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Thursday, September 20, 2007

Tulip IT Services, Garware Offshore, Jubilant Organosys, Punjab National Bank

Tulip IT Services, Garware Offshore, Jubilant Organosys, Punjab National Bank

India Sugar

India Sugar

India Economics

India Economics

Eveninger - Sep 20 2007

Eveninger - Sep 20 2007

Auto, Banking, Cement, Pharma

Auto, Banking, Cement, Pharma

Indices end flat while realty outperforms

The bulls took a breather after catapulting Sensex and Nifty to all-time highs on Wednesday. The benchmarks were stuck in a range as capital goods and auto stocks advanced, technology declined and the rest were rather passive. Frontline stocks lacked fresh buying interest.

“Traders are reluctant to buy with the absence of a short-term trigger. The next big event will be the announcement of quarterly earnings from India Inc. Till then, I expect the market to consolidate,” said Suresh Kumar Iyer, technical analyst at Asit C Mehta Investment Interrmediates.

The National Stock Exchange’s Nifty finished just 15 points or 0.32 per cent higher at 4747.55. The index traded within the band of 4721.15-4760.85.

“The Nifty faces major resistance in the 4760-4790 region. Only if the index closes above these levels on two consecutive sessions, will we see a further rise,” Iyer said.

The Bombay Stock Exchange’s Sensex ended up 25 points or 0.15 per cent at 16,347.95. From a low of 16,261.36 in early trade, it made a new high of 16,415.88.

The gains were backed by Reliance Energy (up 4.4%), Mahindra& Mahindra (3.93%), ITC (3.77%), Larsen & Toubro (2.87%), and Hindalco Industries (1.66%).

But the real action was from the real estate space. With a hope that the Reserve Bank of India will follow the US Federal Reserve and cut interest rates, realty shares surged. The BSE Realty Index ended 6.85 cent higher. Unitech shot up 12.43 per cent, DLF added 5.13 per cent, Indiabulls Realty gained 9.42 per cent and Sobha Developers was up 3.8 per cent.

The technology pack, on the other hand, took a bad knock as money flows from foreign investors pushed the rupee to a high of 39.88 to the US dollar. The BSE IT Index ended 2.24 per cent lower. Wipro was down 3.27 per cent, Infosys Technologies shed 2.89 per cent, Tata Consultancy Services lost 2.12 per cent and Satyam Computer ended 1.91 per cent lower.

The derivatives segment saw a build up of long positions. Nifty September futures ended almost at par with the spot index after trading at a premium earlier in the session. Open interest in the contract stood at 3.55 crore (provisional).

Going forward, Iyer advises traders to book profit at current levels and be choose about the stocks one buys. “For the medium term, one could buy selective power stocks and PSU banking stocks,” Iyer added.

Sensex ends up 25pts; ITC surges 4%

Following the huge 654-pt rally yesterday, the Sensex opened marginally (19 points) higher at 16,342, but soon slipped into red to a low of 16,261. Fresh buying at lower levels helped the index erase losses and rebound into the positive zone.

The index touched a new intra-day peak at 16,416 - up 155 points from the day's low. The Sensex, thereafter, exhibited range bound movement before settling with a gain of 25 points at 16,348.

The BSE Realty index zoomed nearly 7% to 9044. While the IT index dropped over 2% to 4391, the FMCG index gained 1% at 2166.

The market breadth was negative - out of 2,855 stocks traded, 1,589 declined, 1,212 advanced and 54 were unchanged today.


Reliance Energy soared 4.4% to Rs 988, Mahindra & Mahindra zoomed 4% to Rs 770.

ITC surged 3.8% to Rs 194. Larsen & Toubro gained 3% at Rs 2,746.

Hindalco and Grasim moved up 1.6% each to Rs 162 and Rs 3,380, respectively. Tata Motors added 1.4% to Rs 732.


Wipro and Infosys plunged around 3% each to Rs 433 and Rs 1,800, respectively. TCS and Satyam dropped 2% each to Rs 1,001 and Rs 421, respectively.

Maruti slipped 1.7% to Rs 910. ACC, Hindustan Unilever and Ranbaxy declined 1.3% each to Rs 1,138, Rs 214 and Rs 408, respectively.

Dr.Reddy's and Ambuja Cements were down 1% each at Rs 639 and Rs 146, respectively.


DLF topped the value chart with a turnover of around Rs 372.70 crore followed by Wipro (Rs 230 crore), Magnum Ventures (Rs 161.40 crore), Indiabulls Realestate (Rs 137.50 crore) and Reliance Natural Resources (Rs 136.50 crore).

Magnum Ventures led the volume chart with trades of around 2.91 crore shares followed by Reliance Natural (2.48 crore), IKF Technologies (1.90 crore), Tata Teleservices (1.29 crore) and Ispat Industries (1.12 crore).

IPO Note: CCCL: constructing India

Consolidated Construction Consortium Ltd (CCCL) is a Chennai based company, incorporated in 1997 which provides integrated turnkey construction services in the industrial, commercial, infrastructure and residential sectors of the construction industry. CCCL was founded by 4 Promoters, who are qualified professionals in the area of civil engineering and construction. The promoters were ex L&T employees having more than 20 years of experience construction industry.

CCCL activity includes
(i) construction services such as construction design, engineering, procurement, construction and project management.
(ii) construction allied services such as mechanical and electrical, plumbing, fire fighting, heating, ventilation and air conditioning, interior fit out services and glazing solutions.
CCCL has two subsidiaries, Consolidated Interiors Limited and Noble Consolidated Glazings Limited. The company provides services directly through subsidiaries or out sourced to third parties.

As of now CCCL has executed 334 projects. Out of which 172 commercial projects, 104 industrial, 14 infrastructure projects and 44 residential projects across 14 states and union territories in India. The total built up area of the constructed projects is about 19 mn sq ft, comprising of 12.68 mn sq ft in commercial sector, 3.84 mn sq ft in industrial sector and 2.48 mn sq ft in residential sector.

CCCL revenues can be broadly classified in to Commercial, Industrial, Residential, Building products and Infrastructure. For FY07 the Commercial division contributed 59% of revenues, Industrial division contributed 34% of revenues, Residential 3%, Building products 3% and rest from infrastructure. CCCL has good presence in South India. It drives 92% from southern region, 5% from northern region, 2% from western region and the rest 1% from eastern region. CCCL has recently entered in western and eastern region and aims to extend its operation through out India. The company also plans to explore new overseas opportunities in Middle East and has recently entered into an agreement for a JV with Trade line LLC, Dubai to capitalize the increasing construction activities in Middle East.

CCCL projects in commercial sector includes construction of IT/ITES Parks, Hospital, Hotels, Hostels, Resorts, Malls, Multiplexes, Auditorium, Educational buildings etc. Its industrial sector includes construction of factory Building, Bio-parks, Bottling plants etc. On the other hand Residential division includes Housing projects, multi-storey residential complexes etc. Infrastructure includes construction of Airport terminal buildings, water supply scheme, power stations, bridges etc. CCCL clients include both private and public sector companies such as Infosys Technologies, Ascendas IT Park (Chennai), Khivraj Technology Park Private Ltd, Manipal University, Airport Authority of India Limited, Hi-Tech Carbon (a unit of Aditya Birla Nuvo ) and the Infosys Foundation. Its public sector clients include the AAI and public utility works like power distribution entities and water supply boards.

