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Wednesday, October 04, 2006
Movers & Shakers
- Satyam Computer Services, which announced the launch of a global innovation hub in Singapore, ended in the red.
- Welspun-Gujarat Stahl Rohren dropped even as the company announced the signing of a MoU with Volzhsky Pipe Plant of Russia.
- Ceat, which raised $10 million through the ECB route, closed in negative territory.
- ACC slipped despite reporting higher cement production and sales figures for the month of September.
- Birla Power Solutions dipped marginally despite announcing the signing of an advertising deal with BCCL.
- Goldiam International inched lower despite signing a MoU with Cinemax multiplexes to sell its silver fashion jewellery.
PYT Trading Calls
Buy Hindustan Zinc at Rs 610. Stop Loss at Rs 600. Target of Rs 619-627
Sell Satyam Computer Services. Stop Loss at Rs 818.
Sell Maurti Udyog. Stop Loss at Rs 978.
PYT Trading Calls
Buy Indian Oil at Rs 529.80 with a stop loss of Rs 522
Buy Lupin at Rs 482.20 with a stop loss of Rs 475
PYT Trading Calls
Buy HT Media with a stop loss of Rs 570 for a target of Rs 750
Sell Hindustan Lever above Rs 249 with stop loss of Rs 253.50. This is a day-trading recommendation.
Buy IDBI below Rs 85 with a stop loss of Rs 84. This is a day-trading recommendation.
Movers & Shakers
- Visualsoft Technologies flared up on getting the board's
nod to merge Megasoft with itself. - Dabur Pharma surged on reports that its UK arm has got the USFDA nod for the Carboplatin molecule.
- Jyoti Structures advanced on winning a consortium order worth Rs180.27 crore from Dubai Electricity and Water Authority.
- Saksoft hit the upper circuit breaker of 5% after the company announced the acquisition of Acuma for $17 million.
- Petron Engineering Construction was frozen at the upper limit of 5% on bagging an order worth Rs12.43 crore from Madras Cements.
- Rasandik Engineering inched lower on reports that the company has invested Rs98 lakh in its subsidiary RACPL.
- i-flex Solutions, which completed the acquisition of Mantas in an all-cash deal for $122.5 million, ended flat.
Sharekhan Investor's Eye dated October 03, 2006
Universal Cables
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs179
Current market price: Rs109
Ready with new power
Key points
- The management of the company sounded very upbeat on the growth prospects of the cable industry in general and that of Universal Cables Limited (UCL) in particular.
- The power, instrumentation and control cables industry is likely to see a huge continued growth in demand backed by the government's thrust on the power generation sector and capital expansion plans of India Inc.
- To take advantage of the same, UCL is implementing a capital expansion plan of Rs64 crore, wherein it will double its capacity of medium tension (MT) cables and put up a new capacity of extra high tension (EHT) cables (>220 KV).
- UCL will be the only player in India to produce EHT cables after Cable Corporation of India. UCL will slowly reduce its focus on the low-tension cable segment (<11>
- During FY2006, UCL merged one of its associate companies, Optic Fibre Goa Limited (OFGL) with itself. The implied consideration of the deal works out to Rs37 crore. UCL is confident about extracting a good return on the investment from this deal.
- We expect substantial improvement in UCL's operating profit margins and return ratios as it moves towards higher end products and OFGL turns profitable.
- At the current market price of Rs109, the stock is quoting at 8.3x its FY2008E earnings per share and 4.4x its FY2008E enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA). We reiterate our Buy recommendation on the stock with a revised price target of Rs179. The reduction in the price target is on account of the equity dilution due to the amalgamation of OFGL where there is not much clarity on the returns on the investment made.
SECTOR UPDATE
Automobile
Revving up yet again
- Bajaj Auto delivered a powerful performance in September recording an overall growth of 37.5% year on year (yoy), mainly driven by strong motorcycle sales.
- TVS Motors reported another month of strong performance as the overall sales marked an increase of 33.9% to 162,200 vehicles during September.
- Maruti Udyog sold 59,420 vehicles in September 2006, marking a growth of 20.6%. The company sold 56,606 vehicles in the domestic market while the exports for the month stood at 2,814 vehicles.
- Tata Motors reported a 23.8% growth in its overall sales (including exports) to 49,157 vehicles for the month of September 2006.
- M&M's utility vehicle (UV) sales were up by 5.8%, and the sales of the new Scorpio stood at 3,368, rising by 6.4% yoy.
Friday, September 29, 2006
Movers & Shakers
- Electrotherm India hit the upper circuit breaker of 5% on reports that the company plans to raise Rs100 crore.
- Rana Sugars slipped despite announcing plans to install an ethanol-manufacturing unit at its existing distillery in Punjab.
- Sakthi Sugars was down despite announcing that it has repaid debts by availing loans at a cheaper rate from the banks and institutions.
- Sri Adhikari Brothers Television Network inched lower despite getting the board's nod to raise $15 million.
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