STRATEGY INPUTS FOR THE DAY

S-election struggle continues

Elections are won by men and women chiefly because most people vote against somebody rather than for somebody

We 'campaigned' for the bulls yesterday and they got voted to power. Elections don't happen frequently, but stock selection is an ongoing process. Legendary investment gurus swear by this style of stock investing. In fact, with the market getting quite volatile these days, the best bet is to adopt a stock-specific strategy. Some suggest a bottom-up approach while others prefer top-down one. But, if stock research is not your cup of tea, you should leave the same to the experts or invest in mutual funds. We expect the market to remain choppy with a positive bias till the budget is out of the way. The trend thereafter will hinge on what the Finance Minister P. Chidambaram has in store. Another key factor will be the FII inflows. So far this year, it has not been great, but things could change going forward. And, the S&P's upgrade of India's sovereign ratings should come in handy.

For today, the trend looks positive. On Wall Street, the Dow Jones Industrial Average hit a new record. Asian markets are also in cheerful mood this morning. Japan's Nikkei 225 Index clocked a 6-1/2 year intraday high. Markets also rose in Europe and emerging markets like Brazil and Russia. The only worry now is oil prices, which are still ruling well above the $57 per barrel mark. So, expect the bulls to hold on to their edge over the bears at least for the day.

FIIs were net sellers of Rs2.42bn (provisional) in the cash segment yesterday. In the F&O segment, they pumped in Rs4.28bn.

US retailers and energy shares catapulted the Dow to its fifth record this year and the S&P 500 Index to a six-year high after the Bush Government said that consumers spent more without fueling inflation.

Personal spending climbed in December by the most in five months and an inflation measure rose less than forecast. The data reinforced the Federal Reserve's decision to leave interest rates unchanged as economic growth picks up without spurring faster consumer-price increases.

The Dow increased 51.99, or 0.4%, to 12,673.68. The S&P 500 added 7.70, or 0.5%, to 1445.94, the highest since September 2000. A drop in Google shares after the company posted revenue that failed to top projections left the Nasdaq Composite Index lagging behind the blue chip indexes. The tech-heavy index rose 4.45, or 0.2%, to 2468.38.

Gold futures closed at their highest level since August 2006 as a recent strength in oil prices and a slight dip in the dollar helped lift prices past $660 an ounce . Gold for February delivery climbed $5.40 to close at $657.40 an ounce on the New York Mercantile Exchange. It rose as high as $661.50 earlier, an intraday level the contract hasn't seen since Aug. 11.

Crude oil futures were pretty volatile. March crude closed down 84 cents at $57.30 a barrel. The contract peaked at $58.85, its highest level since Jan. 3, on expectations that demand for fuel will rise as the US economy remains strong. Also, this week's data on fuel supplies showed the first decline in distillates in seven weeks.

Treasury prices fell, raising the yield on the benchmark 10-year note to 4.83% from 4.80% late on Wednesday. In currency trading, the dollar gained modestly versus the euro and the yen.

Across the Atlantic, European shares finished up as well. The pan-European Dow Jones Stoxx 600 index advanced 1.1% at 376.95. The UK's FTSE 100 climbed 1.3% at 6,282.20. The French CAC-40 rose 1% at 5,662.25 and the German DAX Xetra 30 rose 0.9% at 6,851.28, with both indexes trading near six-year highs.

Emerging markets too are smiling. The Bovespa in Brazil gained 0.4% at 44,815 while the RTS index in Russia surged 2.8% to 1894 and the IPC index in Mexico added 1% to 27,842.

Asian stocks advanced to the highest in nine months on Friday. Sony and Samsung Electronics gained after US consumer spending climbed to the highest in five months.

The Morgan Stanley Capital International Asia-Pacific Index added 0.5% to 142.93 at 11 a.m. in Tokyo, set for the highest since May 9. For the week, the regional gauge added 1.6%, its third straight consecutive advance.

