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Thursday, April 19, 2007
Wednesday, April 18, 2007
Good Evening - Wednesday 18th April, 2007
Market was down 0.3% in volatile trade today on profit booking after the over 4% rise in key indices in the last two sessions. Strength in Asian and U.S. markets on robust U.S. retail sales report provided support to indices here. At 10:34AM, Sensex was at 13683.18, down 16.99 points, or 0.1%. Nifty was at 4003.30, down 10 points, or 0.3%. CNX Midcap was up 0.2% and S&P CNX 500 Index was flat. On BSE, advances equaled declines in the morning. Shares of oil retailers were the biggest gainers on Nifty. HPCL and BPCL were up 2-3%. Crude oil prices Monday fell slightly to $63.52 a barrel on reports production in Nigeria will increase. Shares of technology companies were down on profit sales. CNX IT Index, which has risen 7% in the last three sessions, was down 2%. Satyam Computer Services, down 4% at Rs 462, was the worst hit on Nifty. TCS was down 2% at Rs 1,251. TCS Monday reported 44% year-on-year rise in Jan-Mar net profit to Rs 11.95 bn, slightly below analysts' expectations of Rs 12 bn. HCL Technologies was down 1% at Rs 306 ahead of its Jan-Mar earnings due after market hours. In the mid trading session, indices were down 0.5% on profit sales in shares of technology companies. BSE IT Index, down 3%, was the worst hit among BSE indices. At around 12.50PM, Sensex was at 13634.77, down 60.81 points or 0.5%. Nifty was at 3995.05, down 18.30 points or 0.5%. Shares of oil retailers were top gainers on Nifty on hopes crude oil prices would ease, as production from Nigeria is likely to increase. Bharati Shipyard was up 3% at Rs 400, as its buy of Swan Hunter's UK shipyard assets will save the company cost and time, otherwise spent in procuring new machinery for its Mangalore unit. Shares of IT companies were down 2-4% as the rupee strengthened against the dollar. The rupee at 41.77 rupees per dollar is near nine-year highs. It has risen 3.2% since the start of April. Infosys Technologies shares were down 2.6% at Rs 2,072. Poly Medicure was up 1% at Rs 138 on reports the company has tied up with a mid-sized U.S. firm to market its products there. Bharat Electronics was down 2% at Rs 1,732 on profit sales, after rising 7.5% in the last two sessions on expectations of robust Jan-Mar results. Key indices ended near the day's lows, taking a break after rallying 4% in the previous two sessions. Sensex was 13607.04, down 88.54 points or 0.6%. Nifty was at 3984.95, down 28.40 points or 0.7%. Technology shares were the biggest losers as investors booked profits after the rupee strengthened against the dollar. Tech shares have gained 7-10% in the previous three sessions. The BSE Infotech Index was down 2.5%. Oil retailers, HPCL No. of Scrips Value (Crs.) Advances 381 2856 Declines 665 6667 Unchanged 29 60 Total 1075 9583 and BPCL, bucked the weak trend and were up 3-4%. The BSE Oil and Gas Index was up 1%. TCS, which reported earnings after market hours Monday, shed 2%. Tech stocks ended down. Infosys was down at Rs 2082.75 with volumes of Rs 359.42 crs, TCS was down at Rs 1250.25 with volumes of Rs 327.33 crs, Satyam was down at Rs 455.80 with volumes of Rs 279.05 crs, and Tech Mahindra closed down at Rs 1454.25 with volumes of Rs 87.89 crs. Pharma stocks ended in mixed trend. Dr Reddy was up at Rs 716.65 with volumes of Rs 51.52 crs, Glenmark closed up at Rs 644.40 with volumes of Rs 43.70 crs, Ranbaxy was down at Rs 337.50 with volumes of Rs 23.27 crs, and Cipla closed down at Rs 229.55 with volumes of Rs 23.18 crs. Banking stocks ended down with exception. In the Public Sector banks SBI closed down at Rs 1010.20 with volumes Rs 111.37 crs & Bank of India closed down at Rs 183.25 with volumes Rs 86.56 crs. In the private sector ICICI Bank closed up at Rs 894 with volume of Rs 83.19 crs & UTI Bank closed down at Rs 465.10 with volumes of Rs 75.94 crs. Auto Stocks ended negative with exception. Tata Motors closed down at Rs 730.60 with volumes of Rs.184.16 crs & M&M closed down at Rs 749.80 with volumes of Rs 45.59 crs. While in the 2 wheeler segment stocks, Baja Auto closed up at Rs 2546.65 with volumes of Rs 67.06 crs & Hero Honda closed marginally down at Rs 649.90 with volumes of Rs 8.28 crs. Cement Stocks witnessed positive trend with exception. ACC closed up at Rs 808.70 with volumes of Rs 156.74 crs, GACL closed up at Rs 113.75 with volumes of Rs 84.01 crs, India Cement closed down at Rs 169.40 with volumes of Rs 75.16 crs and Prism Cement closed up at Rs 34.85 with volumes of Rs 6.80 crs. Nifty ended at 3985 down by 28 points.
