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Monday, September 21, 2009
Rakesh Jhunjhunwala and Shankar Sharma Debate
Last time when we met on this forum, both our gladiators had different opinions. Rakesh Jhunjhunwala was of the view that global economic recovery has started and that corporate India will surprise us. Shankar Sharma kept on insisting you cannot ignore China and that if China goes under, commodity prices will crash. This week, the focus will be different.
So far we are focussed on China but what about the US consumer? The US consumer is now saving more and is certainly spending less.
Rakesh Jhunjhunwala: I mean there is no question of replacing, it is going to be a gradual replacement. China and India, Brazil and Indonesia will replace them. Over a period of time, this is going to be Asia’s century; I have no doubt about it.
But Rakesh, history always repeats itself. Look at the 100-year chart of Dow. The excess of any bull market do not get cleaned up in less than one year.
Rakesh Jhunjhunwala: It is their excesses, so they are, as Chris Wood says and which I agree and which I believe that the Western world is structurally in a bear market. Asia in the emerging world is structurally in a bull market.
Can we ignore the global micro?
Rakesh Jhunjhunwala: We can, we have to look at the global micro to the extent to which it affects India. In fact, the country which will outperform, and out-performance will be known in the next 24 months, will have tremendous advantage because if the world does not do well, interest rates worldwide will remain extremely low.
So, therefore capital will flow and second is capital will flow where there is performance as it always does and then it will overflow. America was not doing well from 64 to 82, Japan had an absolute bull market. So, there have been so many instances in history where certain markets have gone into bull markets. In fact, the Zimbabwean stock market I think was in a bull market in October when the entire world was crashing
Shankar Sharma: No, that is a different market.
Read Full Here
Annual Report - Bharat Forge - 2008-2009
BHARAT FORGE LIMITED
ANNUAL REPORT 2008-2009
DIRECTORS' REPORT
To,
The Members,
Your Directors have pleasure in presenting the Forty-Eighth Annual Report
on the business and operations of the Company and the accounts for the
Financial Year ended March 31, 2009.
Annual Report - Glenmark Pharma - 2008-2009
GLENMARK PHARMACEUTICALS LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
Your Directors have pleasure in presenting their 31st Annual Report and
Audited Accounts of the Company for the year ended March 31, 2009.
Annual Report - Container Corporation of India - 2008-2009
CONTAINER CORPORATION OF INDIA LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
To
The Shareholders
Your directors are pleased to present their report on the business and
operations of your company for the financial year ending March 31, 2009.
Annual Report - Tata Steel - 2008-2009
TATA STEEL LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
To
The Members,
The Directors hereby present their 102nd annual report on the business and
operations of the Company along with the standalone and consolidated
financial accounts for the year ended 31st March, 2009.
Figures in Rupees crore
Tata Steel Standalone Tata Steel Group
2008-09 2007-08 2008-09 2007-08
Net Sales/Income 24,315.77 19,691.03 147,329.26 131,533.63
Total expenditure
before depreciation
(net of expenditure
transferred to
capital) 15,182.34 11,677.25 129,201.59 113,751.20
Operating Profit 9,133.43 8,013.78 18,127.67 17,782.43
Add: Dividend and
Other Income 308.27 242.80 265.67 475.86
Profit before
Interest,
Depreciation,
Exceptional Items
and Taxes 9,441.70 8,256.58 18,393.34 18,258.29
Less: Net Finance
Charges 1,152.69 786.50 3,290.18 4,085.41
Profit before
Depreciation,
Exceptional Items
and Taxes 8,289.01 7,470.08 15,103.16 14,172.88
Less: Depreciation 973.40 834.61 4,265.39 4,136.95
Profit before
Exception Items
and Taxes 7,315.61 6,635.47 10,837.77 10,035.93
Add/(Less):
Exceptional Items - 430.89 (4,094.53) 6,335.13
Profit before taxes 7,315.61 7,066.36 6,743.24 16,371.06
Less: Provision for
