IDBI Capital - Dena Bank

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Macquarie - Oil Price Forecast

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Sharekhan Eagle Eye (equities) & Derivatives Info Kit for January 25, 2007

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Sharekhan Daring Derivatives for January 25, 2007

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Sharekhan Investor's Eye dated January 24, 2007

Bharat Electronics
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,525
Current market price: Rs1,378

Performance ahead of expectations

Result highlights

• Bharat Electronics (BEL) has announced a robust growth of 27.6% in its net sales to Rs863.8 crore, which is ahead of our expectations.
• The operating profit margins have improved by 150 basis points to 22.9% in spite of the 620-basis-point jump in the raw material cost as a percentage of sales. However, the saving of 770 basis points in the staff cost and the other expenses as a percentage of sales more than made up for the adverse impact of the higher raw material cost.
• Consequently, the earnings jumped by 52.7% to Rs148.2 crore, which is ahead of our expectations of around Rs119 crore.
• On the nine-month basis, the revenues have grown by 9.9% to Rs2,181.2 crore. The operating profit has declined by 50 basis points to 20.9%, largely due to the increase in the raw material cost as a percentage of sales. However, the jump of 72.1% in the other income component aided the growth in its earnings, which grew at a relatively higher rate of 18.8% to Rs356.6 crore. The company is expected to comfortably achieve our full year earning estimates of Rs672.6 crore (which implies a growth of 12.5% in Q4FY2007).
• The company has declared an interim dividend of 40% (or Rs4 per share).
• At the current price, the stock trades at 12.2x FY2007 and 9.7x FY2008 estimated earnings (price has been adjusted for cash on the books). We maintain the Buy call on the stock with a target price of Rs1,525 (12x adjusted FY2008 earnings).

Elder Pharmaceuticals
Cluster: Apple Green
Recommendation: Buy
Price target: Rs508
Current market price: Rs412

Growth momentum continues

Result highlights

• Elder Pharmaceuticals (Elder) continued its strong performance during the quarter. The company's net sales rose by 31.7% to Rs115.7 crore in Q3FY2007, on the back of a steady momentum in its core brands, a ramp-up in the sales of the Fairone brand due to the launch of the product in south India and the growing revenues from the in-licenced portfolio. The sales were in line with our estimate.
• Elder reported a 150-basis-point drop in its operating profit margin (OPM) to 18% during the quarter, on account of a 34.9% rise in the raw material cost and a 32.6% increase in the staff cost. The raw material cost was higher on account of the distribution of free samples as a promotional initiative and the staff cost was higher due to an increase in the sales force in order to expand its market reach and penetration.
• Consequently, the company's operating profit rose by 21.8% to Rs20.8 crore in Q3FY2007.
• Despite a 20% drop in the other income, and an increase in the interest and depreciation costs, Elder's net profit grew by 35.7% to Rs14.6 crore. The net profit was in line with our estimate. It was aided by a sharp 41.2% reduction in the company's tax outgo. The tax incidence halved from 24% in Q3FY2006 to just 12% in Q3FY2007, as the company increased the production from its tax-exempt plants of Himachal Pradesh and Uttaranchal.
• In view of its strong growth potential, we remain positive on Elder's future growth prospects. At the current market price of Rs412, the stock is quoting at 10.2x its estimated FY2008 earnings. We maintain our Buy recommendation on the stock with a price target of Rs508.

Marico
Cluster: Apple Green
Recommendation: Buy
Price target: Rs634
Current market price: Rs569

Margins disappoint, but stay on course!!

