting an 18.09% rise in net profit in Q2 June 2007 to Rs 95.69 crore over Q2 June 2006. Sales were up 23.15% to Rs 838.88 crore Q2 June 2007 over Q2 June 2006.

India's third-biggest motorbike maker TVS Motor Company dropped 0.86% to Rs 57.75 after the company said its sales declined 13% to 1.05 lakh units in July 2007 over July 2006.

Jammu & Kashmir Bank lost 6.10% to Rs 651 after it received the Reserve Bank of India's nod for setting up a stockbroking subsidiary.

Jai Corp surged 5% to Rs 3966.05 after its board of directors approved the sub-division of the equity shares from existing face value Rs 10 per share to a face value of Re 1 per share. They also approved increasing the limit for investment by foreign institutional investor (FIIs) to 49% of the paid-up equity capital

Glenmark Pharmaceuticals dropped 2.50% to Rs 670 on reports that it was being sued over patent infringement of anti-allergic drug Clarinex in the US. The Indian drug maker had submitted an abbreviated new drug application (ANDA) to the US Food and Drug Administration (FDA) seeking marketing approval for Clarinex, used for treating seasonal allergic rhinitis (SAR).

VSNL slipped 1.02% to Rs 450.10. Its net profit rose 18.22% to Rs 104.16 crore in Q1 June 2007 over Q1 June 2006. Total income soared 88.49% to Rs 1035.45 crore in Q1 June 2007 over Q1 June 2006.

Escorts lost 7.77% to Rs 96.10 after the tractor and construction equipment maker reported a net loss of Rs 6.24 crore in Q3 June 2007 compared to a net profit of Rs 1.57 crore in Q3 June 2006.

Essar Steel rose 1.20% to Rs 37.90 after the steel maker posted 461.8% surge in net profit to Rs 231.06 crore in Q1 June 2007 over Q1 June 2006

Panasonic AVC Networks India was locked at the 5% upper limit of Rs 16.05 after its Japanese parent Matsushita Electric Industrial Company fixed the de-listing price at Rs 18 per share.

Asian markets were a complete sea of red today, 1 August 2007, on Wall Street's decline. Nikkei tumbled 2.19% at 16,870.88. American Home Mortgage Investment Corp., a large US mortgage provider, said on Tuesday, 31 July 2007, it may have to liquidate assets, fuelling fears that the US housing slump was broadening and sending stocks reeling around the world. Bear Stearns Cos. Inc said on Tuesday, 31 July 2007, it had halted redemptions in a third hedge fund after investors wanted to pull out their money.

Singapore's Straits Times (down 3.27% at 3,431.71), Taiwan's Taiwan Weighted (down 4.26% at 8,891.88), Hang Seng (down 3.15% to 22,455.36) and South Korea's Seoul Composite (down 3.97% at 1,856.46) all slipped lower.

China's Shanghai Composite was down 3.81% to 4,300.63

Most of the key European indices were trading with losses today, 1 August 2007.

US tocks fell sharply on Tuesday (31 July 2007) as worries about the deteriorating US credit market flared up. The Dow slipped 146.32 points, or 1.10%, to 13,211.99 after being up as much as 140 points during the session. Broader stock indicators fell. The Standard & Poor's 500 index declined 18.64 points, or 1.26%, to 1,455.27, and the Nasdaq Composite index fell 37.01 points, or 1.43%, to 2,546.27.

US oil surged more than $1 to a record settle above $78 a barrel on Tuesday, 31 July 2007, on expectation that rising refinery demand will further drain inventories in the United States.

Finance minister P Chidambaram on Tuesday, 31 July 2007, reiterated his intent to trim tax rates, thanks to better compliance by taxpayers and the broadening tax base. He also held out a special dispensation for promising sectors like food processing, electronic hardware, hotels and tourism and leather goods.

Sensex plummets 615 points

The market witnessed the second crash today after witnessing a fall of 541 points on Friday. Following a steep fall in global stock markets led by fears of a credit crunch in the US, the Sensex resumed on a bearish note at 15,344, 207 points below its last close of 15,551. By mid-morning trades the Sensex shed over 500 points on across-the-board selling pressure. The market started to deteriorate further, towards the close, as fresh bout of selling saw the Sensex plummet over 600 points and touch the day's low of 14,911. Despite registering smart gains in the last session, the Sensex dropped 3.96% and was down 615 points for the day at 14,936. The Nifty shed 4.04% and was down 183 points at 4,346.

The market breadth was heavily tilted in favour of the losers as 2,109 stocks declined, 501 stocks advanced and 41 stocks remained unchanged on the BSE. All the sectoral indices were battered on the BSE. The BSE Realty index lost heavily and dropped 6.64% followed by the BSE Metal index (down 4.81%), the BSE CG index (down 4.69%), the BSE Oil & Gas index (down 4.40%), the BSE CD index (down 3.99%) and the BSE Bankex index (down 3.93%). The second-rung benchmark indices the BSE mid-cap index and the BSE small-cap index tanked over 3% each.

None of the 30 Sensex stocks managed to end in the green. Among the major losers ACC tanked by 9.05% at Rs964. Reliance Energy slumped by 7.08% at Rs737, Hindalco shed 6.44% at Rs159, Ranbaxy crumbled by 5.67% at Rs368. Reliance communication dropped 5.05% at Rs531, Tata Steel slipped by 5.04% at Rs622, Reliance plunged 4.98% at Rs1798 and M&M fell by 4.87% at Rs694. Other front-line stocks also declined by around 3-4% each.

