Saturday, November 1, 2008
BNP Paribas Securities puts buy on Sun Pharmaceutical
1 Nov, 2008.
Sun Pharmaceutical
cmp: Rs 1,122.90
target price: Rs 1,695
Citing a healthy earnings growth rate of 21% till 2010-2011, BNP Paribas Securities India has rated Sun Pharma a “buy”. “The management pointed out the possibility of disengaging from Taro given the recent turmoil in credit markets and availability of far superior assets. We believe this could be a strategy to expedite the transaction and not the real intention,” the brokerage said in a client note.
BNP has valued Taro at Rs 69 a share and assigned an option value of Rs 50 to the ‘visible exclusivity opportunities from the Para IV pipeline.’ “Given its strong cash position, the management hinted at the possibility of exploring other inorganic moves in the US generics space as long as they fit the company’s defined criterion of capital returns,” the brokerage added.
ICICI Securities maintains buy on State Bank of India
1 Nov, 2008.
ICICI Securities has maintained its “buy” rating on SBI, with a price target of Rs1,668, after its second quarter results. “We raise estimated FY09 and FY10 earnings by 8.2% and 4.1% respectively, but lower estimates for other businesses and associate banks,” the brokerage said in a client note.
The state-owned bank’s July-September quarter results exceeded market and ICICI Securities’ estimates. “We believe NIMs (net interest margins) will hold at roughly 3% despite funding cost pressures on account of the recent CRR cut and the pricing power enjoyed by banks,” it added.
ICICI Securities maintains buy on State Bank of India
1 Nov, 2008.
ICICI Securities has maintained its “buy” rating on SBI, with a price target of Rs1,668, after its second quarter results. “We raise estimated FY09 and FY10 earnings by 8.2% and 4.1% respectively, but lower estimates for other businesses and associate banks,” the brokerage said in a client note.
The state-owned bank’s July-September quarter results exceeded market and ICICI Securities’ estimates. “We believe NIMs (net interest margins) will hold at roughly 3% despite funding cost pressures on account of the recent CRR cut and the pricing power enjoyed by banks,” it added.
ICICI Securities maintains buy on State Bank of India
1 Nov, 2008.
ICICI Securities has maintained its “buy” rating on SBI, with a price target of Rs1,668, after its second quarter results. “We raise estimated FY09 and FY10 earnings by 8.2% and 4.1% respectively, but lower estimates for other businesses and associate banks,” the brokerage said in a client note.
The state-owned bank’s July-September quarter results exceeded market and ICICI Securities’ estimates. “We believe NIMs (net interest margins) will hold at roughly 3% despite funding cost pressures on account of the recent CRR cut and the pricing power enjoyed by banks,” it added.
CLSA Asia Pacific Markets puts buy on Cairn India
1 Nov, 2008.
CLSA Asia Pacific Markets has rated Cairn a “buy” citing attractive valuations and expectations of a rebound in crude oil prices. “Cairn is discounting $35/barrel nominal Brent to perpetuity on our DCF (discounted cash flow) valuation models.
On a nearer term, the stock reacts more to spot crude but is now at $40/barrel on this regression,” the French brokerage said in a client note. “We do not see $30-40/barrel as sustainable despite a worsening global oil demand scenario given tight supply and rising costs of production; we model in $70-80/bbl Brent over 2009-10 ,” it added.
Sunday, October 19, 2008
DLF buys back 2.5 lakh shares on opening of offer
19 Oct, 2008.
NEW DELHI: Country's largest real estate firm DLF bought about 2.5 lakh shares worth about Rs 7.6 crore on the first day on Friday from the open
market under the buyback offer.
The company purchased 2.5 lakh shares at an average price of Rs 304.19 per share, DLF said in a communique to the National Stock Exchange.
The company has bought back about 1.5 lakh shares from the NSE, while it purchased one lakh shares from the BSE, it added.
DLF today kicked off its Rs 1,100 crore offer to buyback 2.2 crore shares at a face value of Rs 2 each from the open market.
The company has appointed JM Financial Services and DSP Merrill Lynch as its brokers for placing orders on the bourses.
However, the offer failed to boost the company's share prices as the scrip fell by 10.34 per cent to close at Rs 291.30. It had closed at Rs 324.90 per share yesterday.
In July, the company had announced its plan to buy back shares from open market at a price not exceeding Rs 600 a share. Post-buy back, the shareholding of the promoters would increase from 88.16 per cent to 89.32 per cent.
The offer would end on July 9 next year. However, the board in its absolute discretion may decide to close the buy back at an earlier date, if the minimum offer shares have been purchased under the buy back, even if the maximum offer size has not been reached or the maximum offer shares have not been bought back.
Top 10 cos lose Rs 94kcr in a week; SBI defies trend
19 Oct, 2008.
MUMBAI: With stock markets continuing their downslide, the country's elite club of most valued firms lost over Rs 94,000 crore in a week, though S
BI defied the trend and added nearly Rs 4,000 crore to its market capitalisation.
The combined market capitalisation of the country's top 10 firms saw an erosion of Rs 94,448 crore in the past week, dropping to Rs 10,44,245 crore at the end of trading on Friday last week from the previous week's Rs 11,38,734 crore.
Country's largest lender State Bank of India defied trend in the falling market and gained Rs 3,923 crore to Rs 89,768 crore. Last week witnessed banking stocks mostly trading in the negative territory, while SBI outperformed its peers and managed to increase its market capitalisation.
Analysts believe SBI's strong fundamentals support the better performance of its shares amid the bearish market conditions.
However, country's largest private sector lender ICICI Bank, which slipped from the top-20 club last week and lost its position to the HDFC Bank, has regained its position.
While ICICI Bank's market capitalisation rose to Rs 43,606 crore last week from Rs 40,532 crore previously, HDFC Bank's valuation took a marginal dip to Rs 43,533.39 crore.
Country's most valued firm Reliance Industries suffered the highest fall in its market capitalisation of Rs 34,898 crore during the past week. However, the Mukesh Ambani-led firm retained its numero-uno position with a valuation of Rs 2,05,418 crore last week.
Top 10 cos lose Rs 94kcr in a week; SBI defies trend
19 Oct, 2008.
MUMBAI: With stock markets continuing their downslide, the country's elite club of most valued firms lost over Rs 94,000 crore in a week, though S
BI defied the trend and added nearly Rs 4,000 crore to its market capitalisation.
The combined market capitalisation of the country's top 10 firms saw an erosion of Rs 94,448 crore in the past week, dropping to Rs 10,44,245 crore at the end of trading on Friday last week from the previous week's Rs 11,38,734 crore.
Country's largest lender State Bank of India defied trend in the falling market and gained Rs 3,923 crore to Rs 89,768 crore. Last week witnessed banking stocks mostly trading in the negative territory, while SBI outperformed its peers and managed to increase its market capitalisation.
Analysts believe SBI's strong fundamentals support the better performance of its shares amid the bearish market conditions.
However, country's largest private sector lender ICICI Bank, which slipped from the top-20 club last week and lost its position to the HDFC Bank, has regained its position.
While ICICI Bank's market capitalisation rose to Rs 43,606 crore last week from Rs 40,532 crore previously, HDFC Bank's valuation took a marginal dip to Rs 43,533.39 crore.
Country's most valued firm Reliance Industries suffered the highest fall in its market capitalisation of Rs 34,898 crore during the past week. However, the Mukesh Ambani-led firm retained its numero-uno position with a valuation of Rs 2,05,418 crore last week.
Saturday, October 11, 2008
India's Subbarao Is Ready for `Swift' Steps to Boost Liquidity
By Shobhana Chandra
Oct. 11 (Bloomberg) -- Indian central bank Governor Duvvuri Subbarao said he's prepared to take ``effective'' steps to maintain liquidity in the nation's credit markets and repeated the bank's policy of smoothing swings in the currency.
We ``stand ready to take appropriate, effective and swift action'' to provide liquidity, he told reporters yesterday in Washington, where he was attending a meeting of Group of 20 finance ministers and central bankers. He said India's economy is ``strong'' and its banks are ``sound'' and ``well capitalized.''
India yesterday made the steepest cut since 2001 in the amount of cash lenders must set aside as reserves to kick-start the $1.2 trillion economy, as the rupee plunged to an all-time low and overseas investors dumped emerging-market stocks. The drop in the cash-reserve ratio followed a reduction on Oct. 6.
Subbarao, 59, declined to comment on interest-rate policy, saying that ``all variables are up for review'' at the Reserve Bank of India's Oct. 24 policy meeting. While the latest figures on inflation are ``quite comforting,'' it is ``still too early to let the vigil slip'' on prices, he said.
India's inflation has slowed to a 15-week low of 11.8 percent, according to the latest government figures, though it is still more than double the central bank's target.
Steps taken so far to improve liquidity in the Indian financial system amount to as much as $22 billion, Subbarao said.
The governor also said that in the medium term, India's rupee ``should be determined by market fundamentals.'' The RBI's policy, to ``manage exchange-rate volatility'' rather than take a view on its level, ``should continue to serve us well,'' he said.