As on 31st July 2007, the total value of order book is Rs 2050 cr which has to be completed in 12-15 months. The company will be executing 146 projects across various states in India. Out of the total order book 72% is of commercial, 15% industrial, 12% infrastructure and balance 1% in residential. The company is growing aggressively in commercial and industrial sectors as it feels these are main growth drivers.

CCCL owns 17.43 acres of land on the outskirts of Chennai and 3.26 acres of land in Bangalore. The company and its subsidiaries have acquired approximately 127 acres of land in Tuticorin District, Tamil Nadu. It proposes to transfer all of the aforesaid land to subsidiary, CCCL Infrastructure Limited. CCCL is in the process of acquiring approximately 9,467 sq ft of space in New Delhi which intends to use for its operations and has already made an advance payment of Rs 4.23 cr.

CCCL has recently proposed the development of food processing SEZ and has received a formal approval from the Govt for setting it up. It has also earmarked approximately 300 acres of land in Tuticorin District for this. CCCL intends to develop the above SEZ through a joint venture which may involve equity participation by third parties. The funding for this would be met through proceeds of IPO issue.

The company's attempt at is the opportunity of SEZ business and the Govt is still approving many of them. The growth potential is good and there are only few players in this segment. CCCL is attempting to capitalise the huge opportunities in SEZ play and this could be the major driver for the company's revenues in future.

CCL Initial Public Offer of Rs 170-189 cr has been fixed with a price band of Rs 460- 510 per share. The current paid up capital is 33.25 mn shares and the company will increase it by 3.7 mn shares. The total IPO proceeds Rs 189 cr would be utilized to finance the acquisition of construction infrastructure, investment for subsidiaries (to acquire land for SEZ), to meet the expenditures towards skill and management development centre and for repayment of loans.

For the FY07 the revenues grew by 100% to Rs 850 cr from Rs 425 cr. The bottom line also grew by 144% to Rs 46 cr from Rs 20 cr. The Ebidta margins stood at 8%, where the Ebidta profits grew by 99% to Rs 67 cr on yoy basis. The growth was largely from commercial and industrial sectors.

Valuation are expensive and not compelling at all. At the higher price band of Rs 510 as the stock trades at 41 times of FY07 earnings. The business environment is good, with a strong order book. We believe macro scenario is good and one can invest for listing gains at cut off .

The risk to the business is from its unrelated activity. CCCL intends to develop a Food Processing SEZ. It lacks the experience of the same. We believe markets tend to discount too much of the positives. Another risk is from higher raw material prices for their fixed priced contracts. In FY07 company?s revenue from fixed price contract was 28%.

In India real estate investment is expected to double as much as made in the previous 5 years. Investments in real estate will be driven primarily by housing, which is expected to account for nearly 90% of the total real estate sector as defined by CRISIL Research. Investments in commercial construction are expected to grow faster than investments in housing, mainly due to a spurt in office space construction, driven by information technology/IT enabled services (IT/ITES). Over the next 5 years (2006-07 to 2010-11), real estate investments are expected to grow to Rs 18,339 billion from Rs 10,885 billion invested over the last 5 years (2001-02 to 2005-06).

Market Close: Consolidation after new high!

After yesterday's phenomenal rally markets witnessed some consolidation at higher levels. Indian indices started the day on a fair note on back positive global cues but shortly volatility was seen. Indices moved in and out of positive grounds through out the day. Choppiness was seen as investors booked profit at higher level which kept the indices down. Markets finally managed to close marginally high with modest gains. Even though the indices were ranged bound, turnover on BSE remained high for the second day in a row.

Euphoria continued in Reality stocks. Except Banking, Health Care and IT sector most of the sectors ended in green. IT stocks were hit very badly due to Rupee appreciation against US $. Rupee touched nine year high and trading at 39.87. Mid and Small caps closed in line with front line indices. European markets are in red

Sensex closed up by 25 points at 16347. It was helped up by gains in REL (+4.53%), ITC (+3.69%), M&M (+3.25%), L&T (+2.93%) and Grasim (+1.56%). Restricting the gains are Wipro (-3.25%), Infosys (-2.88%), TCS (-2.17%), ACC (-1.90%) and Maruti (-1.90%).

Cement is the pure domestic play and it's in the sweetest spot ever in its lifetime. Capacity additions are expected to change the picture in next 18 months. The companies have hiked prices by Rs 3 per bag, especially across the western region. The major players in western region are Ambuja Cement, Ultratech, Shree Cement, ACC and Binani Cement are the major beneficiaries. This is certainly good for the company's; due to supply demand mismatch the companies are taking the benefit. We expect the companies to post good results for another 6-8 quarters. But valuations are too expensive at this level. We are not comfortable here at this level to enter. One can look for down side for long term opportunity.

Debeers is the biggest diamond miner globally with 50-60% market share in value (43% in volumes). For the years diamond industry had an oligopoly with Debeers controlling 70-80% of the market. This has gradually reduced with new players emerging. Argyle is the second largest player. It is the largest diamond producer in the world by volume but not in value due to the low quality diamonds (Brown, Pink and Red). It is the only known significant source of pink diamonds, producing 90 to 95% of the world's supply. Russia is the third largest player with 25% of market share by value. For years, Russia sold nearly all its production through De Beers' Central Selling Organisation. In 2006 European Commission disallowed Debeers to buy diamonds from Russia after 2009 in order to open market to more competition. Alrosa (23% market share) is the major supplier to Debeers from Russia. However in July 2007 EU Justice overruled the European Commission restriction on De Beers. Competition is emerging for Europe and Australia which made Debeers concentrate on emerging markets for growth. Most of the DTC (marketing arm of Debeers) brands are with Gitanjali. Gitantali hit a lottery with the 200 acre SEZ which it has in Hyderabad. The new airport is planned just next door and those are the positives. There are other SEZs as well. All in all, we believe that the story is not ripe yet. Major business is commodity and ROEs are low. The real estate seems to be a diversion where we are not comfortable.

Technically Speaking: It was a choppy session for the whole day before closing in green. Sensex touched intraday high of 16416 and low of 16261. Overall breadth was in favor of Declines. The Advances stood at 1196, while Declines at 1574. The turnover was extremely good for the second day in a row as it chruned out Rs 7033 cr. Sensex has done our target of 16100+ which we have been advocating for long. The rally is strong and 16600 is the next target for Sensex..

Realty stocks rally in a volatile market

The mood was extremely bullish in the first hour of the trading session as the Sensex recorded a new high of 16,416 on continued optimism regarding foreign investment inflows. However, IT companies suffered a setback on the rising rupee, as the rupee breached its nine-year high of 39.90 against US dollar. Despite registering new high, the market exhibited weak trend as the trading progressed. A negative open in European markets saw the Sensex touch the day's low of 16,261 by the afternoon. Exhibiting sharp volatility thereafter, the Sensex recovered on sustained buying in capital goods and metal stocks. Although action in the frontline stocks was subdued, realty stocks stole the show as the BSE Realty index rose over 6% on the back of solid gains in Unitech, Indiabulls Realestate and DLF, which appreciated by more than 4-12% each. The Sensex finally ended the session marginally above its previous close at 16,348, up 25 points, while the Nifty gained15 points to close at 4,748.

