India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Friday, May 11, 2007
Market to lose ground on weak global equities
The market is likely to lose ground today tracking sharp fall in global markets. Domestic bourses have been closely following global markets in recent years. Volatility may rise due to major local events scheduled today.
The counting of assembly polls in Uttar Pradesh has begun today. The BSP took an early lead in 66 seats while the Samajwadi Party and BJP were locked in a close battle for the second slot in trends available for 155 of 402 seats. The ruling Samajwadi Party and BJP were ahead in 36 and 31 seats respectively. The Congress was leading in 11 seats while independents and others were ahead in as many constituencies
The state is headed for a hung assembly, exit polls said on Wednesday, 9 May 2007, and ebbing support for Congress, which rules nationally, could see it delay reforms.
Key economic data due today is industrial production in March 2007. The market expects between 9% to 11% per annum growth in industrial production in the month. Industrial production had risen 11% per annum in February 2007, which was slightly lower than the 11.4% per annum growth in January 2007.
Another important data due today is inflation. India's wholesale price inflation rate is forecast at 5.73% for the 12 months to April 28, lower than the annual 5.77% a week before. The data will be released at about 12:00 IST.
Asian equities declined sharply on Friday 11 May 2007 taking their cue from a sell off on Wall Street on Thursday. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore, Taiwan and China were down by between 0.76% to 1.3%.
US stocks suffered their steepest fall in two months on Thursday 10 May 2007 as disappointing retail sales and a widening trade deficit renewed worries about the economic outlook. The Dow Jones Industrial Average lost 147.74 points or 1.1% to 13,215.13. Tech laden Nasdaq Composite Index lost 42.60 points or 1.65% to 2,533.74.
The Bank of England raised interest rates to a six-year high of 5.5% on Thursday as it voiced concern that diminishing spare capacity in the UK economy and greater pricing power skewed inflation risks to the upside. On the same day European Central Bank kept its key lending rate unchanged at 3.75%
FIIs resumed buying on Indian bourses on Wednesday 9 May 2007. But their inflow was a tiny Rs 23.30 crore. FIIs had turned net sellers for the first time this month with an outflow of Rs 222.10 crore on Tuesday 8 May 2007. As per provisional data, FIIs were net buyers to the tune of Rs 153.27 crore on Thursday 10 May 2007.
FIIs had made heavy purchases in the month of April 2007 that helped the market stage a solid rebound from lower level. Their inflow in April 2007 totaled Rs 6679.20 crore.
Anand Rathi - Daily Technical - May 11 2007
Nifty and Sensex have exhibited a candlestick with a longer upper shadow.
Technically, one may use the level of 4030 (Nifty) and 13600 (Sensex) as the stop loss level.
Nifty faces resistance at 4150 and Sensex at 14000.
BSE Smallcap and BSE Midcap have exhibited a grave stone doji.
CNX IT has lost ground.
In the Punter's zone we have a Sell in Polaris , Infosys Tech & Reliance Ind.
In the Technical call section, we have a Buy in Bharat Forge & Sell in ONGC and Bajaj Hindustan.
Anand Rathi - Daily Technical - May 11 2007
Market may move in tune with global markets
Overnight fall in US and European indices coupled with subdued Asian markets in morning trades may weigh on the local indices in early trades and thereafter could exhibit volatility during intra-day trades. Nervousness in the market is likely to continue following a slump in the yesterday's trades after a seep rise. However, the prevailing bullish trend may add to the market advantage and help the sentiment turn positive. Among the domestic indices, the Nifty could test 4050 and below this level next support is in 4040-4025 range, while on the upside it could edge higher to 4085. The Sensex has a likely support at 13700 and may face resistance at 14300.
US indices ended weak on Thursday, as investors eyed higher oil prices, weak economic news and lackluster April retail sales. While the Dow Jones dropped by 148 points to close at 13215, the Nasdaq ended 43 points lower at 2534.