`Knock-On Effect'
Indian markets are experiencing a ``knock-on effect'' from the global financial crisis, because the country's banks have no direct exposure to U.S. sub-prime mortgages, Subbarao said. The RBI's priorities include ``managing inflation while maintaining the growth momentum,'' and financial stability has become another objective over the last three months, he said.
Subbarao this week rushed to free up cash after money-market rates surged to an 18-month high and financial stocks slumped. ICICI Bank Ltd., the Indian lender with the biggest losses on overseas investments, dropped by a record on Oct. 10, forcing the bank to reiterate it had sufficient funds.
Some economists predict the RBI may follow central banks worldwide and cut interest rates as inflation pressures ease and the worsening global crisis begins to weaken economic growth.
``India has been cautious in its reaction until now,'' Swaminathan Aiyar, a Cato Institute research fellow with a focus on Asia, said in Washington. ``Subbarao clearly believes in balance'' between the policy objectives of growth and inflation. ``A rate cut is coming.''
Rescue Plans
Subbarao, who took over as RBI governor a month ago, said the problems and perspectives of countries directly affected by the global financial crisis are ``quite different'' from those of nations like India that are affected indirectly.
Relief and rescue plans announced by advanced countries so far don't include components in which peripheral countries such as India could participate, he said.
Still, India would ``hope to be included and involved in the design and implementation'' of such an effort, should there be a need, he said.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
Last Updated: October 11, 2008
India's Subbarao Is Ready for `Swift' Steps to Boost Liquidity
By Shobhana Chandra
Oct. 11 (Bloomberg) -- Indian central bank Governor Duvvuri Subbarao said he's prepared to take ``effective'' steps to maintain liquidity in the nation's credit markets and repeated the bank's policy of smoothing swings in the currency.
We ``stand ready to take appropriate, effective and swift action'' to provide liquidity, he told reporters yesterday in Washington, where he was attending a meeting of Group of 20 finance ministers and central bankers. He said India's economy is ``strong'' and its banks are ``sound'' and ``well capitalized.''
India yesterday made the steepest cut since 2001 in the amount of cash lenders must set aside as reserves to kick-start the $1.2 trillion economy, as the rupee plunged to an all-time low and overseas investors dumped emerging-market stocks. The drop in the cash-reserve ratio followed a reduction on Oct. 6.
Subbarao, 59, declined to comment on interest-rate policy, saying that ``all variables are up for review'' at the Reserve Bank of India's Oct. 24 policy meeting. While the latest figures on inflation are ``quite comforting,'' it is ``still too early to let the vigil slip'' on prices, he said.
India's inflation has slowed to a 15-week low of 11.8 percent, according to the latest government figures, though it is still more than double the central bank's target.
Steps taken so far to improve liquidity in the Indian financial system amount to as much as $22 billion, Subbarao said.
The governor also said that in the medium term, India's rupee ``should be determined by market fundamentals.'' The RBI's policy, to ``manage exchange-rate volatility'' rather than take a view on its level, ``should continue to serve us well,'' he said.
`Knock-On Effect'
Indian markets are experiencing a ``knock-on effect'' from the global financial crisis, because the country's banks have no direct exposure to U.S. sub-prime mortgages, Subbarao said. The RBI's priorities include ``managing inflation while maintaining the growth momentum,'' and financial stability has become another objective over the last three months, he said.
Subbarao this week rushed to free up cash after money-market rates surged to an 18-month high and financial stocks slumped. ICICI Bank Ltd., the Indian lender with the biggest losses on overseas investments, dropped by a record on Oct. 10, forcing the bank to reiterate it had sufficient funds.
Some economists predict the RBI may follow central banks worldwide and cut interest rates as inflation pressures ease and the worsening global crisis begins to weaken economic growth.
``India has been cautious in its reaction until now,'' Swaminathan Aiyar, a Cato Institute research fellow with a focus on Asia, said in Washington. ``Subbarao clearly believes in balance'' between the policy objectives of growth and inflation. ``A rate cut is coming.''
Rescue Plans
Subbarao, who took over as RBI governor a month ago, said the problems and perspectives of countries directly affected by the global financial crisis are ``quite different'' from those of nations like India that are affected indirectly.
Relief and rescue plans announced by advanced countries so far don't include components in which peripheral countries such as India could participate, he said.
Still, India would ``hope to be included and involved in the design and implementation'' of such an effort, should there be a need, he said.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
Last Updated: October 11, 2008
India's Subbarao Is Ready for `Swift' Steps to Boost Liquidity
By Shobhana Chandra
Oct. 11 (Bloomberg) -- Indian central bank Governor Duvvuri Subbarao said he's prepared to take ``effective'' steps to maintain liquidity in the nation's credit markets and repeated the bank's policy of smoothing swings in the currency.
We ``stand ready to take appropriate, effective and swift action'' to provide liquidity, he told reporters yesterday in Washington, where he was attending a meeting of Group of 20 finance ministers and central bankers. He said India's economy is ``strong'' and its banks are ``sound'' and ``well capitalized.''
India yesterday made the steepest cut since 2001 in the amount of cash lenders must set aside as reserves to kick-start the $1.2 trillion economy, as the rupee plunged to an all-time low and overseas investors dumped emerging-market stocks. The drop in the cash-reserve ratio followed a reduction on Oct. 6.
Subbarao, 59, declined to comment on interest-rate policy, saying that ``all variables are up for review'' at the Reserve Bank of India's Oct. 24 policy meeting. While the latest figures on inflation are ``quite comforting,'' it is ``still too early to let the vigil slip'' on prices, he said.
India's inflation has slowed to a 15-week low of 11.8 percent, according to the latest government figures, though it is still more than double the central bank's target.
Steps taken so far to improve liquidity in the Indian financial system amount to as much as $22 billion, Subbarao said.
The governor also said that in the medium term, India's rupee ``should be determined by market fundamentals.'' The RBI's policy, to ``manage exchange-rate volatility'' rather than take a view on its level, ``should continue to serve us well,'' he said.
`Knock-On Effect'
Indian markets are experiencing a ``knock-on effect'' from the global financial crisis, because the country's banks have no direct exposure to U.S. sub-prime mortgages, Subbarao said. The RBI's priorities include ``managing inflation while maintaining the growth momentum,'' and financial stability has become another objective over the last three months, he said.
Subbarao this week rushed to free up cash after money-market rates surged to an 18-month high and financial stocks slumped. ICICI Bank Ltd., the Indian lender with the biggest losses on overseas investments, dropped by a record on Oct. 10, forcing the bank to reiterate it had sufficient funds.
Some economists predict the RBI may follow central banks worldwide and cut interest rates as inflation pressures ease and the worsening global crisis begins to weaken economic growth.
``India has been cautious in its reaction until now,'' Swaminathan Aiyar, a Cato Institute research fellow with a focus on Asia, said in Washington. ``Subbarao clearly believes in balance'' between the policy objectives of growth and inflation. ``A rate cut is coming.''
Rescue Plans
Subbarao, who took over as RBI governor a month ago, said the problems and perspectives of countries directly affected by the global financial crisis are ``quite different'' from those of nations like India that are affected indirectly.
Relief and rescue plans announced by advanced countries so far don't include components in which peripheral countries such as India could participate, he said.
Still, India would ``hope to be included and involved in the design and implementation'' of such an effort, should there be a need, he said.
To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net
Last Updated: October 11, 2008
Saturday, October 4, 2008
Analysts' picks: NTPC
4 Oct, 2008.
CMP: Rs 171.85
Target price: Rs 208
Goldman Sachs Research has initiated coverage on the stock with a ‘buy’ rating, saying NTPC’s business model entails a high degree of earnings visibility with core business consistently yielding 20% plus return on equity (RoE).
“NTPC scores well as a defensive growth option. It has the lowest risk to funding amongst its peers, competitive cost of generation, RBI guarantee for payment realisation from its customers (financially-constrained SEBs) up to FY2016 and inexpensive valuations,” said Goldman Sachs Research in a note to its clients.
The firm expects the company’s net profit to grow at a compounded annual rate of 7.3% between FY2008 and FY2011E (estimated) on the back of a 30% growth in wholly-owned commercial generation capacity over this period.
“Net income growth would rise progressively over the next three years, as we expect around 45% of the 7,760MW of commercial capacity addition over this period only in FY2011E,” the note said.
Analysts' pick: IVRCL
4,Oct, 2008
IVRCL
CMP: Rs 235.05
Target price: Rs 308
Broking house Prabhudas Lilladher has maintained its ‘buy’ rating on the stock saying the stock is attractively valued at 14.5 times FY09 (estimated) earnings and 11.2 times FY10E earnings at the current market price.
“We expect the company to register a CAGR (compound annual growth rate) of 32% and 25% in revenues and PAT (profit after tax), respectively, for FY08-10(estimated),” said the broking house in a note to its clients.
According to the broking outfit, a substantial order book growth would be the primary driver of revenues for the company.