The Nikkei rose 0.5% to 17,600.40. South Korea's Kospi index added 1.8% and the Straits Times Index in Singapore rose to an all-time high. Stock benchmarks advanced around the region, except in China.

China shares listed in Shanghai and Shenzhen were mixed in early trading as bargain-hunting offset concerns that the market may see funds set aside for the A-share subscription for Ping An Insurance, which is set to begin next week.

China shares ended flat on Thursday following a sharp decline on Wednesday on concerns that regulators may impose austerity measures to cool speculative activity. In early Friday trading, the Shanghai Composite index was up 0.2% at 2791.49 while the Shenzhen Index slipped 0.1% to 659.02.

Market Volumes:
The turnover on NSE was down by 22% to Rs80.34bn. BSE Consumer Durable index was the major gainer and gained 2.47%. BSE Bank index (up 2.11%), BSE Metal index (up 1.65%), BSE Technology index (up 1.64%) and BSE Capital Good index (up 1.08%) were among the other major gainers.

Volume Toppers:
IFCI, SAIL, TTML, IDFC, IDBI, Escorts, Pyramid Saimira, Shree Ashtavinayak, R Com, Ashok Leyland, Indiabulls, IVRCL Infrastructure, Hanung Toys, HMT, ITC, Satyam Computer, Crompton Greaves and NTPC.

Upper Circuit Filters:
Crisil Ltd, Prism Cement, Heritage Food, Goldiam International, Goldstone Technology, Radha Madhav, GVK Power, Rajesh Exports, Ganesh Housing, HOV Services, Marg Construction, Taneja Aerospace and Tanla.

Delivery Delight:
ABB, Ashok Leyland, CESC, Indiabulls, IVRCL Infrastructures, Jet Airways, Kesoram Industries, Lupin, Maruti, Patni Computer, Punj Lloyd, Satyam Computer, Siemens, SRF, Strides Arcolab, Titan Industries and Usha Martin.

Brokers Recommendations:
AIA Engineering – Outperform from Kotak with target of Rs1615
Buy - India Cements from Deutsche Bank with target of Rs295

Long Term Investment:
Reliance Energy

Major News Headlines:
Tata Motors Jan sales at 55440 units (up 19%)
Bajaj Auto Jan bike sales at 195560 units (up 12%)
Aditya Birla Group January sales at 2.82mn ton (up 3%)
Tata Chemicals to form 50:50 JV with Total Produce Plc
Ballarpur Ind raises uncoated paper prices – Reports
Orchid Chemical signs partnership pact with Actavis
SAIL bags order worth Rs1.17bn
ACC Q4 profit at Rs3.58bn (up 106%), sales at Rs16.2bn (up 50%); to pay Rs15 dividend
BHEL gets Rs5.05bn order from Bangladesh
Kirloskar Brothers wins US orders worth $2.1mn
Gujarat Ambuja Jan cement sales rise 6% to 1.49mn
Hindus Group denies reports of withdrawal from Hutch race
Sesa Goa to consider interim dividend on Feb 10
NTPC and Railways to build a 1,000MW thermal power plant in Bihar

From Research Desk - ITC Ltd. Q3 FY07 Result Update

ITC recorded better than expected results driven by robust growth across categories. The strong growth in the cigarette business indicates continuing strong volume growth. Outlook for the non-cigarette businesses such as hotels and paper also remains positive with continued demand buoyancy. The other FMCG businesses are also rapidly expanding, while losses are being gradually curtailed.

The company has planned a capex of ~Rs150bn for the next 3-5 years. ITC’s non-cigarette business has been growing rapidly over the last few quarters and now contributes to ~70% of net sales (9M FY07). Given the positive outlook for Indian tourism industry due to increasing foreign tourists, we expect ITC to grow its hotels segment both organically and inorganically. Also, strong cash flows from cigarette business can be invested in scaling up other segments. At the current market price of Rs175, ITC is trading at 24x FY07E EPS of Rs7.3 per share. We maintain our ‘Buy’ rating on this stock.