Realty stocks took a heavy pounding. Housing Development & Infrastructure plunged by 10.01% at Rs516, Indiabulls Real Estate tumbled by 9.33% at Rs501, Parsvanath Developers lost 8.89% at Rs326, Peninsula Land by 8.89% at Rs326 and Unitech declined by 7.96% at Rs514. Sobha Developers, Ansal Infrstructures, Mahindra Gesco and DLF crashed around 4-5% each. Metal stocks, too, were hammered on the bourses. Shree Precoated Steels slumped by 9.62% at Rs334, Welspun Gujrat dropped 6.45% at Rs234 and Bhushan Steel fell by 6.23% at Rs659.

Over 1.35 crore RNRL shares changed hands on the BSE followed by IFCI (1.08 crore shares), Everonn Systems (71.77 lakh shares), Industrial Investment Trust (54.47 lakh shares) and Bella Steel (54.04 lakh shares).

Value-wise Everonn Systems registered a turnover of Rs367 crore on the BSE followed by Reliance Industries (Rs289 crore), Reliance Energy (Rs203 crore), SBI (Rs170 crore) and Reliance Communication (Rs161 crore).

Glenmark Pharma Q1FY08 Result Update (Buy)

Glenmark Pharma Q1FY08 Result Update (Buy)

US Market reels in credit woes and higher crude

Solid earnings reports and upbeat analyst commentaries get totally eclipsed

Fresh credit woes hit US Market today, Tuesday, 31 July, 2007 and stocks were once again pushed back to the wall. Higher oil prices with crude crossing $78/bbl for the first time ever this year added further negative sentiment among investors. Higher crude prices though helped the Energy sector initially, the stocks too slipped in red while going into close. Apple mainly pushed the technology stocks lower today.

Market was fairly up in the morning hours after General Motors posted much better than expected results. Dow was up by more than 105 points at one time. But some solid earnings reports and upbeat analyst commentary were overshadowed in the final hour of trading. Credit markets concerns and bad-home loans once again resurfaced today after news that American Home Mortgage Investment might liquidate its assets after failing to meet margin calls.

The Dow Jones Industrials Average today fell by a huge 146.3 points at the end to close at 13212. Tech heavy Nasdaq shed 37 points to close at 2546. S&P 500 dropped 18.66 points to close at 1455. Twenty-six out of the thirty Dow stocks closed in red today.

All 10 economic sectors lost ground paced by sell-off in Financials that saw a more than 3% swing from its morning highs. Technology was a close second while Industrials and Discretionary also fell substantially.

American Home Mortgage Investment said today that it is unable to borrow on its credit facilities and is struggling to raise money, including "the orderly liquidation of its assets." Yesterday, AHM was unable to fund lending obligations of approximately $300 mln. The stock lost 90% of its value.

Apple weighs heavy on Tech stocks on speculation of iPhone production cut

When market opened in the morning today, core PCE rising just 0.1% for the fourth straight month helped pave the way for another day of broad-based buying. Dow component, General Motors swinging to a much larger than expected Q2 profit just made the situation all the more encouraging.

Also, Chicago PMI checked in with its lowest reading of 58.5 since April. However, since any number over 50 still reflects growth, market reacted positively to the figure. Of the 10 economic sectors trading higher, Utilities paced the way.

But soon a 1% rise in oil prices to their highest level in a year and a reversal in Health Care took some steam out of early buying efforts. The absence of upside leadership from both Tech and Financials started acting as the main trouble for the bulls.

Technology was heavily hit today after a major sell-off in Apple on heavy volume crippled the sector. Speculation that Apple might cut iPhone production provided shareholders good enough reason to take some money off the table.

Host of economic data will set the tone of trading for tomorrow

Crude oil futures rose to a record close of $78.21 a barrel in New York on speculation demand will outpace supply as refiners increase fuel production. Futures touched $78.28 during intra day trading.

Volume hit 1.8 billion shares at the New York Stock Exchange, while 2.4 billion shares were traded at the Nasdaq. Declining stocks beat advancers 9-7 at the NYSE, and by 18-11 on the Nasdaq.

A host of economic data will set the tone of trading for tomorrow. ISM Index will provide investors with an update on US manufacturing activity. Also garnering attention at 10:00 ET will be Pending Home Sales data, the Energy Dept.'s weekly inventory report at 10:30 ET followed by Auto/Truck Sales at 17:00 ET.

Among earnings reports expected tomorrow, Dow component Walt Disney heads the list of earners after the close.

Take Solutions

Started in 2001, Take Solutions (TSL) was formed by a group of professionals, with an entrepreneurial drive, extensive knowledge and experience in the area of supply chain management (SCM). TSL has since grown both organically and through acquisitions. Its products are focused on the SCM and life sciences (LS) verticals and are complimentary to the legacy or enterprise resource planning software, which its clients currently use.

Currently, TSL has 16 active products in the SCM vertical, which are housed under the One SCM™ suite, and six products in the LS vertical under the One Clinical™ suite. The foundation of all its product offerings in both the segments is domain knowledge and the Take RTE (Real Time Enterprise) framework. End March 2007, TSL had completed more than 2,500 software installations for over 250 customers ranging from multinational enterprises to medium- and small-sized companies.