current taxation 2,173.00 2,252.00 1,997.12 3,353.73
Less: Provision for
deferred taxation (75.13) 108.33 (121.93) 674.58
Less: Provision for
Fringe Benefit tax 16.00 19.00 18.81 20.99
Profit after taxes 5,201.74 4,687.03 4,849.24 12,321.76
Less: Minority
interest - - (40.94) 139.94
Add: Share of profit
of Associates - - 60.72 168.16
Profit after
minority interest
and share of profit
of Associates - - 4,950.90 12,349.98
Add: Balance brought
forward from the
previous year 6,387.46 4,593.98 8,234.03 4,840.39
Balance 11,589.20 9,281.01 13,184.93 17,190.37
Which the Directors
have appropriated
as under to: -
(i) Proposed
dividend 1,168.95 1,168.93 1,167.88 1,167.86
(ii) Dividend on
Compulsory Cumulative
Preference Shares 109.45 22.19 109.45 22.19
(iii) Tax on Dividend 214.10 202.43 217.64 207.75
(iv) Special Reserve - - 4.24 6.32
(v) Actuarial
gain/(Loss) - - - 5,906.84
(vi) Statutory Reserve - - 51.53 96.30
(vii) General Reserve 600.00 1,500.00 672.23 1,549.08
Total 2,092.50 2,893.55 2,222.97 8,956.34
Balance to be carried
forward 9,496.70 6,387.46 10,961.96 8,234.03
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Annual Report - Tata Motors -2008-2009
TATA MOTORS LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
TO
THE MEMBERS OF
TATA MOTORS LIMITED
The Directors present their Sixty-Fourth Annual Report and the Audited
Statement of Accounts for the year ended March 31, 2009.
1. FINANCIAL RESULTS:
Financial Year
(Rs. in Crores)
2008-09 2007-08
(i) Gross Revenue 28599.27 33093.93
(ii) Net Revenue (excluding excise duty) 25660.79 28739.41
(iii) Total Expenditure 23908.35 25807.82
(iv) Operating Profit 1752.44 2931.59
(v) Other Income 925.97 483.18
(vi) Profit before Interest, Depreciation,
Exceptional items & Tax 2678.41 3414.77
(vii) Interest and Discounting Charges:
(a) Gross Interest and Discounting Charges 1073.10 541.56
(b) Adjustment/Transfer to Capital Account (399.42) (259.19)
(c) Net Interest and Discounting Charges 673.68 282.37
(viii) Product Development Expenses 51.17 64.35
(ix) Depreciation 874.54 652.31
(x) Exceptional item - Notional Exchange
(loss)/gain (net) on Revaluation of
Foreign Currency Borrowings, Deposits and
Loan Given (65.26) 160.73
(xi) Profit Before Tax 1013.76 2576.47
(xii) Tax Expenses 12.50 547.55
(xiii) Profit After Tax 1001.26 2028.92
(xiv) Balance Brought Forward from
Previous Year 1383.07 1013.83
(xv) Credit taken for Dividend
Distribution Tax for previous year 15.29 -
(xvi) Amount Available for
Appropriations 2399.62 3042.75
APPROPRIATIONS:
(a) Debenture Redemption Reserve 267.80 -
(b) General Reserve 100.13 1000.00
(c) Dividend (including tax) 345.70 659.68
(d) Balance carried to Balance Sheet 1685.99 1383.07
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Annual Report - DLF - 2008-2009
DLF LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
To
The Members
Your Directors have pleasure in presenting their 44th Annual Report on the
business and operations of the Company together with the audited results
for the financial year ended 31st March, 2009.
Financial Results:
(Rs. in Crores)
Consolidated
2008-09 2007-08
Gross operating Profit 5,985.98 9,961.48
Less : Finance Charges 554.84 310.00
Less: Depreciation 238.96 90.06
Profit before Tax 5,192.18 9,561.42
Less: Provision for Tax 675.36 1,739.09
Profit before minority interest 4,516.83 7,822.34
Share of Profit/(loss) in associates (21.10) 26.41
Minority interest (27.54) (35.48)
Profit after tax and minority interest 4,468.19 7,813.27
The year under review was extremely challenging. The markets witnessed
unprecedented turbulence in the wake of the global financial meltdown. A
runaway inflation touching a high point of 12% early in the year, tight
monetary policies followed by the authorities for most of the year to
control inflation with the consequent high interest rates, precipitous 26%
fall in the value of the Rupee during the year and weak consumer demand,
all led to a difficult environment in which the Company had to operate.
The worst affected industry was Real Estate. The Company being the
forerunner had to face the brunt of the economic slow-down resulting into
decreased sales volumes and pressure on the profit margins and financing
costs.
