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Wednesday, August 26, 2009

Tantia Constructions


Tantia Constructions can be a small part of the portfolio of investors with a penchant for risk. Reasonable revenue and profit growth in FY-09, a tough year especially for smaller construction companies, strong order book and presence in lucrative segments such as Railways and urban infrastructure lend themselves well to future earnings growth.

This Kolkata-based player is well-positioned to tap infrastructure development activities in the east and north-eastern regions of the country — geographies that hold higher potential for business, given the relatively slow growth, compared with the rest of the country.

At the current price of Rs 90.5 the stock trades at 4.2 times its expected earnings for FY-10. Given that the company managed a 12 per cent profit growth in FY-09 which was a difficult year, the coming year’s earnings growth with the recent spate of order inflows can only be better.

Investors can buy the stock with a two-year perspective but should actively consider booking profits occasionally by setting target returns.

This would help them lock into gains that small cap stocks often make in a market rally.

Niche player

Tantia Constructions is a contractor with presence in road, rail, bridges and urban infrastructure projects. For a small-sized contractor with revenue of Rs 450 crore (FY-09), the company has enjoyed lucrative profit margins. Its operating profit margin (OPM) for FY-09, for instance, was 13 per cent — superior to a number of listed players.

This high margin can be attributed to two factors: One, the company’s presence in urban infrastructure and rail projects that typically carry healthy return on investments. Two, its well-entrenched presence in the north-eastern regions such as Mizoram and Assam, where there is little competition, given the tough conditions; thus providing scope for higher bidding prices.

Given the government’s steady increase in the budgetary allocations for the region, and the recent creation of the North-East Rail Development Fund, Tantia could emerge as a key beneficiary especially in smaller contractual works.

Tantia has witnessed a spate of order flows from the beginning of this year taking its total order book position to Rs 1,935 crore, four times its revenue for the latest ended financial year.

Projects from Railways, including the Delhi Metro, and road projects account for a good 34 per cent each of the total order book. Urban infrastructure stands next at 28 per cent. Tantia has presence in power transmission and airports as well, though the value of such projects is not significant.

The current order-book proportion could well ensure that the company’s OPMs are in the 12-15 per cent range, provided it is not hurt by any sharp hike in commodity prices. On this account, Tantia did witness a decline in its OPMs in the quarter ending September 2008 but quickly recovered, perhaps due to price escalation clauses available for raw materials costs.
Steady revenue growth

While Tantia’s earnings growth for FY-09 was a muted 12 per cent, its earnings over the last three years has grown at a compounded annual rate of 26 per cent. Recent quarters ending March and June suggest that the company’s earnings growth is back on track after a dip in the December quarter.

Interestingly, Tantia is among the few small infrastructure players that have managed to expand their revenues (on a year-on-year basis) over the last four quarters. This provides comfort as it suggests that the execution of projects has not been hurt as a result of economic slowdown or credit crunch.

Execution, though, has come only at the cost of high leveraging. The company’s debt: equity ratio at about 1.7 times although not alarming, is rather tight, limiting scope for further leveraging, given the small size.

However, that 15 per cent or Rs 30 crore of the total Rs 192 crore of long-term debt is from FCCBs due only in 2012 provides some comfort. The decline in interest rates has also provided marginal relief to the company’s profits.

via BL

Market ends in green ahead of F&O expiry


The Sensex ended the volatile session on a positive note ahead of August series F&O expiry, supported by IT, Tech and realty stocks. Broader markets also performed well. It opened with a gain of 74.62 points, at 15,763.09 on Wednesday folllowing encouraging global cues. The index traded in a range bound manner in the noon trades and later gained momentum on account of sustained buying interest seen in frontliners. It touched a high of 15,831.49 to finally end on a higher note.

BSE Midcap and Smallcap index rose 1.10% and 1.97% respectively.

On sectoral front, BSE IT surged 3.35%, Teck gained 2.50%, Realty moved up 1.23% and Healthcare rose 0.80%, while FMCG down 1.01%.


European stocks pared losses as a rally in Serco Group and bank shares offset a sell-off in WPP. UK`s benchmark index FTSE 100 fell 27.04 points, or 0.55%, to trade at 4,889.59. French benchmark index CAC 40 declined 12.32 points, or 0.33%, to trade 3,668.29. Germany`s benchmark index DAX decreased 35.96 points, or 0.64%, to trade at 5,521.74. (4.30 p.m, IST).

Asian stocks advanced as Chinese companies increased earnings and a US consumer confidence report beat economist estimates. Japanese benchmark index Nikkei rose 142.35 points, or 1.36%, to end at 10,639.71. Hong Kong`s Hang Seng index gained 21.08 points, or 0.10%, to close at 20,456.32. China`s Shanghai Composite increased 51.79 points, or 1.78% to settle at 2,967.60.

Indian stock market started the day on a positive note after a rise of 0.38% on the previous working day. The 30-share index, BSE Sensex opened with a gain of 74.62 points, at 15,763.09 on Wednesday.

Currently, the 30-share index Sensex is trading up 81.38 points, or 0.52%, at 15,769.85, after touching a high of 15,831.49 and a low of 15,695.94. Meanwhile the broad based Nifty is trading higher by 21.50 points, or 0.46%, at 4,680.85, after hitting a high of 4,697.80 and a low of 4,659.10. (03.55 p.m.)

Overall market breadth was extremely positive. Out of the total 2,867 stocks traded at BSE, 1,943 advanced, 851 declined while 73 remained unchanged.

Major gainers in the 30-share index were Infosys Technologies (4.07%), Sterlite Industries (India) (3.92%), Tata Consultancy Services (3.75%), Wipro (2.34%), Reliance Communications (1.98%), and Tata Motors (1.71%).

On the other hand, Hindustan Unilever (2.29%), HDFC Bank (1.79%), Hero Honda Motors (1.19%), Grasim Industries (0.98%), Maruti Suzuki India (0.94%), and ITC (0.89%) were the major losers in the Sensex.

India Strategy - Aug 26 2009


India Strategy - Aug 26 2009

NSE Bulk Deals to Watch - Aug 26 2009


Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks
26-AUG-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,BUY,874551,1486.07,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,248741,1471.04,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,KALASH SHARES & SECURITIES PRIVATE LIMITED,BUY,215143,1472.73,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,BUY,396517,1467.92,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,SMC GLOBAL SECURITIES LTD.,BUY,230170,1477.53,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,TODI SECURITIES PVT. LTD.,BUY,200550,1472.62,-
26-AUG-2009,ALPHAGEO,Alphageo (India) Limited,JMP SECURITIES PVT LTD,BUY,40000,255.06,-
26-AUG-2009,ALPHAGEO,Alphageo (India) Limited,WEXFORD CATALYST INVESTORS MAURITIUS LTD,BUY,33900,244.99,-
26-AUG-2009,ALPHAGEO,Alphageo (India) Limited,WEXFORD SPECTRUM INVESTORS MAURITIUS LTD,BUY,44400,244.96,-
26-AUG-2009,AMDIND,AMD Industries Limited,PATEL.SREYASHKUMAR.MAHESHBHAI,BUY,157560,27.33,-
26-AUG-2009,ANSALINFRA,ANSAL PROPERTIES & IND LT,OM INVESTMENTS,BUY,890140,79.64,-
26-AUG-2009,APTECHT,Aptech Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,253937,269.50,-
26-AUG-2009,BRANDHOUSE,Brandhouse Retails Limite,AJAY BAXI,BUY,290171,37.91,-
26-AUG-2009,DCHL,Deccan Chronicle Hold Ltd,RELIANCE MUTUAL FUND A/C RELIANCE REGULAR SAVING FUND EQ OP,BUY,1945000,105.00,-
26-AUG-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,BUY,93393,396.60,-
26-AUG-2009,EVERONN,Everonn Systems India Lim,NAMAN SECURITIES & FINANCE PVT. LTD,BUY,111679,394.02,-
26-AUG-2009,FCSSOFT,FCS Software Solutions Li,AANGI SHARE & SERVICE P LTD,BUY,92500,74.89,-
26-AUG-2009,FSL,Firstsource Solutions Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,2782592,36.17,-
26-AUG-2009,FSL,Firstsource Solutions Lim,PRAKASH K SHAH SHARES & SECURITIES PVT. LTD,BUY,2000847,36.06,-
26-AUG-2009,JAYSREETEA,Jayashree Tea Ltd.,NIKON FINLEASE PVT. LTD,BUY,94925,277.25,-
26-AUG-2009,MLL,Mercator Lines Limited,GLOBE CAPITAL MARKET LIMITED,BUY,1918166,59.89,-
26-AUG-2009,ORCHIDCHEM,Orchid Chemicals Ltd.,GLOBE CAPITAL MARKET LIMITED,BUY,580025,120.01,-
26-AUG-2009,PSL,PSL Limited,CREDIT SUISSE (SINGAPORE) LIMITED A/C CREDIT SUISSE (SINGAP,BUY,380000,153.85,-
26-AUG-2009,RADICO,Radico Khaitan Limited,PASSION SYSTEM SOLUTIONS PVT LTD,BUY,200,88.08,-
26-AUG-2009,RADICO,Radico Khaitan Limited,THE MASTER TRUST BANK OF JAPAN LTD NOMURA INDIA INVEST FUND,BUY,1500000,89.50,-
26-AUG-2009,RIIL,Reliance Indl Infra Ltd,JMP SECURITIES PVT LTD,BUY,141960,1053.41,-
26-AUG-2009,ROLTA,Rolta India Ltd.,GENUINE STOCK BROKERS PVT LTD,BUY,838012,185.38,-
26-AUG-2009,SELAN,Selan Exploration Technol,MBL & COMPANY LTD.,BUY,90080,317.30,-
26-AUG-2009,SELAN,Selan Exploration Technol,OM INVESTMENTS,BUY,86575,314.88,-
26-AUG-2009,SELMCL,SEL Manufacturing Company,DKG SECURITIES PVT. LTD.,BUY,103737,73.85,-
26-AUG-2009,SELMCL,SEL Manufacturing Company,KANUDIA CAPITAL & MANAGEMENT SERVICES PVT. LTD.,BUY,200000,74.05,-
26-AUG-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,BUY,1342182,20.93,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,C D INTEGRATED SERVICES LTD.,SELL,874551,1486.97,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,248741,1470.11,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,KALASH SHARES & SECURITIES PRIVATE LIMITED,SELL,215143,1473.19,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,PRB SECURITIES PRIVATE LTD.,SELL,398117,1468.92,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,SMC GLOBAL SECURITIES LTD.,SELL,239770,1462.49,-
26-AUG-2009,ABAN,Aban Offshore Ltd.,TODI SECURITIES PVT. LTD.,SELL,200350,1473.20,-
26-AUG-2009,ALPHAGEO,Alphageo (India) Limited,JMP SECURITIES PVT LTD,SELL,5500,251.62,-
26-AUG-2009,AMDIND,AMD Industries Limited,PATEL.SREYASHKUMAR.MAHESHBHAI,SELL,2560,29.54,-
26-AUG-2009,ANSALINFRA,ANSAL PROPERTIES & IND LT,OM INVESTMENTS,SELL,890140,79.70,-
26-AUG-2009,APTECHT,Aptech Limited,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,253937,269.10,-
26-AUG-2009,BRANDHOUSE,Brandhouse Retails Limite,AJAY BAXI,SELL,250171,37.18,-
26-AUG-2009,EVERONN,Everonn Systems India Lim,DEUTSCHE SECURITIES MAURITIUS LIMITED,SELL,130000,401.39,-
26-AUG-2009,EVERONN,Everonn Systems India Lim,MBL & COMPANY LTD.,SELL,93393,397.05,-
26-AUG-2009,EVERONN,Everonn Systems India Lim,NAMAN SECURITIES & FINANCE PVT. LTD,SELL,114789,394.58,-
26-AUG-2009,FCSSOFT,FCS Software Solutions Li,VAJA ATULBHAI GORDHANBHAI,SELL,93669,74.89,-
26-AUG-2009,FSL,Firstsource Solutions Lim,ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,2868092,36.09,-
26-AUG-2009,FSL,Firstsource Solutions Lim,PRAKASH K SHAH SHARES & SECURITIES PVT. LTD,SELL,2149071,36.04,-
26-AUG-2009,GMRFER,GMR Ferro Alloys & Indust,PRIME INDIA INVESTMENT FUND LTD,SELL,141927,27.71,-
26-AUG-2009,GMRFER,GMR Ferro Alloys & Indust,SATABDI INVESTMENT PVT LTD,SELL,75000,27.49,-
26-AUG-2009,JAYSREETEA,Jayashree Tea Ltd.,NIKON FINLEASE PVT. LTD,SELL,94925,277.08,-
26-AUG-2009,MAYTASINFR,Maytas Infra Limited,SICOM LTD,SELL,700000,98.30,-
26-AUG-2009,MCDOWELL-N,United Spirits Limited,GOLDMAN SACHS INVESTMENTS MAURITIUS I LTD,SELL,745394,913.33,-
26-AUG-2009,MINDTREE,MindTree Limited,CAPITAL INTERNATIONAL GLOBAL EMERGING MKTS PVT EQUITY FUND,SELL,605000,525.15,-
26-AUG-2009,MLL,Mercator Lines Limited,GLOBE CAPITAL MARKET LIMITED,SELL,306264,60.49,-
26-AUG-2009,ORCHIDCHEM,Orchid Chemicals Ltd.,GLOBE CAPITAL MARKET LIMITED,SELL,293843,120.03,-
26-AUG-2009,PSL,PSL Limited,CLSA (MAURITIUS) LIMITED,SELL,380000,153.85,-
26-AUG-2009,PVP,PVP Ventures Limited,HARISH CHANDRA PRASAD,SELL,2130000,44.68,-
26-AUG-2009,RADICO,Radico Khaitan Limited,PASSION SYSTEM SOLUTIONS PVT LTD,SELL,1518306,89.50,-
26-AUG-2009,RIIL,Reliance Indl Infra Ltd,JMP SECURITIES PVT LTD,SELL,127657,1051.98,-
26-AUG-2009,ROLTA,Rolta India Ltd.,GENUINE STOCK BROKERS PVT LTD,SELL,838012,185.46,-
26-AUG-2009,SELAN,Selan Exploration Technol,MBL & COMPANY LTD.,SELL,90080,317.51,-
26-AUG-2009,SELAN,Selan Exploration Technol,OM INVESTMENTS,SELL,86575,315.08,-
26-AUG-2009,SELMCL,SEL Manufacturing Company,MASTER TRUST LTD,SELL,350000,73.91,-
26-AUG-2009,WWIL,Wire and Wireless (India),ADROIT FINANCIAL SERVICES PRIVATE LIMITED,SELL,1343182,20.94,-