The SCM vertical contributed 48% of the revenue in the year ending March 2007 (FY 2007), down from 60% in FY 2006. The LS vertical contributed 45% of the revenue, up from 40% in FY 206. Contribution of `Others’ went up to 7% in FY 2007. Geographically, Asia Pacific contributed 52% of the revenue in FY 2007, down from 60% in FY 2006; and US 48%, up from 40%..

Among the segments, product licenses and related activities contributed 43% of the revenue in FY 2007, up from 43% in FY 2006; maintenance fees 11%, up from 10%; and services 42%, down from 47%.

The net proceeds of the issue would be utilised for further acquisition, prepayment of debt (Rs 83.50 crore), for acquisition of ClearOrbit Inc. US, product development (Rs 15 crore), enhancement of domestic infrastructure (Rs 23.20 crore), and prepayment of term loan of Rs 20 crore. TSL has already acquired ClearOrbit Inc., which extends enterprise systems with proven supply chain execution (SCE) and collaborative supply management (CSM) software solutions. The company is also in advanced stage of acquiring at least one potential target, specialising in delivering a unique combination of supply chain information services and analytic applications in the food-service industry.


  • Over the last three years, backed by acquisitions, operating revenue has grown at a CAGR of 138% and net profit at a CAGR of 310%. The product portfolio has increased from four in FY 2004 to 11 in FY 2007, with six products added in the LS vertical in FY 2006 with the acquisition of Take Inc.
  • Acquisitions would allow expansion of clients and geography, enabling cross-selling of services and solutions.


  • Product business is associated with higher volatility in revenue and profits. This can be seen with the operating profit margin (OPM) dipping to 25.3%, from 32.6% in FY 2006.
  • Majority of the revenue is earned in foreign currency. Rupee appreciation has been affecting medium- and small-scale companies more than the larger ones.


At the price band of Rs 675 – Rs 730, FY 2007 EPS on post-issue equity of Rs 26.4 is discounted 25.5 – 27.6. Product-oriented companies such as Subex Azure, Sasken Communications and Nucleus Software are currently trading around P/E of 27-29.

Purvankara Projects IPO Analysis

Promoted by Ravi Puravankar, Puravankara Projects focuses on developing residential and commercial properties, primarily in south India (specially Bangalore). The company has completed 14 residential projects and one commercial project covering approximately 3.77 million square feet (sq ft) of saleable area.

Puravankara Projects had entered into a joint venture with Keppel Investment Mauritius Pvt, a subsidiary of the Singapore-based Keppel Land. The company holds 49% of the shares of Keppel Puravankara Development, which owns 0.86 million sq ft of land in Bangalore. In addition, it has executed a joint venture agreement with 36.26% economic interest for residential projects in Kolkata, aggregating approximately 1.08 million sq ft of land.


  • On 2 July 2007, had a land bank of 38.07 million sq ft, representing a 106.8 million sq ft of saleable area. Has plans to develop land bank over eight years. The land bank was acquired at Rs 98 per floor space index (FSI).
  • Of the land bank, 11.42% (i.e., 12.2 million sq ft) is represented by ongoing projects. Has already sold 55% of its projects. Plans to complete ongoing projects in 2.5 years. Has booked revenue for 1.43 million sq ft (assuming an average realisations of Rs 2900 sq ft) in the year ending March 2007 (FY 2007). As the area under development represents 8.5 times the amounts booked and 55% of its projects have been sold, revenue visibility is high. The realisation target is Rs 3200 per sq. ft. The average cost of construction is Rs 1200-1500 per sq. ft. Moreover, of the saleable area, only 11% (i.e.1.31 million sq. ft) are new projects started in calendar year (CY) 2007.
  • In addition to the land bank, has entered into memoranda of understanding (MOUs) for the purchase of lands or for execution of joint developments agreements on parcels of land located in and around Chennai, aggregating approximately 43.56 million sq ft.


  • The Union government recently banned real-estate players and township developers from accessing external commercial borrowings (ECBs) to fund projects. The Reserve Bank of India (RBI) also earlier raised the risk weights on housing loan, followed by an increase in interest rate to curb the demand for real estate. Thus, real-estate companies are likely to face difficulties in funding projects (particularly for buying land). Their interest burden is also likely to increase.
  • Over the past couple of years, there has been a significant increase in interest rate and prices of real estate. This has increased the equated monthly instalment (EMI) on housing loans. The increase in EMI as a proportion to disposable income of household has raised concern regarding affordability of properties. Real-estate prices are already showing signs of softening in some regions. A drop in prices could also result in customers adopting a wait-and-watch approach before booking new properties and existing customers deferring payments or cancelling bookings made earlier when prices were high. This would impact cash flows and could lead to a cash crunch. This could significantly impact ability to complete existing/start new projects.
  • 1.57 million sq ft of land area is under dispute for claim of Rs 15.27 crore.


Consolidated FY 2007 EPS on post-issue equity works out to Rs 6.1. At the offer price band of Rs 500 – Rs 525, the P/E range is 81.9-85.9, respectively. Comparable listed player according to size is HDIL, currently trading at 24.6 times its consolidated recurring FY 2007 earning. Nearest location-wise comparable company Sobha Developers is trading at 41.1 times its FY 2007 earning.

Market may take a break

Overnight fall in US markets and weak Asian indices in current trades likely to weigh on the local indices in early trades. The sentiment is likely to remain subdued on weak global indices. However, the FIIs remaining net buyers of equities in the domestic market and the yesterday's smart rally despite the hike in CRR rates by Reserve Bank of India could release some pressure. Among the local indices, the Nifty could test higher levels at 4600 and has a support at 4440. The Sensex on the downside may slip to15000 and may face resistance at 15450.