Sharekhan Investor's Eye dated April 18, 2007
Q4FY2007 Media earnings preview
- The fourth quarter is the best quarter for the media industry as corporates exhaust their remaining ad budgets in this quarter.
- For the news channels, specifically the business news channels, the Union Budget is the major event that takes place in the fourth quarter, bringing in more ad revenues.
- The ICC Cricket World Cup West Indies 2007 was seen as a major event that was expected to affect the revenues of the general entertainment channels (GECs) but India's early exit is believed to have negated this to a certain extent.
- This was the first quarter of the roll-out of the conditional access system (CAS) in parts of Mumbai, Delhi and Kolkata. While 1.63 million cable homes fall under these CAS mandated zones, about 29% were estimated to have opted for set top boxes (STBs) till February 15, 2007 (source: FICCI- PWC Frames-2007).
- The penetration of CAS is expected to improve over a period of time with better subscriber awareness, the availability of STBs and its implementation in the other cities. CAS also provides an opportunity to alternative digital distribution platforms such as direct-to-home (DTH) and Internet Protocol TV to expand faster. We expect CAS to bring in transparency and curb under-reporting of subscriber base, thereby improving the profitability of broadcasters and MSOs.
STOCK UPDATE
Genus Overseas Electronics
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs380
Current market price: Rs293
Price target revised to Rs380
Result highlights
- The Q4FY2007 results of Genus Overseas are ahead of our expectations.
- The net sales for the quarter grew by 35% to Rs152 crore on the back of a strong order book of Rs470 crore at the end of previous quarter. The net profit grew by 58% to Rs12.7 crore.
- The operating profit for the quarter grew by 55% to Rs19.9 crore. The operating profit margin (OPM) for the quarter improved by 170 basis points to 13.1% as against 11.4% on a year-on-year (y-o-y) basis as the raw material cost as a percentage of sales declined to 73.1% from 77.2%.
- The interest expense for the quarter rose by 34% while the depreciation cost declined by 33% to Rs0.67 crore.
- The order book of the company stood at Rs403 crore (including export orders worth Rs15 crore) at the end of March 2007.
HCL Technologies
Cluster: Apple Green
Recommendation: Buy
Price target: Rs425
Current market price: Rs316
Price target revised to Rs425
Result highlights
- HCL Technologies (HCL Tech) has reported a revenue growth of 7.6% quarter on quarter (qoq) and 39% year on year (yoy) to Rs1,577.1 crore for the third quarter ended March 2007. This is the third consecutive quarter of close to double-digit sequential growth in revenues (a 9.4% growth in dollar terms) which is far ahead of street expectations. The sequential growth was contributed by a 16.4% growth in the business process outsourcing (BPO) revenues. On the other hand, the infrastructure management service (IMS) and core software service businesses grew at a relatively lower rate of 6.4% and 6.5% respectively, on a sequential basis.
- The earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved by 115 basis points to 23.3% on a sequential basis, despite the adverse impact of the steep appreciation of the rupee (1.6% appreciation in the average realised exchange rate against the US Dollar). The sequential improvement in the margin was largely aided by the cumulative impact of better realisations (including non-effort based gains), higher utilisation (especially in the BPO business) and a 70-basis-point saving in the selling, general and administration (SG&A) cost as a percentage of sales.