Result highlights

• In Q3FY2007 the net revenues of Marico grew by 34.7% year on year (yoy) to Rs409.2 crore, ahead of our estimate. The top line growth was higher in this quarter on account of the full contribution from the acquired brands of Nihar, Manjal, Camelia and Aromatic, partial contribution from the Fianc�e acquisition, and the strong growth of 20% in the focused brand portfolio (organic growth).
• The operating profit margin (OPM) declined by 210 basis points to 13.5% on account of an increase in the selling and administration expenses, and the other expenses as a percentage of sales. Consequently, the operating profit grew by 16.2% year on year (yoy) to Rs55.1 crore. The same was below our estimate.
• The interest cost for Q3FY2007 grew to Rs5.4 crore from Rs1.3 crore in Q3FY2006, on account of the debt taken to achieve inorganic growth. The depreciation and amortisation cost was lower by 20.2% due to a one-time write-off in Q3FY2007 on account of the change in the depreciation policy.
• The net profit before extraordinary items grew by 26.4% yoy to Rs27.7 crore and it was below our expectation. The net profit after the extraordinary items grew by 29.6% yoy to Rs28.4 crore. But due to the placement with the qualified institutional buyers and the resultant equity dilution, the earnings per share (EPS) grew by a slower 20.4% to Rs4.5.
• Marico has acquired two brands (Fianc�e and HairCode) in Egypt which will generate revenues of Rs90-95 crore in FY2008. Significantly, these brands provide 15-18% profit after tax (PAT) margin against that of 7-7.5% for Marico. This indeed comes as a positive surprise as it will help Marico expand its OPM next year.
• The Kaya business grew by an impressive 64% yoy to Rs19.7 crore. It managed to achieve a profit before tax (PBT) in the current quarter. Marico expects the Kaya business to also break even on a full-year basis. This is a big positive because going forward the business will be contribute to the bottom line and its higher margin profile will contribute to the margin of Marico. Marico plans to open roughly 12 new Kaya clinics in FY2008 and Marico wants to concentrate on increasing the utilisation levels and product penetration going forward.
• We are revising our FY2007 and FY2008 earnings estimates higher by 0.6% and 0.7% to Rs18.5 and Rs24.2 respectively. The stock is trading at attractive valuations of a price/earnings ratio (PER) of 23.1x FY2008E and enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 13.2x FY2008E. We continue to remain bullish on Marico and reiterate a Buy on the stock with a price target of Rs634.

Indian Hotels Company
Cluster: Apple Green
Recommendation: Buy
Price target: Rs175
Current market price: Rs159

Another good quarter

Result highlights

• For the third quarter of FY2007, Indian Hotels Company Ltd (IHCL) reported a top line growth of 29% at Rs409 crore against Rs317 crore in the third quarter of the previous year. The bottom line of the company grew by a healthy 43% to Rs87.9 crore from Rs61.5 crore in Q3FY2006, resulting in earnings of Rs1.5 per share.
• The operating profit margin (OPM) improved by 450 basis points from 32.9% in Q3FY2006 to 37.4%. The operating profit has shown a growth of 35% year on year (yoy) to Rs155 crore.
• The healthy trend in the top line is due to the rise in the number of foreign tourist arrivals into India, which has pushed up the average room rate (ARR) and the occupancy rate (OR). During the third quarter, the ARR grew by 32% to Rs10,772 from Rs8,150 in Q3FY2006; the OR zoomed to 76% from 74% in the corresponding quarter of the last fiscal. The hotel industry has witnessed continued buoyancy in the arrival of foreign tourists. During the period January-December 2006, the number of foreign tourist arrivals increased to 4.4 million from 3.9 million in Q3FY2006, representing a 13% growth yoy.
• At the current market price of Rs159 the stock is quoting at a price/earnings ratio (PER) of 25x FY2007E consolidated earnings per share (EPS) of Rs6.2. We maintain our Buy recommendation on the stock with a revised price target of Rs175.

Cipla
Cluster: Cannonball
Recommendation: Buy
Price target: Rs300
Current market price: Rs248

Growth triggers remain intact

Result highlights

• Cipla reported lower than expected numbers for Q3FY2007 with a net profit of Rs184.4 crore against the expectation of Rs192.1 crore.
• The earnings were lower due to the disappointing revenues, which grew by only 13% to Rs880.5 crore against the expectation of a 22% growth to Rs952.7 crore.
• The exports of active pharmaceutical ingredients (APIs) declined by 35% due to reduced supplies of Simvastatin and Finasteride APIs to Teva owing to the expiration of the 180-day exclusivities for the said products in December 2006. This affected the company�s revenue growth. Also, the sales of domestic formulations were lower than expected at Rs435.7 crore.
• However, the company reported a strong 35% growth in the formulation exports to Rs319.7 crore on the back of its global partnerships. The stellar performance of the formulation business was however overshadowed by the 35% decline in the API exports.
• The operating profit margin (OPM) witnessed a 450-basis-point expansion to 24.9% in the quarter, as the other expenses saw savings of 490 basis points caused by the foreign exchange (forex) fluctuation gain and lower factory overheads. Consequently, the operating profit increased by 38% to Rs219.3 crore.
• With the reduction in tax incidence to 14.9% from 22.6% (possibly due to the commissioning of the new export-oriented unit at Patalganga), the net profit before the extraordinary items was up 79.7% at Rs184.4 crore.
• At the current market price of Rs248, the stock is trading at 20.6x its estimated FY2008 earnings. Expecting a strong momentum in the company�s formulation exports, we maintain our Buy recommendation on the stock with a price target of Rs300.

