NSE/BSE STOCK MARKET TIPS

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.

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.

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.

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."