How Market Fared

Market rebounds

The markets bounced back as bulls wiped off Wednesdays losses. After falling over 120 points in the previous trading session the key indices bounced back after RBI lifted the growth projections for the current fiscal to 8.5-9% over its last estimate of 8%. The U.S Fed policy-makers kept the short-term interest rate steady at 5.25% for the fifth time in a row also aided the rally. Further all round buying in scrip’s across the sectors lifted the benchmark Sensex to hit an intra-day high of 14278.08. All the key indices finished in green with ABB, SBI, Tata Motors, Bharti Airtel, RIL and Infosys among the major gainers. Finally, the BSE benchmark Sensex surged 176 points to close at 14267. NSE Nifty advanced by 54 points at 4137.

SAIL surged over 3.5% to Rs112 after the company received order worth Rs1.17bn. The scrip touched an intra-day high of Rs113 and a low of Rs104 and recorded volumes of over 15,00,00,000 shares on NSE.

Ranbaxy Labs gained 0.5% to Rs411 after the company received FDA approval to market Amoxicillin & clavulanate potassium. The scrip touched an intra-day high of Rs411 and a low of Rs405 and recorded volumes of over 6,00,000 shares on NSE.

ACC advanced 1.5% to Rs1034 after the company declared its Q4 result with net profit at Rs3.58bn (up 106%), sales at Rs16.2bn (up 50%) and announced that they would pay Rs15 as dividend. The scrip touched an intra-day high of Rs1053 and a low of Rs1015 and recorded volumes of over 10,00,000 shares on NSE.

Maruti advanced 1.6% to Rs940 after the company announced its January sales at 66341 units (up 30%). The scrip touched an intra-day high of Rs954 and a low of Rs920 and recorded volumes of over 6,00,000 shares on NSE.

Banking stocks were in the limelight. Heavy weight ICICI Bank was up by 1.2%to Rs952 and HDFC Bank added 2.3% to Rs1103. PNB, Bank of India and OBC were the major gainers among the Mid-Cap stocks.

Technology stocks ended with smart gains. The Mid-Cap stocks were among the major gainer, NIIT Ltd surged over 4.5% to Rs587, Moser Baer advanced 2.5% to Rs356 and Mphasis BFL gained 3.8% to Rs290. However, Wipro, Infosys and Satyam Computer were the major gainers among the heavy weights.

Pharma stocks recorded healthy gains. Divi’s Lab surged over 3% to Rs3339, Sun Pharma was up 1.5% to Rs1045 and Lupin advanced 1.2% to Rs608.

Capital Good stocks also gained momentum towards the end. ABB surged over 5% to Rs3805, Siemens rose over 2% to Rs1170, L&T was up by 0.9% to Rs1602 and Punj Lloyd added 1% to Rs1019.

IDBI Capital - Morning Alert

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Firm global indices signal positive outlook

Following gains of 176 points yesterday, the Sensex remaining just short of hitting its record high and is expected to make further headways on firm Asian indices in morning trades and Dow hitting its all-time high. Further, fall in the global crude oil prices may also keep the sentiment positive. However, caution should be maintained on account of the prevalence of a intra-day volatility.

Among the local indices, the Nifty could test 4210 on the upside and may slip to 4120 on the downside. The Sensex has a likely support at 14220 and may face resistance at 14350. Major US indices registered significant gains on Thursday, on account of lower oil prices and the relief about economic outlook. While the Dow Jones flared up by 52 points at 12674, the Nasdaq moved up by 4 points to close at 2468.

Except Wipro, most of the Indian ADRs traded firm on the US bourses. VSNL led the pack with gains of nearly 4% while Infosys, Satyam, HDFC Bank, MTNL, Patni Computers, Dr Reddy's, Tata Motors and Rediff jumped over 1-3% each. While, Wipro was down around 1%.