Market Review - Aug 26 2009


Market Review - Aug 26 2009

Pyramid Saimira Theatre in spotlight


Pyramid Saimira Theatre was locked at the upper limit of 5% at Rs 25.75 on the BSE after its board approved raising up to $100 million through issue of global depositary receipts, American depositary receipts or foreign currency convertible bonds.

The announcement was made after trading hours yesterday, 26 August 2009.

Meanwhile, the BSE Sensex was up 95.41 points, or 0.61%, to 15784.28.

On BSE, 20,733 shares were traded in the counter as against an average daily volume of 1.16 lakh shares in the past one quarter.

The stock had hit a 52-week high of Rs 159.90 on 11 September 2008 and a 52-week low of Rs 13.15 on 5 March 2009.

The stock has risen 21.17% in four trading sessions from a recent low of Rs 21.25 on 20 August 2009. The stock had outperformed the market over the past one month till 25 August 2009, rising 10.34% as compared to the Sensex's 2.01% rise. It underperformed the market in past one quarter, gaining 10.14% as against 12.76% rise in the Sensex.

The small-cap cinema chain operator has an equity capital of Rs 29.76 crore. Face value per share is Rs 10.

The board also approved de-merging its distribution and production wing from the parent company

Pyramid Saimira Theatre is focused on distribution and exhibition of films. Its objective is to have presence in all categories of theatres including malls, multiplexes, cineplexes and standalones across the country in tier I, II and III locations.

The company reported a net loss of Rs 85.37 crore in Q4 March 2009, much higher than a net loss of Rs 3.11 crore in Q4 March 2008. The company's sales fell 67.1% to Rs 80.69 crore in Q4 March 2009 over Q4 March 2008.

Asian markets edge higher


Shanghai, Sydney, Sensex post positive numbers while Taiex bucks regional upswing

Stock market in Asian region continues to teeter between gains and losses as it ended higher on Wednesday, 26 August 2009, tracking the overnight positive close on Wall Street on the back of a better-than-expected surge in consumer confidence prompting investors to go in for some selective buying. Positive earning reports from China fuel the rally.

On Wall Street, economic data supported a broad-based rise in stocks as Fed Chairman Ben Bernanke was renominated. The Dow Jones Industrial Average rose 30.01 points, or 0.3%, to 9539.29, while the S&P 500 climbed 2.43 points, or 0.2%, to 1028. The Nasdaq Composite was up 6.25 points, or 0.3%, to 2024.23.

Home-price data juiced housing stocks, and the broader indices got an upward jolt after the Conference Board reported that consumer confidence rose to 54.1 in August, from 46.6 the month prior and well above expectations for 47.9. The present situation index increased just slightly to 24.9 from 23.3 last month, the expectations index improved more significantly to 73.5, its highest level since December 2007, from 63.4 in July.

In the commodity market, crude-oil prices moved around the $72-a-barrel level in electronic trade, with investors awaiting weekly data on U.S. inventories to assess whether the data supported a further price increase after a recent rally. The Energy Information Administration is due to release its closely watched report on inventories for the week ended 21 August 2009 later Wednesday.

Crude oil for October delivery traded at $72.09 a barrel, up 4 cents, in after-hours trading on the New York Mercantile Exchange at 3 p.m. in Singapore, recovering on the back of gains in regional equities after dropping as low as $71.35 earlier in the day. The front-month contract jumped above the $75-a-barrel level in U.S. trading for the first time in 10 months, before reversing direction on profit taking. The futures contract ended $2.32, or 3.1%, lower at $72.05 Tuesday on the New York Mercantile Exchange.

Brent crude oil for October settlement traded at $72.03 barrel, up 21 cents, on the London-based ICE Futures Europe exchange at 3 p.m. Singapore time. Yesterday, the contract fell $2.44, or 3.3%, to $71.82.

Gold advanced for a second day on signs a recovery in global economies may be weakening, spurring haven demand for the precious metal. Gold for immediate delivery advanced 0.3 percent to $947.35 an ounce at 2:59 p.m. in Singapore.

In the currency market, the U.S. dollar moved in a tight range against major currencies in cautious trading, after rebounding during North American trade.

The Japanese yen strengthened against major currencies on Wednesday, 26 August 2009 as a smaller-than-expected July trade balance data from Japan prompted investors flee from riskier-assets. The Japanese yen was quoted at 93.89 per greenback, down from Tuesday’s quote of 94.31 yen.

The Hong Kong dollar was trading at HK$ 7.7505 against the dollar. Actually The Hong Kong dollar is pegged at HK$ 7.8 to the U.S. dollar but can trade between HK$ 7.75 and HK$7.85 to the U.S. dollar.

In Sydney trade, the Australian dollar ended the day flat, as a lack of direction kept the currency within recent ranges. At the local close, the dollar was trading at $US0.8359, little changed from Tuesday's close of $US0.8362. During the day, the unit moved between $US0.8332 and $US0.8379.

In Wellington trade, the New Zealand dollar held around 11-month highs against the greenback. The NZ dollar was US 68.68 cents at 5pm from US 68.45 cents at 8am and US 68.52 cents at 5pm yesterday.

The South Korea won ended at 1,245.3 won against the greenback, up 2.9 won from Tuesday's close, as offshore investors continued to purchase local stocks.

The Taiwan dollar strengthened slightly against the greenback. The Taiwan dollar gain against the US dollar as it was trading higher at NT$ 32.9150, up by NT$ 0.0050 from Tuesday’s close of NT$32.9200.

Coming back in equities, Asian stocks edged higher, with thin summer trading volumes keeping prices choppy while oil hovered near $US72 a barrel, capped by a surprising rise in US inventories.

In Japan, shares market gained following a strong finish of Wall Street overnight buoyed by upbeat US economic data that strengthen optimism over an economic recovery and a rebound in Shanghai shares boosted Japanese exporters. Automakers shares bounced on new Toyota Motor Corp will cut its global production capacity to match lower sales. Banks and financials, real estate, and insurance shares surged as bargain hunters stepped in. Shares of Japanese electronics surged rose on short covering on upbeat U.S. housing and US consumer confidence beat expectations.

At the closing bell, the Nikkei 225 Stock Average index surged 142.35 points, or 1.36% to 10,639.71, meanwhile the broader Topix index spurted 10.48 points, or 1.09%, to 975.59.

On the economic front, the Ministry of Finance report showed that country’s merchandise trade surplus of 380.2 billion yen in July2009, following the revised 507.5 billion surpluses in June2009.

The government report showed the country’s exports fell 36.5 % in July2009 from a year earlier. Exports fell 1.3% on month for the first monthly drop in two months. Imports in July declined 40.8% on year, after the 41.9% fall in the previous month.

The Bank of Japan said today in a preliminary report that an index measuring corporate service prices in Japan was down 3.4% on year in July to a score of 92.6. On a monthly basis, prices were down 0.2% after adding 0.4% in the previous month.

In Mainland China, share market bounced back from early weakness, on bargain hunting across the sector as the market was oversold yesterday and the half-year earnings of many companies are decent. Property developers led the rally after better than expected earning from Poly Real Estate Group. Airline stocks bounced after Air China first-half profit more than doubled from a year earlier. Materials, industrials and energy shares rebounded on short covering. Consumer staple and consumer discretionary sector lifted up by rising US consumer confidence reading.

At the closing bell, the Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, climbed up 51.79 points, or 1.78% to 2,967.59, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, mounted higher 2.01%, to 3,172.39.

In Hong Kong, benchmark index closed the choppy session edge higher on Wednesday, 26 August 2009, as gains in major banks and financials on better than expected earning. China Life Insurance and Air China outperformed after the company beats earning estimate. The Hang Seng Index climbed 21.08 points, or 0.1%, to 20,456.32, while the Hang Seng China Enterprise rose 2.32 points, or 0.02%, to 11,657.13.

In Australia, the stock market bounced with the broad based gain across the major sector, as a strong finish of Wall Street overnight and well received company reports. Property trusts were the standout performers today on the back of sharp gains from Westfield Group after posting 1H09 earning that meet market expectation. Shares in the major miners were up despite pullback in base metal prices. Retailers climbed up on better-than-expected US consumer confidence reading. Financials, consumer staple, and telecom shares were also higher.

At the closing bell, the benchmark S&P/ASX200 index surged 48.7 points, or 1.11%, to 4,454.5, meanwhile the broader All Ordinaries spurted 46.9 points, or 1.06%, to 4,464.4.

On the economic front, the Australian Bureau of Statistics (ABS) said that total construction work done in Australia fell 0.1% in the quarter-ended June2009 in chain volume terms, seasonally adjusted Total construction work done was valued at $35.031 billion in the June quarter, compared with an upwardly revised $35.062 billion in the March quarter.