The Company's total income on consolidated basis decreased from Rs. 14,684
Crores to Rs. 10,431 Crores, a decrease of 29% over the previous financial
year. Similarly, the gross operating profit on consolidated basis reduced
from Rs. 9,961 Crores to Rs. 5,986 Crores, resulting in a decrease of 40%
and the net profit after tax and minority interest for the year is Rs.
4,468 Crores as against Rs. 7,813 Crores for the previous year (2007-08),
representing a decrease of about 43%. This revenue and profit figures have
been arrived at after adjusting for losses contributed by non-core
businesses of Rs. 163 Crores.
DLF has taken aggressive steps to meet the challenges of the difficult
times through major initiatives in sustaining growth, cost-optimization,
process improvement and efficient management of working capital. The
commitment to meet these challenges resulted in an optimistic start to FY
2009-10.
(CLICK ON THE READ MORE LINK TO VIEW FULL REPORT)
Annual Report - NTPC - 2008-2009
NTPC LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
Dear Members,
Your Directors are pleased to present the 33rd Annual Report and the
audited accounts for the year ended March 31, 2009.
FINANCIAL RESULTS:
Rs. Million
Income 2008-09 2007-08
Sale of Energy 417,913 369,462
Consultancy 1,325 1,039
Other income (Including energy internally 33,320 29,612
consumed)
Total Income 452,558 400,113
Expenditure:
Fuel 271,107 220,202
Employees Remuneration & Benefits 24,631 18,960
Generation, Administration & other expenses 18,192 16,284
Interest 12,750 10,312
Finance charges 7,479 7,669
Depreciation 23,645 21,385
Total Expenditure 357,804 294,812
Profit before tax, provisions and prior 83,172 76,900
period adjustments
Tax 11,582 28,401
Profit after tax but before provisions 83,172 76,900
and prior period adjustments
Less:
Prior Period Adjustments (Net) 1,083 2,745
Provisions (Net) 76 7
Net Profit after tax 82,013 74,148
Appropriations:
Transfer to Bonds Redemption Reserve 4,537 3,822
Interim Dividend 23,087 22,263
Proposed Dividend 6,596 6,596
Tax on Dividend 5,017 4,905
Transfer to General Reserve 44,000 39,000
Transfer to Capital Reserve 86 *
*Rs.12,723/-.
(CLICK ON THE READ MORE LINK BELOW TO VIEW FULL REPORT)
Annual Report - REC - 2008-2009
RURAL ELECTRIFICATION CORPORATION LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
To
The Shareholders,
The Directors have the pleasure in presenting the Fortieth Annual Report
together with the Audited Statements of Accounts of the Company for the
financial year ended 31st March, 2009.
1. PERFORMANCE HIGHLIGHTS
1.1 The highlights of performance of the Company for the year 2008-09 were
as under with comparison of previous year's performance:-
Particulars 2008-09 2007-08
(Rs. in crore) (Rs. in crore)
Loans sanctioned 40745.84* 46770.00*
Disbursements 22277.86 16304.00
(including subsidy under RGGVY)
Recoveries 9796.97 9042.00
Total Operating Income 4757.17 3378.21
Profit before tax 1920.11 1312.42
Profit after tax 1272.08 860.15
* Excluding subsidy under RGGVY
(CLICK ON THE READ MORE LINK BELOW TO VIEW FULL REPORT )
Annual Report - Reliance Communication - 2008-2009
RELIANCE COMMUNICATIONS LIMITED
ANNUAL REPORT 2008-2009
DIRECTOR'S REPORT
Dear Shareowners,
Your Directors have pleasure in presenting the fifth Annual Report and the
audited accounts for the financial year ended 31st March, 2009.