Crude oil prices eased, the Nymex light crude oil for March delivery falling by 84 cents to close at $57.30. In the commodity space, the Comex gold for April series moved up by $5.10 to settle at $663 a troy ounce.

Market may extend gains on firm Asian equities

The market may extend Thursday’s gains on the back of firm global markets. Sensex had surged 176 points on Thursday on the back of rally in global markets triggered by US Federal Reserve’s decision to keep interest rates steady. However, according to a dealer with a local brokerage Thursday’s rally on the domestic bourses was mainly due to short covering and not due to building of fresh long positions.

As per provisional data, FIIs were net sellers to the tune of Rs 242 crore on Thursday, the day when Sensex had surged 176 points. They were net buyers to the tune of Rs 418 crore in index-based futures on that day. They were net sellers to the tune of Rs 88 crore in individual stock futures on that day.

The Q3 results which just got over were strong. With Q3 earnings season over, the market’s focus will shift to expectations regarding Union Budget 2007-08.

The weekly inflation data is due today. The wholesale price inflation rate is forecast to edge up to 6% for 12 months to 20 Jan-07 from 5.95% the previous week.

Asian markets were firm for the second day in a row today. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan were up by between 0.39% to 1.99%.

US stocks gained on Thursday, propelling the Dow to a record close, on stronger-than-expected earnings and expectations that interest rates won't rise any time soon. The Dow Jones industrial average shot up 51.99 points, or 0.41 percent, to 12,673.68. The Standard & Poor's 500 Index gained 7.70 points, or 0.54 percent, to 1,445.94. The Nasdaq Composite Index rose 4.45 points, or 0.18 percent, to 2,468.38.

The S&P 500 index had its highest close since September 2000, while the Dow also reached a record intraday high at 12,682.57.

Nymex crude was flat in Asian trading on Friday at $57.31 a barrel.

Emkay Morning Notes + Updates

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Geojit Investment Ideas

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Sharekhan Reports

Monetary policy review: Sharekhan Special dated January 31, 2007Network18: Sharekhan Special dated February 01, 2007Sharekhan Investor's Eye dated February 01, 2007Sharekhan Daring Derivatives for February 02, 2007Sharekhan Eagle Eye (equities) & Derivatives Info Kit for February 02, 2007Indian Bank: Sharekhan IPO Flash dated February 01, 2007Sharekhan Investor's Eye dated January 31, 2007Sharekhan Investor's Eye dated January 29, 2007Sharekhan Investor's Eye dated January 25, 2007Monetary policy preview: Sharekhan Special dated January 25, 2007Power Finance Corporation: Sharekhan IPO Flash dated January 29, 2007

Firstsource Solutions

Firstsource Solutions, formerly known as ICICI OneSource, is promoted by ICICI Bank, a leading provider of offshore business process outsourcing (BPO) services to clients primarily in the banking, financial services and insurance (BFSI) (53.3%), telecommunications and media (34.4%), and healthcare (6.1%) industries.

Based on the annual rankings by Nasscom, Firstsource has the fifth largest revenue among BPO provider in India in FY2006. The company had 20 delivery centres with 11 located in seven cities in India, six in the US, two in the UK and one in Argentina end December 2006. It had 10,717 employees and 74 clients including BskyB, Capital One, CompuCredit, ICICI Bank, ICICI Prudential, Lloyds TSB Plc., Uniprise, Vodafone, WAMU, HSBC and Wachovia.

Firstsource entered into a strategic partnership with Metavante, the third largest provider of products and services to the financial services industry in the US, in March 2006. Metavante currently has a 20.60% (post-issue) shareholding in the company, which, in turn, is Metavante’s exclusive offshore and preferred onshore BPO service partner.