The Department of Employment and Workplace Relations said in the report that Job vacancies for skilled workers in Australia increased by 1.0% in August from July. The index reading for August was 37.1, notably lower than the 55.7% reading of August 2008.

In New Zealand, stock market ended the day in the positive terrain as most of the Asian markets also gained trailing optimism on the United States overnight. The NZ benchmark index rose for a third day in a row on Wednesday. US stock rose higher after assurance of stability, encouraged investors coupled by positive economic data. The NZX50 advanced 0.34% or 10.39 points to 3090.90. The NZX 15 added 0.19% or 10.58 points to close at 5702.53.

In South Korea, stocks ended higher as investors snapped up undervalued shares and the U.S. economy showed signs of life. The benchmark Korean Composite Stock Price Index (KOSPI) added 12.74 points to 1,614.12, the highest close since 24 July 2008.

In Singapore, the stock market surged as investors chased for discounted buying as a strong finish of Wall Street overnight on better-than-expected US consumer confidence reading strengthen the hope of global economy recovery. Investors chased for bargain on recently battered shares and major blue chips amid tentative signs of a recovery as policymakers around the world responded with a series of unprecedented actions. The blue chip Straits Times Index bounced 9.67 points, or 0.37%, to 2,628.43.

On the economic front, the Economic Development Board of Singapore said Singapore’s industrial production unexpectedly surged in July 2009 as pharmaceuticals output jumped and the electronics slump eased, heralding a sustained economic recovery. The industrial output grew 12.4% year-on-year in July, reversing a revised 9% fall in the preceding month

In Taiwan, stock market in Taiwan failed to escape its worries on Wednesday, 26 August 2009, as jitters about the spread of the H1N1 flu virus hit tourism and airline stocks. About 400 people were reported to have become sick with suspected swine flu in a southern Taiwan village hit by Typhoon Morakot earlier this month.

According to the estimate of Kuo Hsun-sung, director of the Centers for Disease Control (CDC), under the Department of Health of the Executive Yuan, both the government and the private sector are gearing up in full swing to cope with the onset of new flu H1N1, which threatens to afflict seven million Taiwanese people, or one third of the local population, at its peak.

The benchmark Taiex share index extended its losing streak in second straight session as its finished the session lower by 90.20 points or 1.32% in a day, closing the day at 6719.21.

On the economic front, Taiwan’s substantial gross domestic product (GDP) for the second quarter of the year saw a sharp growth of 20.69% over the same quarter of last year, representing the first positive rise of its kind after declining for four consecutive quarters, and the seasonally adjusted GDP is estimated to bounce back to NT$3.3 trillion (US$100 billion at US$1 = NT$33) in the fourth quarter of the year.

According to Chen Tien-chih, chairman of the Cabinet-level Council for Economic Planning and Development, Taiwan’s GDP reached NT$3.3 trillion (US$100 billion) in the first quarter of last year, but kept trending downward ever since, with the substantive GDP plunging 27.2 % in the fourth quarter of 2008. This meant that Taiwan was severely impacted by the global financial tsunami.

In Philippines, stock market overturned yesterday’s losses, closing marginally lower as investors snapped up bargain stocks ahead of the release of second quarter economic output. Citing improved economic conditions, the Monetary Board of the central bank last week, ended its rate easing cycle when it kept its overnight borrowing rate at 4% and lending rate at 6%. Moreover, gains on Wall Street overnight also assisted the composite index to scale up. The benchmark index PSEi escalated 0.18% or 5.38 points to 2,863.53, while the All Shares index mounted 0.37% or 6.76 points to 1,817.39.

In India, stocks ended a volatile trading session with decent gains after the Finance Minister said economic reforms would boost growth. The market rose for the fifth day in a row. The BSE 30-share Sensex was up 81.38 points or 0.52% to 15,769.85. The S&P CNX Nifty rose 21.50 points or 0.46% to 4,680.85.

On the economic front, India's infrastructure output rose 1.8% in July 2009, much lower than a revised 6.8% growth in June 2009, government data released a little while ago showed. Infrastructure output had risen 5.1% in the same month last year. The infrastructure sector accounts for 26.7% of industrial output.

Elsewhere, Malaysia's Kula Lumpur Composite index went up 0.13% or 1.47 points to 1172.56 while stock markets in Indonesia’s Jakarta Composite index ended the day lower at 2380.09.

In other regional market, European shares traded with mild losses on Wednesday, snapping a four-session run of gains, hurt by oil and gas firms despite strength for financials and gains from Alcatel-Lucent and Heineken. On a regional level, the U.K. FTSE 100 index traded down 0.4% or 19.22 points at 4,898, the German DAX index edged down 0.7% or 36.38 points at 5,521, and the French CAC-40 index declined 0.4% or 14.69 points at 3,666.

Koutons Retail


Investors with a long-term perspective can buy the stock of Koutons Retail. At a price of Rs 386, the stock trades at 14.7 times its trailing four quarter earnings.

On an Enterprise Value basis, the stock trades at 1.6 times trailing sales and 1.1 times estimated FY10 sales. Though a shade more expensive, Koutons may deliver growth that is superior to its peers due to its focus on value retail, its presence outside the metros and good profit margins.

Going by numbers posted by listed retailers, consumers are loosening their purse strings in the value retail segment. Koutons offers branded, quality apparel and accessories at affordable costs, and takes to deep discounting from time to time to draw in customers. Koutons’ sales have expanded 32 per cent in FY09, placing it among the top performers in the retail space.

The bulk of retail spending in recent times has originated outside the metros and Tier I cities. Koutons has a retail footprint spanning 1,400 stores, much of it in the smaller cities. Moving into such cities ahead of competition has given it an edge by aiding brand recall.

Koutons plans to further penetrate the smaller cities this year. The company embraced the franchisee mode for expansion early on, quickly establishing a wide store network while controlling costs and capital requirements. Existing smaller stores are being expanded to family-size stores making each store address a wide customer base.

The company has a broad product portfolio, covering apparel for men, women and children, under multiple brands such as ‘Koutons’, ‘Charlie Outlaw’ and ‘Les Femme’ besides accessories, footwear under brand name ‘K2One’ and leather accessories. It plans to introduce new brands, as well as expand into innerwear, further increasing product lines. Operating margins have been maintained at a hefty 21 per cent for FY09, with the June 2009 quarter margins at 24 per cent, due to controlled raw material cost and backward integration.

It also managed to lower store rentals by 15-20 per cent for about 125 of its stores, and is negotiating on rentals for others. It shut 140 unviable stores in an effort to maintain profitability.

However, Koutons still suffers from high debt of 1.2 times equity, and interest and depreciation costs combined have cut net profit margins to 8 per cent in FY09; even so, it has performed better than most peers. The company is targeting a store count of 2,000 for this year, with a capex of Rs 60 crore.