Tata Motors
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,075
Current market price: Rs916

Forex gains lift profits

Result highlights

• The net sales (excluding the foreign exchange [forex] gain/loss) of Tata Motors for Q3FY2007 have marked a strong growth of 34.5% to Rs6,825.2 crore, ahead of our expectations. This was led by a 27.7% volume growth and a 7.7% growth in the realisations. The total income for the quarter stood at Rs6,956.8 crore and includes the forex gains of Rs131.6 crore.
• The operating profit margins (excluding the effect of the forex gains) have declined by 80 basis points year on year (yoy) but have improved slightly sequentially to 12.3%. Consequently, the operating profits excluding the forex gain/loss have improved by 26.5% to Rs842.6 crore. The sequential improvement in the margins is due to the stable raw material costs and cost savings in the other overheads.
• Both the interest costs as well as the depreciation costs have risen due to the higher capital expenditure (capex) of the company. As a result, the adjusted net profits for the quarter stood at 535.6 crore as against Rs80.4 crore a year ago.
• On a consolidated basis, the company has marked a 37% growth in its net sales and a 14% growth in the net profits.
• Due to a very strong volume growth registered in the first nine months, we are revising our estimates upwards for both FY2007 and FY2008. Our net profit estimates are revised upwards by 7.4% and 3.8% respectively.
• At the current market price (CMP) of Rs916, the stock trades at 13.1x its consolidated earnings and at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 6.8x. We maintain our Buy recommendation on the stock with a revised price target of Rs1,075.

Bank of Baroda
Cluster: Apple Green
Recommendation: Buy
Price target: Rs327
Current market price: Rs246

First-cut analysis of Q3 results

Result highlights

• Bank of Baroda's Q3FY2007 results are much above expectations with the profit after tax (PAT) reporting a growth of 62.8% to Rs329 crore compared to our estimates of Rs258.9 crore. The higher than expected total income growth was mainly driven by the other income and resulted in the actual PAT exceeding expectations.
• The net interest income (NII) was up 17.8% to Rs960.8 crore compared to our estimates of Rs921.3 crore. The other income increased by 22.6% to Rs333.7 crore with the net total income up 19% yoy and up 6.8% quarter on quarter (qoq).
• With the net income up 19% yoy and the operating expenses up only 4.5% yoy, the operating profit was up by 37.6% yoy to Rs656.9 crore.
• The provisions declined by 26.7% to Rs141.7 crore primarily due to the nil non-performing assets (NPAs) provisions made during the quarter as compared to Rs42.6 crore in Q3FY2006. The strong operating profit growth and a decline in the provisions helped in the PAT reporting a sharp rise of 62.8% to Rs329.1 crore.
• The total business of the bank increased by 37.06% to Rs189,959 crore, while the deposits increased by 31% to Rs112,298 crore and the advances increased by 46.8% to Rs77,661 crore. The retail credit has increased by 49.2% yoy and constitutes 19.3% of the total gross domestic credit.
• The asset quality has improved as the gross NPAs have come down on a y-o-y and q-o-q basis with the net NPAs in percentage terms also down to 0.67% from 1.1% yoy and 0.77% qoq. The capital adequacy stood at 12.24% compared to 12.93% on a sequential basis.
• The numbers have been strong for Q3FY2007 and based on the higher than expected PAT numbers we have revised our FY2007 PAT upwards by 3.6% to Rs1,015.6 crore. At the current market price of Rs246, the stock is quoting at 7x its FY2008E earnings per share (EPS), 3.4x pre-provision profits (PPP) and 0.9x book value. The bank is available at attractive valuations given its low price to book multiple compared to its peers and earnings upside possibilities. We maintain our Buy call on the stock with a price target of Rs327.