- In terms of segments, the EBITDA margin in all the three business lines improved on a sequential basis. The BPO business reported second consecutive quarter of a robust improvement in the margin, which was up by 360 basis points to 26.5%. The software service and IMS businesses reported an improvement of 85 basis points and 13 basis points respectively.
- The earnings grew at a robust rate of 15.9% qoq and 72.1% yoy to Rs331.8 crore (ahead of our expectation of Rs290 crore and the consensus estimate of a flat or negative growth sequentially, especially after the higher base resulting from the robust performance in the previous two quarters). The growth in the earnings was also aided by the foreign exchange (forex) gains of Rs41.8 crore on the open forward contracts, up from Rs34.7 crore reported in Q2FY2007.
- In terms of operational highlights, the ramp-up in the large deals is beginning to make a material impact on the overall performance. Moreover, the company continues to bag new multi-million, multi-year, multi-service deals and has announced six new deals in Q3�five in the range of $25-50 million each and one worth over $50 million.
- To factor in the higher than expected performance in the past three quarters and the continued traction in the intake of large deals, we have revised upwards the estimates for the FY2007 and FY2008 earnings per share (EPS) by 6.1% and 3.1% respectively. At the current market price the stock trades at 14.9x FY2008 and 12.6x FY2009 estimates. We maintain our Buy recommendation on the stock with a revised price target of Rs425 (17x FY2009E earnings on a diluted equity base).
SKF India
Cluster: Apple Green
Recommendation: Buy
Price target: Rs406
Current market price: Rs332
Annual report review
On the back of the buoyant expectations of the growth in the economy, and increased impetus for the automobile industry with the development of the Golden Quadrilateral and NSEW corridor, the company expects the demand environment for the bearings industry to remain strong. The growth in the automotive sector is expected to continue with excise cuts and the ambitious Automotive Mission Plan (AMP) undertaken by the government. The company also sees good growth in the capital goods industry, and strong potential in sectors like wind energy and the textile industry. All these factors are expected to accelerate the growth for the company going forward.
At the current market price of Rs332 the stock is discounting its CY2008 earnings estimate by 10.7x and its earnings before interest, depreciation, tax and amortisation estimate by 5.7x. We maintain our Buy recommendation on the stock with a price target of Rs406.
Citigroup - ABAN Offshore , ASK RJ - HCL Tech, Mutual Funds, Media Earnings, Eagle Eye
Citigroup - ABAN Offshore
ASK RJ - HCL Tech
Funds for volatile times: Sharekhan Mutual Funds Report dated April 18, 2007
Q4FY2007 Media earnings preview: Sharekhan Special dated April 18, 2007
Sharekhan Daring Derivatives for April 19, 2007
Sharekhan Eagle Eye (equities) & Derivatives Info Kit for April 19, 2007
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Market Close: Consolidation creeps in but the midcaps are in good mood
Market started the day on a positive note but traded in ranged manner. The indices couldn?t sustain the momentum and volatility crept in the mid sessions as investors preferred to book profits at higher levels while on the other hand sustained buying interest in the index heavyweights kept the market in green. But the market witnessed some intense selling pressure in the final sessions as it pared some of their early morning gains but ended in the positive territory. Not much support was seen from global cues as Asian markets ended mixed while European indices were in red. Metal sector extended its gains tracking firm global metal prices as most of the stocks ended in green. Selective Auto, Energy, Engineering and Power stocks bore the brunt of selling pressure, while buying interest was seen in Pharma, Banking and Telecom stocks. Small and mid caps saw some value buying.
Sensex is closed up by 65 points at 13672.19. It was helped up by gains in NTPC (162,+3 percent), SBI (1035.45,+3 percent), Wipro (586.2,+2 percent), Bharti Tele (812.65,+2 percent) and ONGC (905.5,+2 percent). Restricting the gains were TISCO (511.35,-3 percent), Bajaj Auto (2496.8501,-2 percent), Grasim (2342.55,-1 percent), HLL (208.3,-1 percent) and Tata Motors (721.85,-1 percent).