via BL

BSE Bulk Deals to Watch - Aug 26 2009


Deal Date Scrip Code Company Client Name Deal Type * Quantity Price **
26/8/2009 523204 ABAN OFFSHO GENUINE STOCK BROKERS PVT. LTD. B 223515 1463.62
26/8/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD B 451354 1479.04
26/8/2009 523204 ABAN OFFSHO GENUINE STOCK BROKERS PVT. LTD. S 223515 1466.07
26/8/2009 523204 ABAN OFFSHO OPG SECURITIES P LTD S 451354 1480.85
26/8/2009 530707 AFTEK LTD HITESH SHASHIKANT JHAVERI S 652272 20.33
26/8/2009 524448 AHLCON PAREN SEWASTUTI FINANCE P.LTD B 130000 37.70
26/8/2009 524448 AHLCON PAREN PNR SECURITIES LTD. S 130000 37.70
26/8/2009 532875 ALLIED DIGIT OPG SECURITIES P LTD B 122762 508.14
26/8/2009 532875 ALLIED DIGIT OPG SECURITIES P LTD S 122762 509.07
26/8/2009 526397 ALPHAGEO IND JMP SECURITIES PVT LTD B 58471 252.94
26/8/2009 532828 AMD INDUS SREYASH KUMAR MAHESHBHAI PATEL B 162726 27.83
26/8/2009 512642 ARTILL BIO-I DONTHI REDDY BALACHANDRA REDDY S 18342 2.41
26/8/2009 509475 BOMBAY PAINT BALKRISHNA DOLE S 12000 51.70
26/8/2009 531337 CHAN GUIDE I NEELAM DEDHIA B 30500 60.04
26/8/2009 521244 CHITRA.SPIN. UTTAMBHAI PUKHRAJBHAI JAIN B 30121 1.88
26/8/2009 521244 CHITRA.SPIN. SRECKO INDHAN LIMITED S 26686 1.88
26/8/2009 532608 DECCAN CHR* RELIANCE MUTUAL FUND A/C RELIANCE REGULARSAVINGFUND EQUITY OPTION B 1355000 105.00
26/8/2009 532903 DHANUSTECH DRB SECURITIES PVT LTD S 106963 43.45
26/8/2009 532876 EVERONN SYS OPG SECURITIES P LTD B 99267 405.52
26/8/2009 532876 EVERONN SYS OPG SECURITIES P LTD S 99267 405.92
26/8/2009 532666 FCS SOFTWARE AANGI SHARES & SERVICES PVT. LTD. B 100000 74.73
26/8/2009 532666 FCS SOFTWARE ATULBHAI GORDHANBHAI VAJA S 100000 74.73
26/8/2009 512493 GARNET INTL INDIRA GAGGAR B 29775 44.97
26/8/2009 512493 GARNET INTL RAM AUTOMATION S 34000 44.79
26/8/2009 531939 GENUS COMM T RAMLALI TIWARI S 85000 1.18
26/8/2009 504701 GONTERM PEIP ASHARI AGENCIES LTD B 126000 24.25
26/8/2009 504701 GONTERM PEIP DELHI IRON & STEEL P.LTD. S 120000 24.25
26/8/2009 532951 GSS AMERICA CHANDRA PRAKASH KHANDELWAL HUF B 90000 224.52
26/8/2009 509715 JAYSHRE TEA NIKON FINLEASE PVT.LTD B 59462 276.56
26/8/2009 509715 JAYSHRE TEA OPG SECURITIES P LTD B 128702 275.14
26/8/2009 509715 JAYSHRE TEA NIKON FINLEASE PVT.LTD S 59462 277.24
26/8/2009 509715 JAYSHRE TEA OPG SECURITIES P LTD S 128702 275.62
26/8/2009 511131 KAMAN HSG NISHA SUMAN JAIN B 107951 35.76
26/8/2009 530547 KEN FINANCIA GOVIND KHANDELWAL B 15200 32.50
26/8/2009 530547 KEN FINANCIA BHUPENDRA KUMAR GUPTA B 15000 30.10
26/8/2009 530547 KEN FINANCIA GOVIND KHANDELWAL S 15000 30.10
26/8/2009 530547 KEN FINANCIA BHUPENDRA KUMAR GUPTA S 15000 32.48
26/8/2009 507759 LIME CHEM DUKE ADVISORS (P) LTD S 35000 5.20
26/8/2009 532907 MAYTAS INFRA SICOM LTD S 300000 98.15
26/8/2009 526235 MERCATOR LIN ALBULLA INVESTMENT FUND LTD B 5175644 56.50
26/8/2009 526235 MERCATOR LIN MAVI INVESTMENT FUND LTD. S 5175644 56.50
26/8/2009 509040 NETLINK SOLU ANGEL INFIN PRIVATE LIMITED B 210000 1.70
26/8/2009 509040 NETLINK SOLU MINESH VASANTILAL MODI B 4280000 1.58
26/8/2009 509040 NETLINK SOLU RUPA MINESH MODI B 4000000 1.58
26/8/2009 509040 NETLINK SOLU ADITYA FINCAP PVT LTD S 8280000 1.58
26/8/2009 509040 NETLINK SOLU MOTILAL LAXKAR S 350227 1.70
26/8/2009 511702 PARSHART INV KETAN RAJENDRABHAI ACHARYA B 25000 11.70
26/8/2009 511702 PARSHART INV ARCHNA RAJENDRA ACHARYA B 25000 11.70
26/8/2009 511702 PARSHART INV KRUNAL GOPALDAS RANA S 20000 11.70
26/8/2009 511702 PARSHART INV SANJAYBHAI B VALODRA S 25000 11.38
26/8/2009 532692 RADHA MADHAV JMP SECURITIES PVT LTD B 362003 13.75
26/8/2009 532692 RADHA MADHAV JMP SECURITIES PVT LTD S 362003 14.13
26/8/2009 533093 RAJ OIL ASHOKA FINSTOCK LTD B 314427 93.90
26/8/2009 533093 RAJ OIL ASHOKA FINSTOCK LTD S 314427 93.92
26/8/2009 526723 RDB INDUST L SAINATH HERBAL CARE MARKETING P.LTD S 80501 113.17
26/8/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC JMP SECURITIES PVT LTD B 135599 1053.37
26/8/2009 523445 RELIANCE INDUSTRIAL INFRASTRUC JMP SECURITIES PVT LTD S 121684 1052.24
26/8/2009 533083 RISHABHDEV SHELENDRA N BARADIA S 85000 16.56
26/8/2009 531901 SAARC NET DIGVIJAY DHABRIYA B 330000 1.85
26/8/2009 531901 SAARC NET GOVIND SHARDA S 324000 1.85
26/8/2009 530461 SABOO SOD CH GIRDHAR GOPAL SABOO B 71782 9.44
26/8/2009 531569 SANJIVA PARA CAMPHAR SEC.& ADV.P.LTD. B 38759 21.80
26/8/2009 524540 SECUN HEALTH SAURABH KUMAR RASIKLAL GANDHI B 50000 25.94
26/8/2009 524540 SECUN HEALTH DHARMENDRA J MADHANI B 21235 25.99
26/8/2009 524540 SECUN HEALTH DHARMENDRA J MADHANI S 19235 26.02
26/8/2009 524540 SECUN HEALTH VEMULAPALLI PERAPRASAD S 50000 25.97
26/8/2009 532886 SEL MANUF ARPIT SHARE BROKERS PRIVATE LIMITED B 200086 74.21
26/8/2009 532886 SEL MANUF MASTER TRUST LTD S 350000 74.09
26/8/2009 531431 SHAKTI PUMPS NOVEL APARTMENTS PVT LTD B 30000 99.14
26/8/2009 531431 SHAKTI PUMPS UPTURN SECURITIES PVT LTD B 31662 98.06
26/8/2009 500389 SILVERLINE T KSHITIJ PORTFOLIO P LTD B 400000 7.22
26/8/2009 505729 SINGER INDI SINGER (INDIA) B.V S 38800 30.13
26/8/2009 524264 UNIMER INDIA EXPLICIT FINANCE LIMITED B 155936 9.00
26/8/2009 524264 UNIMER INDIA ANURAG GUPTA HUF B 100000 9.00
26/8/2009 524264 UNIMER INDIA PREMLATA JAGDISHCHANDER BANSAL B 500000 9.00
26/8/2009 524264 UNIMER INDIA IFCI LIMITED S 758372 9.00
26/8/2009 532765 USHER AGRO DYNAMIC STOCK BROKING INDIA PVT LTD B 176375 39.89
26/8/2009 532765 USHER AGRO DYNAMIC STOCK BROKING INDIA PVT LTD S 158375 40.08
26/8/2009 526775 VALIANT COMM SHIV LAL GANDHI S 69700 33.10
26/8/2009 503657 VEER ENERGY SHREYANSHNATH SHARES& FINANCIAL SERVICES PVT LTD B 36000 199.84
26/8/2009 503657 VEER ENERGY KIRIT KUMAR MOHANLAL PATEL S 38550 199.66
26/8/2009 523724 VIJ.SHANTI B DARASHAW & COMPANY PVT LTD B 450000 29.95
26/8/2009 523724 VIJ.SHANTI B LAXMI INVESTMENTS S 450000 29.95
26/8/2009 532360 VINTAGE CARD AMIT CHAMPAKLAL SHAH HUF B 5000 21.60
26/8/2009 524576 VIVID IND EMMA AUTO ANCILLARY PRIVATE LTD S 35000 12.45
26/8/2009 531249 WELL PACK PA PANDYA HARDIK M B 30499 180.25
26/8/2009 531249 WELL PACK PA SHOBHANA NARENDRA KUMAR SHAH B 31500 179.95
26/8/2009 531249 WELL PACK PA PANDYA HARDIK M S 28400 180.33
26/8/2009 531249 WELL PACK PA NARENDRA KUMAR SHAH S 26500 180.65
26/8/2009 590032 ZEN TECH* VY PRASAD S 91780 220.32
26/8/2009 530091 ZYDEN GENTEC HITESH SHASHIKANT JHAVERI B 20600 33.25
26/8/2009 530091 ZYDEN GENTEC JMP SECURITIES PVT LTD B 25000 31.64

Post Session Commentary - Aug 26 2009


Domestic market managed to extend its’ initial gains to end in a positive zone. Strong buying over the ground was contributed by positive Asian markets along with higher US index futures. Strong US economic data also added to the positive sentiments. However, stocks were little volatile ahead of the expiry of the August F&O series on Thursday, 27 August 2009. In addition, negative European markets constrained the upward journey of benchmark indices and domestic bourses came off the day’s high during mid session. In the meantime, profit booking was also witnessed following recent rally. The BSE Sensex ended above 15,750 level and NSE Nifty closed above 4,650 mark.

Market extended its previous session’s winning streak and opened the day on positive note tracking firm global cues. The US stocks markets closed higher on Monday, though it came off intraday highs. Market got a boost from an encouraging report on home prices and an unexpected jump in consumer confidence. The gain during the trading contributed stocks to register a new closing high for 2009. Further, Indian stocks exhibited little instability ahead of the F&O expiry due later this week. During mid session, benchmark indices came off the days’ high tracking weak European markets. The market further gained momentum and continued to remain healthy positioned in positive terrain till end on sustained buying support in key stocks. From the sectoral front, IT, Teck, Realty, Pharma, Power and Oil & Gas stocks witnessed most of the buying from these baskets. BSE Midcap and Smallcap stocks also followed the same trend. However, FMCG and Consumer Durable stocks remained out of favour during the trading.

Among the Sensex pack 18 stocks ended in green territory and 12 in red territory. The market breadth indicating the overall health of the market remained positive as 1943 stocks closed in green while 851 stocks closed in red and 73 stocks remained unchanged in BSE.

The BSE Sensex closed higher by 81.38 points at 15,769.85 and NSE Nifty ended up by 21.50 points at 4,680.85. BSE Mid Caps and Small Caps closed with gains of 63.02 and 133.11 points at 5,800.55 and 6,878.35 respectively. The BSE Sensex touched intraday high of 15,831.49 and intraday low of 15,695.94.

Gainers from the BSE Sensex pack are Infosys Tech (4.07%), Sterlite Industries (3.92%), TCS Ltd (3.75%), Wipro Ltd (2.34%), RCom (1.98%), Tata Motors (1.71%), Tata Power (1.70%), DLF Ltd (1.47%), Sun Pharma (1.33%), ACC Ltd (1.22%) and Reliance (0.78%).

Losers from the BSE Sensex pack are HUL (2.29%), HDFC Bank (1.79%), Herohonda Motors (1.19%), Grasim Industries (0.98%), Maruti Suzuki (0.94%), ITC Ltd (0.89%) and ONGC Ltd (0.88%).

On the global markets front, the Asian markets that opened before the Indian market, recovered yesterday’s losses and ended higher. Upbeat data from the US added to the hopes of soon recover. Shanghai Composite, Hang Seng, Nikkei 225, Singapore''s Straits Times Index and Seoul Composite closed lower by 51.79, 21.08, 142.35, 9.67 and 12.74 points at 2,967.59, 20,456.32, 10,639.71, 2,628.43 and 1,614.12 respectively.

European markets, which opened after the Indian market, are trading in red. In Frankfurt the DAX index is trading lower by 22.06 points at 5,535.03 and in London FTSE 100 is trading down by 13.03 points at 4,903.77. The improvement of German business conditions index failed to motivate investors amid concerns that markets could have reached overbought levels after several months of constant rally. German Ifo Business climate index has improved higher than expectations in August, to post 90.5 level from 87.3 in July, beating experts expectations of a reading around 89.0.

The BSE IT index outperformed the benchmark indices as gained (3.35%) or 138.51 points at 4,272.46 on solid readings for US home prices and US consumer confidence overnight. Gainers are Financ Tech (6.61%), Oracle Fin (5.45%), Infosys Tech (4.07%), TCS Ltd (3.75%) and Tech Mahindra (3.78%).

The BSE Teck index increased by (2.50%) or 74.93 points at 3,073.05. Gainers are UTV Software (15.37%), Deccan Chr (12.15%), IBN18 (11.02%), IOL Netcom (9.97%) and Tel Eighteen (9.19%).

The BSE Realty index ended up by (1.23%) or 50.19 points at 4,142.94 as Ansal Infra (15.46%), Pheonix Mill (10.95%), Anant Raj (7.18%), Penland Ltd (7.10%) and Parsvnath (2.59%) ended in green.

The BSE Pharma index closed higher by (0.80%) or 30.76 points at 3,896.52. Main gainers are Biocon Ltd (6.86%), Orchid Chem (3.55%), Opto Circuit (3.29%), Sterl Biotec (3.03%) and Sunpha Adv (2.78%).

The BSE Power index advanced by (0.63%) or 18.59 points at 2,977.98. Gainers are GMR Infra (5.62%), Reliance Power (1.74%), Tata Power (1.70%), Suzlon Energy (1.63%) and Crompton Greaves (1.57%).

The BSE FMCG index lost (1.01%) or 26.49 points at 2,597.41 on concerns that averse monsoon rains may crimp rural sales. Losers are HUL (2.29%), United Spr (1.94%), Britania Industries (1.66%) and ITC Ltd (0.89%).

Aban offshore ended higher by 26.92% after company expects revenue of US$695 million from two contracts it signed for deploying four rigs.

Kale Consultants Ltd. gained 3%. The company, which is the leading provider of solutions to the airline, logistics and travel industry, announced that the International Air Transport Association (IATA) has chosen Kale as the prime technology supplier for the development of its industry-wide interline settlement platform Simplified Interline Settlement (SIS) initiative.

Phoenix Mills Ltd zoomed 10.95% after a block deal of four lakh shares was executed on NSE at Rs. 157.40 per share.

Tilaknagar Industries Ltd advanced 2.43% after the company fixed 3 September 2009 as the record date for a 2:1 bonus issue.

Ansal Properties & Infrastructure Ltd gained 15.46% after it revealed its board will meet on 28 August 2009 to consider fund raising

Pyramid Saimira Theatre Ltd (PSTL) gained 4.89%. The company has decided to offload stake of more than 40% in its movie production company to a Kolkata-based corporation. The new partner is likely to infuse around Rs 100 crore, which would address the company''s immediate liquidity issue. The money would be utilised to restart production of 17 films.

HCL Technologies Limited dropped by 1.78%. The company announced that it has signed a partnership agreement with Optimation, a top ICT services specialist in New Zealand. The new partnership will combine HCL''s global scale and demonstrated capability in delivering high quality IT services with Optimation''s local New Zealand expertise.