Grasim Industries
Cluster: Apple Green
Recommendation: Buy
Price target: Rs3,350
Current market price: Rs2,800

Q3 results ahead of expectations

Result highlights

• The Q3FY2007 net profit of Grasim Industries (Grasim) stood at Rs412 crore. The same was ahead of our expectations on account of the better than expected performance of the viscose staple fibre (VSF) and sponge iron businesses.
• The top line grew by 38.3% year on year (yoy) to Rs2,280 crore on account of the excellent performance of the cement business, higher realisations in the VSF business and strong volumes in the sponge iron business.
• The operating profit jumped by 108% to Rs666 crore whereas the operating profit margin (OPM) expanded by 980 basis points to 29.2%. The margin expansion was driven by a jump of 50% in the cement realisation and a rise of 24% in the VSF realisation. It was also aided by a robust 49% volume growth yoy in the sponge iron business.
• The other income increased substantially by 191% yoy to Rs44 crore, thanks to the deployment of the surplus cash during the quarter.
• The interest cost increased marginally by 2.2% quarter on quarter (qoq) to Rs24 crore whereas the depreciation provision rose by 10% qoq to Rs80.6 crore.
• The excellent performance at the operating level was sweetened by the other income component and this led the net profit to zoom by 154% to Rs412 crore.
• The consolidated results too were of stellar kind on account of a superlative performance of UltraTech Cement Ltd (UTCL). The consolidated net profit (after minority interest) stood at Rs555 crore, up 184% yoy.
• At the current market price of Rs2,800, the stock is discounting its FY2008E earnings by 11.4x and FY2008E enterprise value (EV)/earnings before interest, tax, depreciation and amortisation (EBITDA) by 5.4x. Taking cognisance of the sanguine outlook, we maintain our Buy recommendation on the stock with a price target of Rs3,350.

Madras Cement
Cluster: Cannonball
Recommendation: Buy
Price target: Rs4,000
Current market price: Rs3,386

Upgrading earnings for FY2007
Continuing the trend witnessed in the earlier two quarters, Madras Cements (MCL) is once again expected to report a stellar 795% year-on-year (y-o-y) growth in its net earnings to Rs85 crore for the third quarter of FY2007. The top line is expected to witness a 67% y-o-y increase to Rs405 crore on the back of a 26% jump in the volumes and a 33% rise in the realisations. MCL, which has one of the highest earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne in the industry, is expected to see the same triple to Rs1,070.

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HDFC Bank - Avaya Globalconnect

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Goldman Sachs - India Rising

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Cinemax India IPO Subscription Details

Qualified Institutional Buyers (QIBs) 60.6831 times

Non Institutional Investors / HNI 44.9865 times

Retail Individual Investors (RIIs) 15.7688 times

Employee Reservation 0.4118 times

Overall - 42.32 times

CRISIL - Impact Analysis of Duty Cuts

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Market Close: Ranged action but not willing to give up!

Indian Indices traded in a range bound manner with majors like Tisco, L&T, ONGC supported the rally as market closed up. Global cues were positive with Asian Indices ending in green territory and Europe in green too. Metal stocks like SAIL, Tisco, Hindalco all rallied for the day talks that China had scrapped subsidy on steel exports. There is the bidding for Corus which is on and that lent its feel to the markets. Cement saw yet another day of profit taking. Mid caps and Small contributed their part in the rally with good results. Maruti launched a Diesel Variant of Swift today which brought in some interest here. Oil majors ONGC too traded as Crude prices jumped to trade around $55 A barrel. Not a good sign for Oil Marketing companies which investors reacted with their feet and stocks were down 2% plus each.

Sensex ended up 69 points at 14110.46 helped up by gains in TISCO (481.45,+4 percent), L & T (1576.8,+3 percent), ONGC (913.25,+3 percent), HDFC Bk (1056.8,+2 percent) and Hindalco (168.85,+2 percent). Restricting the gains were HLL (214.25,-4 percent), Tata Motors (916.2,-4 percent), Cipla (248.7,-2 percent), RCVL (434.95,-1 percent) and ACC (1026.35,-1 percent).

Bank of Baroda results were above the street expectations. The company's Q3 net profit was up at Rs 329 crore in the third quarter versus Rs 202 crore in the corresponding quarter of the previous year. Net interest income was up 17.8% at Rs 961 crore from Rs 815 crore. The total income has grown QoQ by almost 33% and the other income had also gone up 21%. Total business has gone up by 37%. The net profit was up by 62.8%, while the net interest income was up by 18.1%. The net interest margin had improved from 3.18% to 3.21%. Bank also has ambitious plans for overseas expansions. Overseas business contributes 18% towards total business and 35% to net profit. Bank has presence in 21 countries with 60 branches and has licenses for 10 more overseas branches. Stockjumped to end higher by 5.16%.