Firstsource made its sixth acquisition end December 2006 by acquiring 100% of BPM (Business Process Management) and its subsidiaries, BPO companies serving the US healthcare industry, for US$ 35 million including earn-out consideration of US$ 2.45 million if BPM’s 2007 EBITDA equals or exceeds a minimum EBITDA of US$ 4.5 million. If EBITDA exceeds US$ 4.5 million, US$ 2.10 will be added to the base amount of US$ 2.45 million, up to the total possible earn-out consideration of US$ 3.5 million.

The current issue of 6.93 crore shares includes offer for sale of 93 lakh shares by ICICI Bank, the promoter. Of the net proceeds of the issue, Rs 180 crore is earmarked for acquisitions, Rs 46.29 crore to set up of new facilities, and Rs 45 crore to repay loan.

Strengths

• Firstsource is the third largest revenue earner among pure-play BPO providers in India in FY 2006. Nasscom has ranked it as the fifth largest revenue generator among all BPO providers. The company has a wide presence with 20 delivery centres in India, the US, the UK and Argentina. It has worked with 74 clients, with repeat business accounting for 87.1% of the revenue in FY2006. Three clients contributed more than Rs 50 crore.

• The Nasscom-McKinsey Report estimates the global offshore BPO industry to grow at a CAGR of 37%, from US$ 11.4 billion in 2005 to US$ 55 billion by 2010. India-based companies accounted for 46% of the total offshore BPO revenue in 2005. The report projects the Indian offshore BPO market to grow from US$ 5.2 billion in 2005 to US$ 25 billion by 2010 --- a CAGR of 36.9%.

Weaknesses

• The post-issue equity base of Rs 416.26 core will be the highest in the IT industry. It is also disproportionately large compared with its size (in terms of sales/profits).

• BPO industry-specific risks such as rising wage cost, high attrition levels, increasing sensitivity to US economic slowdown and anti-offshore rhetoric in western countries, advancing degree of M&A and related risks, and dangers of litigation and claims from clients, compared with the software industry.

Valuation

Between FY 2003 to FY 2006, consolidated revenue registered a CAGR of 94.5% and net profit grew from loss of Rs 10.95 crore in FY 2003 to profit of Rs 24.67 crore in FY 2006. The nine-month annualised EPS on post-equity works out to Rs 2. At the price band of Rs 54 – Rs 64, PE is 27 – 32.1. The TTM PE of Computer – Software Medium/Small is 26.6. However, in the BPO space, WNS trades at a TTM PE of 58.4 and EXL Services Holdings trades at TTM PE of 48.4 on the New York Stock Exchange. On the basis market capitalisation to sales, WNS trades at 6.1 (end March 2006) and EXL Services Holdings 8.9 (end December 2005) against Firstsource’s 4.1 – 4.9.

Power Finance Corporation

Power Finance Corporation (PFC) is a leading power sector public financial institution and a non-banking financial company providing fund and non-fund based support for the development of the Indian power sector. It is a nodal agency to channel investments into the power sector.

At present, state, Central and local municipal power sector utilities, power departments, private and joint power sector utilities and power equipment manufacturers are PFC’s clients.

The object of the issue is to augment the capital base to meet future capital requirement arising from PFC’s growth in loan and investment portfolio due to the thrust given on the development of the power sector.

Strengths

*Investment in the power sector is going to grow at a fast rate.

*Established relationships with and support from government and relevant authorities and departments.

*The gross non-performing assets (NPAs) at Rs 89.67 crore end September 2006 form 0.23% of total loan assets of the company. Net NPA ratio stood at just 0.16%.

Weakness

* The power sector is politically sensitive and the regulatory framework is still evolving, which can increase chances of defaults.

*In future, PFC will have to borrow in an increasingly competitive environment, resulting in higher cost of funds.

*In the current rising interest-rate scenario, PFC’s profitability is under pressure. In the first half ended September 2006, the interest income earned grew 10.9% to Rs 1733 crore over the first half ended September 2005. But interest expenses rose 23.3% to Rs 1094 crore.