Nifty August 2009 futures at premium


Turnover declines

Nifty August 2009 futures were at 4683.70, at a premium of 2.85 points as compared to the spot closing of 4680.85. Turnover in NSE's futures & options (F&O) segment was Rs 78,077.71 crore, sharply lower than Rs 88,341.26 crore on Tuesday, 25 August 2009.

The near month August 2009 futures contract will expire on Thursday, 27 August 2009. Rollover was a little over 54% in Nifty futures at the end of Tuesday's (25 August 2009) trading.

JSW Steel August 2009 futures were at premium at 726 compared to the spot closing of 723.80.

DLF August 2009 futures were near spot price at 399.40 compared to the spot closing of 399.20.

Reliance Industries August 2009 futures were at discount at 2035.85 compared to the spot closing of 2040.15.

In the cash market, the S&P CNX Nifty rose 21.50 points or 0.46% at 4680.85.

Market extends gains for the fifth day on strong US economic data


Key benchmark indices extended gains for the fifth day in a row after the Finance Minister said economic reforms would boost growth. The BSE 30-share Sensex gained 81.38 points or 0.52%, off 61.64 points from the day's high and up 73.91 points from the day's low. Global cues were mixed.

As per provisional data, foreign funds today, 26 August 2009, bought equities worth a net Rs 378.54 crore. Domestic funds mopped up stocks worth a net Rs 128.65 crore

Shares from the IT pack led the rally on the bourses today, 27 August 2009. Realty, metal and power stocks also attracted buying demand. However, banking shares pared early gains on selling pressure. FMCG and select auto shares dipped on profit booking.

The market was volatile. After an early surge triggered by strong US economic data, the market came off the higher level. It regained strength later. The market erased almost its entire intraday gains in early afternoon trade after the latest data showed a slowdown in infrastructure sector growth. The market surged later as European stocks recovered from an initial slide. The market retraced from the day's high on profit booking after a recent strong rally. The market moved in a range in late trade.

Volatility may remain high in the near term as traders roll over positions in the derivatives segment from August 2009 series to September 2009 series, ahead of the expiry the August 2009 contracts on Thursday, 27 August 2009. Rollover was a little over 54% in Nifty futures at the end of Tuesday's (25 August 2009) trading. The rollover in Mini Nifty futures was about 44%.

India's infrastructure output rose 1.8% in July 2009, much lower than a revised 6.8% growth in June 2009, government data released a little while ago showed. Infrastructure output had risen 5.1% in the same month last year. The infrastructure sector accounts for 26.7% of industrial output.

Finance Minister Mukherjee on Tuesday said reforms would continue in right earnest to get the economy back to 9% growth. At an event on Tuesday, 25 August 2009 on 'Mission 2010: The Reform Road Map', the finance minister said that the green shoots were visible in industry with basic goods, intermediates and consumer durables doing better in the first quarter.

Mr Mukherjee made it clear that public spending won't push interest rates higher. Nor would the government's huge debt appetite leave private industry high and dry.

Both Mukherjee and C Rangarajan, chief of the Prime Minister's Economic Advisory Council, pegged the GDP growth for this fiscal at 6-6.5% after factoring in the drought damage. Mr Rangarajan, a former Reserve Bank of India governor, said growth should pick up speed to hit 7-8% next fiscal. To accelerate to 9%, though, it was vital to boost domestic consumption, he added.

Planning Commission Deputy Chairperson Montek Singh Ahluwalia said on Monday, 24 August 2009 that India's fiscal deficit this year will not exceed 6.8% despite rising concerns that high government spending. In the budgetary estimates for 2009-10, the fiscal deficit was projected at 6.8%. The first full meeting of the Planning Commission will be held on 1 September 2009 and the main topic of discussion will be the state the economy.

European markets declined in volatile trade, led lower by commodity stocks. Key benchmark indices in UK, Germany and France were down by between 0.16% and 0.32%.

Profit taking weighed on European stocks despite a strong economic data in Germany. The Ifo Institute's index of German business confidence rose to 90.5 in August 2009, up from 87.3 in July 2009 and surpassing expectations for a rise to 88.8, news reports said. The Ifo current conditions index rose to 86.1 in August from a reading of 84.3 the previous month. The expectations gauge jumped to 95.0 from 90.4 in July

Most Asian markets gains were trading higher today, 26 August 2009, helped by solid US data on Tuesday and a stronger Wall Street. Key benchmark indices in China, South Korea, Japan, Singapore were up by between 0.37% and 1.78%. However, Taiwan's Taiwan Weighted slipped 1.32%

Japan's Nikkei 225 index rose 1.36% supported by news that the country's merchandise trade surplus in July 2009 widened, from the year ago period, for the second straight month.

Hong Kong's Hang Seng index came off day's high and closed 0.10% higher.

On Wall Street, stocks finished modestly higher on Tuesday, 25 August 2009 as better-than-expected economic reports on housing prices and consumer confidence and news of Ben Bernanke's reappointment as the Fed Chief for a second term generated some upbeat sentiment.

The three major indices closed at 2009 highs, although they were off the intraday highs reached after the stronger-than-expected economic data. The Dow Jones Industrial Average advanced 30.01 points, or 0.32%, to 9,539.29. The Standard & Poor's 500 Index gained 2.43 points, or 0.24%, to 1,028.00. The Nasdaq Composite Index rose 6.25 points, or 0.31%, to 2,024.23.

The Consumer Confidence Index for August 2009 jumped to 54.1, rising for the first time in three months. This marked an improvement from an upwardly revised 47.4 in July 2009. Meanwhile, the S&P/Case-Shiller home-price index declined 15.4% in June 2009 from a year earlier, less than estimated by economists.

Trading in US index futures showed the Dow could fall 10 points at the opening bell on Wednesday, 26 August 2009. The Dow futures reversed initial losses

Closer home, the Central Board of Direct Taxes (CBDT) has advised its field formations to scrutinise all cases in which companies have amortised foreign exchange losses under the one-time discretion allowed by the government through an amendment to Accounting Standard 11 (AS-11).

The temporary relief on AS-11 was permitted on 31 March 2009 against the background of the sharp depreciation of the rupee against the dollar, euro, pound and Swiss franc in 2008. As a result of this, several companies with significant foreign currency loans had to suffer mark-to-market losses.

Under AS-11, gains or losses from foreign exchange fluctuations have to be recognised in the profit and loss account. The amendment to AS-11 provided an option to capitalise or amortise exchange differences on long-term foreign currency positions (typically overseas borrowings) with retrospective effect from December 2006. This was done by adding or deducting such losses from the cost of fixed assets if, and only if, the money was borrowed for acquiring an asset. This treatment enabled companies to make adjustments directly on the balance-sheet by bypassing provisioning in the profit and loss account.

The BSE 30-share Sensex was up 81.38 points or 0.52% to 15,769.85. The Sensex opened 74.62 points higher at 15763.09. The barometer index gained 143.02 points at the day's high of 15,831.49 in mid-afternoon trade. The Sensex rose 7.47 points at the day's low of 15,695.94 in early afternoon trade.

The S&P CNX Nifty rose 21.50 points or 0.46% to 4,680.85. Nifty August 2009 futures were at 4683.70 at a premium of 2.85 points as compared to the spot closing.

The market has surged in the past five days supported by positive global cues. The BSE Sensex has risen 960.21 points or 6.48% in the past five trading days to 15,769.85 on Wednesday, 26 August 2009 from 14,809.64 on 19 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 6122.54 points or 63.46% in calendar year 2009 as on 26 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7609.45 points or 93.24% as on 26 August 2009. FII inflow in calendar year 2009 totaled Rs 36854.50 crore (till 24 August 2009).

Coming back to today's trade, the BSE clocked a turnover of Rs 6865 crore, higher than Rs 6430 crore on Tuesday, 25 August 2009. Turnover in NSE's futures & options (F&O) segment was Rs 78,077.71 crore, sharply lower than Rs 88,341.26 crore on Tuesday, 25 August 2009.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1938 shares advanced as compared with 884 that declined. A total of 70 shares remained unchanged.

The BSE Mid-Cap index was up 1.10% to 5,800.55 and the BSE Small-Cap index rose 1.97% to 6,878.35. Both these indices outperformed the Sensex.

Sectoral indices on BSE displayed mixed trend. The BSE IT index (up 3.35%), the BSE Realty index (up 1.23%), the BSE Oil & Gas index (up 0.61%), the BSE Teck index (up 2.50%), the BSE Power index (up 0.63%), the BSE Healthcare index (up 0.80%), outperformed the Sensex.

The BSE Metal index (up 0.40%), the BSE Consumer Durables index (down 0.45%), the BSE Capital Goods index (up 0.36%), the BSE Auto index (up 0.06%), the BSE FMCG index (down 1.01%), the BSE Bankex (down 0.16%), the BSE PSU index (up 0.33%), underperformed the Sensex.

Among the 30-member Sensex pack, 18 advanced while the rest slipped.

IT stocks dominated Sensex gainers on strong US economic data. US is the biggest market for Indian IT firms. India's second largest software services exporter Infosys Technologies jumped 4.10% to Rs 2182 after a 1.70% rise in its American depository receipt (ADR) on Tuesday, 25 August 2009. It was the top gainer from the Sensex pack.

After market hours today, 26 August 2009, Infosys announced that it has bagged a five-year outsourcing deal from oil and gas firm BP. Financial details were available not disclosed.

India's third largest software services exporter Wipro gained 2.13%, extending Tuesday's 3.7% advance. After trading hours Wipro said it has entered into a five-year agreement with BP to provide IT applications development and maintenance services for its fuels and corporate businesses globally. No financial details were available.

India's largest software services exporter TCS jumped 3.69%. As per reports, leading IT companies including Tata Consultancy Services (TCS), Infosys, Wipro and IBM are bidding for various outsourcing contracts to help the Department of Posts (DoP) to automate and integrate its business processes with a standard software solution. The DoP will be spending up to $1 billion over the next five years and will announce the selected tech vendors from the list by the end of this month

Kale Consultants rose 1.45% after the company secured a contract from International Air Transport Association for providing industry wide interline settlement solution. The company announced the new order win during trading hours today, 26 August 2009.

Educomp Solutions jumped 2.98% after the company's board approved a 5-for 1 stock split. The company made this announcement during trading hours today, 26 August 2009.

Tech Mahindra rose 2.91% on reports the company has won a 10-year outsourcing contract worth about $500 million from Swan Telecom.

Select mid-cap software stocks faltered after Tuesday's rally. Mastek (down 2.33%), MphasiS (down 3.81%), Polaris Software (down 1.19%), and CMC (down 1.51%), and Megasoft (down 0.46%) slipped.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.70% to Rs 2038 in volatile trade. The stock moved in a band of Rs 2013.10 and Rs 2045 in the day. A panel of ministers has reportedly decided to protecting NTPC's interests with regard to a gas dispute. As per reports, the government has decided to spell out its position in the two disputes involving the Krishna-Godavar Basin D6 block gas supplies - NTPC-Reliance Industries (RIL) and RIL-Reliance Natural Resources Ltd (RNRL).

On Friday, 21 August 2009 the government had clarified that it was not correct that it would earn Rs 500 crore from the KG basin gas, as claimed by Anil Ambani in the media. It said it would get Rs 84,000 crore.

The dispute between Reliance Industries and Reliance Natural Resources (RNRL) is centered around the price and supply of gas from KG basin operating by RIL to RNRL for the power plants of Anil Dhirubhai Ambani group. NTPC-RIL case also deals with price and supply of gas to NTPC's power plants from RIL. NTPC was down 0.50% while RNRL surged 9.94%

India's largest oil exploration firm by market capitalisation ONGC lost 0.97% after crude oil prices slipped sharply from 10-month high on Tuesday, 25 August 2009.