All Indian ADRs had a weak outing on the US bourses. MTNL fell sharply and tumbled around 4% and ICICI Bank by 3% while Tata Motors, Infosys Patni Computers, Satyam, Wipro, HDFC Bank and Rediff declined over 1-2% each.
Crude oil prices gained strength. The Nymex light crude oil for June delivery rose by 23 cents to close at $61.81. In the commodity space, the Comex gold for June series declined $15.50 to settle at $667 a troy ounce.
Indiainfoline - Intraday Stock Ideas
NIFTY (4066.8) SUP 4028 RES 4096
BUY HEROHONDA (706.95)
SL 700 T 717, 719
BUY TATACHEM (235)
SL 230 T 244, 247
BUY KPIT (136.45)
SL 132 T 145, 147
SELL JSTAINLESS (148.80)
@ 150 SL 153 T 142, 140
@ 134 SL 137 T 126, 124
STRATEGY INPUTS FOR THE DAY
Bears set to enjoy weak end
Dig where the gold is…unless you just need some exercise.
While you were sleeping, the US indices came crashing down. So after a topsy turvy ride so far in the week, the bulls should brace for a big jolt early in the morning. Given the fact that we have to contend with UP election results and inflation today we expect the key indices to open sharply lower. Unless the regional indices recover, we fear that bears may just have an upper hand ahead of the weekend.
Gold diggers can keep their list and cash handy as opportunities will come in today to buy your picks at lower rates. But don’t pick up counters simply because they are falling. Be prudent in your investments.
Wider than anticipated trade deficit, weaker than expected retail sales and higher oil prices led to the US indices ending in the red. Other global markets in Europe, Latin America and Asia have taken their cues from Wall Street and have fallen sharply.
Investors should remain cautious as the undertone seems to have turned a little weak. Fresh buying should be avoided unless one is a long-term investor. The market needs fresh impetus to move forward. One may have to wait for a while before the major indexes hit new historic peaks.
As we have mentioned in our recent editions, FII inflows have slowed considerably after a bumper April. Plus, we have a volatile rupee to deal with. There are no major triggers on the horizon for a tired market to look forward to except for the monsoon and weekly inflation figures.
The Indian economy is likely to slow in FY08 following the series of monetary tightening steps. One such signal is the slowdown in automobile sales in the month of April. The industrial output numbers to be released shortly may also confirm a slowdown. Corporate earnings are also likely to fall as interest and other costs are on their way up.
Airline companies like Air Deccan, SpiceJet, Kingfisher Airlines (UB Holdings) and GoAir (Bombay Burmah Trading) will be in the limelight amid reports that the Government is considering relaxing the five-year limit for local carriers to fly abroad. Jet Airways may also gain from reports that the Gulf sector will be opened up soon for private airlines. Piramyd Retail could attract some attention as a financial daily states that the Aditya Birla Group is looking to buy the Mumbai-based organised retail player. Reliance Communications is another stock to keep an eye on. The company says that it has sold a million handsets after launching the Rs777 scheme last week.
FirstSource is also expected to be in action amid reports that Khemkas of Sun Group are likely to buy a 9% stake in the BPO major from Sequoia Capital. Bajaj Auto will also be in the spotlight as it will consider the much-awaited demerger plan on May 17. UB may gain amid reports that beer consumption rose 27% in FY07 to around 137mn cases. Maruti is another stock to keep an eye on as the Government has sold its remaining 10.27% stake in the car major at an average price of Rs796.
US stocks tumbled on Thursday, with the Dow Jones Industrial Average leading the way a day after ending at an all-time high. Higher oil prices, weak economic news and lackluster April retail sales spooked investor sentiment.
Citigroup and JPMorgan dragged the Standard & Poor's 500 Index from its six-year high and the Dow Jones from a record on concern that a weaker economy will hurt credit demand. Retailers like Wal-Mart and Federated Department Stores reported drop in April sales.
The trade gap widened more than market expectations in March on higher oil imports, fueling fears that the government may slash its first-quarter GDP estimate. The report came a day after the Fed kept its benchmark interest rate unchanged and said that inflation remains a bigger threat than economic downturn.