Among the sectoral indices, the Realty index led the upsurge with gains of 6.85% at 9,044 followed by the BSE CG index (up 1.98% at 14,392), the BSE Metal index (up 1.41% at 12,723) and the BSE FMCG (up 1.16% at 2,166). However, the BSE IT index slipped 2.24%. The market breadth was negative. Of the 2,855 stocks traded on the BSE, 1,589 stocks declined 1,212 stocks advanced and 54 stocks ended unchanged.

Out of the 30 Sensex stocks, 12 managed to end in the green while 18 stocks ended with losses. Reliance Energy was the leading gainer and soared 4.40% at Rs988. M&M jumped 3.93% at Rs770, ITC shot up by 3.77% at Rs194, L&T advanced 2.87% at Rs2,746, Hindalco moved up by 1.66% at Rs162, Grasim added 1.56% at Rs3,380 and Tata Motors gained 1.36% at Rs732. Among the laggards Wipro dropped 3.27% at Rs434, Infosys shed 2.89% at Rs1,799, TCS declined by 2.12% at Rs1,001, Satyam fell 1.91% at Rs421 and Maruti Udyog slipped 1.71 at Rs910.

Over 2.90 crore Magnum Ventures shares changed hands on the BSE followed by Reliance Natural Resources (2.48 crore shares), IKF Technologies (1.90 crore shares), Tata Teleservices (1.29 crore shares) and Ispat Industries (1.12 crore shares).

DLF registered a turnover of Rs372 crore on the BSE followed by Wipro (Rs230 crore), Magnum Ventures (Rs161 crore), Indiabulls Realestate (Rs137 crore) and Reliance Natural Resources (Rs136 crore).

All-time closing highs for Sensex and Nifty

The market posted small gains after moving in and out of positive zone since mid-morning trade. It had opened on a firm note, but immediately slipped in the red on selling pressure. The market rebounded from lower level in mid-afternoon trade. Turnover on BSE remained high for the second day in a row.

Key Asian markets, which opened before Indian markets, settled with gains today, 20 September 2007. However, European markets, which opened after Indian market, were trading weak today, 20 September 2007.

The 30-shares BSE Sensex was up 25.20 points or 0.15% at 16,347.95, an all time closing high. It opened slightly higher at 16,341.55 and advanced further to hit an all-time high of 16,415.88. It also slipped to a low of 16,261.36

At the day’s high of 16,341.55, Sensex had risen 93.13 points for the day. At the day’s low of 16,261.36, the Sensex had lost 61.39 points for the day. Sensex oscillated 154.52 points in the day.

The S&P CNX Nifty was up 15.20 points or 0.32% at 4,747.55, an all time closing high. It struck an all-time high of 4759.55 earlier today. The Nifty September 2007 futures settled at 4,749.50, a premium of 1.95 points as compared to spot closing

The market breadth was negative on BSE as small and mid-cap shares came under selling pressure. 1574 shares declined as compared to 1196 that advanced. 56 remained unchanged. This was in contrast to strong breadth in early trade when 1230 shares had risen, 787 had declined and 49 were unchanged.

The BSE Mid-Cap index was up 0.23% to 7,132.71. It hit all-time high of 7,177.65 today. The BSE Small-Cap index also hit an all time high of 8,962.81. It settled 0.06% higher to 8,876.07.

BSE clocked a turnover of Rs 7033 crore as compared to Rs 7486 crore yesterday, 19 September 2007

The NSE F&O turnover was Rs 58327.40 crore as compared to Rs 68643.65 crore yesterday, 19 September 2007

Most of the sectoral indices on BSE posted gains. BSE Auto Index (up 0.84% at 5,136.85), BSE PSU index (up 0.52% to 7,682.63), BSE FMCG Index (up 1.16% at 2,165.71), BSE Metal Index (up 1.41% at 12,723.31), BSE Capital Goods Index (up 1.98% at 14,392.46), The BSE Consumer Durables index (up 0.43% to 4,764.10), BSE Realty index (up 6.85% to 9,044.40), BSE Oil and Gas Index (up 1.07% at 9,019.56), outperformed the Sensex.

BSE Health Care Index (down 0.81% at 3,674.19), BSE Bankex (down 0.03% at 8,688.68), BSE IT Index (down 2.24% at 4,390.75), and BSE TecK index (down 1.10% to 3,580.26) were underperformers

Among the 30-member Sensex pack, 17 declined while the rest advanced.

IT pivotals kept on declining as the day progressed on fresh selling as a steep interest rate cut by the US Federal Reserve on 18 September 2007, set the rupee on fire and it hit nine-year high above 40 per US dollar. Three out of top 4 losers in Sensex were IT pivotals.

India’s third largest software services exporter Wipro lost 3.22% to Rs 433.70 on huge volumes of 53.45 lakh shares. Two block deals of 25.25 laklh shares each were struck in the counter on BSE at an average price of Rs 432.50 per share by 13:17 IST. It was the top loser from Sensex pack.

Other IT pivotals Satyam Computers (down 1.75% to Rs 422), Infosys Technologies (down 2.88% to Rs 1799.90), and TCS (down 2.17% to Rs 1000.30), also edged lower.

The rupee was trading at 39.69 against the dollar, stronger than Wednesday (19 September 2007)'s closing of 40.20/40.21. The spot rupee had closed at 40.20 in May 1998. A firm rupee impacts the margins of IT companies, as they derive over 50% of their revenues from exports.

Ranbaxy Laboratories (down 1.43% to Rs 407), Maruti Suzuki India (down 1.93% to Rs 908), and ACC (down 1.56% to Rs 1135) were the other losers from Sensex pack.

India’s top private sector utility company in terms of revenue Reliance Energy (REL) surged 4.76% to Rs 991.15 on 11.25 shares. The stock hit an all time high of Rs 998.60. It was the top gainer from Sensex pack. As per reports, REL is scouting for coal mines in Indonesia, Australia, Africa and Mozambique and it sees infrastructure projects such as road and rail transport as key growth drivers. It also plans to raise $12.0-$12.5 billion in debt over the next seven to eight years to expand generation capacity nearly 16 times to 15,000 mega watt

Mahindra & Mahindra (up 2.57% to Rs 760), Hindalco Industries (up 1.80% to Rs 162.30) and ITC (up 3.48% to Rs 193.35) were the other gainers from Sensex pack.

India’s largest private sector entity by market capitalisation and oil refiner Reliance Industries (RIL) advanced 1.02% to Rs 2195 on 5.96 lakh shares. It struck an all time high of Rs 2200 on BSE in late trade. The Mukesh Ambani-led RIL on Wednesday, 19 September 2007 became the first company to attain a market capitalisation of Rs 3,00,000 crore.

India's largest engineering & construction firm by revenue Larsen & Toubro climbed up 2.89% to Rs 2747 on reports that the company is eyeing a stake in Feedback Ventures, a leading integrated infrastructure services firm.

India’s largest oil exploration company in terms of market capitalisation Oil and Natural Gas Corporation (ONGC) rose 0.39% to Rs 905. It slipped from its day’s high of Rs 924.90. It has reportedly sought a steep hike in the price of gas to Rs 4,500 per thousand cubic metre from the present Rs 3,200 per thousand cubic metre. ONGC hopes to gain Rs 2000 crore in revenues annually if prices were raised.

Meanwhile, ONGC Videsh, the overseas investment arm of ONGC won three exploration blocks in Columbia.