Financial Results
The standalone performance of the Company for the financial year ended 31st
March, 2009 is summarised below:
Particulars Financial Year ended * Financial Year ended
31st March, 2009 31st March, 2008
(Rs. in crore) USS in (Rs. in crore) US$ in
million** million**
Total income 13,694.66 2,700.05 13,426.65 3,354.99
Gross profit before
depreciation,
amortisation and
exceptional items 3,288.75 648.41 4,463.92 1,115.42
Less:
a. Depreciation and
amortisation 1,933.51 381.21 1,843.66 460.68
b. Exceptional items
and other adjustments (3,459.83) (682.14) 16.17 4.04
Profit before tax 4,815.07 949.34 2,604.09 650.70
Less: Provision for:
Current tax - - 2.10 0.52
Fringe benefit tax 12.40 2.44 15.54 3.88
Profit after tax 4,802.67 946.90 2,586.45 646.29
Add: Balance brought
forward from previous
year 4,300.24 847.84 2,294.90 573.44
Profit available for
appropriation 9,102.91 1,794.74 4,881.35 1,219.73
Appropriations:
Proposed Dividend on
equity shares - - 154.80 38.68
Interim Dividend paid
on equity shares 165.12 32.56 - -
Dividend Tax 28.06 5.53 26.31 6.57
Transfer to General
Reserve 8,400.00 1,656.15 400.00 99.95
Transfer to Debenture
Redemption Reserve 6.98 1.38 - -
Balance carried to
Balance Sheet 502.75 99.12 4,300.24 1,074.52
* Figures of previous year have been regrouped and reclassified, wherever
required.
** Exchange Rate Rs. 50.72 = US$ 1 as on 31st March, 2009 (Rs.40.02= USS1
as on 31st March, 2008).
(CLICK ON THE READ MORE LINK BELOW TO READ THE FULL REPORT )
Euro Multivison IPO Review
Mumbai based Euro Multivision the second largest maker of CD-R`s and DVD-R`s, has come out with initial public offering (IPO) to raise about Rs 660 million. The IPO, which will open for subscription on Sep. 22, 2009, has price band of Rs 70 to Rs 75 a share of Rs 10 each. The issue will close on Thursday, Sep. 24, 2009.
EML outlays Rs 1,780 million to venture into photo voltaic business by manufacturing solar cells used for generation of electrical energy. The project cost will be funded through issue proceeds, Rs 1,000 million in term loans and internal accruals. It has proposed to build a photo voltaic solar cell manufacturing unit with a capacity of 40 MW per year at its Gujarat unit. It owns 28.75 acres of land for the SEZ purposes. It has also started construction work of the plant.
The renewable energy industry presents bright long term future given the kind of global thrust for renewable energy and domestic market potential. The availability of Special Economic Zone (SEZ) and brand recognition in the existing CDR/DVDR market will also benefit the company.
However, the delay in photo voltaic project execution, high debt-equity ratio (6:1), small scale of existing operations, reducing margins in the existing business, uncertain export market conditions and slowdown in IT sector are causes of worry.
In addition, the moderate corporate governance, substitution risk from other renewable sources of energy, capital intensive nature of business and lack of long-term arrangements for sourcing raw material are also a matter of concern.
Independent investment advisor, SP Tulsian said that solar cell business is high technology and high capital intensive, where, even established and large players are finding it difficult to succeed. Even Reliance Industries have been talking to foray in this but not yet done any headway and Moser Baer is struggling to succeed.
via IRIS
The financials of the company are also not so impressive. Analysis revealed sharp drop in revenues and operating margins resulted in 81.15% y-o-y plunge in FY09 net profit to Rs 18.3 million. It posted decline of 19.31% y-o-y in FY09 revenues to Rs 734.07 million while operating margin dipped 709 bps over the year to 27.80%.
Further, the valuations of the company also seem to be expensive. At floor and cap price, the issue is priced at 57.40 times and 61.50 times respectively of FY`09 earnings of Rs 1.22 a share. However, the industry`s average P/E was 6.36 and highest P/E was at 16.77.
Issue does not deserve any merit and attention and should be avoided under any and all the circumstances, Tulsian advised.
``We recommend investors to avoid the issue considering the pessimistic outlook for compact disks``, broking firm KC Securities said.
On the whole, it is better to stay away from stock offering of the company considering the demand concern, high debt-equity, weak financials and expensive valuation.
IPO Recommendation - Thinksoft Global Services
Focused on testing services in BFSI vertical
The IPO seems to be mainly to give an exit route to selling shareholders
Promoted by technocrats, Mr Asvini Kumar, Ms Vanaja Anand and Mr Mohan Parvatikar, Thinksoft Global services, is a testing services company focused on the Banking, Financial Services & Insurance (BFSI) vertical. Europe contributes more than 50% of the revenues. The company has acquired the ability to customize testing solutions for clients across a variety of business areas and products for system integrators, product development companies and to clients in the finance sector to achieve near defect free roll outs. The company has a 360 seat offshore facility in Chennai and offices in New York, London, Frankfurt, Singapore, Brussels, Sydney, Bangalore and Chennai.