L&T the engineering major reported that the company's engineering and construction division has bagged three orders from the Delhi Metro Rail Corporation for the second phase of the Delhi Metro project (L&T was also involved in the first phase, which has been successfully completed). The projects are valued at Rs 360 Cr (US$ 79 m). The second phase of this project is targeted for completion by 2010, in time for the Commonwealth Games to be held in New Delhi. While two of the three contracts are directly in L&T's fold, the remaining one contract will be implemented as a joint venture with some international and domestic contractors. L&T executed Rs 700 cr (US$ 156 m) worth of contracts in the first phase of the Delhi Metro project. L&T rallied to support indices to close high.

The Cement stocks took it on the chin. The overall impact is unlikely as bad as the stocks make it out to be. A cut in import duty will not lead to any big imports. Its too difficult to import cement.. It needs large storage facilities and a strong distribution network. However given that the Government is so keen to keep prices low, the announcement of price hikes could have the Government banning exports as well and thats the worry. Ambuja was the big loser. The Government has put a freeze to trading on a couple of commodities.. i.e . Urad and Tur futures trade has been banned. Such irrationality needs to be priced into commodities and thats reason for some caution.

FNO closing is an event which will get over.. Its the results which keep flowing in thick and fast. Most of the numbers are good but there are a few negative surprises as well. There are others where performance did not meet raised expectations and the stocks came off despite good comparative numbers. Its all about expectations. Markets will now bring in expectations from the budget. With the economy doing what it is, expecting a further phillip from the budget would be asking for too much. However no one can stop expectations. The pink papers put them out daily.

Technically Speaking: Sensex Traded ranged ahead of FNO expiry. Declines were ahead of Advances. Market turnover stood good at Rs 4,447 cr. Market traded in the range of 14156 and 14043. Sensex Resistance lies at 14170-14220 levels and support at 14058-13994 levels.

Sensex up on positive global cues

The market rallied smartly towards the close on buying in select heavyweight, metal, capital goods and oil stocks and ended the session with gains of 69 points at 14110. The Sensex opened in positive territory at 14070 on the back of firm international markets and rallied further to touch the day's high at 14156.The market appeared to be heading towards a negative close after a strong bout of profit taking in the afternoon chopped off 112 points from the gains. The Sensex ended the session with gains of 69 points at 14110, while the Nifty added 24 points to close at 4090.

The breadth of the market was neutral. Of the 2,674 stocks traded on the BSE, 1,296 stocks advanced, 1,329 stocks declined and 49 stocks ended unchanged. Among the sectoral indices the BSE Metal index advanced 3.72% at 9229 followed by the BSE CG index (up 1.52% at 9469), the BSE PSU index (up 1.34% at 6232) and the BSE Oil & gas index (up 0.97% at 6639). However, the BSE Auto index, the BSE CD index, the BSE FMCG index, the BSE HC index and the BSE Teck index closed in negative territory.

L&T jumped 2.85% at Rs1,577, ONGC added 2.52% at Rs913, HDFC Bank advanced 2.50% at Rs1,057, BHEL was up 2.36% at Rs2,370 and HDFC added 2.26% at Rs1,643. Wipro, Maruti Udyog and ICICI Bank gained over 1% each. Among the metal stocks Sesa Goa soared 10.53%, SAIL added 7.52% and JSW Steel jumped 6.49%. Jindal Steel, Tata Steel and Sterlite Industries added over 3% each.

Over 80.35 lakh SAIL shares changed hands on the BSE followed by Kotak Bank (39.65 lakh shares), IDFC (34.57 lakh shares), Reliance Communication (33.46 lakh shares) and Tata Steel (30.47 lakh shares).

Sensex ends above 14,100

Firm global markets, short-covering in derivatives and a surge in FII buying sparked a recovery on the domestic bourses after Tuesday’s 168-point fall. A bout of intra-day volatility was witnessed ahead of the expiry of January 2007 derivatives contracts on Thursday (25 January 2007). .

The 30-share BSE Sensex gained 69.22 points (0.49%), to settle at 14,110.46. The S&P CNX Nifty advanced 23.80 points (0.59%), to settle at 4089.90.