“The order book as on May 2008 stood at Rs 12,200 crore (year on year growth of 71%) as against Rs 7,100 crore. On account of focus on cash contracts, IVRCL enjoys a healthy order book position amongst the peers,” the note said.
IVRCL has improved upon its Sales/WC (working capital) ratio at 1.9 times as against 1.7 times in FY07 and is expected to maintain the same, says the broking house. “We believe that NWC (net working capital) position in future will depend upon order intake and projects reaching revenue reorganisation level,” the note added.
Sunday, September 28, 2008
Ranbaxy Labs: Canadian jolt
September 28, 2008
The stock closed at almost a six-year low on Friday on a report that the Canadian drug regulator, Health Canada, had issued a notice to the company to review its medicines. Earlier, the stock was under pressure on the USFDA’s decision to ban import of 30 of its drugs manufactured at its facilities in Paonta Sahib and Dewas.
The scrip fell from Rs 356.85 to Rs 272.39 during the week, reporting an almost four-fold rise in the combined turnover on the bourses. A total 30.6 million equity shares were traded on BSE and NSE last week against 8.24 million shares changing hands in the previous week.
Ranbaxy Laboratories, the country’s largest drug-maker by sales, dropped as much as 40 per cent from Rs 453.95, after the US drug regulator blocked the sale of more than 30 generic medicines and seven APIs made at its two facilities.
Ranbaxy Labs: Canadian jolt
September 28, 2008
The stock closed at almost a six-year low on Friday on a report that the Canadian drug regulator, Health Canada, had issued a notice to the company to review its medicines. Earlier, the stock was under pressure on the USFDA’s decision to ban import of 30 of its drugs manufactured at its facilities in Paonta Sahib and Dewas.
The scrip fell from Rs 356.85 to Rs 272.39 during the week, reporting an almost four-fold rise in the combined turnover on the bourses. A total 30.6 million equity shares were traded on BSE and NSE last week against 8.24 million shares changing hands in the previous week.
Ranbaxy Laboratories, the country’s largest drug-maker by sales, dropped as much as 40 per cent from Rs 453.95, after the US drug regulator blocked the sale of more than 30 generic medicines and seven APIs made at its two facilities.
Ranbaxy Labs: Canadian jolt
September 28, 2008
The stock closed at almost a six-year low on Friday on a report that the Canadian drug regulator, Health Canada, had issued a notice to the company to review its medicines. Earlier, the stock was under pressure on the USFDA’s decision to ban import of 30 of its drugs manufactured at its facilities in Paonta Sahib and Dewas.
The scrip fell from Rs 356.85 to Rs 272.39 during the week, reporting an almost four-fold rise in the combined turnover on the bourses. A total 30.6 million equity shares were traded on BSE and NSE last week against 8.24 million shares changing hands in the previous week.
Ranbaxy Laboratories, the country’s largest drug-maker by sales, dropped as much as 40 per cent from Rs 453.95, after the US drug regulator blocked the sale of more than 30 generic medicines and seven APIs made at its two facilities.
Dabur up as Nepal facility resumes operations
DALAL STREET SPIKES
September 27, 2008.
The share price of Dabur moved up by 2.30 per cent, or Rs 2, to close at Rs 89.05 on the Bombay Stock Exchange (BSE). The company's subsidiary in Nepal has resumed operations, ending nearly a month-long lock-out by a pro-Maoist union over labour tussle.
The company at Birgunj in the Parsa district resumed operations yesterday after it reached an agreement with the All Nepal Trade Union Federation Revolutionary and dropped a clause that said it would not pay wages for the strike period, sources in the company said. The stock touched a high of Rs 90 and a low of Rs 87 on BSE.
Saturday, September 27, 2008
Vishal Info: Acquisition boost
The stock gained 12.4 per cent from Rs 314.55 to Rs 353.65 in a falling market last week after the company announced that it was considering acquisitions in the UK and Europe. The company has announced a board meeting on October 1 to consider raising funds through external commercial borrowings and global depository receipts (GDRs).
The combined trading volume on the counter almost doubled, with 11 million equity shares changing the hands last week compared with 6 million shares traded in the week earlier. The stock, which got listed in August this year, has appreciated by 136 per cent from its issue price of Rs 150 on BSE.
The company covers almost all segments in IT-enabled services sector other than the voice call centre. Currently, the company’s revenues are generated from projects and services and e-publishing, including data digitisation.
Friday, September 19, 2008
Goldman Sacs retains 'buy' on Axis Bank
17 Sep, 2008.
Axis Bank
CMP: Rs 696.55
TARGET PRICE: Rs 1,010
Goldman Sacs has retained its ‘buy’ rating on Axis Bank, expecting the bank’s earnings per share of grow at a compounded annual rate of 33% between FY07 and FY10. The growth, says Goldman Sachs, would be driven by improvement in cost competitiveness, rising contribution from fee income and higher productivity arising from economies of scale.
“We believe Axis’ current valuation does not capture the upside potential from its rapid growth in franchise value. Investors appear to be concerned about the rapid growth witnessed by the bank in the past, and hence, the potential for increase in credit losses impacting the bank’s earnings growth prospects adversely in our view. We believe the bank’s credit portfolio is concentrated in the large corporate segment, which is less vulnerable to rapid deterioration in credit quality. As such, we believe increase in credit costs is unlikely to impair earnings growth expectations materially,” the note said.
Thursday, September 18, 2008
ICICI Bank denies talk of share sale by top management
17 Sep, 2008.
MUMBAI: ICICI Bank has dubbed rumours about top management selling the company’s shares over the last few days as baseless and irresponsible.
No shares have been sold by members of the top management of the bank during the current year, the bank said in a release.
ICICI Bank is taking up this matter with regulatory authorities for necessary action against those responsible for the rumours.
Towards end of Wednesday’s trade, ICICI Bank shares were down 4.92 per cent at Rs 362.25 on BSE. The stock had fallen to a low of Rs 530 earlier.
ICICI Bank denies talk of share sale by top management
17 Sep, 2008.
MUMBAI: ICICI Bank has dubbed rumours about top management selling the company’s shares over the last few days as baseless and irresponsible.
No shares have been sold by members of the top management of the bank during the current year, the bank said in a release.
ICICI Bank is taking up this matter with regulatory authorities for necessary action against those responsible for the rumours.
Towards end of Wednesday’s trade, ICICI Bank shares were down 4.92 per cent at Rs 362.25 on BSE. The stock had fallen to a low of Rs 530 earlier.
ICICI Bank denies talk of share sale by top management
17 Sep, 2008.
MUMBAI: ICICI Bank has dubbed rumours about top management selling the company’s shares over the last few days as baseless and irresponsible.
No shares have been sold by members of the top management of the bank during the current year, the bank said in a release.
ICICI Bank is taking up this matter with regulatory authorities for necessary action against those responsible for the rumours.
Towards end of Wednesday’s trade, ICICI Bank shares were down 4.92 per cent at Rs 362.25 on BSE. The stock had fallen to a low of Rs 530 earlier.
Sensex likely to drop to 11K next month: Religare's Chakraborty
MUMBAI: The Sensex is likely to drop further to 11K level next month as foreign institutional investors are pulling out drastically due to liquidity crisis in the global market, said Amitabh Chakraborty, president-equity, Religare Securities.
“We are seeing the near-term bottom at 11,000 for the Sensex and 3,650 for the Nifty in the month of October because FIIs are in selling mode and will continue further," he said.
Foreign funds net sold $212.30 million in equity on Monday and $156 million Tuesday on news of Lehman Brothers filing for bankruptcy, according to SEBI data. So far, FIIs have pulled out over $1 billion from India.
Chakraborty said the present on-going problem is very much concerned with the financial economy, which is likely to shift towards non-financial economy by 2009 and the slowdown in real economy would be visible.
“More and more countries from emerging economies would come under the influence,” Chakraborty said.
However, there would be a short term bounce back in near future as a fair amount of liquidity has been pumped in by US, but the mid-term outlook is grim.
Retail investors should keep away for some more time and a better option for them would be to invest in a segment having strong cash position or other options like liquid and debt funds, he said.
Wednesday, September 10, 2008
Deutsche Securities puts 'hold' on Indiabulls Real Estate
10 Sep, 2008,
Indiabulls Real Estate
cmp: Rs 286.80
target price: Rs 300
Deutsche Securities has initiated coverage on Indiabulls Real Estate with a ‘hold’ rating as it feels the company has limited track record in execution. Weakness in the Mumbai office market for high-end office properties, and a large free float — which allows much larger head-room for “borrowing” and selling short — are downsides for the stock.
According to a Deutsche Bank note, Indiabulls’ revenue growth would be driven by volumes and stake sale of associate and/or subsidiaries. “We expect a revenue CAGR (compound annual growth rate) of 41% over FY08 to FY11 (estimated). \
We expect EBITDA margins to drop from 72% in FY08 to 55% in FY11 (estimated), mainly driven by higher costs (land, construction, employees, SG&A).