In the BFSI segment, the company does testing in core banking/retail banking (for products like finacle, Banc 24, Flexcube, FinnOne etc.), treasury (Kondor+, Kastle, Urbis), Investment Banking (MIDAS), retail lending/loans/mortgages (Pan Credit, LSI-NT, Foresee, Cheque mate etc.), credit cards (VisionPLUS, TS2, Prime), payment system (STS – CWS), corporate banking (Flexcude), Insurance (GENIUS, METFACS2, PREMIA), private banking (ORBI), CRM (Siebel) and Campaign management (ClarityQ).
As of March 31, 2009, the company has 34 active clients. The company added 17 clients in FY2009. Of the revenues for FY2009, 15% was contributed by new clients. The top 10 clients contributed 92.66% of the revenues for FY2009 down from 94.85% in FY2008.
The share of onsite to the operating revenues has increased to 62.98% from 48.59% in FY2008. The management has indicated a target level of 55%. Most of the revenues are generated primarily on the time and material basis about 88% down from 93% in FY2008. The level over the last 4 years is 87-93%.
Within the BFSI segment, for FY2009, banking contributed 43% up from 29%, credit cards segment contributed 37% down from 52%, capital market segment contributed 10% up from 8%, Insurance contributed 8% up from 6% and others contributed 5% up from 2%.
As of March 31, 2009, the headcount was 538 employees down from 582 at end FY2008. The utilization for FY2009 was 59% down from 65% in FY2008. As of August 2009, the employee strength has further come down to 523 employees of which testing staff is 383, domain experts 72 employees, marketing are 25 employees and foundation & support staff are at 43 employees.
In terms of geographies, Europe contributed 53.7% of the revenues down from 58.2% in FY2008. The share of Europe has come down gradually from a high of 76.9% in FY2006. Singapore & Middle East contributed 26.7% up from 17.1% in FY2008 and 5.4% in FY2005. Australia & US contributed 16.1% against 16.8% in FY2008 and 8% in FY2005. India contributed 3.5% of the revenues down from 8% in FY2008.
The company had received investment of about Rs 5.13 crore from Euro Indo Investments & its promoter (Vinod Ganjoor) in 2000-2001. The fund is offering 90% of its stake for sale in the public issue. This accounts for about 63% of the public issue. The balance 37% is being raised to fund setting up new testing centre at MEPZ-SEZ adding 400 seats to be completed by March 31, 2011 at a capex of Rs 16.09 crore.
Strengths
* The revenues of the company have reported CAGR of 43.5% in rupee terms and 42.7% in US dollar terms (assuming average INR/US$) over the period FY2005 - FY2009. However, the growth was lower at 8.7% (in US$ terms) in FY2009 over FY2008 impacted by the global slowdown.
* The company has close to 10 years experience in financial domain. Within the BFSI vertical, the company has opportunity in the replacement of legacy systems/applications with off-the-shelf products, addition of new banking channels such as such as Mobile/e-Banking, innovation in cards markets such as Contact less cards, Chip and Pin – Smart cards (EMV), industry initiatives such as Single Euro Payment Area (SEPA), growth in Middle Eastern region especially in Islamic Banking, opportunities to mine existing accounts by expanding width and depth of engagements.
Weaknesses
* The company has high dependence on few clients with more than 90% of the revenues coming from top 10 clients. Top 10 clients contributed 92.66% in FY2009, 94.85% in FY2008, 96.99% in FY2007, 97.64% in FY2006 and 94.64% in FY2005. Top client contribution for FY2009 was 26%.
* The services of the company are part of the discretionary spend of any client. There has been a slump in the discretionary spend by clients all across verticals. While it seems to have bottomed out, how fast the discretionary spend will pick up is not clear.
* The company is focused on only one vertical i.e. BFSI. The vertical has seen a major impact due to the challenging economic environment and will remain very sensitive to fluid global economic environment.
Valuation
At the price band of Rs 120 - 130, on the consolidated FY09 EPS of Rs 14.4 on post IPO equity, PE works out to 8.3 – 9 times. The company has cash on books of Rs 26 per share for FY2009 on post issue share capital. Excluding this cash, the P/E comes down to 6.5 – 7.2 times.