The market was afflicted by volatility. The Sensex had almost evened out in mid-afternoon trade, but rose again during the latter part of the session. It had dropped to 14,043.54 at 14:06 IST, just 2.30 points more for the day. The barometer index had gained as many as 115 points, to 14,156.46, in early trade.

The market-breadth turned negative in the latter part of trading in contrast to a strong breadth earlier during the day. For 1,345 shares declining on BSE, 1,287 rose and 49 remained unchanged. Losers outpaced gainers by a ratio of 1.04:1.

Nifty January 2007 futures finished at 4098.95, compared to the spot Nifty closing of 4,089.90. Nifty February 2007 futures ended at 4107.

The BSE metal index was the top gainer among sectoral indices. It rose 331.25 points (3.7%), to settle at 9,228.90. While the BSE banking sector index, the Bankex, added 69.21 points (0.9%), to end on 7,383.82, the BSE PSU index gained 82.14 points (1.3%), to 6,231.89. The BSE Auto index lost 61.53 points (1.1%), to settle at 5,539.78.

The BSE Small-Cap Index added 42.61 points (0.5%), to settle at 7,543.89, against a BSE Mid-Cap Index rally of 14.30 points (0.24%), to 6,028.48.

The BSE clocked a turnover of Rs 4448, compared to Tuesday’s Rs 4055.48 crore.

Tata Steel jumped 4% to Rs 483.20. A block deal of 20 lakh shares was struck in the counter at Rs 471. Tata Steel said on Wednesday its Singapore-based subsidiary NatSteel Asia increased its holding in three of NatSteel's units. All three stakes were bought from Malaysia's Southern Steel Berhad, Tata Steel said.

L&T gained nearly 3% to Rs 1577, after bagging Rs 355 crore order. Larsen & Toubro also said it will invest Rs 500 crore over the next five years in a technology park in Gujarat.

Bharat Heavy Electricals rose nearly 3% to Rs 2382, after the company said it had a contract for building two, 500-megawatt units at a power plant in West Bengal.

Maruti Udyog rose 1.5% to Rs 934, after the car maker launched a diesel version of the Swift.

ICICI Bank gained 1% to Rs 975.10, and HDFC Bank rose 2.8% to Rs 1060. On Tuesday, HDFC Bank's ADR gained 1.6% to $75.89, while ICICI Bank's rose 1.8% to $44.54.

HDFC gained 2.2% to Rs 1643, ahead of the Q3 results, slated for release today. Four brokerages expect 20.1 - 27.1% growth in HDFC’s Q3 net profit, between Rs 341.80 crore and Rs 361.70 crore, compared to a net profit of Rs 284.52 crore in December 2005 quarter.

ONGC rose 2.7% to Rs 915, following Tuesday’s surge in oil price.

Hindalco gained 2.8% to Rs 169.65, tracking a recovery in global base metal prices. The company unveils Q3 results tomorrow.

Tata Motors lost 3.3% to Rs 918. Tata Motors reported 11.5% growth in net profit in December 2006 quarter, to Rs 513.17 crore from Rs 460.23 crore in December 2005 quarter. The company’s revenue for the quarter rose 37% to Rs 6956.84 crore (Rs 5074.86 crore). The numbers were unveiled after trading hours on Tuesday.

Hindustan Lever was down 3% to Rs 215.30. A strong 15.1 lakh shares changed hands in the counter on BSE.

Cipla shed 2.2% to Rs 248. After trading hours on Tuesday, Cipla reported a marginal 5.2% growth in net profit in December 2006 quarter, to Rs 184.38 crore (Rs 175.31 crore). Net sales rose 12.8% to Rs 880.54 crore (Rs 780.62 crore).

Bharti Airtel rose 0.4% to Rs 692. The telecom regulator on Wednesday slashed tariffs for national roaming on mobile networks by up to 56%, further reducing already low call rates in the fastest growing mobile market. The Telecom Regulatory Authority of India said the new tariffs, effective from Feb. 15, will be applicable for the dominant GSM network as well as the CDMA platform.

Reliance Communications shed 1% to Rs 436.65. The finance ministry has approved Reliance Communications’ proposed issue of $1.2 billion of American or Global Depository Receipts. Reliance Communications said in a regulatory filing earlier this month that it wanted to raise $1.2 billion to expand.

Among index heavyweights Reliance Industries (RIL) rose 0.4% to Rs 1367, whereas Infosys shed 0.6% to Rs 2221.