DLF was the top traded counter on BSE with total turnover of Rs 372.22 crore followed by Wipro (Rs 231.32 crore), Indiabulls Real Estate (Rs 137.38 crore), Reliance Natural Resources (Rs 136.54 crore) and Reliance Industries (Rs 130 crore).

Real estate shares surged for the second straight day on expectation of softer interest rates after US Federal Reserve cut the rate by half percentage point. Soft interest rates would raise demand for real estate properties. Unitech (up 12.38% to Rs 329), Indiabulls Real Estate (up 10% to Rs 577), IVR-Prime Urban Developers (up 6.78% to Rs 414.30) and Sobha Developers (up 4.01% to Rs 827.90) surged.

DLF moved higher by 4.16% to Rs 742.90 on recent reports that the company is getting into the retail of luxury brands and is in talks with some well-known retail chains, including Georgio Armani, Versace and Dolce Gabbana. DLF is in talks with 10-12 brands. Also another set of reports stated that DLF will tie up with a foreign major Carrefour for the supermarket business at a later stage.

Shipping Corporation of India gained 1.38% to Rs 210 on reports that firm has floated four joint venture companies for its proposed foray into four different ventures.

SREI Infrastructure Finance rose 0.10% to Rs 113.40 after it approved to issue up to 2.50 crore preferential warrants to promoters.

Punj Lloyd rose 0.80% to Rs 305.80 on reports that Pipavav Shipyard is raising $125 million private equity through pre-IPO deals.

IndusInd Bank soared 8.24% to Rs 77.50. As per reports it plans to set up an insurance broking subsidiary which will help the bank to create a separate subsidiary for wealth management services. Both subsidiaries will be set up in this fiscal, even as the bank expands its partnerships with mid-sized overseas banks, in locations with sizeable chunks of high net worth NRIs

Sun TV Network jumped 6.24% to Rs 354.20. Earlier this month, Sun TV had acquired 48.9% stake in Red FM, promoted by NDTV. In return (on a swap ratio basis), the Red FM promoters had picked up 35% stake in South Asia FM, the subsidiary of the company.

Mangalore Refinery and Petrochemicals vaulted 5.42% to Rs 51.50. The company is reportedly foraying into retail marketing of petroleum products under the brand name HiQ. The first three retail outlets would be in Karnataka followed by fifteen such outlets in various parts of South India including Kerala.

Tata Chemicals edged higher by 5.42% to Rs 281.90. The company had raised $100 million through a private placement in the United States in August 2007, a few days before India tightened rules on foreign borrowing. The private placement was led by the Bank of America, and the proceeds would be used for purposes including acquisitions.

Ashapura Minechem galloped 6.35% to Rs 427.90 after its shareholders approved issue of 1:1 bonus shares.

Simplex Infrastructures rose 2.88% to Rs 397 after it said it had secured orders worth Rs 802 crore.

Tulip IT Services rose 0.98% to Rs 870 after it bagged the West Bengal state wide area network project worth Rs 53 crore.

Britannia Industries rose 1.62% to Rs 1540. As per reports, Groupe Danone is ready to quit Britannia Industries. Danone has recently sold its biscuit business in all markets worldwide, except India, to Kraft Foods. Groupe Danone and Wadia together hold 50.96% in Britannia through Associated Biscuits International, which is a subsidiary of UK-registered ABI Holdings. ABI Holdings is 50:50 JV between Groupe Danone and Wadia group.

Bharat Petroleum Corporation rose 3.69% to Rs 322 after its board approved the proposal to form a joint venture company in Singapore in association with Matrix Marine Fuels LLC (USA). Both the companies will hold an equal participation in the venture.

Meanwhile, after discussing the nuclear deal for two hours yesterday, 19 Seoptember 2007, neither the UPA nor the Left budged an inch from their earlier position on the contentious Hyde Act. The government repeated that once the 123 Agreement had been ratified in the US Congress, national laws including the Hyde Act would become irrelevant. The Left, led by CPI (M) General Secretary Prakash Karat, rejected this argument and reiterated that the Hyde Act would supersede the 123 Agreement.

The discussions will continue further at the next meeting of the committee scheduled to be held on 5 October 2007

European markets, which opened after Indian markets, were trading weak, with key benchmark indices in United Kingdom (down 0.60% to 6,421.20), Germany (down 0.53% to 7,709.96) and France (down 0.70% to 5,690.03) declining.

Key Asian markets settled with gains today, 20 September 2007. Japan's Nikkei (up 0.20% at 16,413.79). Hang Seng (up 0.57% at 25,701.73), Taiwan Weighted (up 0.63% at 8,983.03), and Shanghai Composite (up 1.39% to 5,470.06) gained.

However Singapore's Straits Times slipped 1.17% at 3,552.46

US stocks posted steady gains overnight, 19 September 2007 building on a huge rally the previous day as markets cheered the US Federal Reserve's cut in key interest rates. The Dow Jones Industrial Average climbed 76.17 points or 0.55% to 13,815.56. The tech-heavy Nasdaq Composite index rose 14.82 points or 0.56% to 2,666.48 while the broad-market Standard & Poor's 500 index gained 9.25 points or 0.61% to 1529.03

NYMEX crude for October delivery held near $82 a barrel, aided by a bigger than expected drawdown in US crude inventories, after hitting an all-time intraday high of $82.51 on Wednesday, 19 September 2007.

National Stock Exchange (NSE) has decided to launch a new index comprising of 50 stocks from the mid-cap segment. The index will be called Nifty Midcap 50. The index will be launched from 25 September 2007. Nifty Midcap 50 index has a base date of 1 January 2004 and a base value of 1000, NSE said in a circular today.

Minister for petroleum and natural gas Murli Deora today, 20 September 2007, ruled out immediate hike in price of petroleum products, including petrol and diesel. Though international crude prices are going up, the government's view is that the subsidy on petroleum products should continue as in the case of food and fertilisers, Deora said

Supreme Infrastructure

Promoted by Bhawanishankar Sharma and his two sons Vikram and Vikas, Supreme Infrastructure is a Mumbai-based small construction company with primary focus on road construction. Traditionally, road construction is a low-margin business. But with presence in quarrying, crushing, wet batch mixing, asphalt and ready-mix concrete (RMC), the company is well integrated to earn healthy margin in constructing roads.

The RMC plants, one at Powai in Mumbai and another at Bhiwandi outside Mumbaiwith, have an aggregate capacity to produce 90 cubic meters of RMC per hour. Another RMC plant, with a capacity of 60 cubic meters of RMC per hour, is being installed at Powai. There is a proposal to set up an RMC unit at Citradurga in Karnataka. This will add another 30 cubic meters of RMC per hour.

The wet mix plant and the asphalt plant are located at Powai. The quarrying and crushing unit is in Bhiwandi. Their current capacity is 80 tonnes an hour of wet mix macadam and 85 tonnes per hour of asphalt, respectively. After meeting inhouse requirement, RMC, wet mix and asphalt are sold to other users.

Apart from setting up an RMC plant to cater to the needs of the National Highway (NH) 4 Western Transport Corridor project in Karnataka, Supreme Infrastructure is constructing a new crushing plant. A Rs 90-crore order for construction of an IT park from Supreme Housing & Hospitality (SHHL), a company set up by promoters, marks Supreme Infrastructure’s foray into construction of office blocks.