Further, we expect the tax rate to increase from around 28% in FY08 to nearly 30% in FY11 (estimated). Thus, while we expect volume growth (around 40%), we expect PAT (profit after tax) to grow by only a 19% CAGR over FY08-11 (estimated),” the note to clients said.
However, the Deutsche Bank note added that the demerging and listing of its forays in power and retailing would drive growth and shareholder value in the near term. Meanwhile, SEZs, townships and annuities from completed projects will drive long-term growth, it added.
Deutsche Securities puts 'hold' on Indiabulls Real Estate
10 Sep, 2008,
Indiabulls Real Estate
cmp: Rs 286.80
target price: Rs 300
Deutsche Securities has initiated coverage on Indiabulls Real Estate with a ‘hold’ rating as it feels the company has limited track record in execution. Weakness in the Mumbai office market for high-end office properties, and a large free float — which allows much larger head-room for “borrowing” and selling short — are downsides for the stock.
According to a Deutsche Bank note, Indiabulls’ revenue growth would be driven by volumes and stake sale of associate and/or subsidiaries. “We expect a revenue CAGR (compound annual growth rate) of 41% over FY08 to FY11 (estimated). \
We expect EBITDA margins to drop from 72% in FY08 to 55% in FY11 (estimated), mainly driven by higher costs (land, construction, employees, SG&A).
Further, we expect the tax rate to increase from around 28% in FY08 to nearly 30% in FY11 (estimated). Thus, while we expect volume growth (around 40%), we expect PAT (profit after tax) to grow by only a 19% CAGR over FY08-11 (estimated),” the note to clients said.
However, the Deutsche Bank note added that the demerging and listing of its forays in power and retailing would drive growth and shareholder value in the near term. Meanwhile, SEZs, townships and annuities from completed projects will drive long-term growth, it added.
Deutsche Securities puts 'hold' on Indiabulls Real Estate
10 Sep, 2008,
Indiabulls Real Estate
cmp: Rs 286.80
target price: Rs 300
Deutsche Securities has initiated coverage on Indiabulls Real Estate with a ‘hold’ rating as it feels the company has limited track record in execution. Weakness in the Mumbai office market for high-end office properties, and a large free float — which allows much larger head-room for “borrowing” and selling short — are downsides for the stock.
According to a Deutsche Bank note, Indiabulls’ revenue growth would be driven by volumes and stake sale of associate and/or subsidiaries. “We expect a revenue CAGR (compound annual growth rate) of 41% over FY08 to FY11 (estimated). \
We expect EBITDA margins to drop from 72% in FY08 to 55% in FY11 (estimated), mainly driven by higher costs (land, construction, employees, SG&A).
Further, we expect the tax rate to increase from around 28% in FY08 to nearly 30% in FY11 (estimated). Thus, while we expect volume growth (around 40%), we expect PAT (profit after tax) to grow by only a 19% CAGR over FY08-11 (estimated),” the note to clients said.
However, the Deutsche Bank note added that the demerging and listing of its forays in power and retailing would drive growth and shareholder value in the near term. Meanwhile, SEZs, townships and annuities from completed projects will drive long-term growth, it added.
Anand Rathi puts 'buy' on Bharat Electronics
8 Sep, 2008,
Anand Rathi Securities has a 'buy' call on Bharat Electronics around the current price of Rs 974 for target Rs 1,140 and stop loss of Rs 900.
Based on the chart pattern to date, the stock is likely to get support around Rs 930.
Bharat Electronics, after a descent consolidation, exhibits a trend reversal; rise in RSI from over sold zone indicates a medium term buy.
Saturday, August 30, 2008
Analysts'Picks: Tata Motors
27 Aug, 2008.
Tata motors
cmp: Rs 433.50
target price: Rs 454
HDFC Securities has maintained its ‘sell’ rating on the stock with a revised target price of Rs.454 (from Rs.431 earlier). The brokerage believes due to uncertainties looming over the company’s Nano project at Singur and 24-35% equity dilution would cap the upside in the stock.
Also the Jaguar-Land Rover (JLR) acquisition would continue to be an overhang on Tata Motors’ stock, the note added. “We are revising our earnings per share estimate upwards by 9% (Rs.29.9 earlier) mainly on account of lower equity dilution by reducing the amount of funds raised through the equity route. We value the company on an SOTP basis with the core business valued at Rs 293 per share and subsidiaries at Rs 161 per share,” the note to clients said.
Analysts'Picks: Infosys Tech
27 Aug, 2008
Infosys Tech
cmp: Rs 1,697.60
target price: Rs 1,703
Broking firm Edelweiss Securities has maintained its ‘accumulate’ rating on the stock as it believes that the company’s recent acquisition of the Axon group would bolster the company’s presence in the consulting space.
“The deal is earnings per share (EPS) neutral on standalone basis in FY09 (estimated), but EPS accretion in FY10 (estimated) depends on Axon’s growth and margin trajectory. Incorporating the financial impact of this acquisition, the stock trades at 16.5 times and 13.9 times FY09 and FY10 earnings respectively,” the note said. However, according to the brokerage firm, slowdown in US, significant increase in the salary hikes and attrition rate, reduction in the number of H1B visas granted by US, and incremental appreciation of rupee against US dollar, euro and GBP remain key concerns for the company.
Analysts'Picks: Infosys Tech
27 Aug, 2008
Infosys Tech
cmp: Rs 1,697.60
target price: Rs 1,703
Broking firm Edelweiss Securities has maintained its ‘accumulate’ rating on the stock as it believes that the company’s recent acquisition of the Axon group would bolster the company’s presence in the consulting space.
“The deal is earnings per share (EPS) neutral on standalone basis in FY09 (estimated), but EPS accretion in FY10 (estimated) depends on Axon’s growth and margin trajectory. Incorporating the financial impact of this acquisition, the stock trades at 16.5 times and 13.9 times FY09 and FY10 earnings respectively,” the note said. However, according to the brokerage firm, slowdown in US, significant increase in the salary hikes and attrition rate, reduction in the number of H1B visas granted by US, and incremental appreciation of rupee against US dollar, euro and GBP remain key concerns for the company.
Analysts'Picks: Infosys Tech
27 Aug, 2008
Infosys Tech
cmp: Rs 1,697.60
target price: Rs 1,703
Broking firm Edelweiss Securities has maintained its ‘accumulate’ rating on the stock as it believes that the company’s recent acquisition of the Axon group would bolster the company’s presence in the consulting space.
“The deal is earnings per share (EPS) neutral on standalone basis in FY09 (estimated), but EPS accretion in FY10 (estimated) depends on Axon’s growth and margin trajectory. Incorporating the financial impact of this acquisition, the stock trades at 16.5 times and 13.9 times FY09 and FY10 earnings respectively,” the note said. However, according to the brokerage firm, slowdown in US, significant increase in the salary hikes and attrition rate, reduction in the number of H1B visas granted by US, and incremental appreciation of rupee against US dollar, euro and GBP remain key concerns for the company.
Macquarie Research initiates 'underperformer' rating on ABB
10 Sep, 2008
ABB India
cmp: Rs 893.40
target price: Rs 728
Macquarie Research has initiated coverage on ABB India with an ‘underperformer’ rating saying ABB has traded at a significant premium to peers in the power sector equipment space.
“We expect growth to moderate and multiples to come off,” said Macquarie in a note to its clients. Macquarie expects the company’s growth to mod-erate to 26% CAGR over CY08-10.
“We expect ABB’s growth to come in line with BHEL’s (proxy to generation sector investment) projected growth. Our projected topline growth over CY08-10 is 26%, against 42% over CY05-07,” the note said. According to Macquarie, ABB has built-in price escalation clauses in its contracts and has also hedged key raw materials such as copper.
“We expect margins to remain stable on pass through clauses, earnings growth around 27%,” the note added.
Wait for more signals before turning positive
28 Jul, 2008,
At the recent low of 12514 points, the Sensex has tested the 12800-12000-pts support zone and has since then attempted a corrective rally. During the past trend phases in the Sensex, a monthly moving average convergence/divergence (MACD) cross-down below its trigger line, have, typically, led to a significant value erosion, with the corrective phase lasting, at least, for a year.
Therefore, immediate rallies would be interpreted as corrective in nature until the medium-term technical parameters turn positive. The recent upmove in the Sensex since the low of 12514 pts has been very sharp. The upside gap of July 23, 2008 had created a bullish ‘Island Reversal Gap’ on the daily charts between 14510 pts and 14519 pts.
Normally, the implications of this on the medium-term outlook would be very positive, especially since the “Island” comprised of 22 trading sessions. When a stock indicates an uptrend, trades above the gap which occurs, then gaps back down and trades below the initial price, an island reversal has occurred.