Zee Group's demerged direct-to-home (DTH) business debuted on the bourses at Rs 114, discount to its base price of Rs 115. The stock could not sustain above base price throughout the day as valuations seems to be expensive at current price as per the market. However the stock touched an intraday high of Rs 120 and low of Rs 100 on BSE but closed at Rs 102.55 down nearly 11% to its issue price. Dish TV has also raised about Rs 500 cr and the amount would be invested in Dish TV and WWIL's distribution business. The company is targeting a user base of 10 million by 2010, from the current two million.
Prithvi Information Solutions reported a healthy set of results for the fourth quarter ended March 2007. PISL posted a net profit of Rs 26.6 crore in the fourth quarter ended March 2007, against Rs 23.4 crore in the corresponding quarter of the previous year with growth of 13.67%. Its revenues increased to Rs 259 crore from Rs 199 Cr up by 30.15%. The numbers were above market expectation. The company is really focused into the core information solutions businesses which give the strength to grow further. The stock moved up by 6%.
Bharat Electronics Ltd aims to capture 20-30% of the $10-billion defence offsets pie. The defence PSU, which ended 2006-07 with a provisional turnover of Rs 3,960 crore, has identified offsets and contract manufacturing in defence and hi-end electronics as growth drivers. It signed MoUs with Lockheed Martin, Boeing, EADS and Northrop Grumman during the February air-show and is talking to other companies. There is an estimated $10-billion offsets opportunity over six years. Offsets and contract manufacturing facilities (that have 20 per cent spare capacity) should propel BEL to become a $1-billion (Rs 4,500-crore) company during the current fiscal and double that turnover by 2011-12. The stock closed up by more than 1% while its peer also closed in green.
Technically Speaking: Markets traded in green but within a narrow range. Sensex touched an intraday high of 13762 levels and low of 13602 levels. Volumes were decent at Rs. 3757 cr. Overall breadth was in favor of Advances, where the Advance were 1324 against Decliners of 1243. Sensex is in continuous uptrend since the start of April. We see some profit booking taking place as it is approaching the key level of 13800. More upside will come after consolidation. Good Support is seen at 13550 levels.
Sensex ends on a bullish note
After yesterday’s fall the market saw an upmove during the day on sustained buying in heavyweight, banking and pharma stocks. The Sensex opened with a negative gap of four points but soon gained momentum and moved into positive territory. The Sensex gyrated by over 100 points in early trades and surged to touch the day's high of 13763. However, the market eased towards the close on selling in auto, engineering and metal stocks. The Sensex ended the session with gains of 65 points at 13672 while the Nifty closed at 4012, up 27 points.
The breadth of the market was positive. Of the 2,661 stocks traded on the BSE, 1,337 stocks advanced, 1,234 stocks declined and 90 stocks ended unchanged. Among the sectoral indices the BSE HC Index gained 1.56%, the BSE PSU Index rose 1.40% and the BSE Bankex was up 1.07%.
Most of the Sensex stocks ended at higher levels. NTPC surged 3.12% at Rs162, SBI soared 2.65% at Rs1,035, Wipro gained 2.09% at Rs586, Bharti Airtel added 1.64% at Rs813, ONGC advanced 1.64% at Rs906, Cipla gained 1.39% at Rs233, Hindalco jumped 1.33% at Rs145 and ACC was up 1.25% at Rs817.
Pharma stocks were in demand and attracted strong buying support. Sterling Biotech spurted 16.13% at Rs167, Sun Pharma gained 3.40% at Rs1,151, Glenmark Pharma added 3.23% at Rs665 and Biocon advanced 2.24% at Rs524. Matrix, Wyeth Lab, Divis Lab and Wockhardt gained around 1% each.
Over 1.88 crore Dish TV shares changed hands on the BSE followed by IFCI (77.13 lakh shares), Himachal Futuristic (75.45 lakh shares), Tata Steel (47.55 lakh shares) and Hindustan Oil Exploration (47.09 lakh shares).
Value-wise ICRA clocked a turnover of Rs391 crore followed by Tata Steel (Rs241 crore), Dish TV (Rs201 crore), Reliance Industries (Rs80 crore) and Page Industries (Rs79 crore).
Sensex pares gain from two-month high
The market edged higher today, extending a recent solid rebound but profit-taking at the higher levels capped gains. Although market-breadth ended positive, it had weakened in the latter part of trading. Subdued European markets pulled the Sensex down from a near two-month peak in afternoon trade.