Considering the cash on books, trend of operating cash flow and the capex plan, the IPO seems to be mainly to give an exit route to the selling share holders.
Of the small software companies focused on BFSI space, Nucleus Software, a product company is trading at TTM PE of 11.1 times (pre cash) and 7.2 times (post cash) and Saksoft, a testing services cum product company (similar sized company in terms of revenues) is trading at TTM PE of 5.1 times. Nucleus Software would command a higher PE as it is product centric as against Thinksoft which is a services company.
via CM
IPO Analysis and Recommendation - Euro Multivision
Entering solar PV cell business
After feeling the impact of global slowdown in the optical business, entering the solar business without any experience
Part of Euro group, Euro Multivision is the second largest manufacturer of compact disc recordable (CDR) and digital versatile disc recordable (DVDR). The company began commercial production in April 2004 at Bhachau, Kutch, Gujarat, with five manufacturing lines with an installed capacity of 720 lakh units of CDR and 72 lakh units of DVDR a year. It increased its capacity to 10 lines comprising 1,800 lakh units a year and converted the DVDR capacity into CDR capacity. These lines are interchangeable and are convertible between CDR and DVDR. Euro Mutlivision has 16 distributors with over 515 district dealers and more than 1,50,000 retailers spread across the country.
To enter the solar photovoltaic business, Euro Multivision plans to manufacture solar cells from imported silicon wafers at a PV solar cell manufacturing unit in a proposed special economic zone (SEZ) at Bhachau, Kutch, Gujarat. One unit of silicon wafer can produce one cell with capacity of 3.5-3.8 watts. The cost of one unit of wafer is about US$ 2.75 – US$ 3.25. The selling price of one watt of PV cell is US$ 1.8 – US$ 2. There are at least nine companies in the solar PV cell manufacturing business. Euro Multivision would be selling the solar PV cells to solar module manufacturers. The modules would be set on solar panels and used to store solar energy.
OTB Solar B.V, Netherlands will sell and design, deliver, install, test and mechanically commission the production line needed for the project. The manufacturing line has already been delivered. The 40-MW facility will be commissioned by December 2009. Euro Multivision will be exporting the entire production and has identified Europe, US, South East Asia and Middle East as some of the key places to set up marketing offices.
The project, to cost an estimated at Rs 178.04 crore, has been appraised by State Bank of India. SBI has sanctioned Rs 80 crore as a term loan and has opened a letter of credit. Euro Multivision has utilized Rs 20 crore out of the sanctioned Rs 33.75 crore from Cosmos Co-operative Bank. The balance will be funded through the proceeds of the public issue and internal accruals.
Strengths
* Governments across the world have increased their thrust on renewable energy. With the Kyoto Protocol in place, industrial countries will have to reduce their collective emissions of greenhouse gases by 5.2% compared with 1990. Being a renewable energy, without emission of any greenhouse gases, solar energy will be one of the ways to lower emission. The Spanish solar PV market is expected to grow and reach 33,738 MW by 2020, the Italian solar PV market at a CAGR of around 48% to nearly 50 GW by 2020, and the US solar PV market at a higher CAGR of nearly 50% to more than 75 GW by end 2020. India's National Solar Mission is targeting 20,000 MW of installed solar generation capacity by 2020.
Weaknesses
* Solar PV cell production reached a consolidated 6.85 GW, with a capacity utilisation of 67%, in 2008 as against demand of 5.95 GW. With supply outstripping demand, prices of cells have crashed. With capacity expansions across all countries including in India and many projects either approved or awaiting approval in India as well as overseas, there are possibilities of continued overcapacity and higher competition.
* The solar PV cell business will need continuous capital investments for technology upgrade.
* The cost of solar energy is still high as compared with other sources of energy, thereby making it less feasible than other forms of energy without active government support.
* Prices of CDR/DVDR are falling continuously. Operating profit per unit sold has come down from Rs 2.42 per unit in fiscal ended March 2007 (FY 2007) to Rs 1.29 per unit in FY 2009.
* The price of polycarbonate, the basic raw material for optical business, is influenced by a variety of factors including crude oil prices and demand-supply balance. Any sharp increase in prices of crude will impact margin.
* Most of the raw material requirements are through imports. Polycarbonate, the basic raw material required for the optical business, and silicon wafer required for solar PV cell business are/will be imported. Adverse and volatile forex movements can affect performance.