*The financial track record is lackluster. Net interest income dropped from Rs 1400 crore in FY 2004 to Rs 1156 crore in FY 2006, and further by 6% to Rs 639 crore in the half-year ended September 2006. Profit before tax (PAT) before extraordinary (EO) items has also fluctuated between Rs 775 to Rs 925 crore over the last four years. In the latest half, it’s down 15% to Rs 412 crore.

Valuation

The first-half annualized EPS will be Rs 7 on post-IPO equity. At the price band of Rs 73-85, PE is 10.4-12.2. Pre-IPO book value is around Rs 70, giving P/BV ratio of 1 to 1.2. At this kind of valuations, one can get to choose from many PSU banks, some of whom are much better placed than PFC. The only listed sector-specific financial institution is Tourism Finance Corporation, which has seen its price spurt 50% in January 2007, ahead of PFC’s IPO, and yet trades at a PE of 10 and P/BV of 0.7.

Indian Bank IPO

The Indian Bank, currently celebrating 100 years of operations, is tapping the capital markets to augment its capital base to meet Basel II standards. End September 2006, the bank’s capital adequacy ratio (CAR) was 12.02% (Tier I CAR: 9.84%) as against Reserve Bank of India (RBI) stipulation of 9%.

With roots in Chennai, Indian Bank has a pan-India presence. It had 1,408 branches end September 2006, spread over 26 states and three Union territories. The bank also has a branch in Singapore and a branch and a foreign-currency banking unit in Colombo, Sri Lanka. About 70.45% (992 branches) were in south India. Of this, almost 640 branches were in Tamil Nadu. Also, 59.07% and 37.22% of the loans and advances were from branches in south India.

Strengths:

• Net non-performing asset (NPA) to net advances has come down to an impressive 0.45% end September 2006, from as high as 8.30% in FY 2002.

• The credit-deposit ratio stood at 57.61% end September 2006 (40.93% in FY 2003). This is low compared with industry ratio, giving elbow-room to enhance lending portfolio.

Weaknesses:

• High portion of the funding requirement is met through term deposits. End September 2006, term deposits represented 64.09% of the total deposits, with savings and current deposits constituting 27.05% and 7.06%, respectively. Even though this lends the bank a stable source of funds, the cost is high.

• Like other PSU banks, Indian Bank depends on treasury income. In a rising interest-rate scenario, this will leave adverse effect on the profit growth rates. Almost 43% of the bank’s total income in FY 2006 and 37% of the total income in the six months ended September 2006 comes from treasury income. However, the bank has successfully brought down its dependence on treasury income from 55% in FY 2003 to 43% in FY 2006.

• The bank has a chequered past, which required huge write-offs. During the restructuring of its capital base in September 2006, aggregate accumulated unabsorbed losses of Rs 3830 crore were netted against the paid-up capital of Rs 4574 crore end March 2006. The retention of the balance Rs 743.82 crore were: Rs 400 crore in perpetual non-cumulative preference share capital and Rs 343.82 crore in equity share capital.

Valuation:

FY 2006 EPS on post-issue equity works out to Rs 11.4. Pre-IPO September 2006 book value stands at Rs 64. At the price band of Rs 77- Rs 91, PE works out to 6.8 to 8, and price/book value ratio 1.2 to 1.4. These are in line with those of its peers.

Market croons to Fed tune; keeps global winning streak intact

The market shot back up today after Wednesday(31 January)’s 121-point fall, tracking firm global markets, which were boosted by the US Federal Reserve’s decision to keep interest rates steady. The Fed also abstained from voicing new concerns about inflation, signalling that a rate hike this year was less likely.