To meet the funding requirement for these projects, augment plant and machinery (P&M), and meet long-term working capital requirement, Supreme Infrastructure is tapping the capital market. The company has budgeted Rs 14.33 crore for purchase and upgrade of P&M, and Rs 6.88 crore for buying P&M required for road construction, and Rs 17.90 crore for long-term working capital requirement.


The unexecuted portion of the order book was Rs 299.84 crore on 1 August 2007. The current order book stands at Rs 330 crore including RS 30-crore orders for supply of RMC. Excluding the supply order for RMC and Rs 90-crore order for building the IT park, the remaining the orders of Rs 210 crore are for road projects.

Enjoys higher margin compared with peers operating in the same segment despite the construction business largely skewed towards the thin-margin and highly competitive road segment. Has been historically earning a net profit margin of 10%-12% in road projects. The integration into quarrying, crushing, wet maccadam and RMC allows for better margin in road projects compared with peers.

Is registered as class ‘I’ by the public and works department (PWD) of the Maharashtra government and as ‘A’ class contractor by the Bombay Municipal Corporation. Entitled to bid for and accept works and orders as per its bidding capacity.


Prospects largely skewed on single segment: road construction. About 89% of the current order book (as of August 2007) accounted by three projects: two road projects and another construction of IT park of the promoter group company. Has little experience in executing building construction, specially IT parks.

May have to suffer bad publicity and financial losses due to litigations by environmentalists against its RMC, asphalt and quarrying /crushing activities (which form its backward integration and provide competitive strength) in and around Mumbai.

Till year ending March 2007 (FY 2007) had claimed Section 80IA benefit for Rs 15-crore projects cumulatively. But has stopped claiming the benefit from FY 2008. Has not provided / charged / reversed the Section 80IA benefit claimed subsequent to the withdrawal of this benefit in the Union Budget for 2007-08.

Cash flow from operations has increased to a negative Rs 2.77 crore in FY 2007 from a negative Rs 46 lakh in FY 2006 on account of higher sundry debtors and inventories. Sundry debtors rose to Rs 16.43 crore in FY 2007 compared with Rs 3.79 crore in FY 2006. Inventories were up to Rs 14.05 crore in FY 2007 from Rs 1.82 crore in FY 2006.


Sales revenue clocked a CAGR of 67.78% to touch Rs 81.66 crore in FY 2007 from Rs 6.14 crore in FY 2003. EPS on post-issue expanded equity of Rs 13.87 works out Rs 9.2 in FY 2007. The offer price discounts this by 10.3x & 11.7x on the lower and upper price band of Rs 95 and Rs 108, respectively. As comparable peers such as PBA Infrastructure, MSK Projects and Roman Tarmat are available at a P/E of 11.6, 15.7 and 23 times, the issue is reasonably priced.

Market Mantra

Market Mantra

Futures, Options - Sep 20 2007

Futures, Options - Sep 20 2007

Market Gossip - Morepen Labs

Allotment of shares and naked warrants through

Grey Market Premium Update

The grey market premiums for Indowind and Magnum Ventures have been going horribly wrong - this is mainly due to the market euphoria and bunch of operators.

We would suggest that you take these grey market premiums not to seriously.

You should just look at grey market premiums for large issues which is mostly accurate

Insurance, Automobiles

Insurance, Automobiles

Market Gossip - Bata India

We hear that about land sale by Bata again, Keep a tab on the counter

Disclaimer: Just Gossip, Ignore it

Pre Market Watch

Indian market is likely to have a positive opening due to positive global cues. On Wednesday, the Indian markets ended on a firm positive note, as BSE Sensex closed higher by 653.63 points at 16,322.75 while Nifty grew by 186.15 points to close at 4,732.35. We expect the market to remain range bound during the trading session.
On Wednesday, The US market closed in green. The Dow Jones Industrial Average (DJIA) surged 76.17 points to close at 13,815.56. The S&P 500 (SPX) index increased by 9.25 points to close at 1,529.03 and the NASDAQ Composite (RIXF) grew 14.82 points to close at 2,666.48.
Indian ADRs ended in mixed. In technology sector, Patni computers grew by (4.61%) along with Satyam by 3.46% while Infosys and Wipro fell (0.44%) and (0.42%) respectively. In banking sector, HDFC bank and ICICI bank advanced by (2.69%) and (2.19%) respectively. MTNL grew by (2.50%).
The major stock markets in Asia are trading higher. Hang Seng is trading up by 101.56 points to close at 25,655.20. Japan''s Nikkei advanced by 13.68 points to trade at 16,395.22. Taiwan weighted trading higher by 126.35 points at 9,052.73. Singapore Strait times increased by 9.99 points to trade at 3,584.37.
Today, Nifty has support at 4,680 and resistance at 4,795 and BSE Sensex has support at 16,050 and resistance at 16,525.

Daily Technicals, Futures, Outlook - Sep 20 2007

Daily Technicals, Futures, Outlook - Sep 20 2007

Daily Call - Sep 20 2007

Daily Call - Sep 20 2007

Rajesh Exports

Rajesh Exports

Market to scale further ground

The market is expected to scale further ground on global cues. Asian stocks advanced today, 20 September 2007 tracking gains on Wall Street overnight, 19 September 2007. Japan's Nikkei (up 0.08% at 16,395.22), Hang Seng (up 0.40% at 25,656.20), Taiwan Weighted (up 1.42% at 9,052.73), gained. However Singapore's Straits Times declined 0.28% at 3,584.37.

US stocks posted steady gains overnight, 19 September 2007 building on a huge rally the previous day as markets cheered the US Federal Reserve's cut in key interest rates. The Dow Jones Industrial Average climbed 76.17 points or 0.55% to 13,815.56. The tech-heavy Nasdaq Composite index rose 14.82 points or 0.56% to 2,666.48 while the broad-market Standard & Poor's 500 index gained 9.25 points or 0.61% to 1529.03

NYMEX crude for October delivery held near $82 a barrel, aided by a bigger than expected drawdown in US crude inventories, after hitting an all-time intraday high of $82.51 on Wednesday, 19 September 2007.

As per provisional data, foreign institutional investors (FIIs) purchased shares worth a net Rs 2457.62 crore, while domestic institutional investors (DIIs) were net sellers of shares worth Rs 328.15 crore on Wednesday, 19 September 2007

The 30-shares BSE Sensex posted biggest single-day point gain rallying 653.63 points or 4.17% at 16,322.75, on Wednesday, 19 September 2007. It also hit an all-time high of 16,335.30.

Sensex has surged 2,333.64 points or 16.68% to 16,322.75 from a recent low of 13,989.11 on 21 August 2007, in just 21 trading sessions.

The S&P CNX Nifty jumped 186.15 points or 4.09% at 4,732.35, on that day. It also struck an time high of 4,739.

The global rally was triggered after the US Federal Reserve announced a higher than expected 50 basis points cut in fed funds rate to 4.75% from 5.25% on Tuesday, 18 September 2007, easing concerns about housing slump driving the world's largest economy into recession. Prior to this, it had hiked rates for 17 consecutive times in the span of four years.

Meanwhile, after discussing the nuclear deal for two hours yesterday, 19 Seoptember 2007, neither the UPA nor the Left budged an inch from their earlier position on the contentious Hyde Act. The Left, led by CPI(M) general secretary Prakash Karat, rejected this argument and reiterated that the Hyde Act would supersede the 123 Agreement.