The S&P 500 fell 21.11, or 1.4%, to 1491.47, its steepest drop since March 13. The Dow Jones Industrial Average lost 147.74, or 1.1%, to 13,215.13. The Nasdaq Composite Index decreased 42.60, or 1.7%, to 2533.74.
US light crude oil for June delivery rose 26 cents to $61.81 a barrel on the New York Mercantile Exchange. The front-month contract was 6 cents down at $61.75 a barrel in extended hours of trading in Asia.
COMEX gold for June delivery fell $15.50 to settle at $667 an ounce. Treasury prices rose, lowering the yield on the 10-year note to 4.64% from roughly 4.66$ late on Wednesday. In currency trading, the dollar gained against the euro and slipped versus the yen.
European shares too closed in the red. The pan-European Dow Jones Stoxx 600 index slipped 0.5% to 388.49. The UK's FTSE 100 closed down 0.4% at 6,524.10, the German DAX Xetra 30 slipped 0.8% to 7,415.33 and the French CAC-40 lost 0.6% at 6,012.76.
Major Latin American markets declined as well. In Brazil, the Ibovespa stocks index closed 1,065 points, or 2.1%, at 50,234.68 points. Mexico's IPC index of 35 most-traded issues fell 339 points, or 1.1%, to 29,653.82.
Key Asian stock indices are bleeding profusely this morning after raw-material prices dropped and reports showed falling retail sales and a wider trade deficit in the US, the region's largest export market.
All 10 industry groups making up the Morgan Stanley Capital International Asia-Pacific Index retreated. BHP Billiton posted its biggest drop in two weeks as copper and zinc declined. Canon slid by the most in two months on concern that demand for its digital cameras will falter as the US economy slows.
The Nikkei is down 243 points at 17,493 while the Hang Seng in Hong Kong is down 289 points at 20,456. The Kospi in Seoul is down 11 points at 1587 and the Straits Times in Singapore is down 27 points at 3441.
Key indices ended in the red as uncertainty was witnessed ahead of outcome of UP election and Inflation numbers tomorrow. Cautious investors favored to book profits dragging the benchmark index Sensex to close in negative terrain.
Markets registered strong opening after The FOMC left its key overnight lending rate unchanged at 5.25% for a seventh consecutive meeting. Buying interest in the frontline stocks like Tata Steel, ITC, Bajaj Auto, Reliance Communication and ABB also aided benchmark Sensex to hit day’s high of 13976.79. However, markets pared all its gains in the second half of the session as the Oil & Gas, Technology and Capital Good stocks was hammered out on back of profit booking.
Finally, the 30-share benchmark Sensex slipped 10 points to close at 13771. NSE Nifty was down 12 points to close at 4066.
Subex Azure declined by over 3% to Rs608. The company announced that it has won a contract to provide fraud management and revenue assurance solutions for MCEL, the largest GSM operator in Mozambique. The scrip touched intra- day high of Rs649 and a low of Rs608 and recorded volumes of over 41,000 shares on NSE.
Autoline Industries was frozen at 10% upper circuit to Rs237.90 after the company executed an agreement with the promoters of Detroit Engineered Products INC. USA to acquire 51% stake in the Company as strategic investor. The scrip touched intra-day high of Rs237.90 and a low of Rs217 and recorded volumes of over 77,000 shares on NSE.
GVK Power also locked 10% upper circuit to Rs366.15 after the company announced its plans to raise Rs12.21bn through an issue of shares priced at Rs325 each. The company would raise the money through a Qualified Institutional Placement (QIP). The scrip has touched intra-day high of Rs366.15 and a low of Rs335 and recorded volumes of over 1,00,000 shares on NSE.
Ansal Properties also saw only buyers as the scrip was locked at 5% upper circuit to Rs298.15 after the company announced that a MOU has been entered between the Company and Deyaar Development PSC, a real estate Company in UAE, with head quarters in Dubai, (in short Deyaar), for developing a mega mixed use township comprising of residential, commercial, institutional and industrial properties in India. The scrip touched intra-day high of Rs298.15 and a low of Rs293 and recorded volumes of over 3,00,000 shares on NSE.