* The Euro group has not lived up to the expectation of the investors. Euro Ceramics has disappointed since listing, with return a negative 67% as against the BSE Sensex return of 30%.
Valuation
At the price band of Rs 70 – Rs 75 on the FY 2009 EPS of Rs 0.8 on post-IPO equity, PE works out to 90.9 – 97.4 times. Among the listed companies, Moser Baer has a similar business model, but it is a very large company compared with Euro Vision on financials and capacities. Moser Baer reported production of 3,158 million units as against Euro Multivision's 159 million in FY 2009. In the PV business, Moser Baer has an operational capacity of 80MW crystalline silicon, 40MW of thin film. The company has at least 135 MW of capacity lined up. Against his, Euro Multivision's capacity will be 40 MW by December 2009. Moser Baer has reported large losses for the past two years and, excluding extraordinary item, continued to be in the red in the first quarter ending June 2009. Moser Baer currently trades around Rs 91.
via CM
Asian markets ease in holiday thin trading
Sydney, Seoul softens while Shanghai shows small up tick
Stock market in Asian region eased on Monday, 21 September 2009, pulling further away from 13-month highs hit last week, as investors worried prices may have raced too far ahead of economic fundamentals, with shares in China feeling supply pressures ahead of a string of IPOs.
On Wall Street, the Dow Jones Industrial Average closed at a new high for 2009 on Friday, amid a handful of expirations known to cause volatility. Referred to as quadruple witching, contracts for stock index futures, stock index options, stock options and single stock futures all expired.
The S&P 500 rose 2.81 points, or 0.3%, to 1068.30. The Dow Jones Industrial Average added 35.28 points, or 0.4%, to 9820.20. The Nasdaq Composite also increased 6.11 points, or 0.3%, to 2132.86. Stocks posted the strongest weekly gains since July - the Dow advanced 2.2%, and the S&P and Nasdaq tacked on 2.5% each - suggesting again that the rally is durable.
In the commodity market, crude oil fell for a third day in New York on speculation further evidence of a global recovery is needed to extend the commodity's 61% gain this year.
Crude oil for October delivery fell as much as 72 cents, or 1%, to $71.32 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $71.37 at 4:46 p.m. in Sydney. Japan, India and Singapore, Asia's major oil trading hub, are closed today for holidays.
Brent crude oil for November settlement fell as much as 70 cents, or 1%, to $70.62 a barrel on the London-based ICE Futures Europe exchange. It was at $70.73 at 4:49 p.m. in Sydney. It declined 0.3% to $71.32 on Sept. 18.
In the currency market, the U.S. dollar bounced back against the yen in Asia, in a technical correction after sustained losses in recent days, but should remain in tight ranges ahead of key events later this week. With many large Asian markets closed for holidays, including Japan, Singapore and India, the dollar was well-supported in low-volume trade, as foreign exchange players await a statement from the U.S. Federal Reserve due Wednesday.
The Japanese yen softened against US Dollar. The Japanese yen was quoted at 92.2010 against the US dollar.
The Hong Kong dollar was trading at HK$ 7.7507 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 dropped after the US dollar received a boost on speculation the Federal Reserve might raise American interest rates sooner than had been expected by the market. At the local close of trade, the dollar was at $US0.8627, down from $US0.8686 on Friday, and off a one-year high of $US0.8776 seen last week.
In Wellington trade, the New Zealand dollar is ripe for a turn - although traders disagree markedly over which way they could go. At 5pm the NZ dollar was buying US70.73c, easing from US70.88c at the 8am today and a 13-month high of US71.55c on Thursday.
The South Korean won rose to a near one-year high against the U.S. dollar as foreigners continued to buy Seoul stocks on economic recovery hopes. The South Korean won closed at 1,204.4 won to the greenback, up 3.4 won or 0.28% from the previous session, the strongest level since 29 September 2008. The Korean unit climbed as high as 1,202.2 won to the dollar at one point.
The Taiwan dollar strengthened against the greenback. The Taiwan dollar was trading higher against the US dollar at NT$ 32.4190, 0.0390 up from Friday's close of NT$32.4580.
In the Asian equities, stock markets closed mostly lower Monday, taking their cue from weakness in Chinese shares. Markets in Japan, India, Malaysia, Singapore, Indonesia and the Philippines were closed for public holidays.