The discussions will continue further at the next meeting of the committee scheduled to be held on 5 October 2007

US Market continues with its joyride

Rate-cut rally continues at Wall Street in spite of crude touching $82/barrel

US Market continued with its joyful journey today, Wednesday, 19 September 2007, a day after, Federal Reserve Chairman, Ben Bernanke mesmerised US market by cutting fed fund interest rate by 50 basis points from 5.25% to 4.75%. This was the first rate cut since June 2003. The Fed had also cut its discount rate from 5.25% to 4.75%. All ten sectors once again closed higher today.

The Dow Jones industrial Average closed higher by 76.17 points at 13,815.56. The Nasdaq Composite Index, finished higher by 14.82 points at 2,666.48. S&P 500 finished higher by 9.25 points at 1,529.03.

Twenty-four out of thirty Dow stocks ended in green today. Merck was the top gainer today as shares soared by more than 2%. GM was the main laggard as the company is still continuing its discussion with United Auto Workers. Shares of GM slid more than 2%.

Financial stocks were once again in the forefront. But today’s rally was led by telecom services sector and was followed by utilities and basic materials. Energy sector also provided notable support with crude prices rising. The financial sector ignored a disappointing earnings report from Morgan Stanley.

Consumer price report offsets negative news from housing report

When market opened in the morning, all the indices were trading strongly higher. Stocks were trading with previous day’s enthusiasm. Yesterday it was Producer Price Index report and today it was Consumer Price Index report that provided good support to the market.

At the top of the hour, Labour Department reported that consumer prices unexpectedly fell in August by 0.1%. It was the first decline in the Consumer Price Index (CPI) since October of last year. The CPI had risen 0.1% in July.

The core CPI, which takes out volatile food and energy prices, rose 0.2% from July, and was up 2.1% year over year, the lowest level in more than 2½ years.

The Commerce Department reported that U.S. housing starts and permits fell to a 12-year low in August, dropping 2.6% to an annualized rate of 1.331 million, slightly under the 1.35 million forecast by the market.

Indian ADRs closed mixed today. Infy, Wipro Tech, WNS and VSNL registered loss today. Sify and Patni were the two top gainers gaining more than 4.6% each. HDFC Bank and ICICI Bank gained 2.7% and 2.2% respectively.

Crude almost touches $82

Crude oil closed above $81/barrel for the second time today in New York after an Energy Department report showed a larger-than-expected U.S. inventory decline. As per today’s weekly inventory report by the Energy Dept, crude supplies fell 3.8 million barrels during the week ended 14 September. This was more than analysts’ expectation of 2 million barrels.

Crude-oil futures for light sweet crude for October delivery closed at $81.93/barrel (higher by $0.42/barrel or 0.52%) on the New York Mercantile Exchange. The contract had climbed as high as $82.50 to set an all-time high level for a front-month contract on the exchange.

Volume hit nearly 1.7 billion shares at the New York Stock Exchange, with advancing stocks ahead of decliners 2 to 1. At the Nasdaq, more than 2.2 billion shares were exchanged, and advancing issues overtook those declining, also by a 2-to-1 count.

Tomorrow investors will again look for economic data to help set the tone of trading. Initial Claims will be out at 8:30 ET, followed by Leading Indicators at 10:00 ET. The Philadelphia Fed Index, meanwhile, will hit the wires at 12:00 ET. On the earnings front, financial companies like Bear Stearns, Goldman Sachs, and AG Edwards will report their earnings before the bell.

Daily Technicals - Sep 20 2007

Daily Technicals - Sep 20 2007

Grey Market - Circuit, Consolidated, Kouton, Dhanus

Circuit Systems 35 4 to 5.50

Consolidated Constructions 460 to 510 120 to 140

Koutons India 370 to 415 100 to 120

Dhanus Tech 280 to 295 90 to 100

Kaveri Seeds 150 to 170 5 to 6

Allied Computers 12 1 to 1.50

PGICL 44 to 52 19 to 20

Magnum Ventures 27 to 30 3 to 4

Dollar Update

Dollar falls below Rs 40, 9 year high

Intraday Stock Ideas

NIFTY (4732) Supp 4678 Res 4796

Buy RCOM (564) SL 559
Target 571, 574

Buy Voltas (157) SL 153
Target 163, 165

Buy Praj Inds (224) SL 220 Target 232, 234

Sell Dabur (107) SL 110
Target 101, 100

Sell HPCL (240) SL 245
Target 232, 230

After Wonderful Wednesday, Tired Thursday!

On the day of victory no one is tired

The bulls batting on the bourses more or less resembled Yuvraj Singh smashing 36 runs (6x6) in an over. The bears, like the beaten bowler Stuart Broad had to look over the covers to find the ball. For the market, it was by far the best day for the bulls in recent memory. The Sensex surged past the 16k mark in the initial trades itself and made a new all-time high. The Nifty too crossed its own lifetime peak, as did some other indices. The fact that the trend has reversed in favour of the bulls after the carnage last month made it even better. The market's ability to bounce back after a brief correction has improved considerably. The main indices are taking less time now to stage a turnaround from an intermediate downtrend. This should be music to the ears of the bulls.

Today could be a tired Thursday as bulls may run out of energy. Expect indices to drop in the red. The bears will look at staging a comeback sooner or later. Liquidity in terms of FII inflows will be the key. We may have a situation of domestic funds booking profits even as FIIs may look at putting in fresh money.

The rate cuts by the Fed will boost inflows towards emerging markets where returns are better. India, with its strong economic fundamentals and earnings momentum, should get a big slice out of this. So, the outlook remains upbeat, though one needs to be careful as valuations may just be getting a little bit expensive.

A stock centric approach always pays rich dividends in every market cycle. Its no different today. While the global response to the Fed rate cuts so far has been positive, the question is what happens after investors get over the euphoria. Locally, we have to grapple with the developing political situation with mid-term polls a certainty. Oil is also on the boil again. And, of course how the RBI copes with the deluge of foreign money and what it does with interest rates remains a mystery.

IT stocks should be under pressure as the Rupee has risen past the 40 per dollar mark this morning.

Also keep an eye on Magnum Ventures, which gets listed on the bourses today.

US stocks extended their biggest rally in four years on hope that the interest rate cuts will help contain the housing sector mess and boost earnings growth.

AT&T helped lead the Dow Jones Industrial Average to within 1.4% of a record after saying sales of Apple's iPhone have increased. Freeport-McMoRan Copper & Gold, the world's second-largest copper producer, climbed to a new high.

The Standard & Poor's 500 Index rose 9.25 points, or 0.6%, to 1,529.03. The Dow gained 76.17 points, or 0.6%, to 13,815.56. The Nasdaq Composite Index added 14.82 points, or 0.6%, to 2,666.48. All 10 S&P 500 industry groups gained for a second day.

Ten-year Treasury notes fell for a third day as investors bet that rate cuts will fuel inflation, even after the government said consumer prices fell in August. The dollar rose from an all-time low against the euro and gold gained.

Thursday brings earnings reports from Bear Stearns, Goldman Sachs and Circuit City. Thursday also brings several economic reports after the start of trading, including the leading economic indicators and the Philadelphia Fed index - a regional manufacturing reading.