However, the Sensex has since run into a strong resistance zone between 15026 pts and 15390 pts. The monthly mid-point of June 2008 is at 15026 pts. The 50% retracement level of the fall from the May 2008 peak (17735 pts) is at 15124 pts. The positive implications of the bullish “Island Reversal Gap” would thus get negated if the Sensex has a daily close below 14104 pts (the close on July 22, 2008). The Sensex is then expected to have an initial downside of 13513 pts, the 61.8% Fibonacci retracement level of the recent rise from 12514 pts to 15130 pts.
If the bearish “Island reversal gap” of 14484-14568 pts is immediately filled and the Sensex manages to decisively overhaul the resistances between 15130 pts and 15390 pts, the ongoing upmove would continue. The Sensex may then test higher levels between 16618 pts and 16860 pts.
The 78.6% Fibonacci retracement level of the fall from the May 2008 peak is at 16618 pts while 16860 pts is the 50% retracement level of the entire fall from the January 2008 peak. Hence, one would await further confirmation before turning positive on the medium-term outlook.
Friday, August 15, 2008
Dish TV shines bright on debut in NSE F&O
August 14, 2008
Dish TV India on Wednesday surged 10.26 per cent to close at Rs 39.75 after being included in NSE’s futures and options segment with effect from August 21. NSE announced this yesterday after the market hours. The stock opened 7.07 per cent higher at Rs 38.60 and touched an intraday high of Rs 40.45.
The counter witnessed volumes of 76,78,034 shares vis-Ã -vis a two-week average of 34,47,892 shares. The stock hit a 52-week high of Rs 106.4 on January 1 and a 52-week low of Rs 26.3 on July 2. The scrip has gained 18.1 per cent in the last one week.
Vornado, RIL team up for shopping centres
August 15, 2008,
The US-based real estate investment trust Vornado Realty Trust has announced an equal joint venture with the Mukesh Ambani-led Reliance Industries to acquire, develop and operate shopping malls in India. Both partners will invest $250 million (nearly Rs 1,000 crore) each in the JV.
“The shopping centers, spread over 5,00,000 to 10 lakh square feet or more, will be anchored by a hypermarket owned and operated by Reliance,” Vornado said.
The JV is expected to boost the expansion plans of RIL’s retail venture Reliance Retail, which operates 700 multiple-format stores across 60 cities, encompassing 3.5 million sqft.
Reliance Retail has announced ambitious plans to the tune of Rs 25,000 crore. The retailer runs neighbourhood store Reliance Fresh, consumer durable chain Reliance Digital, hypermarket chain Reliance Mart, apparel chain Reliance Trends and footwear chain Reliance Footprint.
The New York Stock Exchange-listed Vornado already has an exposure to the Indian realty market. The company has an aggregate investment nearing $91 million and capital commitments of $92 million in joint ventures across the country. Vornado Realty Fund, an integrated real estate investment trust, owns over 100 million sq ft of office, retail and other properties in the US.
Retail rentals have doubled in most premium locations across Mumbai, Delhi and Bangalore in the last three years. Retailers have been hit hard due to the soaring realty prices, delays in getting properties and reduction in footfalls.
In a bid to counter this, most retailers have floated their own funds that invest in shopping malls or formed JVs to invest in real estate.
Future Group, which houses India’s largest retailer Pantaloons, has floated Kshitij realty fund that invests in the group’s shopping malls. Tata’s retail arm Trent has tied up with private equity firm The Xander Group to float a retail real estate fund, while Aditya Birla Retail, formed by AV Birla group, has plans to float a retail real estate fund.
The domestic retail market that is currently valued at $511 billion, is projected to grow to $833 billion in the next five years. Organised retail is expected to grow by 40 per cent every year to $107 billion by 2013, according to retail consultancy AT Kearney.
Property consultancy CB Richard Ellis sees a likelihood of nearly 100 million sq ft retail property being developed. Some of the biggest shopping centre developers and investors have started their operations in the country. South Africa’s Old Mutual Property Investments, the UK’s Liberty International, Israel’s Plaza Centres and Metro Junction have announced plans in the country.
Analysts are however concerned about an impending oversupply of space in the retail sector. “Over-supply and saturation may result in correction of rentals in certain pockets and micro-markets in the short to medium-term,’’ said a report from property consultancy CB Richard Ellis.
Vornado, RIL team up for shopping centres
August 15, 2008,
The US-based real estate investment trust Vornado Realty Trust has announced an equal joint venture with the Mukesh Ambani-led Reliance Industries to acquire, develop and operate shopping malls in India. Both partners will invest $250 million (nearly Rs 1,000 crore) each in the JV.
“The shopping centers, spread over 5,00,000 to 10 lakh square feet or more, will be anchored by a hypermarket owned and operated by Reliance,” Vornado said.
The JV is expected to boost the expansion plans of RIL’s retail venture Reliance Retail, which operates 700 multiple-format stores across 60 cities, encompassing 3.5 million sqft.
Reliance Retail has announced ambitious plans to the tune of Rs 25,000 crore. The retailer runs neighbourhood store Reliance Fresh, consumer durable chain Reliance Digital, hypermarket chain Reliance Mart, apparel chain Reliance Trends and footwear chain Reliance Footprint.
The New York Stock Exchange-listed Vornado already has an exposure to the Indian realty market. The company has an aggregate investment nearing $91 million and capital commitments of $92 million in joint ventures across the country. Vornado Realty Fund, an integrated real estate investment trust, owns over 100 million sq ft of office, retail and other properties in the US.
Retail rentals have doubled in most premium locations across Mumbai, Delhi and Bangalore in the last three years. Retailers have been hit hard due to the soaring realty prices, delays in getting properties and reduction in footfalls.
In a bid to counter this, most retailers have floated their own funds that invest in shopping malls or formed JVs to invest in real estate.
Future Group, which houses India’s largest retailer Pantaloons, has floated Kshitij realty fund that invests in the group’s shopping malls. Tata’s retail arm Trent has tied up with private equity firm The Xander Group to float a retail real estate fund, while Aditya Birla Retail, formed by AV Birla group, has plans to float a retail real estate fund.
The domestic retail market that is currently valued at $511 billion, is projected to grow to $833 billion in the next five years. Organised retail is expected to grow by 40 per cent every year to $107 billion by 2013, according to retail consultancy AT Kearney.
Property consultancy CB Richard Ellis sees a likelihood of nearly 100 million sq ft retail property being developed. Some of the biggest shopping centre developers and investors have started their operations in the country. South Africa’s Old Mutual Property Investments, the UK’s Liberty International, Israel’s Plaza Centres and Metro Junction have announced plans in the country.
Analysts are however concerned about an impending oversupply of space in the retail sector. “Over-supply and saturation may result in correction of rentals in certain pockets and micro-markets in the short to medium-term,’’ said a report from property consultancy CB Richard Ellis.
Vornado, RIL team up for shopping centres
August 15, 2008,
The US-based real estate investment trust Vornado Realty Trust has announced an equal joint venture with the Mukesh Ambani-led Reliance Industries to acquire, develop and operate shopping malls in India. Both partners will invest $250 million (nearly Rs 1,000 crore) each in the JV.
“The shopping centers, spread over 5,00,000 to 10 lakh square feet or more, will be anchored by a hypermarket owned and operated by Reliance,” Vornado said.
The JV is expected to boost the expansion plans of RIL’s retail venture Reliance Retail, which operates 700 multiple-format stores across 60 cities, encompassing 3.5 million sqft.
Reliance Retail has announced ambitious plans to the tune of Rs 25,000 crore. The retailer runs neighbourhood store Reliance Fresh, consumer durable chain Reliance Digital, hypermarket chain Reliance Mart, apparel chain Reliance Trends and footwear chain Reliance Footprint.
The New York Stock Exchange-listed Vornado already has an exposure to the Indian realty market. The company has an aggregate investment nearing $91 million and capital commitments of $92 million in joint ventures across the country. Vornado Realty Fund, an integrated real estate investment trust, owns over 100 million sq ft of office, retail and other properties in the US.
Retail rentals have doubled in most premium locations across Mumbai, Delhi and Bangalore in the last three years. Retailers have been hit hard due to the soaring realty prices, delays in getting properties and reduction in footfalls.
In a bid to counter this, most retailers have floated their own funds that invest in shopping malls or formed JVs to invest in real estate.
Future Group, which houses India’s largest retailer Pantaloons, has floated Kshitij realty fund that invests in the group’s shopping malls. Tata’s retail arm Trent has tied up with private equity firm The Xander Group to float a retail real estate fund, while Aditya Birla Retail, formed by AV Birla group, has plans to float a retail real estate fund.
The domestic retail market that is currently valued at $511 billion, is projected to grow to $833 billion in the next five years. Organised retail is expected to grow by 40 per cent every year to $107 billion by 2013, according to retail consultancy AT Kearney.
Property consultancy CB Richard Ellis sees a likelihood of nearly 100 million sq ft retail property being developed. Some of the biggest shopping centre developers and investors have started their operations in the country. South Africa’s Old Mutual Property Investments, the UK’s Liberty International, Israel’s Plaza Centres and Metro Junction have announced plans in the country.