The 30-share BSE Sensex jumped 176.26 points (1.2%), to settle at 14,267.18. It is quite close to an all-time closing high of 14,282.72, which was reached on 25 Jan-2007. The Sensex's life high is 14,325.92, which was attained on 18 Jan-2007. The barometer index is up 480.27 points (3.4%) since the start of 2007. having closed at 13,786.91 on 29 December 2006, the last day of trading in 2006.

The S&P CNX Nifty advanced 54.50 points (1.3%), to 4,137.20. The Nifty’s record closing high was 4,147.70 on 25 Jan-2007.

The market sentiment was also firm after the Reserve Bank of India on Wednesday, 31 January 2007, upgraded its 2006/07 GDP growth forecast to 8.5 - 9.0% from 8%, along with raising the key short-term lending rate by 25 basis points. RBI upped the GDP forecast on Wednesday at the third quarter review meeting of the Annual Monetary Policy 2006-07. The Sensex had declined 121 points following the announcement on Wednesday.

In today's trade, the BSE Small-Cap index gained 29.02 points (0.39%), to 7,532.52. The BSE Mid-Cap index gained 31.69 points (0.5%), to 6,076.79.

Banking, telecom and cement pivotals led today’s surge. All BSE sectoral indices notched up gains. The BSE Bankex surged 102.31 points (1%), to settle at 9,588.10. A recovery in global metal prices boosted metal scrips, the BSE Metal index rising 152.79 points (1.6%) to 9,435.96. The BSE IT index advanced 51.06 (0.96%), to 5,348.23.

The market-breadth on BSE was a bit positive. For 1,333 shares rising on BSE, 1,319 declined. Just 41 shares were unchanged.

The BSE clocked a turnover of Rs 3985 crore, lower than Wednesday’s Rs 5263.55 crore.

State Bank of India (SBI) jumped in mid-afternoon trade soon after a the Union Cabinet approved the transfer of RBI’s stake in SBI to the Government by June-2007 at a valuation based on market prices. The stock was up nearly 6%, to Rs 1204. As many as 12.1 lakh shares changed hands in the counter on BSE.

Among private sector banks, HDFC Bank gained 2.9% to Rs 1109, and ICICI Bank gained 1.2% to Rs 952.

Hindalco surged nearly 4% to Rs 183, tracking recovery in global commodity prices.

Tata Motors surged 3.6% to Rs 909.45, ahead of unveiling sales numbers for January 2007.

Cellular services major Bharti Airtel gained 3.6% to Rs 732.95. In January 2007, the company reported robust Q3 Dec-2006 results.

Reliance Communications rose 2.7% to Rs 473.50. During trading hours on Wednesday, 31 January 2007, RCL reported a net profit of Rs 924 crore in the Dec-2006 quarter. Its board also approved a foreign listing of its unit, Flag Telecom. The company also informed that its board was looking at "unlocking value" in Reliance Telecom Infrastructure.

Reliance Energy advanced 2.3% to Rs 525.50, after the company said on Wednesday it had bagged two contracts worth Rs 4157 crore.

Index heavyweight Reliance Industries gained nearly 1% to Rs 1377.55.

ACC was up 1.4% to Rs 1035, but the stock came off the higher level after surging as much as 3.2% to Rs 1053 soon after the December-2006 quarter results were released this afternoon. ACC’s net profit surged to Rs 358.46 crore in the Dec-2006 quarter from Rs 173.45 crore in the Dec-2005 quarter.

Gujarat Ambuja Cements rose nearly 2% to Rs 139.70, after reporting 6.4% growth in shipments in the Jan-07 to 1.49 million tonnes.

Tata Steel shed 0.9% to Rs 459.50, but up from the session’s low of Rs 451.10 on short-covering. It had plunged 10.6% to Rs 463.95 on Wednesday after winning Anglo-Dutch steel maker Corus Group in an auction held in London. Tatas will pay $12.1 billion for Europe's leading steel producer. The price is said to be expensive and may put under strain Tata Steel's finances, at least in the short term.