Aban Offshore galloped 28.46% to Rs 1555 on high volume of 38.59 lakh shares after the company said it expects revenue of $695 million from two contracts it signed for deploying four rigs. The company announced the new order win after market hours on Tuesday, 25 August 2009.

Shares of state run oil marketing firms came off day's high after oil secretary R.S. Pandey said the government is not considering raising retail fuel prices despite an uptrend in global crude oil prices. HPCL declined 0.22% to Rs 347.70, off day's high of Rs 357.30. BPCL slipped 0.66% to Rs 500.50 after striking day's high of Rs 509.90. Indian Oil Corporation also eased from day's high of Rs 583 to settled 0.42% higher at Rs 574.80.

Rising global crude oil prices will result in increase in under recoveries of PSU OMCs on domestic sale of petrol, diesel, kerosene and LPG at controlled prices.

Crude oil prices fell on Tuesday, 25 August 2009 as traders took profits after a recent rally despite strong US economic data on home prices and consumer confidence. Light sweet crude for October delivery dropped to $72.05, losing $2.32 or over 3% on the session.

FMCG stocks dipped on concerns deficient monsoon rains may crimp rural sales. FMCG firms derive a substantial revenue from rural India.

India's largest FMCG company by sales Hindustan Unilever lost 2.27% to Rs 262.80 and was the top loser from the Sensex pack. India's largest cigarette maker by sales ITC fell 0.96%

Auto stocks were mixed. India's largest truck marker by sales Tata Motors was up 1.58% to Rs 498, after striking a 52-week high of Rs 505 in intra-day trade today, 26 August 2009. At its annual general meeting in Mumbai on Tuesday, 25 August 2009, Ratan Tata, Chairman of Tata Motors, said that Tata Motors and Jaguar Land Rover will come through this tough period as leaner and more cost-efficient companies.

However India's top car maker by sales Maruti Suzuki India lost 0.66% on profit booking after four straight days of rise. India's largest bike maker by sales Hero Honda Motors fell 1.66%. India's second largest bike maker by sales Bajaj Auto rose 0.79%.

Motherson Sumi Systems soared 11.36% after its unit won orders worth 500 million euros, or Rs 3490 crore from major European carmakers including Volkswagen. The announcement was made during trading hours today, 26 August 2009.

Bank stocks pared early gains on profit taking. India's second largest private sector bank by net profit HDFC Bank shed .58% to Rs 1463.05 despite a 0.61% rise in its ADR on Tuesday, 25 August 2009.

India's largest private sector bank by net profit ICICI Bank was up 0.28% to Rs 761.50. The stock came off the day's high of Rs 768.

India's biggest bank in terms of branch network State Bank of India (SBI) rose 0.14% to Rs 1749.80, off day's high of Rs 1770.25.

India's largest private sector copper maker by sales Sterlite Industries India surged 3.61% on a solid surge in copper prices on the London Metal Exchange in the past few days.

Gujarat NRE Coke rose 7.20%. Some reports today, 26 August 2009, suggested that Gujarat NRE Coke, which has made a takeover bid to acquire Australia's Rey Resources, will not hike its offer if share prices continue to rally.

Rey shares have jumped over 250% since the takeover offer first came in June from Gujarat NRE Minerals, the Australian unit of Gujarat NRE Coke. Rey Resources owns coal, oil and gas tenements in west Australia. The offer is valid up to 4 September 2009.

India's largest cellular services provider by sales Bharti Airtel was up down 0.55%. Chairman Sunil Mittal on Monday, 24 August 2009 met the Finance Minister Pranab Mukherjee and Minister of Corporate Affairs Salman Khursheed to discus a proposed deal with South African firm MTN. Bharti and MTN last week extended their merger talks for the second time till 30 September 2009.

Bharti and MTN are in exclusive talks since May for a $23-billion complex cash and share swap deal. As per the proposal, Bharti would acquire 49% in MTN and in turn MTN and its shareholders would buy about 36% economic interest in the Indian firm.

India's second largest cellular services provider by sales Reliance Communications rose 1.87%. The company has reportedly raised Rs 1225 crore ($252 million) selling one-month bills on Tuesday, 25 August 2009.

Power stocks rose on fresh buying. Among a slew of IPOs lined from the sector include that of Indiabulls Power, JSW Energy, Jindal Power, Sterlite Energy, and GMR Energy.

India's largest private sector power generation company by net profit Reliance Infrastructure rose 0.34%. India's second largest private sector power generation company by net profit Tata Power gained 1.82%.

Adani Power (up 2.49%), JP Hydropower (up 1.21%), Torrent Power (up 0.09%), moved higher

Infrastructure stocks came off day's high after latest data showed a slowdown in growth in infrastructure output. India's largest engineering & construction company by sales Larsen & Toubro was almost unchanged at Rs 1573, off day's high of Rs 1586. The company has won four orders for electrical projects totaling Rs 1044 crore from Qatar, United Arab Emirates and Oman to build electrical sub-stations. The announcement was made during trading hours on 24 August 2009.

India's largest power equipment marker by sales Bharat Heavy Electricals slipped 0.28% to Rs 2296 after striking day's high of Rs 2325.

ABB (down 0.20%), Lanco Infratech (down 1.91%), and Gammon Infrastructure (down 0.44%) declined.

Gayatri Projects was locked at upper limit of 5% after it raised Rs 18.50 crore through a preferential allotment of shares to Reliance Mutual Fund. The announcement was made during trading hours today, 26 August 2009.

Realty shares gained on fresh buying after taking a breather on Tuesday, 25 August 2009 on profit booking. Omaxe (up 0.45%), Parsvnath Developers (up 2.59%), DLF (up 1.12%), Sobha Developers (up 1.04%), Unitech (up 0.88%), gained.

Ansal Properties & Infrastructure jumped 14.11% after the company said its board will meet on 28 August 2009 to consider fund raising. The announcement was made after market hours yesterday, 25 August 2009.

Phoenix Mills galloped 10.74% after a block deal of four lakh shares was executed on NSE at Rs 157.40 per share. The block deal constituted 0.28% of the company's equity.

Prominent realty firms Lodha Group, Godrej Properties and Oberoi Construction have filed a draft red herring prospectus (DRHP) with the Securities & Exchange Board of India (Sebi) for raising funds through an initial public offer (IPO).

Aban Offshore topped the turnover chart on BSE with a turnover of Rs 570.29 crore followed by Reliance Natural Resources (Rs 255.15 crore), Mahindra Satyam (Rs 177.61 crore), Educomp Solutions (Rs 132.79 crore), Reliance Industries (Rs 132.56 crore).

Cals Refineries clocked the highest volume of 6.39 crore shares on BSE. Reliance Natural Resources (2.94 crore shares), Mahindra Satyam (1.61 crore shares), FirstSource Solutions (1.237 crore shares) and Suzlon Energy (1.234 crore shares), were the other volume toppers in that order.

Shares of export oriented sectors gained ahead of the Foreign Trade Policy on Thursday, 27 August 2009. Among the textile pack - Gokaldas Exports (up 4.96%), Arvind Mills (up 10.50%), Alok Industries (up 7.88%), Raymond (up 5%), gained.

From leather sector - Bhartiya International (up 19.91%), Mirza Tanneries (up 1.65%), Liberty Shoes (up 3.46%), Crew Bos (up 4.97%), advanced

Gitanjali Gems (up 0.66%), Shrenuj & Company (up 1.34%), Vaibhav Gems (up 4.91%), SB&T International (up 9.93%), and Asian Star (up 2.85%), were the gainers from the gems and jewellery sector.

Exporters are expecting the forthcoming Foreign Trade Policy to provide the much-needed impetus for growth revival in the face of waning overseas demand. They are hoping that the policy will act on certain long pending demands such as streamlining the taxation structures and creating market development assistance funds to fuel growth.

Among the small and mid-cap shares - Pitti Laminations (up 20%), Jetking Infotrain (up 19.98%), IFGL Refractories (up 19.96%), Asian Tea (up 19.90%), Granules India (up 19.97%), Aries Agro (up 19.96%), Murudeshwar Ceramics (up 20%), Allied Digital (up 19.99%), and Jindal Photo (up 7.01%), surged.

Singer India (down 6.05%), Valiant Communications (down 7.80%), and HTMT Global (down 7.20%), declined.

Kavveri Telecom Products rose 4.96% after a wholly owned subsidiary of the company signed a pact with one of the major cellular operators. The company made this announcement before trading hours today, 26 August 2009.

Hanung Toys & Textiles rose 4.96% after the company's board approved raising up to US$50 million by issuing securities. No other details were disclosed by the company. The announcement was made after trading hours yesterday, 25 August 2009.

Great Eastern Shipping Company rose 7.01%. Rating agency Brickwork Ratings today, 26 August 2009, assigned BWR AAA+ (Pronounced BWR Triple A Plus) rating for the Great Eastern Shipping Company's proposed unsecured non convertible debenture (NCD) issue of Rs 250 crore of ten year terms.

NHPC IPO Allotment Status


NHPC IPO Allotment Status can be checked here

Zodiac Clothing


Shareholders can stay invested in the stock of Zodiac Clothing, which is among the premium players in the retail space, catering primarily to luxury formalwear for men. At Rs 295, the stock trades at a multiple of 17 times standalone four-quarter trailing per share earnings, at a premium to a good number of retail peers. Zodiac commands a substantial brand recall, and has design offices across countries to pick up on trends.

A low debt equity ratio, high operating margins, and quick movement of inventory bode well for the premium retailer. However, considering the company’s premium bent, declining sales growth and higher valuations, fresh investments may not be made at this level.
Brand equity

The company’s flagship brand ‘Zodiac’ is an established name catering to formal menswear, reaching out to older men. In an effort to branch out and reach a wider segment of customers, Zodiac launched two more brands that have been successful.

‘ZOD!’ is a brand aimed at party and club wear for young men, while ‘Z3’ is meant for casual wear, but could be used as office wear, again for young men.

All three are luxury brands. Related accessories such as ties, cuff-links and belts are also marketed by Zodiac, and the company is contemplating entering men’s footwear, which constitutes the majority of the Indian footwear market. Zodiac has a design studio in Mumbai with support from design and sales offices in London, New York and Dusseldorf (Germany).
Store count

Zodiac currently has a retail network of more than 1,200 stores in multi-brand outlets besides 69 (as of March 2009) own stores, including overseas outlets in Dubai. All the exclusive brand outlets are owned by the company and not franchised. This has thus translated into higher depreciation, which has kept pace with sales growth.

Deviating from strategies followed by its retail peers, Zodiac has not, and does not plan to, increase store count through franchisees. Franchising has been the preferred expansion method in this industry for some time since it requires minimal capital investment on the part of the retailer, reduced rentals and store maintenance.

Zodiac, though, is not beset by the funding woes plaguing most retailers and can therefore meet capital requirements quite easily. It operates on a debt-equity ratio of 0.21 times, a high interest cover of 11 times, a positive operating cash flow, and has reserves of Rs 87 crore to draw on.
Margin performance

Operating margins stand at 11.4 per cent for 2008-09, higher when compared with a good many of the company’s retail peers. Even so, margins have dropped from the 16.5 per cent in the preceding year, primarily due to losses on foreign exchange fluctuations.

Given its high own-store count, depreciation and taxes cut net profit margins to 5.7 per cent, though this is still higher than peers. In fact, operating and net profit margins improved to 13 and 7 per cent, respectively, in the June 2009 quarter on the backs of lower raw material costs. In terms of inventory turnover, at 5.67 times sales in FY-09, Zodiac has not only managed to improve on this count over the previous year but is also among the better performers in the retail space.