Analysts are however concerned about an impending oversupply of space in the retail sector. “Over-supply and saturation may result in correction of rentals in certain pockets and micro-markets in the short to medium-term,’’ said a report from property consultancy CB Richard Ellis.
Thursday, August 14, 2008
Analysts' picks:Future Cap Holdings, HCL Infosystems
13 Aug, 2008,
Future Cap Holdings
cmp: Rs 360.50
target price: NA
Edelweiss has initiated coverage on Future Capital Holdings with an ‘accumulate’ rating as it feels that the company with its vertically-integrated model is likely to capture value across the chain in the high-growth consumption space.
“The company is building a vertically integrated capital-cum-agency business model through its investment advisory, financing and financial products distribution businesses,” says the report. The company is a focused investment advisor with $1.5 billion funds under advice in consumption-related sectors, it adds.
The brokerage expects its assets under management to grow to $5 billion by FY11E. It also expects the “company’s net revenues to grow seven-fold to Rs 7.7 billion in FY10E and profit after tax to grow to Rs 1.8 billion in FY10E”. The stock is trading at 12.6 times FY10E earnings and 2.5 times FY10E book, says the report. Edelweiss recommends investors to accumulate the stock at current levels from a long-term perspective (2-3 years).
HCL Infosystems
cmp: Rs 121.80
target price: Rs 155
CLSA has maintained an ‘outperform’ rating on HCL Infosystems while lowering the target price from Rs 230 to Rs 155 due to the further slowing down of PC sales. “HCL Infosystems’ sales are slowing down further and we now expect flat to negative year-on-year revenue growth in the segment in the June’08 quarter,” says the brokerage.
Around 30% of the company’s PC sales go to the retail segment, where the slowdown observed since late CY2007 has deepened, it says. Lower computer systems revenue assumptions are driving around 4-11% further cut in EPS estimates for FY08-10, it goes on to add.
According to CLSA, the demand of PC seems to be waning due to “cost-led 5-7% price hikes passed on by vendors, plus the lower financing options available (higher interest rates plus cut back in new loans from financiers)”. A 6.4% dividend yield provides some buffers to the stock, but upsides seem limited as a weak quarter looms, it adds.
Vishal Retail
cmp: Rs 415.90
target price: Rs 485
Kotak Institutional Equities has initiated coverage on Vishal Retail with a ‘add’ rating as it feels that the company would benefit from its ‘value’ model that has national scalability, thereby offering economies of scale.
“The company’s transformation to an integrated retailer dilutes its dependence on apparel while its emphasis on private labels is likely to support margins,” says the report.
It goes on to add that the company’s product mix is likely to under go significant changes in the near future, with negative margin impact of FMCG sales offset by higher share of private labels. The brokerage, however, feels that the “proposed rollout is aggressive” and that it would be “tempered by funding constraints”.
“We expect the total retail space to grow at 48% CAGR to 7 million sq ft by FY2011E, which is 30% lower than management estimates, after factoring in funding constraints,” says the report. Inflation and economic slowdown are concerns given the company’s concentration on lower income categories, it adds.
Wipro
cmp: Rs 433.30
target price: NA
ICICI Securities has maintained a ‘buy’ rating on Wipro even while viewing that the risk-reward is unfavourable at current valuations owing to deteriorating earnings visibility. The brokerage believes that Wipro’s upswing in the past weeks and the resulting par-valuations with Infosys is unjustified in the short term and expects profit booking at current levels.
“With FY09E and FY10E PE at 17.2 times and 14.1 times (versus 17 times and 14.9 times for Infosys), we believe Wipro will witness profit booking in the short term given lower earnings visibility and similar EPS CAGR through FY08-11E,” says the report.
As against a historically strong second quarter, Wipro’s Q2FY09 dollar-denominated revenue growth guidance indicates that the company is witnessing client-specific ramp downs in Q2FY09, it adds. ICICI Securities, however, believes that client-specific issues in material accounts (GM, Nokia-Siemens, Alcatel-Lucent) are likely to lead to a bounceback in revenue growth only post Q2FY09.
Saturday, August 9, 2008
A positive opening on the cards
August 10, 2008,
The major indices are likely to open strong on Monday due to extremely positive cues from the US markets. Market internals suggest selling bias at higher levels. While the indices managed to hold crucial support levels, an impending correction may see the indices break below the support levels in the coming days.
Sensex, has gained nearly 13 per cent (1,714 points) during the period. The index moved in a range of 919 points last week – it rallied from a low of 14,504 to a high of 15,423 - and finally ended with gains of 511 points at 15,168.
Among the Sensex stocks, Maruti zoomed over 21 per cent. HDFC Bank, ICICI Bank, Tata Motors, Grasim, Mahindra & Mahindra and ACC rallied 9-16 per cent each. Tata Power and Tata Steel, however, dropped 5 per cent and 4 per cent respectively.
The Sensex crossed the resistance level of 15,200 in intra-day trades during the last three days. However, the index could not close above it. The index may target 17,150 in the medium-term. But a sharp correction is not ruled out, given the high 14-day relative strength index (RSI) at 72 per cent. An RSI of above 70 per cent indicates overbought zone.
The index may face resistance around 15,625-15,740 this week, above which it may spurt to the 16,000-mark. On the downside, the index may seek support around 14,600 and 13,350-13,500.
The Nifty moved in a range of 253 points - rallying from a low of 4,363 to a high of 4,616 - before settling 116 points higher at 4,530.
The index has closed above the 4,500-mark for the last four straight days and looks set to target its 200-DMA (daily moving average) at 5,135 in the coming days.
However, it is likely to face resistance around 4,700-4,800 in the near term, and profit-taking at these levels could see the index slide to 4,170-4,050.
The Nifty is likely to face resistance around 4,625-4,690 and may find support around 4,430-4,370 this week.
AnandRathi puts 'buy' on JP Associates; target Rs 232
6 Aug, 2008,
AnandRathi has advised buying Jaiprakash Associates at around the current price for a target of Rs 232 and a stop loss of Rs 168.
JP Associates, after a descent consolidation exhibits a trend reversal, rise in RSI from over sold zone indicates a medium term buy.
Based on the chart pattern developed to date, the stock is likely to get support around Rs.170.
The brokerage suggests accumulating more if the stock comes close to the support level. If it moves above Rs 232 level then it can even touch Rs 254 levels.
AnandRathi puts 'buy' on JP Associates; target Rs 232
6 Aug, 2008,
AnandRathi has advised buying Jaiprakash Associates at around the current price for a target of Rs 232 and a stop loss of Rs 168.
JP Associates, after a descent consolidation exhibits a trend reversal, rise in RSI from over sold zone indicates a medium term buy.
Based on the chart pattern developed to date, the stock is likely to get support around Rs.170.
The brokerage suggests accumulating more if the stock comes close to the support level. If it moves above Rs 232 level then it can even touch Rs 254 levels.
AnandRathi puts 'buy' on JP Associates; target Rs 232
6 Aug, 2008,
AnandRathi has advised buying Jaiprakash Associates at around the current price for a target of Rs 232 and a stop loss of Rs 168.
JP Associates, after a descent consolidation exhibits a trend reversal, rise in RSI from over sold zone indicates a medium term buy.
Based on the chart pattern developed to date, the stock is likely to get support around Rs.170.
The brokerage suggests accumulating more if the stock comes close to the support level. If it moves above Rs 232 level then it can even touch Rs 254 levels.
Anand Rathi puts 'buy' on Tata Motors
7 Aug, 2008
Anand Rathi Securities has initiated a medium term technical 'buy' call on Tata Motors. The brokerage suggests buying this stock between Rs 430-440 with a stoploss of Rs 399 for a target of Rs 520. The current market price is Rs 440.
The stock has sustained above its strong resistance levels at Rs 435-440. The 14-day Relative Strength Index indicates the stock is in an oversold zone and the candle stick chart has formed a bullish engulfing pattern.
“We strongly believe that the stock has entered into medium term bullishness with substantial upside,” Anand Rathi says in its report
Wednesday, August 6, 2008
ICICI Securities maintains a 'buy' on HPCL
6 Aug, 2008
CMP: Rs 234.20
Target price: NA
ICICI Securities has maintained a ‘buy’ rating on HPCL even after the company reported a recurring loss of Rs 880 crore in the first quarter of the current financial year due to lower than expected subsidy support from the government and upstream companies.
The brokerage expects subsidy support to increase over the year as the government has not yet accounted for the Rs 40,000 crore unallocated burden. “Though we continue to believe that the stock may remain subdued in the short term till the government decides the final subsidy burden-sharing formula, the company is trading at a significant discount to the replacement value of its asset,” says the report.
The brokerage also highlights the fact that risks of further increase in interest costs along with expectations of a fall in refining margins could potentially impact earnings. Positive surprise, however, on higher subsidy sharing by upstream companies and oil bonds could be a boost to stock prices, it adds.
Positive news on the E&P front and implementation of subsidy reforms recommended by the Rangarajan Committee could trigger re-rating in the stock, says the report.