Steel stocks shined today as reports stated that Government announced that it would not intervene to control rising steel prices. Tata Steel surged 2.5% to Rs576 SAIL was up 0.7% to Rs134 and Jindal Steel gained 1% to Rs2929.
FMCG stocks stood firm till the end. ITC surged 2% to Rs163, Britannia surged over 6% to Rs1586, Marico advanced 1.3% to Rs57 and Colgate added 0.8% to Rs376. However HLL was down 0.5% to Rs190.
Select Technology stocks continued to be on the receiving end. Mphasis BFL, Polaris and HCL tech were the major losers among the Mid-Cap stocks. Infosys was the major losers among the IT heavy weights, the scrip fell 0.5% to Rs1974. However, However Satyam Computer and Wipro each gained 0.5%.
Select Consumer Durable stocks again ended with smart gains. Titan rose over 2.5% to Rs998, Rajesh Exports advanced by over 4.5% to Rs393.
Insider Trades:
Micro Technologies (India) Limited: Goldman Sachs Investments (Mauritius) I Limited ("GSIMI") has purchased from open market 174328 equity shares of Micro Technologies (India) Limited on 4th May, 2007.
ACC Limited: Ambuja Cement India Private Limited has purchased from open market 7691499 equity shares of ACC Limited on 9th May, 2007.
Indiabulls Financial Services Limited: Goldman Sachs Investments (Mauritius) I Limited ("GSIMI") has purchased from open market 227500 equity shares of Indiabulls Financial Services Limited on 4th May, 2007.
Index Moves:
BSE Oil & gas index was the major loser and lost 1.03%. BSE PSU index (down 0.98%), BSE Capital Good index (down 0.72%), BSE IT index (down 0.27%) and Auto index (down 0.19) were among the other major losers. However, BSE Metal index gained 1.40%.
Volume Toppers:
IFCI, RNRL, IDBI, TTML, PFC, IDFC, Tele Data Informatics, HFCL, SAIL, RPL, IBREAL, Tata Steel, ITC, Orbit Corp, Rolta, IDEA, IVRCL Infrastructures, Dena Bank and Bank of India.
Upper Circuit:
Tele Data Informatics, GVK Power, Ansal Infrastructure, Deccan Aviation, Autoline Industries, PSTL, Ess Dee Aluminum Educomp Solutions, Amara Raja, Saksoft, Tanla, Pantaloon and Patel Engineering.
Delivery Delight:
Alstom Projects, Andhra Bank, Apollo Tyres, Aurobindo Pharma, Bank of India, Bharat Forge, Colgate, HDFC Bank, Hindalco, HDFC, Tata Chemicals, Tata Steel, UTI Bank and Wipro.
Abnormal Delivery:
Corporation Bank, Bank of Baroda, Indian Overseas Bank, Century Textiles, Lupin, Union Bank, MTNL and Kotak Mahindra Bank.
Results Today:
Chennai Petro, Dalmia Cement, Eveready Industries, Hero Honda, MRPL and Novartis India.
Brokers Recommendations:
R Comm – Outperform from CLSA with target of Rs486
DCHL – Buy from CLSA with target of Rs217.
Long Term investment:
BHEL
Major News Headlines:
Govt won't intervene to control rising steel prices
Govt sells 10.27% stake in Maruti at an average price of Rs797
ONGC finds Oil & Gas in Iran
Bajaj Auto to mull demerger on 17th May
Pratibha Industries gets Rs2.23bn contract from BMC
Cairn makes two new discoveries in Rajasthan
BSEL Infra to sell convertible securities at Rs77 to promoters
RESEARCH
Dabur India Ltd (FY07)
CMP: Rs94 May 10, 2007
Consolidated revenues grew 18% yoy to Rs22bn driven by healthy double-digit growth
witnessed across segments.
Operating margins improved marginally to 15.7% due to firm raw material prices.
