PSEC - Ashok Leyland

P-Sec report on Ashok Leyland:

Ashok Leyland reported flattish volume growth of 1.6% y-o-y on account of degrowth in domestic MDV goods segment of 24% y-o-y. MDV passenger goods segment grew by 318% y-o-y on account of low base during last year in June’06. The volume growth has been above our expectations. Ashok Leyland has recently entered in JV with Alteams Group of Finland to manufacture High Pressure Die Casting aluminium products in automotive and telecom sector. This venture will enable ALL to diversify and de -risk its product portfolio in long run; the company is already present in foundaries through Ennore foundaries. The stock trades at 9x its FY09P earnings. We recommend Accumulate.

PSEC - Maruti Udyog

P-Sec report on Maruti Udyog:

Maruti reported robust volume growth of 23% y-o-y during June’08 aided by healthy growth in A2 segment of 38% y-o-y and good response to the new launch SX4 in A3 segment. The company sold 2500 units of SX4 and 7500units of Swift. The A3 segment grew by 46% y-o-y. Presently operating at over 100% capacity at Manesar plant a strong jump in volume in these segments is unlikely as new capacity with come on stream only in FY09. Impact from hardening interest rates were no seen in volumes growth however, we expect realizations to remain subdued. The stock trades at 13x its FY0 8P earnings, we maintain BUY.

PSEC - Infosys Technologies

P-Sec report on Infosys Technologies:

This shall be one of the tough AMJ quarter for Infosys. We are revising are Rs/USD assumption to Rs 42.5 for FY08 and FY09 estimates. We are expecting operating revenues of Rs 39313 million, a q-o-q growth of 4.22% and y-o-y growth of 30.4%. However in USD terms we are estimating revenues of USD 925 million ( 7.2% q-o-q, 40.2% y-o-y) We are expecting a q-o-q margin erosion of 244 bps this quarter reflecting the impact of rupee appreciation, Salary hikes, visa expenses. Infosys has only 3.2% of the balance sheet size in the form of debtors & balance in foreign bank a/c. Hence, shall have lesser impact of mark to market of monetary assets. We continue to recommend a BUY at these levels.

PSEC - 3i Infotech

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