Fed chief Ben Bernanke is due to testify on Capitol Hill as part of a hearing on the subprime mortgage crisis. Treasury Secretary Henry Paulson is also due to testify.

The day's economic news seemed to support the Fed decision. Housing starts fell to a 12-month low in August, according to a government report that also showed a big drop in building permits, a measure of builder confidence. But another government report was more positive, showing a surprise drop in consumer prices in August, versus forecasts for a flat reading.

US light crude oil for October delivery rose 42 cents to settle at $81.93 a barrel on the New York Mercantile Exchange, briefly hitting a fresh record trading high of $82.50 after a report showed a negligible rise in weekly crude oil and gas inventories.

Treasury prices tanked, pushing the yield on the 10-year note to 4.53% from 4.47% late on Tuesday. In currency trading, the dollar slumped against the euro and was little changed versus the yen. COMEX gold for December delivery rallied $5.80 to $729.50 an ounce.

European shares ended higher. The broad pan-European Dow Jones Stoxx 600 index rose 2.7% to 377.61, putting in its best one-day gain this year. The UK's FTSE 100 index closed up 2.8% at 6,460.00, the German DAX 30 added 2.3% to 7,750.84 and the French CAC-40 climbed 3.3% to 5,730.82.

In the emerging markets, the Bovespa in Brazil rose 1% to 57,264 while the IPC index in Mexico was down 0.3% at 30,512. The RTS index in Russia shot up by nearly 4% to 2015 and the ISE National-30 index in Turkey soared by 7.4% to 68,691.

Asian markets were trading mixed this morning. The the Hang Seng in Hong Kong was up 0.5% while the rest of the markets were more or less flat.

Markets further extended its rally and the benchmark Sensex not only tested the 16k levels but managed to breach it as bulls were overjoyed after Federal Reserve announcement that it had cut its benchmark interest rate by 50 basis points. The Banking and the Realty stocks were the leading gainers on hopes that the Fed’s decision might also prompt the RBI to relax its hawkish stance on the monetary policy going forward.

The index heavyweights partied hard as RIL, SBI, DLF, BHEL, SAIL, Tata Steel and RPL hit their respective lifetime high. Further announcement from the government it may allow mills to make Ethanol directly from Cane juice lifted the sugar stocks from their lows and Cement stocks also recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and Gujarat across both wholesale and retail segments.

Reliance Communication surged by over 5% to Rs564 after the company’s owned Flag Telecom signed a five year contract with UK based virtual network operator Vanco to share their networks. This agreement provides Flag and its customer’s access to further 81 countries. The scrip has touched an intra-day high of Rs584 and a low of Rs545 and has recorded volumes of over 58,00,000 shares on NSE.

Bharti Airtel jumped by over 6.5% to Rs886 after reports stated that the company has awarded $150mn contract to Chinese vendor Huawei for building and managing GSM mobile infrastructure for its Sri Lankan operations. The scrip touched an intra-day high of Rs894 and a low of Rs845 and recorded volumes of over 11,00,000 shares on NSE.

Crompton Greaves advanced 2.2% to Rs316 following reports that the won bid to distribute and bill power in three major divisions in Nagpur. The scrip has touched an intra-day high of Rs325 and a low of Rs314 and recorded volumes of over 9,00,000 shares on NSE.

Hotel Leelaventure shed by 0.5% to Rs47. According to reports the company has earmarked Rs22bn in next three years for developing hotel properties spanning the major cities in the country. The scrip touched an intra-day high of Rs49 and a low of Rs47 and recorded volumes of over 25,00,000 shares on NSE.

BPCL ended flat at Rs310. Reports stated that the company has planned to submit a US$350mn non-binding bid to acquire 10% interest in a Congo oil field. The scrip touched an intra-day high of Rs315 and a low of Rs306 and recorded volumes of over 2,00,000 shares on NSE.

ITC gained by 4% to Rs187 following reports that the company is planning to set up a third food factory in Bangalore. The scrip touched an intra-day high of Rs189 and a low of Rs180 and recorded volumes of over 85,00,000 shares on NSE.

Sugar stocks turned sweeter as government would allow mills to make Ethanol directly from Cane juice. Renuka Sugar jumped by over 24% to Rs683, Bajaj Hindustan surged by over 20% to Rs176, Sakhti Sugar was locked at 20% upper circuit to Rs92.80.

Cement stocks recorded concrete gains after cement manufacturers increased prices by Rs3 a bag in the largest markets of Maharashtra and Gujarat across both wholesale and retail segments. ACC surged by over 3% to Rs1155, Kesoram Industries advanced by 2.8% to Rs549 and India Cement added 3% to Rs284.

Banking stocks rallied after the Fed's decision to cut interest rates by 50 basis points. HDFC Bank surged by over 7.5% to Rs1324, ICICI Bank surged by over 5% to Rs973 and SBI added 4.4% to Rs1769. Union Bank, Bank of Baroda and PNB were the major gainers among the Mid-Cap stocks.

Realty stocks also were among the major gainers. DLF surged by over 8.5% to Rs713, Parsvnath advanced by 5.4% to Rs337, Sobha gained by 4.5% to Rs797, Akruti added 3.2% to Rs718 and Peninsula land added 2.6% to Rs586.

Tata Motors is planning to replace its existing range of 100-180hp trucks with the 'world truck' by September 2008 to meet competition from Volvo, Man and others.

The PMO has asked the Jharkhand Government to renew SAIL's Chiria mines lease.

Bharti Airtel is the only Indian company left in the fray for bagging the second mobile license in Qatar.

Shipping Corporation of India has floated four joint ventures to enter into shipbuilding, container terminal operation, dredging and offshore services.

Titan Industries has entered into a five-year tie-up for exclusive marketing-cum-distribution of Hugo Boss watches in India with MGI Luxury.

HCL Infosystems plans to set up a major systems integration hub in Kolkata over next 8-12 months.

L&T is close to acquiring a stake in Feedback Ventures.

ONGC Videsh, the overseas investment arm of ONGC, has won three exploration blocks in Colombia in the latest round of auctions.

The Carlyle Group and Citigroup Venture are in the race to acquire 15% stake in Pyramid Saimira.

Britannia will take legal action against Group Danone for unauthorized use of the Tiger biscuit brand in other countries.

SREI Infrastructure Finance has proposed a preferential issue of up to 25mn warrants to the promoter group at Rs100 per share.

The government is planning to allow manufacturing of ethanol directly from sugarcane.

Production of kharif foodgrains during FY08 will touch 112.24mn tons. This is 1.72mn tons more than that of last year.

The Ministry of Information & Broadcasting may cut the entertainment tax.

The Telecom Regulatory Authority of India has suggested that telecom operators can offer mobile television services to subscribers without licence.

Fund Activity:

FIIs were net buyers of Rs24.58bn (provisional) in the cash segment on Wednesday and the local institutions pulled out Rs3.28bn. In the F&O segment, foreign funds were net buyers of Rs42.55bn.

On Tuesday, FIIs were net sellers to the tune of Rs1.38bn in the cash segment. Mutual Funds were net sellers of Rs190mn on the same day.

Major Bulk Deals:

Macquaire Bank has sold Atul; Merrill Lynch has bought Dwarikesh Sugar while HSBC Global has sold it; Emerging Capital Advisors has sold Evinix and has purchased Gremac Infra; Deutsche Bank has sold Karuturi Networks; BNP Paribas has picked up Megasoft while Sundaram BNP Paribas Select Mid-Cap Fund has sold it; Deutsche Securities has bought Unity Infra.