Adjusted net profit rose by 32% yoy to Rs2.8bn.
Dabur plans to enter into country's US $12bn organized retail market by setting up retail outlets based on the health and beauty platform, across the country. The company plans to open 350 stores (first store is expected to open in Q1 FY08) and targets to generate revenues of Rs17bn in the next five years. The company plans to infuse Rs1.4bn as
equity into the wholly-owned subsidiary (H&B Stores Ltd under a separate brand name) and may look for additional debt after a couple of years.
The company expects its retail venture to breakeven by the third year and generate profit
in the fourth year of operations.
Dabur is aggressively expanding its homecare portfolio and has a full pipeline of new products to be launched. The international business division contributes 13% to the total revenues and the company expects it to increase to 16% by 2010. The company plans to scale up presence in skin category and built up OTC portfolio, which is currently very small. At the current market price of Rs94, the stock is trading at 23.3x FY08E consolidated EPS of Rs4 per share. We recommend a ‘Market Performer’ rating on the stock.
Binani Cement IPO Analysis
Binani Cement, a subsidiary of Binani Industries, was promoted by Braj Binani. The company currently operates a 2.25 million-tonne per annum (mtpa) cement plant along with a 25-MW coal/lignite-based captive power plant (CPP) at Sirohi, Rajasthan. End June 2006, the company had a market share of 13% in Rajasthan and 7% in Gujarat. Around 45% of its dispatches are to the Rajasthan market.
One of the current shareholders of Binani Cement, JP Morgan Special Situations (Mauritius), is coming out with an offer for sale for its 10.09% stake (20,500,000 equity shares of Rs. 10 each) in company. Post-IPO, it will hold a 14.91% stake. J P Morgan Special Situations (Mauritius) had invested Rs 120 crore (at around Rs 24 per share) to purchase of equity shares in September 2005 and has extended a term loan of Rs 130 crore for the expansion of cement capacity.
Strengths
- 3.05 mtpa of cement capacity is likely to come on stream in May 2007. This will increase cement capacity to 5.3 mtpa, from 2.25 mtpa. The company has already begun trial runs. The capacity is likely to fully stabilise by Q2 (September 2007) of FY 2008.
- The captive power capacity (CPP) will be increased by 44.6 MW in two phases: 22.3 MW each by June 2007 and October 2007. CPP will be sufficient to meet the power requirement of Binani Cement, which is buying 25%-30% of its power requirement from the grid at Rs 4.55 per unit. The variable cost of power was Rs 2.1 per unit in the nine months ended December 2006. After considering fixed cost such as depreciation, the company is likely to save Re 1 per unit. At 100% capacity utilisation, the total power requirement is 170 million kwh. Thus, the saving would be about Rs 4.25 crore – Rs 5.1 crore.
- The Ministry of Coal has allocated the Nimbri Chandavan lignite block to Binani Cement for captive mining for the captive power plant in Sirohi. The lignite block is likely to have reserves to meet 35 years of the company’s requirement. It is expecting a saving of 30% when the lignite mine becomes operational.
- Binani Cement had a blending ratio of 48% in FY 2007 (compared with 77% in the northern region in April 2006-February 2007). It is targeting to increase this to 60%. Higher proportion of blended cement will result in better margin as cost of production of blended cement is lower.
Weaknesses
- The northern region where the company operates is likely to witness the highest amount of capacity additions. Apart from Binani Cement’s capacity addition, another nine mtpa (Mangalam cement 0.5 mtpa, Shree Cement three mtpa, JP Associate 4.5 mtpa, Ambuja Cements 0.5 mtpa, JK Lakshmi 0.5 mtpa) of capacity is scheduled to come on stream in FY 2008 and another 13 million tonnes (Grasim eight mtpa, JP Associate two mtpa, Ambuja Cements three mtpa) in FY 2009. In Q4 (March ending) FY 2007, Shree Cement’s 1.5-mtpa capacity and JK Lakshmi’s 0.5-mtpa capacity have come on stream. ACC has commenced the trial run for its 0.9-mtpa capacity at Lakheri. The current size of the northern market is about 32.06 mtpa (FY 2008 dispatches). Delay in capacity addition and time requirement for capacity addition to stabilise and intra-region movement in cement is likely to extend the current cement cycle up to end of FY 2008. However, supply is likely to exceed demand, putting pressure on price realisation from FY 2009.