Bank of Baroda gained 5% to Rs 247.45, after it reported a net profit of Rs 329 crore in December 2006 quarter, compared to a net profit of Rs 202 crore in December 2005 quarter.

Oriental Bank of Commerce was down 0.2% to Rs 223.90. It also posted a net profit of Rs 182.42 crore in the December 2006 quarter, compared to a net profit of Rs 143.42 crore in the December 2005 quarter.

Indian Overseas Bank gained 3% to Rs 115.40. It had posted a net profit of Rs 246.78 crore in December 2006 quarter, compared to a net profit of Rs 197.21 crore in the December 2005 quarter.

Corporation Bank rose 1.4% to Rs 315.75. It also posted a net profit of Rs 146.42 crore in December 2006 quarter, compared to a net profit of Rs 115.07 crore in December 2005 quarter.

Radha Madhav Corporation jumped 5% to Rs 54.90. The company reported a net profit of Rs 3.54 crore in December 2006 quarter, compared to almost breakeven results for December 2005 quarter.

Textiles firm Bombay Rayon Fashions dropped 4% to Rs 203.25, after the company said Citigroup Global Markets (Mauritius) purchased 3.22 million shares, or 5.12% stake, in the company.

Pyramid Saimira Theatre jumped 16% to Rs 292.85. The stock rose on heavy volume of 91.7 lakh shares on BSE.

Gitanjali Gems rose 0.7% to Rs 231.55, after the jewellery maker and retailer reported an 86% increase in net profit in December 2006 quarter, to Rs 24.83 crore.

MRPL rose almost 2% to Rs 45.30, after it reported a surge in net profit in December 2006 quarter, to Rs 118.46 crore from Rs 19.36 crore in December 2005 quarter. Total income rose to Rs 7397.44 crore from Rs 6815.66 crore.

Varun Shipping (down 2% to Rs 64.80) slipped for the second day in a row, after a 24.8% fall in net profit in December 2006 quarter, to Rs 39.62 crore (Rs 52.72 crore). Income from operations declined 13.5%, to Rs 163.47 crore (Rs 189.09 crore).

Kinetic Engineering jumped nearly 15% to Rs 150.70, following reports that the company expects sales of Rs 180 crore in calendar 2007, as it expands its auto components business, which it started last year. The company, now only makes auto components, after it sold its motorcycle business to Kinetic Motor Company, a group firm.

European markets edged up in early trade. Key benchmark indices in London, Germany and France were up between 0.1 - 0.7%. Asian markets were firm. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up between 0.25 - 1.4%.

US stocks gained on Tuesday, as a spike in crude oil prices lifted shares of energy companies, including Exxon Mobil Corp., while strong profits from United Technologies Corp gave investors a reason to buy aerospace stocks.

The Dow Jones industrial average gained 56.64 points, or 0.45%, to end at 12,533.80. The Standard & Poor's 500 Index added 5.04 points, or 0.35%, to finish at 1,427.99. The Nasdaq Composite Index inched up just 0.34 of a point, or 0.01%, to 2,431.41.

Nymex crude was down 35 cents to $54.69 a barrel. It rose nearly $2.50 on Tuesday, when the United States announced plans to build up emergency crude reserves, and as colder weather pushed up demand in the world's top consumer.

FIIs stepped up buying on Monday (22 January). FIIs were net buyers to the tune of Rs 320 crore on 22 January, compared to Friday (19 January)’s inflow of Rs 76.80 crore. Sustained buying by FIIs over the past few days, which followed their substantial sales earlier this month, is also an important factor. FIIs have been net buyers in seven out of the last eight trading sessions.

As per provisional data, FIIs were net buyers to the tune of Rs 127 crore on Tuesday (23 January), the day when the Sensex lost 168 points. FIIs were net buyers to the tune of Rs 30 crore in index-based futures that day. They were net sellers to the tune of Rs 510 crore in individual stock futures on the same day.

The Q3 results announced so far were good. The season is in its last lap and the focus will shift to the Union Budget 2007-08 and related expectations. The RBI meeting for monetary policy is on 31 January 2007. With inflation surging to a two-year high of over 6%, the central bank is widely expected to raise interest rates

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Sharekhan Reports

Sharekhan Highnoon dated January 24, 2007

Sharekhan Commodities Buzz dated January 24, 2007