Tata Steel dropped due to concerns of equity dilution after they unveiled funding plans for the Corus acquisition. PSU banks extended their uptrend. Auto and cement shares dropped. IT pivotals were mixed. Index heavyweight Reliance Industries (RIL) struck a new all-time high.
The 30-share BSE Sensex gained 65.15 points (0.48%), to 13,672.19. It had come off the higher level after surging as many as 155.88 points, to 13,762.92 at 13:15 IST, its highest level since 23 February 2007.
The S&P CNX Nifty advanced 26.65 points (0.67%), to settle at 4,011.60.
Against 1,324 stocks that rose on BSE compared to 1,243 that declined. Just 93 scrips were unchanged. Gainers outpaced losers by a ratio of 1.06:1. In early-afternoon trade, the advance-decline ratio was a 1.65:1.
European markets opened on a subdued note today despite gains in Asian markets. Key benchmark indices in London, Germany and France were down between 0.2 - 0.5%. Asian markets edged up after data eased fears over inflation in the United States, a key export market for the region. Key benchmark indices in Japan, South Korea, and Taiwan were up between 0.4 - 0.8%.
Firm global bourses and continued FII-buying, have boosted the bourses over the past few days after the Sensex tanked 617 points in a single trading session on 2 April following the Reserve Bank of India (RBI)’s surprise hike in interest rates announced after trading hours on 30 March 2007. From a low of 12,455.37 on 2 April 2007, the Sensex has gained 1,216.82 points (9.76%) in a short while.
Stocks across the globe have surged over the past few weeks amid growing confidence that the benign backdrop of solid global economic growth and moderate inflation will continue. Global liquidity still remains strong. It has helped global markets recover quickly from recent steep corrections.
FII inflows have picked up after Infosys gave a strong guidance for FY 2008 in dollar terms, putting to rest concerns of the impact of a slowdown in the US on India's IT sector. FIIs were net buyers to the tune of Rs 788.30 crore on Monday (16 April), the day when the Sensex had surged 312 points in a global rally. They were net buyers to the tune of Rs 648.50 crore on Tuesday (17 April). FII inflows for the first few days of April 2007, stand at Rs 3804.30 crore (till 17 April).
Stock-specific activity is likely on the bourses in the near-term, as the earnings reportage season has just begun. On 24 April 2007, the Reserve Bank of India (RBI) will announce an Annual Policy Statement for FY 2007-08. There are concerns among market men that interest rates may go up further since inflation remains above the RBI’s target range of 5 - 5.5%. Higher interest rates raise borrowing costs and impact corporate profits.
In today’s trade, sectoral indices on BSE were mixed. The BSE Healthcare Index added 57.68 points (1.56%), to end at 3,762.60. It was the top-gainer among sectoral indices on BSE. The banking sector index, the BSE Bankex, advanced 72.22 points (1.07%), to 6,810.72. The BSE Tech Index, which is a free-float index comprising IT, telecom and media shares rose 31.14 points (0.85%), to end at 3,677.68
The BSE Auto Index lost 21.74 points (0.45%), to finish 4,843.53. The BSE Metal Index lost 22.29 points (0.24%), to end at 9,415.02.
The BSE clocked a turnover of Rs 3961 crore, compared to Tuesday’s Rs 4565 crore.
Infosys shed 0.3% to Rs 2075. The stock had declined 2.1% to Rs 2081.70 on Tuesday (17 April) after the rupee struck a nine-year high against the US dollar. The rupee’s surge is a cause of concern for IT firms, as it directly impacts their revenue and profits, a lion’s share of which is accounted for by exports.
At the time of announcing Q4 March 2007 results, Infosys had pointed out that its operating margins would be impacted by about 150-160 basis points (bps) due to rupee inflation and by 300 bps on account of wage inflation. The company plans to compensate the impact through improved utilisations, lower losses in subsidiaries and scaled benefit from selling & general as well as administration expenses.
Tata Steel dropped 3% to Rs 511.60. However, the stock came off the lower level attained on losing as much as 6.1% to Rs 496.35, at the onset of the trading session. A whopping 47.4 lakh shares changed hands in the counter on BSE.