ICICI Securities maintains a 'buy' on HPCL
6 Aug, 2008
CMP: Rs 234.20
Target price: NA
ICICI Securities has maintained a ‘buy’ rating on HPCL even after the company reported a recurring loss of Rs 880 crore in the first quarter of the current financial year due to lower than expected subsidy support from the government and upstream companies.
The brokerage expects subsidy support to increase over the year as the government has not yet accounted for the Rs 40,000 crore unallocated burden. “Though we continue to believe that the stock may remain subdued in the short term till the government decides the final subsidy burden-sharing formula, the company is trading at a significant discount to the replacement value of its asset,” says the report.
The brokerage also highlights the fact that risks of further increase in interest costs along with expectations of a fall in refining margins could potentially impact earnings. Positive surprise, however, on higher subsidy sharing by upstream companies and oil bonds could be a boost to stock prices, it adds.
Positive news on the E&P front and implementation of subsidy reforms recommended by the Rangarajan Committee could trigger re-rating in the stock, says the report.
ICICI Securities maintains a 'buy' on HPCL
6 Aug, 2008
CMP: Rs 234.20
Target price: NA
ICICI Securities has maintained a ‘buy’ rating on HPCL even after the company reported a recurring loss of Rs 880 crore in the first quarter of the current financial year due to lower than expected subsidy support from the government and upstream companies.
The brokerage expects subsidy support to increase over the year as the government has not yet accounted for the Rs 40,000 crore unallocated burden. “Though we continue to believe that the stock may remain subdued in the short term till the government decides the final subsidy burden-sharing formula, the company is trading at a significant discount to the replacement value of its asset,” says the report.
The brokerage also highlights the fact that risks of further increase in interest costs along with expectations of a fall in refining margins could potentially impact earnings. Positive surprise, however, on higher subsidy sharing by upstream companies and oil bonds could be a boost to stock prices, it adds.
Positive news on the E&P front and implementation of subsidy reforms recommended by the Rangarajan Committee could trigger re-rating in the stock, says the report.
Tata Steel makes it to Fortune Global 500 list for first time . 6 Aug, 2008.
MUMBAI: Steel major Tata Steel has for the first time made it to the prestigious Fortune Global 500 list of the world's largest corporations, a company statement said on Wednesday.
The company ranks 231 in terms of revenue, the statement said.
Interestingly, Fortune magazine in its July 21, 2008 issue, had for the first time included Tata Steel in its Global 500 list but the company was ranked 315th in terms of revenue.
This ranking was, however, based on the company's total revenues in the first three quarters of the current fiscal and the last quarter of the previous fiscal.
Following the announcement of the company's annual results, Fortune has re-ranked Tata Steel.
In a clarification on its website, Fortune has said: "Tata Steel's revenue for fiscal year end March 31, 2008 -- released by the company after the Global 500 publication deadline -- was $32.8 billion. Had the information been available, the company would have placed 231 on the list. The company ranked 315th in the listing, based on revenue for the four quarters ended Dec. 31, 2007, of $25.7 billion."
Indiabulls maintains 'buy' on HDFC Bank
6 Aug, 2008
CMP: Rs 1,184.35
Target price: Rs 1,400
Indiabulls has maintained a ‘buy’ rating on HDFC Bank as it feels that the bank would revert to its more profitable numbers once Centurion Bank of Punjab (CBoP) is integrated in its existing network.
“Sound fundamentals make HDFC Bank a strong performer,” says the report, adding that “despite taking a nominal hit on its net interest margin (NIM) post the merger with CBoP, net interest income (NII) grew by 74.9% YoY and fee income by 37.3% YoY.” This pulled up net profit by 44.6% and on a proforma basis, by 31.1%.
While the bank recorded a 111.60% YoY increase in its non-performing assets, the brokerage feels it is more on account of the merger than due to a deterioration in asset quality, since HDFC Bank’s net NPA ratio stood at 0.5% of net advances this quarter.
Friday, August 1, 2008
1 Aug, 2008,
MUMBAI: Shares of MTNL picked up steam after the telecommunications ministry announced that BSNL and MTNL will be allotted high-speed third-generation spectrum right away.
A global auction for 3G mobile services will be held and have five operators initially. The new guidelines for 3G spectrum, released today, provides for a reserve price for availing of radio frequency.
The department of telecommunications has also fixed the base price at Rs 160 crore for metros and category A circles, Rs 80 crore for category B, and Rs 30 crore for C circles, respectively for 3G spectrum auctions.
The guidelines for 'mobile number portability', also released by the government, MTNL shares up 6% on 3G spectrum allocation
1 Aug, 2008,
proposes dividing the country into two zones for implementing the scheme that is prevalent in most mature telecom markets.
India has 60 MHz of 3G spectrum available, and will allow both GSM and CDMA 3G services.
At 12:45 pm, MTNL shares soared 6.45 per cent to Rs 110.50. Among other telcom players, Bharti Airtel was marginally higher, Tata Communications rose 2.03 per cent while Idea Cellular lost 0.79 per cent.
Wednesday, July 30, 2008
Oil firms to raise diesel imports
July 31, 2008, 0:00 IST
IOCL, BPCL, HPCL may buy 3.5 mt from
Indian Oil abroad to meet demand
Indian Oil Corporaton (IOCL), the nation’s biggest refiner, and its state-run counterparts may import 3.5 million tonnes of diesel in the year ending March 2009 to meet demand for the fuel.
IOCL, Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) imported 2.93 million tonnes of diesel in the last financial year, making good the shortfall in supply created by increased exports from Reliance Industries’ Jamnagar refinery in Gujarat.
IOCL will increase diesel imports to 1.2 million tonnes in the financial year to March 2009 from 670,000 tonnes last year, Serangulam V Narasimhan, director (finance), IOCL, told reporters in New Delhi today.
The refiner has imported 200,000 tonnes of the fuel so far this year, Narasimhan said. The company does not plan to import diesel in the next two to three months as demand usually lows during the monsoon, he said.
Demand for diesel is growing at the rate of around 25 per cent, while the Indian refiners have capacities to meet the growth in demand up to 15 per cent. The higher demand and production capacity constraints necessitate increased imports.
Reliance exports almost all of the 11 million tonnes of diesel it produces from its refinery after it was given the status of an export-oriented unit early last year.
“At the worst of times, the diesel demand growth has been 8-10 per cent,” said IOCL Chairman and Managing Director Sarthak Behuria. He added that demand for the fuel increases as it is used to generate electricity from generator sets during power failures.
He added that the demand growth has been high in states like Karnataka, where the power crisis has been severe.
Oil marketing companies sell diesel to industrial users as well as retail consumers at the same subsidised prices. “This has created the jump in demand,” Behuria said.
Diesel is the largest-selling fuel in the country. The country consumed 47.64 million tonnes of the fuel in 2007-08. Consumption is expected to be higher by around 20 per cent this year.
ICICI Bank: Hard times
Mumbai July 29, 2008,
A slower loan growth could hurt profits.
One reason why ICICI Bank has seen a 6 per cent fall in its net profit for the June 2008 quarter is that its total income has barely budged. The interest earned from loans—the bank’s core business—is up just 5.6 per cent and it is the 37 per cent rise in income from fees that has pulled up the topline. Treasury losses of close to Rs 600 crore too have hurt profits.
If the fall in the bottomline isn’t sharper, it is because the bank has managed to keep costs in check. Thanks to a higher share of cheaper current and savings accounts (CASA), which went up by about 500 basis points, it has paid less to borrow .That’s why the net interest margin (nim) has risen by 45 basis points y-o-y to 2.4 per cent and stayed flat sequentially. Besides, expenses on direct marketing have been slashed.
The loan book has grown by just 13 per cent for the stand-alone entity while for the consolidated entity, it was up 20 per cent. The management says it will scale back retail loan targets to 5-10 per cent this year though the corporate book could grow by about 25 per cent.
Given that fee incomes will not be as easy to come by — especially in the derivatives segments, the bank could grow at a slower pace this year. Margins may remain stable with the bank able to access more low cost deposits from an expanding branch network.
The real problem area, however, is the rising quantum of non-performing loans (npls). Net npls are up at Rs 1,300 crore compared with Rs 1,100 crore in the March 2008 quarter: loan defaults could increase in a weakening economic environment.
The ICICI Bank stock came off by close to 10 per cent on Friday to close at Rs 656.85. At this price, the stock trades at about 1.1 times estimated FY09 book value and is not expensive. However, the worst may not be over given that the environment remains challenging.
Tuesday, July 29, 2008
Interest rates set to harden: BankersPosted online: Tuesday , July 29, 2008
Bankers on Tuesday said both lending and deposit rates are likely to go up by a minimum of 0.5 per cent, as a fall out of Reserve Bank announcing a hike in short-term lending rate and cash reserve requirement of banks.
"We have to assess what is the actual impact and a decision would be taken accordingly. A minimum 0.5 per cent hike in our BPLR and deposit rates cannot be ruled out," state-owned Punjab National Bank's Chairman and Managing Director K C Chakarabarty said in Mumbai.