US indices finished weak on Tuesday amid concerns of credit and subprime mortgage market worries and record-high oil prices. While the Dow Jones declined 146 points at 13212, the Nasdaq dropped 37 points to close at 2546 on weakness in tech stocks.

Most of the Indian ADRs battered on the US bourses. ICICI Bank tumbled 3.69% and Tata Motors by 3.33% , while Infosys, Satyam, Dr Reddy's, HDFC Bank, MTNL and Rediff fell around 1-2% each. However, VSNL and Patni computer gained marginally.

Crude oil prices gained marginally, with the Nymex light crude oil for September delivery advanced by $1.38 at $78.21 a barrel. In the commodity segment, the Comex gold for December series was up by $2.70 to settle at $679.30 a troy ounce.

BPCL, TVS Motors, Grasim, BPCL

TVS Motors Q1FY08 Result Update (Sell)
Grasim Ind Q1FY08 Result Update (Accumulate)
Hindustan Unilever Q2CY07 Result Update (Reduce)
BPCL Q1FY08 Result Update (Accumulate)

Monthly Picks, Daily Technicals, Futures

Monthly Picks, Daily Technicals, Futures

Daily Trading Calls

NIFTY (4529) Supp 4495 Res 4562

Buy Crompton Greaves (293) SL 288 Target 302, 304

Buy Bharti Airtel (901) SL 895 Target 912, 916

Buy Voltas (141) SL 137
Target 148, 150

Sell GE Ship (341) SL 346
Target 332, 330

Sell IOB (127) SL 131
Target 120, 118

Bulls get Reddy to CRRy

“No stock is worth your tears, but once you find one that is, it won't make you cry”

While the bond market shed tears on Tuesday following the CRR hike, the equity markets tanked and bounced back in no time. Those gains could be wiped out at open today, as global markets have taken a fresh tumble, thanks to the lingering concerns over the subprime mortgages and credit markets in the US. Oil prices too are very close to their previous highs, both in London and New York on the back of persistent supply worries. As a result, the sentiment will once again take a nosedive at least in the early session.

The market is likely to remain highly volatile in the near term, driven primarily by the global factors, even as local fundamentals remain strong. The key factor to watch will be the trend in FII inflows. If there is a reversal in foreign capital flows towards emerging markets due to the US woes, it will reflect in India too. It would be prudent to avoid fresh buying at this juncture due to the current uncertainty. One has to endure the short-term pain and ride out the temporary bearish phase. Book profits at every rally and trade with stop losses to avert a major crack in your portfolio.

Banks will remain in the limelight in the aftermath of the first quarter review of the annual monetary policy. Sugar shares may be under pressure amid no sign of the pall of gloom dying down. PSU oil companies could fall as crude oil prices are ruling very close to record levels. TVS Motor is likely to be in action amid reports that the company is planning to launch as many as 11 new models by April 2008.

Indian Hotels could gain as the company has reported good set of numbers for the first quarter. It is also planning to raise funds for expansion, including a Rights Issue. SpiceJet might attract some attention amid reports that Ryanair is likely to pick up 20-25% stake in the Indian low-cost carrier.

Shares of Everonn Systems will get listed today. The IPO of the education solutions company was subscribed 131 times. The company has fixed the issue price at Rs140 per share. The stock may get frozen at the upper circuit at opening bell itself.

US stocks tumbled anew on Tuesday amid continuing worries over credit markets and subprime mortgages. The Dow Jones Industrial Average dropped nearly 150 points. The Standard & Poor's 500 Index posted its biggest monthly decline in three years.

The Dow Jones erased a gain of 140 points and eventually slipped by 146.32 points, or 1.1%, to 13,211.99. The S&P 500 shed 18.64 points, or 1.3%, to 1455.27. The Nasdaq Composite Index slumped 37 points, or 1.4%, to 2546.27.

American Home Mortgage Investment Corp. said it doesn't have cash to fund new loans. The news sent shares of American Home Mortgage plummeting 89% and renewed worries about the scope of the recent subprime mortgage mess and fanned credit market worries.

Lehman Brothers, Bear Stearns and Goldman Sachs led the brokerage industry to a 10-month low because the prospect of American Home liquidating assets threatened to depress the value of mortgage securities.

Oil prices in New York climbed to a one-year high above $78 a barrel. Oil prices finished at an all-time high, climbing $1.38 to $78.21 a barrel. Tuesday's closing price is also very close to oil's all-time trading high of $78.40, set in July 2006. The front-month contract was quoting 35 cents lower at $77.86 a barrel.

Bonds prices climbed as investors sought shelter in Treasurys, lowering the yield on the 10-year note to 4.74% down from 4.8% late on Monday. The dollar edged higher versus the euro and was lower against the yen. COMEX gold for December gained $2.70 to $679.30 an ounce.

Apple shares slumped 6.8% amid speculation that the company is cutting production of either iPod or the iPhone, perhaps by as much as 50%.

On the economic front, Wall Street received some relatively encouraging numbers, including a tame inflation reading in the June personal spending and income report. Consumer confidence rose to its highest level in nearly six years, comfortably beating forecasts.

However, construction spending showed a surprise decline and business activity in the Midwest grew slower-than-expected.