Upper Circuit:

RIIL, Mawana Sugar, Rana Sugar, Tourism Finance, KM Sugar, Bombay Burmah, Goldstone Tech, Uttam Sugar, Jai Corp and Prakash Industries.

Lower Circuit:

Hindo SPG and Shree Precoated Steels.

Trading Calls

Buy SBI with stoploss of Rs 1700 for target of Rs 2100.

Buy Core Projects with a stop loss of Rs 168 for a short-term (3 Months) target of Rs 210.

Buy DLF with stoploss of Rs 640 for target of Rs 840.

Aban Offshore, Gujarat NRE Coke, Kalpataru Power, Larsen Tourbo

Aban Offshore, Gujarat NRE Coke, Kalpataru Power, Larsen Tourbo

More cheap cellphones coming soon

It’s official now. Along side the Nokias, Samsungs, Motorolas and Sony Ericssons there’ll be a new mass cellphone brand in India — Vodafone! Vodafone Essar, which will spend nearly Rs 250 crore on a high-profile brand transition from Hutch to Vodafone being unveiled on Thursday, is poised to launch cheap cellphones in India under the Vodafone brand. It will also launch co-branded handsets sourced from major global vendors.

“On the heels of the brand change from Hutch to Vodafone, Vodafone Essar will launch an array of low-cost cellular handsets in India which will be directly marketed under the Vodafone brand or co-branded with select overseas handset makers,” a Vodafone Essar director told ET on condition of anonymity. “The objective is to leverage Vodafone Group’s global scale in bringing millions of low-cost handsets from across the world into India and use Vodafone Essar’s famed cellphone distribution reach to maximise sales,” he added.

With Reliance Communications (RCOM) recently launching ultra budget handsets with prices starting at Rs 777, the industry buzz is that Vodafone would lower the entry barrier to an unbelievable Rs 666. There’s also speculation that Vodafone may follow the pricing model of Rs 666, Rs 777, Rs 888 and Rs 999 for its ultra-cheap handsets.

The Vodafone director refused to confirm this: “I cannot share pricing details but there will be no discounts or subsidised handset offers. Instead, Vodafone Essar may come up with innovative handset-bundled schemes for its 35 million consumers.” Company sources also said that the bundled handsets will primarily be distributed through Vodafone Essar’s four lakh-odd distribution outlets. “Vodafone Essar is also entering collaborative arrangements with some of the top vendors to achieve unprecedented sales,” a top company official told ET.

While CDMA players like RCOM and Tata Teleservices have adopted handset-driven expansion strategies to drive up subscriber base, this is the first time that a GSM player is venturing into this space on a pan-India level.
China’s ZTE, which is looking to set up a cellphone manufacturing unit in India, is expected to provide many Vodafone handsets in India. Early this year, Vodafone inked a global low-cost handset procurement deal with ZTE.

ZTE global vice-president (handset systems) He Shiyou told ET that as per the deal, Vodafone would offer ZTE’s handsets to its subscribers in India. “ZTE hopes to ship over 10 million of these to India. Though, we ship high-end phones to the West, our plan for India revolves around low-cost phones, which we offer in collaboration with operators there,” Mr Shiyou added.

The company will unveil the Vodafone brand on Thursday in one of the biggest brand transition exercises in the recent times. According to PTI, Vodafone will keep in-tact its predecessor’s assurance of following customers wher-ever they go, but will replace Hutch’s ‘Wherever you go our network follows’ catchline with ‘Make the most of now’.

Market Close : 16k conquered with aplomb !

It took 53 days for the journey from 15k to 16k for the Sensex. .The magical figure of 16k was crossed early in the morning as the indices zoomed like a rocket sparked by a rally across global markets. The US Fed slashed benchmark interest rates by half a percent. As the day started markets were on a rampage as major stocks cutting across sectors rose sharply for the day. The Reality stocks sang their way as the reality index moved up by almost 6%. But Sugar shares were stars as the Agriculture Minister Sharad Pawar said the government plans to give more fiscal incentives to sugar mills and that it would decide on monetary sugar sops in 8-10 days.

Tech stocks started positive but soon were the weaker of the lot. The Rupee attempted its highest levels in more than nine years after it rose by 0.7% to 40.20 per Dollar. The appreciating Rupee would put more pressure on the Tech stocks. The Banking and financial sectors saw action as they felt that the Fed move to cut the rates would put pressure on RBI to loosen its monetary policy. Buying was witnessed across the board with Auto, Banking, and Energy stocks leading the way. BSE Oil & Gas Index and the BSE Bank advanced by 5% and 4.8% respectively. Mid & Small caps also joined the rally with the frontline stocks.

Sensex ended the day up by 653 points at 16322 helped up by gains in HDFC (2367,+9 percent), HDFC Bk (1322,+7 percent), ONGC (899,+6 percent), Maruti (923.2,+5 percent) and Bharti Tele (874.5,+5 percent). There were no drags on the Sensex components.

Sugar was the story for the day. The sugar stocks rallied and most sugar stocks locked in upper circuit. This was on the back of the news that government will decide on monetary sops in 8-10 days. If this goes in line with the market expectations it would be a big positive for the sugar industry. There were other rules allowing them to manufacture Ethanol and that was seen as a profitable initiative. Integrated players like Shree Renuka Sugars and Balrampur Chini in particular would be benefited the most by the impending government move. And on the Ethanol blending issue sugar industry will need to increase ethanol production capacity by 40%. With this even the bigger market for ethanol will improve the sugar market. Currently a price of Rs 21.50 for ethanol translates to a price of Rs 14.50 for sugar. This is seen fairly attractive in the ethanol market. Requirement is for yet another 1 bn litre of ethanol production capacity for the current demand. Another report said that the sugar mills may be allowed to produce ethanol directly from cane juice instead of molasses to lower dependence on sugar prices. It was a sweet day.

DLF reported that the company plans to raise about $2 bn and list as a real estate investment trust in Singapore. The company also plans to enter the business of retail of luxury brands and is in talks with well-known retail chains including Georgio Armani, Versace and Dolce Gabbana. DLF may tie up with a foreign major for the supermarket business at a later stage. However, its first priority would be to partner with luxury brands. DLF is looking at franchising as well as joint ventures through the single brand FDI route. On real estate front the company continues to be in talks with international firms for investing in DLF projects. It had also tied up with Prudential for insurance, Hilton for hospitality segment, Nakheel group for SEZ's. This move is a part of the company's strategy to diversify its area of operations. All Reality stocks ended the day on a high note following DLF which ended the day up by 9%.

It was a rally of the Sensex stocks and the Index rallied. The current actions of the US and Europe will see their economies slow. Asia is seen as the haven for equities and the the rally reflects that. Asia is suddently becoming hot and thats the reason.

Technically Speaking: Sensex scaled up to 16000 levels and sustained above this levels. Indices made a high of 16335 and low of 16192. Whooping Turnover of Rs 7405 Cr for the the day. Sensex has done our target of 16100+ which we have been advocating for long. The rally is strong and 16600 is the next target for Sensex..

Midcap Stock Ideas

Midcap Stock Ideas

Purvankara Projects

Purvankara Projects

Consolidated Construction IPO

Consolidated Construction IPO