Working capital too has seen a faster rotation in the past three years, perhaps one key reason why it has managed with little borrowing for operations.
Diminishing sales growth

Superior margins notwithstanding, sales growth has been on the wane, even as consumer spending staged a revival. From a 23 per cent growth in the September 2008 quarter over the same period the preceding year, sales growth progressively declined, slipping to a 3 per cent growth in the June 2009 quarter. Added to declining sales growth, increased expenditure resulted in profits dropping 24 per cent in 2008-09.

Zodiac also has an export component; exports constitute a good 36 per cent of revenues. Even with domestic sales outpacing international sales, and the company’s efforts to keep up with changing fashion trends for the international market, it is still open to slackening global demand and forex fluctuations.

In the domestic market itself, recovery in consumer spending has centred on value-for-money products, leaving premium players such as Zodiac still searching for sales. However, the festival season is now on, and Zodiac has traditionally clocked a healthy sales growth during the September and December quarters.

If Zodiac has to capture a larger piece of the retail apparel market through diversification — either into value retail or women’s and kids’ apparel — it may yet face challenges as a result of its premium, masculine positioning in consumers’ minds.

via BL

Jindal Cotex IPO Analysis


Ludhiana-based Jindal Cotex is a textile company promoted by Sandeep Jindal and his family. The company manufactures acrylic, polyester, and polyester-viscose, polyester cotton, combed and carded yarns. The yarns produced are used for made-ups in the apparel, hosiery and garment industry. The installed capacity is 23,472 spindles of acrylic, cotton blended and polyester yarns with a manufacturing capacity of 7,000 tonnes. The company has a 1,250-KW windmill and entered into agreement with Ajmer Vidut Vitran Nigam for sale of electricity for 20 years.

To diversify and venture into technical textiles, Jindal Cotex has established two fully owned subsidiaries, Jindal Medicot and Jindal Specialty Textiles in Himachal Pradesh. Jindal Medicot is to manufacture medical textile products like absorbent bleached cotton wool and its products and cotton crepe bandages and cloth, with a capacity of 5,000 tonnes. On the other hand, Jindal Specialty Textiles is mobilised for manufacturing PVC laminated products, tent fabrics, and truck sliders, with an estimated capacity of 60 million sq meters per annum.

Jindal Cotex plans an equity infusion of Rs 30.01 crore in Jindal Medicot and Rs 51.01 crore in Jindal Specialty textiles. This equity infusion will help Jindal Medicot to raise Rs 58.00-crore term loan and Jindal Specialty Textiles to raise Rs 100-crore term loans. In addition, it has plans to set up a new facility for manufacturing cotton yarn, yarn dyeing and garments (phase I and phase II) at an outlay of Rs 134.79 crore. The total project cost including the project outlay of subsidiaries is Rs 373.81 crore.

To part finance the same, Jindal Cotex is coming out with a public issue of 1,24,53,894 shares of Rs 10 each at a price band of Rs 70 to 75 per share. Accordingly, the company will raise between Rs 87.18 crore to Rs 93.40 crore in the upper and lower band, respectively. The balance will be raised as term loans by the company and its subsidiaries.

Strengths

* Technical textiles, particularly specialty textiles and medical textiles, are growing at a faster rate. So, there will be relatively lower competition and higher growth market.

Weaknesses

* The textile Industry in India is fully fragmented. With the abolition of the quota system from 1 January 2005 many companies have ramped up their capacities, increasing competition among players in the textile industry.
* The promoters do not have experience in the proposed new projects of manufacturing garments and technical textiles.
* There has been delay in the implementation of projects.

Valuation:

At a price band of Rs 70 – Rs 75, PE on fiscal year ended March 2009 EPS on post-issue equity works out to 40.3 - 43.2, which is extremely high for a textile company.

Sensex extends gains for the fifth day; IT pivotals rally


Key benchmark indices extended gains for the fifth straight sessions after strong economic data from the US suggested that the world's biggest economy is emerging from the longest recession since the 1930s. The BSE 30-share Sensex was up 111.30 points or 0.71%, up 61.58 points from the day's low and off 19.03 points from the day's high. IT stocks were in demand after strong US economic data. The market breadth was strong.

Volatility may rise in the near term as traders roll over positions in the derivatives segment from August 2009 series to September 2009 series, ahead of the expiry the August 2009 series on Thursday, 27 August 2009. Rollover was a little over 54% in Nifty futures at the end of Tuesday's (25 August 2009) trading. The rollover in Mini Nifty futures was about 44%.

Encouraging statement from the Finance Minister Mukherjee indicating that reforms would continue in right earnest to get the economy back to its 9% growth also boosted sentiment. At an event on Tuesday, 25 August 2009 on 'Mission 2010: The Reform Road Map', the finance minister said that the green shoots were visible in industry with basic goods, intermediates and consumer durables doing better in the first quarter.

Mr Mukherjee made it clear that public spending won't push interest rates higher. Nor would the government's huge debt appetite leave private industry high and dry.

Both Mukherjee and C Rangarajan, chief of the Prime Minister's Economic Advisory Council, pegged the GDP growth for this fiscal at 6-6.5% after factoring in the drought damage. Mr Rangarajan, a former Reserve Bank of India governor, said growth should pick up speed to hit 7-8% next fiscal. To accelerate to 9%, though, it was vital to boost domestic consumption, he added.

Planning Commission Deputy Chairperson Montek Singh Ahluwalia said on Monday, 24 August 2009 that India's fiscal deficit this year will not exceed 6.8% despite rising concerns that high government spending. In the budgetary estimates for 2009-10, the fiscal deficit was projected at 6.8%. The first full meeting of the Planning Commission will be held on 1 September 2009 and the main topic of discussion will be the state the economy.

Most Asian markets were trading higher today, 26 August 2009, helped by solid US data on Tuesday and a stronger Wall Street. Key benchmark indices in China, South Korea, Japan, Hong Kong, Singapore were up by between 0.16% and 1.52%. However, Taiwan's Taiwan Weighted slipped 1.19%

Japan's Nikkei 225 index rose 1.37% were supported by news that the country's merchandise trade surplus in July 2009 widened, from the year ago period, for the second straight month.

On Wall Street, stocks finished modestly higher on Tuesday, 25 August 2009 as better-than-expected economic reports on housing prices and consumer confidence and news of Ben Bernanke's reappointment as the Fed Chief for a second term generated some upbeat sentiment.

The three major indices closed at 2009 highs, although they were off the intraday highs reached after the stronger-than-expected economic data. The Dow Jones Industrial Average advanced 30.01 points, or 0.32%, to 9,539.29. The Standard & Poor's 500 Index gained 2.43 points, or 0.24%, to 1,028.00. The Nasdaq Composite Index rose 6.25 points, or 0.31%, to 2,024.23.

The Consumer Confidence Index for August 2009 jumped to 54.1, rising for the first time in three months. This marked an improvement from an upwardly revised 47.4 in July 2009. Meanwhile, the S&P/Case-Shiller home-price index declined 15.4% in June 2009 from a year earlier, less than estimated by economists.

Trading in US index futures showed the Dow could fall 15 points at the opening bell on Wednesday, 26 August 2009.

Closer home, the Central Board of Direct Taxes (CBDT) has advised its field formations to scrutinise all cases in which companies have amortised foreign exchange losses under the one-time discretion allowed by the government through an amendment to Accounting Standard 11 (AS-11).

The temporary relief on AS-11 was permitted on 31 March 2009 against the background of the sharp depreciation of the rupee against the dollar, euro, pound and Swiss franc in 2008. As a result of this, several companies with significant foreign currency loans had to suffer mark-to-market losses.

Under AS-11, gains or losses from foreign exchange fluctuations have to be recognised in the profit and loss account. The amendment to AS-11 provided an option to capitalise or amortise exchange differences on long-term foreign currency positions (typically overseas borrowings) with retrospective effect from December 2006. This was done by adding or deducting such losses from the cost of fixed assets if, and only if, the money was borrowed for acquiring an asset. This treatment enabled companies to make adjustments directly on the balance-sheet by bypassing provisioning in the profit and loss account.

At 10:25 IST, the BSE 30-share Sensex was up 111.30 points or 0.71% to 15,798.81. The Sensex opened 74.62 points higher at 15763.09. The barometer index gained 129.37 points at the day's high of 15,817.84 in early trade. The Sensex rose 48.76 points at the day's low of 15,737.23 in early trade.

The S&P CNX Nifty rose 30.70 points or 0.66% to 4,690.05

The market surged in the past four days supported by positive global cues. The BSE Sensex jumped 878.83 points or 5.93% in the past four trading days from 14,809.64 on 19 August 2009 to 15688.47 on Tuesday, 25 August 2009.

The BSE clocked a turnover of Rs 1296 crore at 10:25 IST

The market breadth, indicating the overall health of the market, was strong. On BSE, 1276 shares advanced as compared with 286 that declined. A total of 35 shares remained unchanged.

Among the 30-member Sensex pack, 22 advanced while the rest slipped.

IT stocks dominated gainers from the Sensex pack on solid readings for US home prices and US consumer confidence on Tuesday. US is the key market for Indian IT firms.

India's largest software services exporter TCS jumped 4.44% to Rs 551.05 and was the top gainer from the Sensex pack. India's second largest software services exporter Infosys rose 3.68%.

India's third largest software services exporter Wipro gained 3.21%, extending Tuesday's 3.7% advance triggered by reports Australian beer and wine giant Fosters Group will outsource much of its internal IT department to Wipro, with the transition to occur before the end of the year. As per reports, Foster's is planning to move its internal service desk to India by November 2009, with the rest of the support teams spread out in different locations.

HCL Technologies rose 1.79% after the company's net profit rose 26.45% to Rs 192.94 crore on 9% rise in total income to Rs 1191.71 crore in Q4 June 2009 over Q3 March 2009. The company announced its result before market hours on Tuesday, 25 August 2009.

India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 0.67% to Rs 2037.40. A panel of ministers has reportedly decided to protecting NTPC's interests with regard to a gas dispute. As per reports, the government has decided to spell out its position in the two disputes involving the Krishna-Godavar Basin D6 block gas supplies รข€” NTPC-Reliance Industries Ltd (RIL) and RIL-Reliance Natural Resources Ltd (RNRL).

On Friday, 21 August 2009 the government had clarified that it was not correct that it would earn Rs 500 crore from the KG basin gas, as claimed by Anil Ambani in the media. It said it would get Rs 84,000 crore.

The dispute between Reliance Industries and Reliance Natural Resources (RNRL) is centered around the price and supply of gas from KG basin operating by RIL to RNRL for the power plants of Anil Dhirubhai Ambani group. NTPC-RIL case also deals with price and supply of gas to NTPC's power plants from RIL. NTPC was up 0.93% while RNRL rose 1.04%

India's largest truck marker by sales Tata Motors was up 0.36%. At its annual general meeting in Mumbai on Tuesday, 25 August 2009, Ratan Tata, Chairman of Tata Motors, said that Tata Motors and Jaguar Land Rover will come through this tough period as leaner and more cost-efficient companies.

Bank stocks rose on bargain hunting after recent slide. India's biggest bank in terms of branch network State Bank of India (SBI) rose 0.74%.

India's largest private sector bank by net profit ICICI Bank gained 0.49% mirroring a 1.16% rise in its ADR on Tuesday, 25 August 2009.

But India's second largest private sector bank by net profit HDFC Bank fell 0.83% despite a 0.61% rise in its ADR on Tuesday, 25 August 2009.

India's top car maker by sales Maruti Suzuki India lost 1.22% on profit booking after four straight days of rise.