Dow Jones' Bancroft family members, who own a 32% stake in the Wall Street Journal publisher, agreed to back News Corp.'s $5bn offer. Dow Jones shares finished over 11% higher.

European shares posted their best one-day advance since mid-March. The pan-European Dow Jones Stoxx 600 index gained 2.2% to 380.87. The UK's FTSE 100 jumped 2.5% to 6,360.10, the German DAX 30 surged 1.7% to 7,584.14 and the French CAC-40 advanced 1.9% to 5,751.08.

Brazilian and Mexican equities fell. In Brazil, the benchmark Bovespa index fell 381 points, or 0.7%, to end at 54,191.26, after moving as high as 55,662 during the session. The IPC index in Mexico posted a loss of 241 points, or 0.8%, at 30,659.66. Argentina's Merval fell 6 points, or 0.3%, to 2,180.25. Chile's IPSA, meanwhile, edged up 4 points, or 0.1%, at 3,340.43. Russia's RTS index surged 1.7% to 1993.

Most Asian markets are deeply in the red this morning. The Nikkei in Tokyo was down 193 points at 17,055 while the Hang Seng in Hong Kong dived 311 points to 22,873. The Kospi in Seoul was down 40 points at 1893 and the Straits Times in Singapore shed 67 points at 3480.

The Morgan Stanley Capital International Asia Pacific Index declined 1.1% to 154.31 at 11:32 a.m. in Tokyo, ending a two-day, 1% gain. Nine of its 10 industry groups fell. All Asian markets open for trading slid.

Bulls fought back as Sensex posted its fifth straight monthly gains. Markets once again followed the cues from firm Asian and European markets boosting both the key indices to bounce back. After a small blip of RBI decision of raising CRR by 50 bps to 7% from 6.50, bulls bounced back shrugging off the hike as the heavy front liners like RIL, L&T, BHEL, SBI and ICICI Bank lifted the benchmark Sensex almost by 300points and NSE Nifty almost 90points.

All the key sectoral indices ended in green. BSE Auto, Bankex and Realty indexes erased all its intra-day losses. TV Today, Voltamp, PTC India were some of the star performers among the mid-Cap index. Finally, BSE 30-share Sensex surged 290 points to close at 15550 hitting an intra-day high of 15568 and a low of 15224. NSE-50 Nifty added 88 points to close at 4528 touching an in intra-day high of 4434 and a low of 4432.

Reliance Industries gained by 2.4% to Rs1893. Reports have stated that the prime minister's economic advisory council is examining the formula for pricing the gas it plans to extract from India's east coast The scrip touched an intra-day high of Rs1901 and a low of Rs1833 and recorded volumes of over 22,00,000 shares on NSE.

Tata Steel advanced by 1.6% to Rs656 as the company announced that it has raised the size of a convertible securities sale to shareholders by 38%, seeking to use the additional funds to part-finance its $12.9 billion purchase of Corus Group Plc. The scrip touched an intra-day high of Rs659 and a low of Rs642 and recorded volumes of over 18,00,000 shares on NSE.

Speciality steel maker Mukand surged by over 4% to Rs84 as reports stated that the Bajaj Group firm may offer equity stake to auto component manufacturer, Bosch India. The scrip touched an intra-day high of Rs86 and a low of Rs83 and recorded volumes of over 1,00,000 shares on NSE.

Ranbaxy spurred by over 3.5% to Rs390 after the company yesterday announced that it would sell Authorized Version of Generic Isoptin in US. The scrip touched an intra-day high of Rs392 and a low of Rs379 and recorded volumes of over 17,00,000 shares on NSE.

BHEL surged by 5% to Rs1728 after the company Q1 net profit rose 22% to Rs2.89bn and revenue gained 23.7% to Rs34.4bn. The scrip touched an intra-day high of Rs1740 and a low of Rs1607 and recorded volumes of over 18,00,000 shares on NSE.

REL continued its upward trend as the company won bid for sasan power project, the scrip was up by over 2% to Rs793 touching an intra-day high of Rs874 and a low of Rs781 and recorded volumes of over 48,00,000 shares on NSE.

Jet Airways edged higher by 0.5% to Rs726 after the company announced its Q1 result with net profit at Rs308.8mn against loss of Rs449.8mn and revenue at Rs18.07bn (up 11%). The scrip touched an intra-day high of Rs735 and a low of Rs705 and recorded volumes of over 1,00,000 shares on NSE.

FMCG stocks also ended on a strong note led by gains in the heavyweight ITC as the scrip was up by over 2% to Rs171, Colgate gained by 6.5% to Rs411 and McDowell added 4.5% to Rs1376. However, Hindustan Unilever declined on back of profit booking; the scrip was down by 1 % to Rs206.

Banking stocks erased its intra-day losses led by gains in SBI as the scrip rose 3% to Rs1623, HDFC Bank advanced by 2.7% to Rs1200 and ICICI Bank added 0.6% to Rs927. PNB, Bank of Baroda and OBC were the major gainers among the Mid-Cap stocks.

Auto stocks were in reverse gear after the Central Bank’s announcement. M&M was down by 3% to Rs728, Hero Honda declined 1.7% to Rs674 and Tata Motors declined 1.2% to Rs699. However, Bajaj Auto surged by over 2.6% to Rs2354 and Ashok Leyland gained 1% to Rs37

Realty stocks reversed all its intra-day losses. DLF was up 1.4% to Rs612, Unitech surged by 4% to Rs558, Parsvnath gained 0.7% to Rs357 and Sobha added 3.3% to Rs982.