IT shares were in demand. Wipro rose 1.6% to Rs 623, Infosys rose 1.2% to Rs 2273 and TCS gained 0.8% to Rs 1290.

Maruti notched up only marginal gains even as the company reported strong sales figures for January 2006. The stock rose 0.2% to Rs 939. The company said on Thursday, it sold 65,341 vehicles in January 2007, its highest ever monthly sales, up 30% from 50,109 units during the same month a year earlier. Maruti said it sold 62,248 units in the domestic market, up 28% from 48,526 units during the same month a year earlier. Its exports nearly doubled to 3,093 units from 1,583 a year earlier.

Hero Honda gained 0.8% to Rs 723.95. The company reported 19% growth in sales to 2.97 lakh units in January 2007 compared to 2.49 lakh units in January 2006.

Bajaj Auto shed 0.2% to Rs 2755. Bajaj Auto’s total vehicle sales in January 2007 rose 13% to 2,29,583 units from 2,03,777 units in the same month a year earlier.

Cummins India lost 0.4% to Rs 271.55. As many as 5.27 lakh shares changed hands in BSE in a block deal executed at Rs 273.

RCF jumped 7% to Rs 44.40, on the back of strong Q3 Dec-06 numbers. The net profit at Rs 64.60 crore, recorded a gain of a massive 132.8% over its corresponding last year figure of Rs 27.75 crore. Net sales grew 14.9% to Rs 929.97 crore.

ABB jumped 5% to Rs 3815. ABB unveils its Q4 Dec-06 results on 16 Feb-07.

Exporter Adani Enterprises rose 3% to Rs 237.35, after its December 2006 quarter net profit more than doubled to Rs 37.01 crore.

Dabur Pharma rose 5% to Rs 82.85, after its board approved the sale of its non-oncology formulations unit to Alembic for Rs 159 crore.

Tanla Solutions rose 2% to Rs 398.90. The scrip was up from a drop of 2% to a low of Rs 383.30 earlier during the day.

Matrix Labs rose 2.7% to Rs 222.75. The company scotched media reports on the company's plans for an equity buy-back.

Tata Tea rose 1.8% to Rs 724, after reporting a surge in consolidated net profit in the December 2006 quarter to Rs 117.19 crore (Rs 60.08 crore). Total income went up to Rs 1119.32 crore (Rs 812.02 crore).

Aurobindo Pharma ended flat at Rs 720.05, even after reporting a surge in net profit in the December 2006 quarter to Rs 60.12 crore (Rs 26.19 crore). Total income for the same quarter went up to Rs 554.73 crore (Rs 416.97 crore).

Jindal Saw rose 1.1% to Rs 465, after reporting 50% growth in net profit in the December 2006 quarter to Rs 60.13 crore (Rs 40.21 crore). Net sales for the same quarter rose to Rs 1193.62 crore (Rs 821.38 crore).

Thermax rose 1.5% to Rs 411.50, down from an early high of Rs 425. The company on Wednesday, 31 January 2007, reported 88% growth in net profit in the December 2006 quarter to Rs 55.45 crore (Rs 29.46 crore). Total income went up to Rs 558.17 crore (Rs 362.37 crore).

Paper Products was up 2% to Rs 409.50. Paper Products' board approved splitting each share into five, the company said late on Wednesday. The board of the company also approved a dividend of Rs 9 per share of Rs 10 face value.

Global ratings agency Standard & Poors (S&P), on 30 January 2007, raised India's sovereign local currency credit ratings to investment grade BBB-/A-3, with a stable outlook, citing strong economic prospects and an improving fiscal situation.

Global markets were firm on Thursday. In Europe, key benchmark indices in London, Germany and France were up between 0.8 - 1%. In Asia, key benchmark indices in Hong Kong, Japan, South Korea, and Singapore and were up between 0.7 - 1.7%.

Nymex crude was down 38 cents, at $57.76 a barrel.