L&T Finance - NCD


Investments can be considered in L&T Finance’s secured non-convertible debentures (NCD), especially the longer-term options as they offer attractive rates and provide a hedge against the interest rate volatility over a 10-year period. With banks’ term deposit rates hovering in the 6.5-8 per cent range across comparable tenures, the rates offered by the debenture appear attractive.

However, investors can give the five-year quarterly and semi-annual options a skip. For one, they offer lower rates of interest compared to many fixed deposit options with similar or marginally higher credit risk.

Locking into the shorter term options also appears unattractive given the expectation that interest rates will trend up over the next few quarters.

The NCD has received LAA+ and CARE AA+ ratings (both indicating ‘investment grade’) from ICRA and CARE respectively. This apart, diversified revenue stream, high proportion of capital adequacy and reasonable growth prospects of segments such as commercial vehicles, micro-financing, where the company has recently set foot and which have high yields, are the key investment arguments.
About the company

L&T Finance was set up 15 years ago as a SME financing company to fund its parent company’s vendors and distributors. Today, it has evolved into a full-fledged NBFC that provides equipment financing, tractor and commercial-vehicle financing, micro-financing and lending against shares. The company has 311 branches and points of presence.

L&T Finance had an advance book size of Rs 5,218 crore. Ninety per cent of the loans are secured by assets. The advances book is divided into corporate finance group (37 per cent of loans) and retail finance group (63 per cent of loans). Construction equipment, other retail financing such as tractor and farm equipment financing, CV financing are major segments in that order, according to the management. Most of its borrowings come from bank loans (69 per cent) followed by commercial paper and NCDs.

In the previous fiscal, the company’s interest income grew 38.3 per cent over 2007-08 to Rs 830 crore but due to the prevailing slowdown the profits fell 14 per cent to Rs 98 crore.

The interest spread is 2.7 per cent for the company, which has fallen due to increase in the borrowing costs and higher provisioning for the NPAs (non-performing assets). After providing for Rs 22 crore, the net NPA ratio is at 2.04 per cent, up from 0.7 per cent in 2007-08.

The company has a comfortable capital adequacy of 16 per cent and debt-equity ratio (post issue) of 6.68 times. .

Choosing the best option


The issue is secured by the receivables of the company and 50 per cent of the capital raised in NCD is set aside as debenture redemption reserve.

Of the four options, the 88-month cumulative and the 10-year semi-annual one are good investment options. In the light of the new Tax Code that is expected to come into force from 2011, the post-tax returns of these longer-term options appear more attractive. For instance, for an individual earning Rs 6 lakh per annum, the cumulative option which gives pre-tax yield of 9.5 per cent on an accrued basis may yield only 7.2 per cent as he is in the 30 per cent tax bracket.

However, if the new Tax Code comes into force, the post-tax yield will increase to 8.7 per cent as he would be in the 10 per cent tax bracket. Investors can consider the cumulative option as it reduces the re-investment risk as the accrued interest continues to grow at the same rate, maintaining the yield-to-maturity at relatively higher levels.

The other instrument with similar tenor is Kisan Vikas Patra, which has 1.55 percentage points lower spread over the NCD.

The semi-annual 10-year option, on the other hand, is a one of its kind for the retail investors issued by any NBFC which provides an annualised return of 10.24 per cent, semi annually over a period of 10 years. The only other retail option for such a long tenor is a 10-year government bond with a coupon rate of 6.94 per cent.

A cumulative option is attractive for those who do not require a periodic payout. Investors seeking regular payout may choose the interest payout options.

One advantage of the current NCD issue is that it can be traded on the NSE which makes the bonds liquid. Any major increase in the price of the NCD would present the investor with an opportunity to cash out, especially if interest rates reach a ‘trough’. But investors do not face downside risk. Even if the price of the NCD falls in the secondary market, investors can redeem it at par value on maturity.

For example, the Tata Capital NCD (option 4), with a coupon rate of about 12 per cent and face value of Rs 1000, trades at Rs 1,130 giving an annualised return of more than 25 per cent because of the fall in yields of most debt instruments.

Apart from the exit option that enables selling the NCD in NSE, company may also announce buybacks from time to time and investors can voluntarily retire their NCD.
Risks

The limited track record of L&T Finance in some of its segments may create business risk. There are signs of revival in segments in which L&T Finance has exposure, but it is uncertain if the recovery will uncertain.

The NPAs have continuously trended up for the last four years from 0.1 per cent to 2 per cent and may continue to put pressure on company’s earnings for next few quarters.
via BL

India Real Estate


India Real Estate

GMR Infrastructure


GMR Infrastructure

Pre Session Commentary - Aug 26 2009


Today domestic markets are likely to open positive as majority of Asian markets have opened in green. The better than expected consumer confidence data for the month of August helped US markets close with moderate gains. However the sentiments across Asian markets are positive exuding some rebound after yesterday’s selling pressure. In the domestic arena one could witness a range bound trade today as the bench mark indices had rebound yesterday before the fag ending of markets.

On Tuesday, domestic markets closed marginally higher after a volatile session. The sentiments were weak in the morning trading hour as Asian markets had opened with blood bath. However as the day progressed investors picked up stocks at lower level. Stocks moved between positive and negative territory during the trading on continuous bouts of buying and selling ahead of expiry of August 2009 contracts on Thursday, 27th August 2009. Despite negative European markets, the benchmark indices gained some ground and moved northward during afternoon trade on some buying seen among key stocks. However, profit booking was also witnessed following recent rally. Further, lower than normal rains this year have raised worries about growth in the economy of country. The BSE Sensex ended above 15,650 level and NSE Nifty closed above 4,650 mark.

The BSE Sensex closed higher by 59.72 points at 15,688.47 and NSE Nifty ended up by 16.55 points at 4,659.35. BSE Mid Caps and Small Caps closed with gains of 33.15 and 99.37 points at 5,737.53 and 6,745.24 respectively. The BSE Sensex touched intraday high of 15,735.32 and intraday low of 15,423.39.

On Tuesday, US stock markets closed higher. The better than expected Consumer Confidence reading helped stocks gain remarkably during the opening trade. Consumer Confidence Index for August recorded at 54.1 than 47.9 that was widely expected and marked an improvement from the upwardly revised July reading of 47.4. The retail stocks were in the limelight as they gained 1.8% higher during the day’s trade. On the other hand financial stocks also provided a lot of support to the broader markets. The sector finished with a gain of 1.1%. The sentiments were further supported by the nomination of Ben Bernanke for the second term as Chairman of the Federal Reserve. US light crude oil futures for October delivery closed at $72.05 per barrel down by 3.1% on the New York Mercantile Exchange.

The Dow Jones Industrial Average (DJIA) closed higher by 30.01 points at 9,539.29, NASDAQ index inclined by 6.25 points to 2,024.23 and the S&P 500 (SPX) closed high by 5.43 points at 1,028.00.

Indian ADRs ended mixed. In the telecom pack, MTNL remained unchanged, while Tata Communications was down 0.81%. In the banking space, ICICI Bank was up 1.16% and HDFC Bank was up 0.61%. In the IT sector, Infosys was up 1.7%, Patni was up 5.2%, while Satyam was up 1.87% and Wipro was up 2.2%. In the other sector, Sterlite was down 0.15%, Tata Motors was up 0.93% and Dr Reddys was down 0.67%.

The FIIs on Tuesday stood as net buyers in equity and net sellers in debt. Gross equity purchased stood at Rs 2,543.90 Crore and gross debt purchased stood at Rs 48.30 Crore, while the gross equity sold stood at Rs 1,695.20 Crore and gross debt sold stood at Rs 103.60 Crore. Therefore, the net investment of equity and debt reported were Rs 848.60 Crore and Rs (55.30) Crore respectively.

On BSE, total number of shares traded were 53.41 Crore and total turnover stood at Rs 6,339.93 Crore. On NSE, total number of shares traded were 97.10 Crore and total turnover was Rs 17,889.19 Crore.

Top traded volumes on NSE Nifty – Suzlon Energy with total volume traded 59841049 shares, followed by Unitech with 50264647, DLF with 9608861, Tata Motors with 9098617 and Hindalco with 9016841 shares.

On NSE Future and Options, total number of contracts traded in index futures was 923424 with a total turnover of Rs 20,539.62 Crore. Along with this total number of contracts traded in stock futures were 849577 with a total turnover of Rs 26,501.14 crore. Total numbers of contracts for index options were 1696433 with a total turnover of Rs 39,334.10 Crore and total numbers of contracts for stock options were 63118 and notional turnover was Rs 1,966.40 Crore.

Today, Nifty would have a support at 4,545 and resistance at 4,602 and BSE Sensex has support at 15,312 and resistance at 15,525.

ENIL


Investors with a medium-term perspective can buy Entertainment Network India.

The stock has been on an intermediate term up-trend from the November 2008 low of Rs 93.

However, following a short-term correction in June and July, the stock has recently resumed its uptrend.

The stock rallied 16 per cent over the past two trading sessions with heavy volumes and is trading above 21- and 50-DMA. The daily momentum indicators are bullish.

We believe that the stock has potential to move up to Rs 295, with a likely pause around Rs 270. Investors can buy while maintaining Rs 170 as stop-loss.

Short-term traders enter with a target of Rs 229 and stiff-stop at Rs 198.

via BL

Market seen extending four-day rise on positive global cues


Local markets are seen extending their four-day gaining streak today, 26 August 2009 as well, with positive global cues boosting sentiment. The SGX Nifty futures for August 2009 expiry was up 19.5 points in Singapore. Encouraging statements from the Finance
Minister Mukherjee indicating that reforms would continue in right earnest to get the economy back to its 9% growth path may boost sentiment. He added that the green shoots were visible in industry with basic goods, intermediates and consumer durables doing better in the first quarter. Meanwhile the likely progress of the ongoing gas dispute between the Ambani brothers ahead of the Supreme Court verdict on 1 September 2009 may also influence the markets.

However volatility may rise ahead of the expiry of the August 2009 series on Thursday, 28 August 2009.

Most Asian markets were trading higher today, 26 August 2009. Key benchmark indices in China, South Korea, Japan, Hong Kong, Singapore were up by between 0.26% and 1.52%. However Taiwan's Taiwan Weighted slipped 1.5%

US stocks rose on Tuesday, 25 August 2009 as economic data and the renomination of Federal Reserve chief Ben Bernanke strengthened investor confidence. The three major indices closed at 2009 highs, although they were off the year's intraday highs reached after the stronger-than-expected economic data. The Dow Jones Industrial Average advanced 30.01 points, or 0.32 per cent, to 9,539.29. The Standard & Poor's 500 Index gained 2.43 points, or 0.24 per cent, to 1,028.00. The Nasdaq Composite Index rose 6.25 points, or 0.31 per cent, to 2,024.23.

Planning Commission Deputy Chairperson Montek Singh Ahluwalia said on Monday, 24 August 2009 that India's fiscal deficit this year will not exceed 6.8% despite rising concerns that high government spending. In the budgetary estimates for 2009-10, the fiscal deficit was projected at 6.8%. The first full meeting of the Planning Commission will be held on 1 September 2009 and the main topic of discussion will be the state the economy.

The BSE Sensex has risen 878.83 points or 5.93% in the past four trading days from 14,809.64 on 19 August 2009 to 15688.47 on Tuesday, 25 August 2009.

Equities have risen sharply this year on the back of heavy buying by foreign funds. The Sensex is up 6041.16 points or 62.62% in calendar year 2009 as on 25 August 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 7528.07 points or 92.25% as on 24 August 2009. FII inflow in calendar year 2009 totaled Rs 36,018.20 crore (till 21 August 2009).

As per the provisional figures on NSE, foreign funds sold shares
worth Rs 259.14 crore and domestic funds bought shares worth Rs 436.59 crore on Tuesday, 25 August 2009.