Fund Activity:

FIIs were net buyers of Rs346.3mn (provisional) in the cash segment on Tuesday. Local institutions too were net buyers at Rs3.48bn. In the F&O segment, FIIs were net buyers at Rs13.06bn. On Monday, FIIs pulled out Rs1.5bn from the cash segment.

Major bulk Deals:

Franklin Templeton MF has picked up EMCO; Jpmsl Ac Copthall Mauritius has bought McDowell Holdings; BNP Paribas has purchased Milk Food while Jpmsl Ac Copthall Mauritius has sold the stock; Kotak Securities has picked up Parry Agro.

Lower Circuit:

Easun Reyrolle and BF Utilities.

Upper Circuit:

Dhanlakshmi Bank, Jai Corp, United Breweries, TV Today, Marksons, Ganesh Forgings, Voltamp Transformers, Prism
Cement, Yashraj Containers, Anant Raj Industries, Godawari Powers, Nirlon and IID Forgings.

Delivery Delight (Rising Price & Rising Delivery):

Amtek Auto, Bongaigaon Refinery, Essar Steel, HCC, Prism Cement, Tata Power and Varun Shipping.

Abnormal Delivery:

ACC, NIIT, Bharati Shipyard, Aurobindo Pharma, Rajesh Exports, Nicholas Piramal and BEML.

Major News & Announcements:

Tata Motors Q1 net profit at Rs4.67bn (up 22.2%), net sales at Rs60.57bn (up 5.3%)

NTPC forms JV with Singareni Collaries

Hindalco Q1 profit flat at Rs6.03bn, total income at Rs48.03bn (up 10%)

Kesoram Industries Q1 net profit at Rs806.8mn (up 27.2%), net sales at Rs7.81bn (up 41%)

Cadila Q1 profit atRs739mn (up 26.5%), net sales at Rs5.72bn (up 28.2%)

Man Industries to split each shares into two and to raise FII limit to 49%

Jindal Saw Q1 profit at Rs820.5mn (up 98%), net sales at Rs12.86bn (up 34%)

Amtek Auto Q4 profit at Rs631.4mn (up 48%), net sales at Rs2.83bn (up 30%)

Israel Chemicals form Venture with Zuari Industries

Godrej Consumer Board approves raising Rs4bn

IVRCL Infrastructure Q1 profit at Rs259.3mn (up 19.3%), net sales at Rs6.77bn (up 58.5%)

Satyam signs two contracts with FIFA

Welspun Gujarat may bid for pipeline orders in Russia, Canada.

Daily Result Updates

Reliance Communications: In-line 1QFY08 results, low increase in costs a positive surprise; fine-tuned estimates

Tata Steel: 1Q 2008 results'Volumes, dilution disappoint; maintain U

Tata Motors: 1Q net profit at Rs4.7 bn grows 22% yoy; margins under pressure

Cairn India: 2QCY07 results hit by forex loss; strong otherwise in line with high crude prices

i-flex solutions: Another weak quarter'de-listing expectations supporting expensive valuations. Maintain Underperform rating

Bharat Electronics: Disappointing results with low execution and margins decline

Aditya Birla Nuvo: Standalone results below expectations, but does it really matter?

HPCL: Another wasted quarter but probably a good time to buy when nobody is looking

Jet Airways: Results miss expectations, near-term outlook remains challenging

Oriental Bank of Commerce: Lower provisioning support profit growth, retain IL

India Cements: 1QFY08- Targeting 15 mn tpa capacity by FY2010; retain IL with target price of Rs200/share

HT Media: Slightly weaker-than-expected 1QFY08 results; reduced estimates moderately

India Infoline: Operating in line, raising estimates but downgrade to Underperform

Godrej Consumer Products: 1QFY08: Price hikes aid revenues growth and retain margins

Dredging Corporation of India: Better-than-expected numbers led by in-chartered dredgers

SREI Infrastructure Finance: Growth on track, profit in-line, retain IL

Change in recommendations

Reliance Energy: Sasan in the bag'4,000 MW capacity addition on fast track


Infosys Technologies: Key takeaways from Infosys analyst meet; Reiterate outperform rating

Banks/Financial Institutions:

RBI quarterly credit policy a net negative for the banking sector
1QFY08 operational performance disappoints

Daily Result Updates - August 1 2007

Anagram Daily Call - Aug 1 2007

Anagram Daily Call - Aug 1 2007

Investment profile of higher income groups

India Unveiled

Trading Calls

Sell GMR Infra with stop loss of Rs 872 for target of Rs 685. This recommendation is with a one week perspective.
Sell Reliance Capital with stop loss of Rs 1210 for target of Rs 1075. This recommendation is with a one week perspective.
Buy Jagran Prakashan with stop loss of Rs 494 for short-term target of Rs 587.
Buy Federal Bank with stop loss of Rs 337 for short-term target of Rs 375.

Market Close: Recovery post CRR hike !

All eyes were on RBI's meet as it was supposed to decide on liquidity tightening. That kept the indices ranged and negative biased till the decision of CRR hike was announced by the RBI. Global markets bounced back today and India followed the same trend. But as soon as RBI announced CRR hike market indices took a dip. However, buying at lower levels across major sectoral indices in the final trading hours helped to offset the negatives on CRR hike. However we believe that the impact will be seen gradually. The major gainers for the day were on the Banking, Consumer Goods, Metals and Reality counters. Small and mid caps were also able to attract buyers. Europe was in green.