Tata Steel said on Tuesday it will raise Rs 3655 crore ($872 million) from a rights issue, to fund a $12-billion acquisition of Anglo-Dutch steelmaker Corus Group. The Indian steelmaker will offer a rights share at Rs 300 each in 1:5 ratio. Tata Steel also plans to raise Rs 4350 crore from the rights issue of preference shares, the company said. It was also looking at a foreign issue of an equity-related instrument to raise up to $500 million, with an issue of global depositary receipts being an option.
Automobile makers slipped. Bajaj Auto lost 3% to Rs 2471. The stock had surged 4.2% in the past two trading sessions following reports that India will enjoy a healthy monsoon. Tata Motors shed 1.1% to Rs 722.
Cement pivotals slipped on profit-taking. Grasim shed 1.5% to Rs 2336 and Gujarat Ambuja Cements (GACL) shed 0.7% to Rs 112.90. Cement scrips had recovered from a lower level over the past few days on expectations of strong March 2007 quarter results from cement firms. ACC unveils results on 19 April 2007, followed by GACL on 20 April 2007.
ONGC gained 1.6% to Rs 905.50. Recently, the company had unveiled its expansion plans.
PSU banks extended gains, triggered by data showing cooling of inflation for the week ended 31 March 2007. State Bank of India gained nearly 3% to Rs 1037, Andhra Bank rose 5% to Rs 82.75, Corporation Bank rose 3% to Rs 312, Bank of India advanced 2.8% to Rs 188.25, and Punjab National Bank gained 1.9% to Rs 476.90. India's wholesale price index rose 5.74% in the 12 months to 31 March 2007, lower than an increase of 6.39% a week earlier, data showed on Friday (13 April 2007).
HCL Tech jumped 6.6% to Rs 322, after reporting strong Q3 March 2007 numbers on completion of trading on Tuesday. The consolidated net profit as per US GAAP rose 15.9% on a sequential basis to Rs 331.80 crore from Rs 286.20 crore in Q2 December 2006. Revenue rose 7.6% to Rs 1577.10 crore from Rs 1465.10 crore.
Dish TV settled at Rs 102.55 on BSE. The stock debuted at Rs 120, which is also its high so far. Dish TV also hit a low of Rs 100. Volumes in the scrip were a huge 1.88 crore shares on BSE. Dish TV has nearly 2 million subscribers and competes with a joint venture between Tata group and News Corp as well as state-owned Prasar Bharti.
Index heavyweight Reliance Industries rose 0.6% to Rs 1485. The stock hit a high of Rs 1495, which is a lifetime high for the scrip. The stock has surged this month after Chairman Mukesh Ambani had said on Monday that the petrochemicals cycle was yet to peak.
NTPC surged 3% to Rs 161.90. The stock hit a high of Rs 163.55, which is a lifetime high for the scrip. A strong 16.8 lakh shares changed hands in the counter on BSE
Telecom stocks advanced on strong growth in new subscriptions in March 2007. Bharti Airtel rose 1.7% to Rs 813 and Reliance Communications gained 0.5% to Rs 435
Siemens dropped 4% to Rs 1065. Siemens announces Q2 March 2007 results on 23 April 2007.
Metal shares extended gains tracking firm global metal prices. Hindalco gained 1.3% to Rs 145.20, Sterlite Industries rose 2.8% to Rs 522.95 and Hindustan Zinc advanced 4% to Rs 667. Copper, zinc and aluminium futures rose 2.5 - 6% on London Metal Exchange (LME) on Tuesday.
Praj Industries dropped 2.3% to Rs 451.75, even as the company announced a liberal 1:1 bonus during trading hours.
GTL jumped nearly 17% to Rs 163, on rumours that the company will announce a buy-back of shares. As many as 28 lakh shares changed hands in the counter on BSE.
Godavari Fertilisers rose 0.9% to Rs 124. The company reported 44% fall in net profit in the March 2007 quarter, to Rs 6.20 crore (Rs 11.07 crore).
Genus Overseas Electronics surged nearly 3% to Rs 290, after reporting a 58% surge in net profit in the March 2007 quarter at Rs 12.63 crore (Rs 8 crore).
Construction firm Valecha Engineering dropped 1.4% to Rs 228.40, even as the company secured orders worth Rs 100 crore, the new set of contract taking the company's order-book close to Rs 1000 crore.