In Mainland China, share market bouncing off from a morning low to finish the session higher, with healthcare, consumer discretionary, and consumer staple sector led the rally ahead of the weeklong National Day holiday, meanwhile Metallurgical Corp of China's listing debut bolstered sentiment. The Shanghai Composite Index, measuring A shares and B shares on the Shanghai Stock Exchange, added 4.34 points, or 0.15% to 2,967.01, while the CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, rose 0.28%, to 3,208.60.
In Hong Kong, the stock market drifted back into negative terrain to finished the session lower, giving up intraday gains as financials, properties, materials, and Mainland Chinese stocks caved into profit-taking pressure amid rekindled concern last week's rally stretched stock valuations more than companies fundamental and the potential recovery in bottom lines. The Hang Seng Index stumbled 150.60 points, or 0.7%, to 21,472.85, while the Hang Seng China Enterprise slipped 196.23 points, or 1.56%, to 12,418.34.
In Australia, the shares market endured losses for second consecutive day, dragged down by major materials and resources stocks after base metal prices fell on the London Metal Exchange on Friday in response to a resurgent US dollar and rising LME inventories. Significant selling pressure in top four banks weighed down financial sector. At the closing bell, the benchmark S&P/ASX200 index stumbled 15.8 points, or 0.34%, to 4,677.4, meanwhile the broader All Ordinaries fell 9.6 points, or 0.2%, to 4,684.1.
On the economic front, Australian bureau of statistics said today that total new motor vehicles sales gained by 0.3%, seasonally adjusted, to 75,388 units in August.
In New Zealand, benchmark index ended the first trading day of the week moderately up in the positive terrain. However, the NZX15, comprising the 15 largest and most liquid domestic securities edged down. The share market registered the fourth day of gain in a row on Monday. The NZX50 edged down 0.81 points or 0.03% to 3155.65. The NZX 15 however, dipped down 0.16% to close at 5765.89.
On the economic front, the service sector continued on its road to recovery as the August result provided the first consecutive monthly expansion since early 2008. The PSI for August stood at 51.3, which was 1.2 points up from July. In comparison with previous years, the August result was 3.4 points up from August 2008, but still 8.1 points down from 2007. Business NZ Chief Executive Phil O'Reilly said the results were positive for two reasons. The first being the historic low point of 43.7 in April looks well and truly over, as new orders/business has been particularly strong over July and August. Although this is still not at the level experienced during 2007, it is quickly heading in the right direction.
In South Korea, stocks closed lower as institutional investors continued their selling streak for a third session. The benchmark Korea Composite Stock Price Index (KOSPI) declined 4.21 points to 1,695.5. Foreign investors snapped up stocks for the 12th straight session, encouraged by South Korea's inclusion in the Financial Times Stock Exchange (FTSE) advanced market category, which was effective as of Monday.
In Taiwan, stock market finished lower, as investors sold high-flying tech shares such as Mediatek that have helped push the market to this year's highest close on Friday, but LCD makers capped losses.
The benchmark Taiex share index continued to swing between gains and losses as it started the third week of September on a lower note by finishing the first day of the bluer by 24.09 points or 0.32% in a day, closing the day at 7502.46, retreating from its fourteen month high status by showing the closing not seen from 27 June 2008 when market closed at 7548.76.
On the economic front, with central banks around the world embracing a wait-and-see attitude toward the anniversary of the global financial tsunami, the Central Bank of Republic China (CBC) in Taiwan is unlikely to raise the policy interest rates at its regular meeting of board directors and supervisors on Thursday.
According to Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (TEN), the CBC will resort to open-market operation to absorb flooding idle fund in the market, while withholding interest-rate hike until the second quarter or third quarter next year, reported the EDN citing sources familiar with the policy-making mode of the Central Bank of Republic China.
Discount rate hit the nadir of 1.25%, a record low, in February 2009, following seven interest cuts by the Central Bank of Republic China since on 16 September 2008, in the wake of the bankruptcy of Lehman Brothers.
Elsewhere, stock markets in Indonesia's Jakarta Composite index ended the day higher at 2456.99.
In other regional market, Europe stocks declined on Monday, as traders moved away from resource and chemical plays that have fronted gains as the economy recovers. By region, the German DAX fell 1.5% to 5,620.94, the U.K. FTSE 100 fell 1% to 5,123.24 and the French CAC 40 weakened 0.8% to 3,795.82.
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