Banks have already reported a slowdown in the credit off take because of higher lending rates?CRR will further bring it down. We believe that the impact of the CRR hike would also continue to impact the corporate Indian on account of higher rates. We expect the fuel prices in the country to be hiked in the next few weeks because of higher crude prices. That would further add to the inflation. Let see how CRR hike helps to control inflation. We will bring more updates here for you..Keep watching this space.

Sensex was by 307 points at 15567.89. It was helped up by gains in HDFC (2006.5,+5 percent), L & T (2568,+5 percent), BHEL (1720,+5 percent), ACC (1057.7,+3 percent) and Ranbaxy (388.75,+3 percent). Restricting the gains were Maruti (831.05,-2 percent), Hero Honda (674.95,-2 percent), Tata Motors (699.9,-1 percent), HLL (206.8,-1 percent) and Infosys (1973.25,-1 percent).

Larsen & Toubro was one of the major gainers for the day. Company?s net profit for the June ended quarter was at Rs.377 cr vs Rs.157 cr, up by 140%. Net sales for the quarter were at Rs.4505 cr vs Rs.3469 cr, up by 30%. Company bagged orders to the tune of Rs.3,445 cr in the month of July itself. We believe that the company is well placed in the industry. Order book is large and it will continue to bag more orders. Valuations are high and growth as well !

Ceat delivered good set of numbers for the quarter June. The top line witnessed a growth of 8% YoY. The EBIDTA for the quarter was up by 248% to Rs.64 cr?thanks to lower rubber prices. The bottom line stood at Rs.30 cr against Rs.0.23 cr in the same quarter previous year. The proximity to the OEM?s (Original Equipment Manufacturers) which had witnessed a slow down in the last quarter which impacted the top line growth for the quarter. The revenues from the OEM?s were down by 10% while that from the replacement market were higher by 12%. We believe that other players are better placed in the industry compared to Ceat. Do read our note on the company to be published shortly for that.

Everest Kanto Cylinders (EKC) the largest manufacturer of CNG cylinders in the country ended 4% higher for the day. 60% of EKC's production goes to retrofitters and 25% to OEM. Demand and supply gap has made company enjoy huge profits and things will continue to be the same for next few years. CNG is more economical as compared to high crude may force more people to go for CNG. Govt. ruling is also helping. But we are not a buyer ! Do read our note to know more.

Technically Speaking: Indices rallied after RBI?s CRR hike news. Sensex made high of 15569 and low of 15225. Advances were much ahead of Declines in the ratio 1.7:1.Sensex churned a turnover of Rs 5255Cr. VJ stood to the stand that markets will test 15500 after the fall during midday. Markets bounced back as per the reading of VJ and closed above 15500.

Monetary Policy, Tata Motors, United Phosphorous, Omax Autos

Monetary policy review

CRR hike a surprise, but market takes it in its stride
In the first quarter review of the annual monetary policy, the Reserve Bank of India (RBI) has kept the policy rates unchanged as per expectations but hiked the cash reserve ratio (CRR) by another 50 basis points to 7%, which has come as a surprise. Higher money supply and reserve money growth coupled with risks from higher commodity and oil prices to price stability and inflation are likely to have forced the RBI to take the rather pre-emptive step. In addition to price stability the RBI has added maintenance of financial stability in the policy stance.


Madras Cement
Cluster: Cannonball
Recommendation: Buy
Price target: Rs3,700
Current market price:

Price target revised to Rs3,700

Result highlights

  • In Q1FY2008, Madras Cements' top line grew by 37.7% year on year (yoy) to Rs469 crore on the back of a 5.8% growth in volumes and a 30% rise in realisations. The rise in realisation was because of a Rs10-15 increase in the price per bag of cement in May and June in the south.
  • The operating expenditure rose sharply by 40% yoy to Rs286.6 crore on account of higher freight cost and higher employee expenditure. The costs per tonne grew by 32% yoy to Rs1,976 because of a 26% increase in the variable costs.
  • The operating profit margin on a year-on-year (y-o-y) basis was lower by 100 basis points at 39.5% whereas on a sequential basis, it was higher by 830 basis points on account of a higher realisation growth. The higher realisations also helped the earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne to grow by 26% yoy to Rs1,260.
  • During the quarter, the interest cost doubled to Rs8 crore, thanks to higher borrowings, whereas the depreciation provision grew by 37.4% yoy to Rs23.9 crore.
  • Consequently, the profit after tax (PAT) grew by 27.5% yoy to Rs100.5 crore, which was in line with our expectations.
  • The company is incurring a capital expenditure (capex) of Rs1,474 crore to expand its capacity by 4 million metric tonne (MMT) in the next one year. The 2MMT expansion at Jayantipuram (including a 1MMT grinding unit at Kolkata) will be commissioned by the third quarter of FY2008, whereas the remaining 2MMT capacity at Ariyalur including an additional 56 megawatt (MW) wind power plant will be commissioned by the second quarter of FY2009.
  • Taking cognisance of the higher volume growth and the improved pricing scenario after the price freeze, we are upgrading our FY2008 earnings per share (EPS) estimate by 18% to Rs368 per share and FY2009 EPS estimate by 23% to Rs443.
  • The higher capacities will drive the volume growth of the company going forward whereas the improved pricing scenario will improve its profits. The captive power plants (CPPs) will help lower the power & fuel cost. The company will be able to save income tax in FY2009 to the extent of the accelerated depreciation available on wind power plants, which will positively increase the cash flows of the company. At the current market price (CMP) of Rs3,328,the stock is trading at a valuation of 7.5x its FY2009 earnings which almost captures the near-term opportunity. Thus we maintain our Buy recommendation with a revised price target of Rs3,700.

Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs340
Current market price: Rs238

Strong performance

Result highlights

  • Subros' Q1FY2008 results are above our expectations, thanks to a strong improvement in its profitability. The net sales of the company grew by 11.4% to Rs157.7 crore in the quarter led by a volume growth of 17%. The strong performance of one of its key customers, Maruti Suzuki India, particularly contributed to Subros' impressive performance.
  • The operating profit margin (OPM) improved by a good 150 basis points to 12.2% during the quarter due to rising efficiencies and savings in logistic cost as a result of better operations from its newly commissioned Gurgaon plant. Consequently, the operating profit for the quarter grew by 26.1% to Rs19.2 crore.
  • Both interest and depreciation charges were higher due to the capital expenditure (capex) incurred by the company for the new plant and efforts to raise its capacity further. Consequently, the company reported a 10.1% growth in its net profit to Rs6.6 crore.
  • We maintain our positive outlook on Subros. We also understand that the company has recently bagged a huge order from Suzuki for the export vehicle that shall be manufactured from the Japanese company's Manesar plant. Also, the company shall be supplying to Mahindra and Mahindra for the latter's yet to be launched Ingenio range.
  • At the current levels, the stock is available at attractive valuations of 5.3x FY2009E earnings and an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 2.5x. We maintain our Buy recommendation on the stock with a price target of Rs340.

Omax Autos
Cluster: Apple Green
Recommendation: Book Out
Current market price: Rs71.5

Book out

Result highlights

  • Omax Auto's Q1FY2008 results were better than our expectations due to a higher than estimated top line and stable margins during the quarter.
  • The net sales of the company grew by a good 7.5% to Rs172.3 crore in the quarter, led by an 8.3% growth in the domestic sales to Rs165 crore. The exports for the quarter were disappointing at Rs7.3 crore against Rs8 crore in the same quarter last year.
  • The operating profit margin (OPM) for the quarter declined by 80 basis points year on year (yoy) and was flat sequentially at 9%. Consequently, the operating profit declined by a marginal 0.7% to Rs15.6 crore.
  • A higher capital expenditure (capex) led to an increase in both the interest and the depreciation cost. This led to a 29.3% decline in the profit to Rs4 crore.
  • Omax Auto has rendered a mixed performance in the past few quarters. Though its margins have improved a bit, the company has fallen short of meeting its export targets. The entry into the business of components for commercial vehicles would de-risk its business model a little. However, we expect the company to face the heat in the domestic market due to a slowdown in the two-wheeler industry. Moreover, the cut-throat competition in the ancillary industry might restrict the margin growth for Omax Auto. We thus expect FY2008 to be weak for Omax Auto, both in terms of top line and bottom line growth.
  • We expect the company to report a 27.6% decline in its earnings in FY2008 but recover in FY2009, with better two-wheeler volumes as well as the commencement of supplies to Tata Motors. We expect its earnings per share to reach Rs11.3 in FY2009. At the current market price, the stock is trading at 6.3x its FY2009E earnings and is available at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 4x. Considering the slowdown in domestic market in FY2008, slower offtake in its exports and restricted margins, we are closing our recommendation on the stock. We recommend investors to book out.

Tata Motors
Cluster: Apple Green
Recommendation: Buy
Price target: Rs792
Current market price: Rs699

Q1FY2008 results: First-cut analysis

Result highlights

  • Tata Motors Q1FY2008 results were below our expectations due to lower than expected margins during the quarter. However, the bottom line was buttressed by a higher foreign exchange (forex) gain on account of the appreciation in the rupee during the quarter.
  • The net sales for the quarter grew by 5.3% to Rs6,056.8 crore on the back of a 1.3% volume growth and a 3.9% realisation growth during the quarter.
  • However, high raw material cost and lower volumes, particularly in the commercial vehicle segment, adversely affected the margin (excluding the forex gain/loss). The margin declined to 9% from 11.9% in the same quarter of the last year. Hence, the operating profit dropped by 19.9% to Rs546.3 crore.
  • A little higher interest and depreciation charges led to a drop of 39.4% in the adjusted net profit to Rs259 crore. After accounting for the forex gain of Rs205.9 crore during the quarter, the net profit grew by 22.4% to Rs466.76 crore.
  • On consolidated basis, the company's sales grew by 13.3% to Rs7,631.3 crore while the net profit excluding the forex gain declined by 27.7% to Rs308.2 crore. The profit after extraordinaries and forex adjustments increased by 35.7% to Rs516.1 crore.
  • At the current levels, the stock trades at 10.6x its FY2009E consolidated earnings and is available at an enterprise value/earnings before interest, depreciation, tax and amortisation of 5.3x. We maintain our Buy recommendation on the stock with a price target of Rs792.


United Phosphorus

Focus on Latin American markets for growth
We attended the conference call of United Phosphorus Ltd (UPL) to discuss Q1FY2008 results. We present the key takeaways from the call

Investor's Eye - July 31 2007