Infotech Enterprises plunged 5% to Rs 366, after the company today reported a surge in net profit in the March 2007 quarter to Rs 20.90 crore from Rs 10.60 crore. Net sales surged to Rs 96.58 crore from Rs 65.20 crore.
Software services firm Prithvi Information Solutions gained nearly 3% to Rs 293, on reporting 49% growth in net profit in the March 2007 quarter to Rs 26.01 crore from Rs 17.50 crore in the March 2006 quarter. Net sales surged 89% to Rs 259.22 crore from Rs 136.97 crore.
TV Today gained 5% to Rs 147.30, as Reliance Capital announced an open offer worth up to Rs 151 crore to raise its stake in the news broadcaster by up to 20%.
Petron Engineering Construction jumped 5.4% to Rs 148, after the company said on Wednesday it had won a contract worth Rs 37.76 crore from China's Sichuan Fortune Project Management Company.
Alfa Laval India dropped nearly 4% to Rs 944, after its Swedish parent shot down rumours that it would revise upwards the open offer price of Rs 875 per share for raising its stake in the Indian subsidiary. The scrip had spurted 9.3% to Rs 981.60 on Tuesday (17 April).
ICRA lost 2% to Rs 889. The stock had dropped on Tuesday after a solid surge since the debut on Friday (13 April). Pent-up demand for the scrip from the IPO, which was subscribed 75 times, had kept the counter ticking.
Wall Street traded mostly higher on Tuesday, briefly pushing the Dow Jones industrials into record territory, after a rise in home construction and a mild reading on consumer inflation encouraged investors to buy. The Dow traded as high as 12,790.02, passing its closing high of 12,786.64 set on 20 February 2007, and approached its trading high of 12,795.93, attained on the same day. Dow Average settled 52.58 points, or 0.41%, up at 12,773.04. Broader stock indicators were mixed. The Standard & Poor's 500 Index rose 3.01 points, or 0.20%, to finish at 1,471.48, while the Nasdaq Composite Index fell 1.38%, or 0.05%, to 2,516.95.
US March housing stats rose 0.8% -- a feeble rise compared with February's 7.6% advance, but much better than the drop investors expected. Building permits also rose. US stocks have had many tumultuous weeks this year due to worries about the financial troubles of the subprime lending sector spilling into the already sluggish housing market.
The US Labour Department's core consumer price index rose 0.1% in March, less than expected, and alleviating some anxiety about the Federal Reserve's need to raise interest rates to curb costs. The overall consumer price index, which takes into account energy and food, rose 0.6% in March -- the largest increase in 11 months -- and was in line with expectations.
Edelweiss - TCS - big, and looking even bigger; result update Q4FY07; maintain Buy
TCS (TCS IN, INR 1,250, maintain Buy)
Tata Consultancy Services' (TCS) Q4FY07 results were in line with our expectations. Revenues came in at INR 51.5 bn, up 5.9% Q-o-Q, and net profit was at INR 11.7 bn, up 6.2% Q-o-Q. On Y-o-Y basis, revenue and net profit growth stood at 37.9% and 44.9%, respectively.
TCS closed FY07 with revenues of USD 4.3 bn and net income of USD 950 mn, a growth of 41% and 43%, respectively, in USD terms. The company crossed the USD 2 bn and USD 1 bn revenue mark from North America and Europe, respectively, attesting to its scale and geographic spread. TCS' existing realizations have room for expansion.
Recent services such as business intelligence, remote infrastructure management, BPO, and assurance services are seeing strong traction. We expect these services to continue to lead healthy growth in FY08E. We believe that TCS has sufficient levers to sustain margins in FY08E given the continuing trend towards offshore and improving realizations on account of pricing and productivity gains.
Our EPS forecasts of INR 55.4 in FY08 and INR 69.7 in FY09 imply an EPS CAGR of 28.4% over 2007-09. At the CMP of INR 1,250 the stock trades at a P/E of 22.6x and 17.9x for our FY08E and FY09E earnings respectively. We reiterate our 'BUY' recommendation on the stock.
Edelweiss - TCS - big, and looking even bigger; result update Q4FY07; maintain Buy
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