Announcing the quarterly review of credit policy, RBI hiked CRR by 0.25 per cent to 9 per cent and Repo by 0.5 per cent to 9 per cent.
Union Bank of India's Chirman and Managing Director M V Nair said the bank's Asset Liability Committee (ALCO) would look at the liquidity condition of the bank after the hike.
The lender is likely to up its BPLR, Nair said, but did not say what would be the range of revision. "Our ALCO will meet soon to assess the impact. There is a clear pressure on the profitability of banks after the present hikes in RBI key-rates. We may revise our BPLR upwards," Nair said.
Interest rates set to harden: BankersPosted online: Tuesday , July 29, 2008
Bankers on Tuesday said both lending and deposit rates are likely to go up by a minimum of 0.5 per cent, as a fall out of Reserve Bank announcing a hike in short-term lending rate and cash reserve requirement of banks.
"We have to assess what is the actual impact and a decision would be taken accordingly. A minimum 0.5 per cent hike in our BPLR and deposit rates cannot be ruled out," state-owned Punjab National Bank's Chairman and Managing Director K C Chakarabarty said in Mumbai.
Announcing the quarterly review of credit policy, RBI hiked CRR by 0.25 per cent to 9 per cent and Repo by 0.5 per cent to 9 per cent.
Union Bank of India's Chirman and Managing Director M V Nair said the bank's Asset Liability Committee (ALCO) would look at the liquidity condition of the bank after the hike.
The lender is likely to up its BPLR, Nair said, but did not say what would be the range of revision. "Our ALCO will meet soon to assess the impact. There is a clear pressure on the profitability of banks after the present hikes in RBI key-rates. We may revise our BPLR upwards," Nair said.
Interest rates set to harden: BankersPosted online: Tuesday , July 29, 2008
Bankers on Tuesday said both lending and deposit rates are likely to go up by a minimum of 0.5 per cent, as a fall out of Reserve Bank announcing a hike in short-term lending rate and cash reserve requirement of banks.
"We have to assess what is the actual impact and a decision would be taken accordingly. A minimum 0.5 per cent hike in our BPLR and deposit rates cannot be ruled out," state-owned Punjab National Bank's Chairman and Managing Director K C Chakarabarty said in Mumbai.
Announcing the quarterly review of credit policy, RBI hiked CRR by 0.25 per cent to 9 per cent and Repo by 0.5 per cent to 9 per cent.
Union Bank of India's Chirman and Managing Director M V Nair said the bank's Asset Liability Committee (ALCO) would look at the liquidity condition of the bank after the hike.
The lender is likely to up its BPLR, Nair said, but did not say what would be the range of revision. "Our ALCO will meet soon to assess the impact. There is a clear pressure on the profitability of banks after the present hikes in RBI key-rates. We may revise our BPLR upwards," Nair said.
Friday, July 18, 2008
Buy Bharti Airtel for target Rs 1,150: Religare
29 Jul, 2008
MUMBAI: Religare Research has maintained ‘buy’ on Bharti Airtel for a target price of Rs 1,150. The company has released a good set of numbers in April-June 2008-09, ahead of the brokerage estimates. Strong subscriber additions in conjunction with higher mobile traffic from existing and new clients supported a revenue growth of 8.5 per cent quarter on quarter.
A decrease in STD rates and roaming charges boosted mobile traffic volumes but caused margins in the segment to decline. In a further dampener to mobile margins, the licence fee concession period in six circles expired during the quarter, elevating licence costs. However, average revenue per user in the mobile segment bettered Religare’s estimate of Rs 350, a marginal decline of 2 per cent quarter on quarter against their expectation of a 5.2 per cent decline.
Religare has revised their ARPU assumption since the gestation period for rural customers is proving to be lower than anticipated, with traffic picking up at a rapid pace. The brokerage has increased their revenue and earnings estimates for 2008-09 and 2009-10 based on strong subscriber additions and their revised ARPU assumptions.
The stock is trading at 16.8x and 13.8x expected FY09 and FY10 earnings of Rs 47.4 and Rs 57.7 respectively.
Buy Bharti Airtel for target Rs 1,150: Religare
29 Jul, 2008
MUMBAI: Religare Research has maintained ‘buy’ on Bharti Airtel for a target price of Rs 1,150. The company has released a good set of numbers in April-June 2008-09, ahead of the brokerage estimates. Strong subscriber additions in conjunction with higher mobile traffic from existing and new clients supported a revenue growth of 8.5 per cent quarter on quarter.
A decrease in STD rates and roaming charges boosted mobile traffic volumes but caused margins in the segment to decline. In a further dampener to mobile margins, the licence fee concession period in six circles expired during the quarter, elevating licence costs. However, average revenue per user in the mobile segment bettered Religare’s estimate of Rs 350, a marginal decline of 2 per cent quarter on quarter against their expectation of a 5.2 per cent decline.
Religare has revised their ARPU assumption since the gestation period for rural customers is proving to be lower than anticipated, with traffic picking up at a rapid pace. The brokerage has increased their revenue and earnings estimates for 2008-09 and 2009-10 based on strong subscriber additions and their revised ARPU assumptions.
The stock is trading at 16.8x and 13.8x expected FY09 and FY10 earnings of Rs 47.4 and Rs 57.7 respectively.
Buy Bharti Airtel for target Rs 1,150: Religare
29 Jul, 2008
MUMBAI: Religare Research has maintained ‘buy’ on Bharti Airtel for a target price of Rs 1,150. The company has released a good set of numbers in April-June 2008-09, ahead of the brokerage estimates. Strong subscriber additions in conjunction with higher mobile traffic from existing and new clients supported a revenue growth of 8.5 per cent quarter on quarter.
A decrease in STD rates and roaming charges boosted mobile traffic volumes but caused margins in the segment to decline. In a further dampener to mobile margins, the licence fee concession period in six circles expired during the quarter, elevating licence costs. However, average revenue per user in the mobile segment bettered Religare’s estimate of Rs 350, a marginal decline of 2 per cent quarter on quarter against their expectation of a 5.2 per cent decline.
Religare has revised their ARPU assumption since the gestation period for rural customers is proving to be lower than anticipated, with traffic picking up at a rapid pace. The brokerage has increased their revenue and earnings estimates for 2008-09 and 2009-10 based on strong subscriber additions and their revised ARPU assumptions.
The stock is trading at 16.8x and 13.8x expected FY09 and FY10 earnings of Rs 47.4 and Rs 57.7 respectively.
Friday, July 4, 2008
Nifty may re-test recent highs
WEEKLY TECHNICAL ANALYSIS
The markets bounced back sharply in the last two days of the trading week, mainly on account of short-covering in banking stocks, as the US markets rebounded. Realty and energy stocks logged smart gains.
The Nifty hit a fresh calendar low of 3,790 (close to the support level of 3,770 mentioned last week) and then pulled back to higher levels. The buying momentum was so strong that the index zipped past the 4,000-mark to a high of 4,118. The index finally settled with gains of 43 points at 4,092.
The Nifty MACD (moving average convergence divergence) and Stochastic Slow indicate more upside. The index could re-test its recent high of 4,215. If it sustains above this level, one may see the 4,500 level in the medium term.
The index closed above its short-term moving (20-days) average (4,064) after a gap of 41 days. The medium-term (50-days) moving average is 4,492. Going forward, the 3,850 level will be crucial. The Nifty may see a further upside as long as it trades above this level. But a dip below the mark could take the index up to 3,400-3,250.
The Nifty is likely to find support around 3,965-3,930-3,890, while it may face resistance around 4,215-4,255-4,295 this week.
The Sensex moved in a range of 1,170 points - from a low of 12,514, the index rallied to a high of 13,684 and finally ended with gains of 165 points at 13,635.
Among the index stocks, ONGC and Maruti soared 11 per cent each. Larsen & Toubro, Bharti Airtel, NTPC, Reliance Infrastructure and SBI gained 6-8 per cent each. On the other hand, Ranbaxy slumped 18 per cent to Rs 531, and Satyam, Wipro, Tata Steel, Hindalco and Infosys dropped 8-14 per cent each.
RCom, RIL shares to be most watched stocks on bourse
MUMBAI: With the deal between Reliance Communication and South African telecom entity MTN falling apart, amid the battle between the two Ambani siblings, the stocks of RCOM and Mukesh Ambani-led Reliance Industries will be the most watched ones when the market opens tomorrow.
Analysts believe the two stocks, though most watched by investors for any big movements, are expected to remain subdued this week due to the continuing tussle between Anil and Mukesh Ambani.
"RCom and RIL stocks will continue to face pressure this week amid the overall bearish sentiments in the market. The shares are expected to remain under pressure till the market situation improves," SMC Global Vice President Rajesh Jain said.
In another significant move, AAA Communications, a private company of Anil Ambani that holds 63.38 per cent equity in RCOM, wrote to RIL claiming it was "free to and shall deal with RCOM shares as it deems fit."