- On account of pressure from the Union government, the cement industry agreed that it will not hike prices for a year. Thus, Binani Cement may not be able to pass on any increase in cost to customers. As the company is increasing its installed cement capacity by about 136%, the lead distance to the market may increase. This may increase freight cost. Besides, the proportion of sales to institutional clients may increase, reducing net realisation and blocking the company’s funds on account of credit given to them. Currently, institutional sales form negligible proportion of its total sales.
- Binani Cement is currently selling cement in Gujarat. Indian cement is mainly exported from Gujarat. Prices of cement in Gujarat may come under pressure if the government decide to ban exports.
- The Binani group’s financial track record has not been good.
Valuation
As per a share-swap scheme, shareholders of Binani Industries are expected to get shares of Binani Cement from the shares held by Binani Industries in Binani Cement. This will release additional 9% equity to the floating stock of the company.
At the price band of Rs 75 – Rs 85, the P/E range works out to 15.9 – 18.1, respectively, on FY 2007 EPS on post-issue equity, enterprise value (EV)/tonne (on expanded capacity) US$ 95 and US$ 104, and EV/earning before interest, depreciation, tax and amortisation (EBIDTA) of 9.2 and 10.1. JK Lakshmi with a cement plant at Sirohi is currently trading at P/E of only 3.9 times annualised nine months earnings, EV/tonne US$ 77 (on expanded capacity) and EV/EBIDTA (annualised) 5.6. The TTM P/E of Cement- North India is about 12.1 after sharp corrections in cement companies’ share prices due to number of negative developments for the industry in recent months.
Sharekhan Investor's Eye dated May 10, 2007
Lupin
Cluster: Apple Green
Recommendation: Buy
Price target: Under review
Current market price: Rs714
Q4FY2007 results: first-cut analysis
Result highlights
- Lupin's net sales increased by 22.8% year on year (yoy) to Rs518.1 crore in Q4FY2007. The growth in the top line is above our expectations. The sales growth was driven by a 12% rise in the domestic formulation business to Rs144.3 crore and a 53.4% increase in the formulation exports to Rs165.9 crore.
- Having launched six new products in the USA in FY2007, Lupin continues to maintain a healthy double-digit market share for most of its products. It has managed to grab a market share of 33% for Lisinopril and that of 25% for Cefprozil tablets and suspension. Further, Lupin's branded product in the US market, Suprax, continues to do well. The product has seen a strong volume growth with prescriptions exceeding 8,500 a week during the peak season.
- Lupin's operating profit margin (OPM) expanded by 460 basis points yoy to 14.5% in Q4FY2007; the same was lower than our expectation of 15.7%. The OPM was below expectations on account of a higher than anticipated rise in the company's raw material cost and higher research and development (R&D) expenses. Consequently, the company's operating profit grew by 80.0% yoy to Rs75.0 crore in Q4FY2007.
- The profit before tax stood at Rs66.6 crore, a growth of 7.9% yoy. The same was below our expectation of Rs74.2 crore. However, on including the one-time income of Rs114.32 crore (euro 20 million) in relation to the sale of the Perindopril patent to Laboratories Servier of France, the reported net profit stood at Rs137.1 crore, a growth of 173.1% yoy.
- The company's reported net profit stood at Rs137.1 crore, up by 173.1% yoy. However, this includes the one-time income related to the sale of the Perindopril patent. Based on our estimates, the net profit excluding the post-tax consideration received from the sale of the Perindopril patent stood at Rs61.3 crore, a jump of 22% yoy. The same was above our estimate of Rs57.5 crore.
