Reliance Money, Motilal Oswal best

Reliance Money has emerged as the top brokerage house in terms of online security and cost effectiveness, while Motilal Oswal leads as the most research driven stock trading platform, a survey says.

According to an online survey conducted by US-based Starcom Mediavest to study trends on investor’s choice of broking firm, Anil Dhirubhai Ambani Group firm Reliance Money was voted as the top platform in terms of security and cost effectiveness.

Motilal Oswal led the general perception about being the most research driven stock trading player, while ICICI Direct was considered as the most accessible by the respondents, the survey said.

In terms of respondent’s perception of best online security, Reliance Money received 47% votes followed by ICICI Direct with 20% endorsements.

Although Reliance Money leads the tally on online security, it is more favoured by business owners (54%) than retired individuals (29%), the survey showed.

For cost-effectiveness in stock trading, more than half (54%) believe that Reliance Money is the best followed by 5paise.com, which got 15% votes.

Meanwhile, just 7% respondents rated ICICI Direct as cost effective.

Motilal Oswal found favour with 34% respondents for being the most research driven stock trading player.

Reliance Money - Market Wrap

Reliance Money - Market Wrap

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Reliance Money - Ultratech Cement

COMPANY UNDER COVERAGE: Ultratech Cement Ltd
THEME: Cementing Growth
BSE CODE: 532538
PE (Q1FY07): 35.05X
CMP: Rs.889.10
52 Wk H/L: Rs.921.40/Rs.384.50

Short Term: Buy
Medium to Long Term: Buy


KEY THEMES
Positives
•Largest cement producer in the country
• Largest exporter of cement clinker
• Backing of the Aditya Birla group
• Fundamentals of the economy looking solid backed up by solid growth in housing and infrastructure sectors
• Demand for cement expected to outstrip supply in the immediate future
• Average cement consumption in India is on the lower side as against the world average leaving a lot of scope for increase in consumption


Negatives
• Indian exports to Sri Lanka may be affected due to protectionist policies of Sri Lanka
• Susceptible to freight rate vagaries particularly if freight rate depicts upward partiality
• Risk of overcapacity in the future
• In the long run, industry may have to face Chinese competition
• Supreme Court ban on overloading of trucks will have an adverse bearing on transportation cost

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ET - Reliance Money brokerage fees

Brokerage rates for stock market transactions are yet to bottom out. Reliance Money, the financial services division of the Anil Dhirubhai Ambani Group-promoted Reliance Capital, is set to unleash yet another round of price war in this segment.

According to an email sent by a Reliance Money franchisee to a prospective client, the company is offering a brokerage charge of 7.4 paise on every Rs 100 worth of delivery-based trades, and 2 paise on non-delivery trades, which some rival brokers admit is the lowest in the industry so far.

"We would not like to comment on this at this point in time. The details of the offering are still being worked out," a Reliance spokesperson said.

Reliance Money is to offer a common platform for investors to invest in all equity products, commodities, forex, IPOs, insurance and other financial products.

While the company has not formally announced the launch of its operations, many traders said they have been approached by Reliance Money franchisees . Retail brokerage houses fear that Reliance Money may rewrite the rules of the broking business, distorting business dynamics in the short term, the way the Reliance group had done when it forayed into the telecom sector some four years ago.

"Broking has completely become a balance-sheet game as there is very little to distinguish between the services offered by various firms," said the head of a retail brokerage house. "A large player like Reliance has the capacity to absorb losses for a couple of years, making life difficult for rivals," he added.

DELIVERY TRADES

In a Rs 500 card, an investor gets a maximum delivery limit of Rs 10 lakh; so, the initial fixed cost is 5 paise. The investor will be charged Rs 12 per trade if he purchases through a series of trades. If he buys shares worth Rs 10 lakh in 20 trades, at an average of Rs 50,000 per transaction, the total brokerage charge will be Rs 740 (500+240), which works out to 7.4 paise per Rs 100 worth of transaction

INTRA-DAY TRADES

For non-delivery trades, an investor can take exposure up to Rs 90 lakh on a Rs 500 card. Suppose the investor uses up his limit in 90 trades of Rs 1 lakh each, at Rs 12 per trade, his total charge will be Rs 1,580 (1,080+500)

Reliance Money - Stock of the Week

Subex Azure
Recommendation: Buy
BSE Code: 532348
CMP: Rs. 580
52 Wk H/L: 887/355
Price target: Rs. 900

Introduction

Subex Azure was formerly known as Subex Systems. The Group's principal activity is to provide revenue maximization solutions to communications service providers worldwide. These solutions improve the revenues and profits of the communications service providers through identification and elimination of leakages in their revenue chain. It markets in Canada, United Kingdom, China and the United States of America. On 25-Apr-2006, the Group acquired Azure Solutions.

So what’s new?
Subex with the acquisition of Azure Solutions will be a market leader in terms of revenues and installations for Fraud Management Systems (FMS) and Revenue Assurance (RAS). The merged entity will have a 25% share of its target market that is growing at a CAGR of 15%. With this acquisition, Subex will leverage on one of the most powerful brands in this space and will establish its leadership position.
Till recently Subex had a steady growth in its market and have consolidated. Post the merger; Subex has entered an exponential growth phase. The market dominance of the products and its sheer size will lead to a surge in revenues and profitability. We believe that Subex, has the potential to increase the under penetrated market for Revenue Assurance.
There were many skeptics as far as this deal is concerned, as it was highly dependant on the successful integration of Azure with Subex. However, taking the recent developments and the management views into consideration, we at SAANS believe that the integration is well under way and the concerns regarding the same can be laid to rest. It is extremely encouraging to know that the integration of Subex Systems and Azure, almost 70% complete, is well ahead of schedule, with financial consolidation completed. In Q2 FY07, 60 employees of Azure have been made redundant. This itself is an indicator of the degree of integration completed. Though financial consolidation has been effective from Q2 FY07, the company had already re-aligned its accounting policies in Q1 FY07.
Now, with this acquisition in place, Subex has access to 23 of the 40 Tier I Telco customers. Post the integration the growth opportunity lies in leveraging these clients. As the quality of the clients improves, we expect the average revenue per contract to improve significantly from US$0.95m to US$1.2m.

Financial performance
Subex recorded a staggering 137 per cent QoQ growth in 2QFY07 to Rs. 103 crores as compared to Rs. 43.4 crores in the quarter ending June 2006. This growth was mainly fuelled by the successful integration of Azure with Subex. The bottom line of the company almost jumped three times to Rs. 17.1 crores in 2QFY07 as compared to Rs. 3.75 crores in 1QFY07. We expect this strong growth to continue in the medium to long-term future too.

Valuation
At the current market price of Rs. 558, the scrip is discounting the FY07E EPS by 27x. We expect this exponential growth to continue at least for a period of another two years. Apart from this, we also expect the management’s concentration over small acquisitions to bring in some good client base will continue to drive the stock performance. We at SAANS expect the stock to trade at Rs. 900, which will mean a discounting of 20x its FY08E EPS in another 6 – 12 months.

Reliance Money Details

Reliance Money - the online brokerage from Reliance ADAG has started offering online trading accounts

Visit at Reliance Money

To open an account - Fill in your details here

Expect them to create quite a flutter like the days when Reliance Communications (then Reliance Infocomm) came in with those Rs 500 connections

Thanks Vishesh for the pointer