- For FY2007, the company's net sales increased by 22.7% to Rs1,970.9 crore, which was above our estimates. The OPM expanded by 70 basis points to 14.9% as against our estimate of 15.7%, driven largely by higher R&D expenses. The company's reported net profit stood at Rs302.1 crore, up by 65.3% yoy. However, this includes the one-time income related to the sale of the Perindopril patent. Based on our estimates, the net profit excluding the post-tax consideration received from the sale of the Perindopril patent stood at Rs226.2 crore, a jump of 23.8% yoy, and was in line with our estimate of Rs228.4 crore.
- The management aims to increase its turnover from the current level of Rs2,000 crore to Rs3,000 crore in FY2008 (a 50% growth) through various initiatives in the USA, Europe and semi-regulated markets. In FY2009, the company plans for an additional 40% growth to $4,200 crore. This growth will largely come from organic initiatives, with a small component of inorganic growth as well. Further, Lupin's lead anti-migraine new chemical entity is currently in Phase III trials; the management aims to monetise this molecule in FY2008 and any news on this front will come as a positive earnings surprise for the company.
- Based on the FY2007 performance and the outlook provided by the management at the recently held analyst meet, we are in the process of upgrading our numbers and will come out with an update shortly. At the current market price of Rs714, Lupin is quoting at 18.9 its FY2008 fully diluted earnings.
Gateway Distriparks
Cluster: Cannonball
Recommendation: Buy
Price target: Rs250
Current market price: Rs182
Results in line with expectations
Result highlights
- Gateway Distriparks Ltd's (GDL) revenues from the container business grew by 24% year on year (yoy) to Rs41 crore in Q4FY2007. With Snowman Frozen Foods, the cold chain subsidiary, contributing Rs6.65 crore for the quarter, the total revenues for the quarter stood at Rs47 crore.
- The operating profit grew by 22% yoy to Rs22.6 crore whereas the operating profit margin (OPM) declined by 840 basis points to 47.4%. Snowman Frozen Foods continued to remain unprofitable at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, registering a loss of Rs0.17 crore for the quarter.
- The interest cost decreased by 66% yoy to Rs0.20 crore, thanks to the repayment of debt whereas the depreciation provision increased by 62.6% yoy to Rs4.57 crore on account of higher capital expenditure (capex) during the quarter.
- The tax provision stood at 17% as the company continued to enjoy the 80 IA benefit for investment in inland container depots (ICDs). The net profit increased by 8.5% yoy to Rs19.27 crore.
- Last month, GDL through its subsidiary GatewayRail had formed a 51:49 joint venture with Container Corporation of India (Concor) to construct and operate a rail-linked double-stack container terminal at Garhi-Harsaru, 7 kilometre from Gurgaon in Haryana.
- We are in the process of revising our numbers and will update you soon on the revised numbers. Meanwhile we maintain our Buy recommendation on the stock with a price target of Rs250 per share.
VIEWPOINT
Patel Engineering
Unlocking value of land bank
We attended the analyst meet of Patel Engineering Ltd (PEL) held on May 09, 2007 in Mumbai. Following are the key takeaways from the meet.
Real estate plans
- For the first time, the company unveiled its real estate plans and strategy for its land bank.
- The current land bank stands at around 500 acre, located in four places.
- The important thing about the company's land bank is that the entire land bank is situated in urban areas and hence commands higher realisation.
- The company has floated a wholly owned subsidiary called Patel Realty India Ltd (PRIL) under which all its real estate activities will take place.
MUTUAL FUNDS: WHAT'S IN WHAT'S OUT
Fund Analysis: May 2007
An analysis has been undertaken on equity and mid-cap funds' portfolios, indicating the favourite picks of fund managers for the month of April 2007. Equity funds comprise all diversified, index, sector and tax planning funds, whereas mid-cap funds include a universe of 18 funds such as Reliance Growth, Franklin India Prima Fund, HDFC Capital Builder, Birla Mid-cap Fund etc
Labels:
Gateway Distripaks,
Investor's Eye,
Lupin,
Patel Engineering,
Sharekhan
DP Group! | Facebook | Twitter
Subscribe to:
Posts (Atom)