June, 2007 | Dalal Street

PVR , BASF and Cyber Media India Results

June 6, 20072 min read

Net profit of PVR rose 93.05% to Rs 10.56 crore in the year ended March 2007 as against Rs 5.47 crore during the previous year ended March 2006. Sales rose 59.28% to Rs 164.09 crore in the year ended March 2007 as against Rs 103.02 crore during the previous year ended March 2006.

Net profit of BASF India declined 26.31% to Rs 3.67 crore in the quarter ended March 2007 as against Rs 4.98 crore during the previous quarter ended March 2006. Sales rose 10.68% to Rs 160.70 crore in the quarter ended March 2007 as against Rs 145.19 crore during the previous quarter ended March 2006. For the full year, net profit rose 10.31% to Rs 50.09 crore in the year ended March 2007 as against Rs 45.41 crore during the previous year ended March 2006. Sales rose 12.59% to Rs 768.53 crore in the year ended March 2007 as against Rs 682.57 crore during the previous year ended March 2006.

Net profit of Cyber Media (India) declined 74.22% to Rs 0.33 crore in the quarter ended March 2007 as against Rs 1.28 crore during the previous quarter ended March 2006. Sales rose 9.45% to Rs 16.56 crore in the quarter ended March 2007 as against Rs 15.13 crore during the previous quarter ended March 2006. For the full year, net profit declined 15.19% to Rs 4.30 crore in the year ended March 2007 as against Rs 5.07 crore during the previous year ended March 2006. Sales rose 22.54% to Rs 66.98 crore in the year ended March 2007 as against Rs 54.66 crore during the previous year ended March 2006.

Equity Research

Citi Recommends Telcos for demreged Tower Business

June 6, 20071 min read

Citigroup in its research report continues to be Bullish on the prospects of Bharti Airtel. Citi factors into its price targets the valuations of Telecom Towers these companeis have which are likely to be hived off as separate entities and may also be listed on NSE or BSE.

Bharti Airtel Leads the Pack:
Bharti’s towerco has a headstart given: 1) the highest tower market share (~40%), 2) unconditional rollout plans (30,000 towers in FY08), and, most importantly, 3) an MoU with Vodafone that imparts greater visibility on average tenancy and operating margins.

Citi has set a 12-month forward target price of Rs 960 is based on core DCF of Rs 800 and a towerco option value of Rs158.

Reliance Communications:
In the case of RCOM, however, Citi uses EV/EBITDA in the absence of a detailed balance sheet and lack of transperency from Management. 12-month target price of Rs510 is based on 9.6x FY09E EV/EBITDA, at a 15% discount to Bharti’s target multiple (ex- towerco) to reflect the uncertainty regarding the timing of GSM rollout and the associated challenges. Citi also maintains a Medium Risk rating on RCom.

Breaking Corporate India Earnings News

Clutch Auto shifts into higher gear

June 6, 20071 min read

Clutch Auto said after trading hours on Tuesday, 5 June 2007, JM Financial mutual fund, through its various schemes, has bought a further 0.64% stake in the company. The funds’ combined stake in Clutch Auto has thus risen to 5.5%, the company said.

On 4 April 2007, Clutch Auto confirmed the company was in advanced stage of negotiations with the US-based International Truck and Engine Corporation, manufacturers of Navistar brand of trucks.

Clutch Auto’s net profit jumped 72.68% to Rs 7.08 crore in Q4 March 2007 as against Rs 4.10 crore in Q4 March 2006. Sales moved up 84.32% to Rs 90.96 crore in Q4 March 2007 (Rs 49.35 crore). Net profit scaled up 71.47% to Rs 21.52 crore in the year ending March 2007 as against Rs 12.55 crore in FY 2006. Sales rose 56.75% to Rs 235.50 crore (Rs 150.24 crore).

Clutch Auto manufactures clutches, and components and spares for the automotive sector. Its clientele includes Tata Motors, Maruti Udyog, Escorts Tractors, Bharat Earth Movers and state transport undertakings.

Mutual Funds Review

SBI Infrastructure Fund – NFO

June 5, 20071 min read

ICICI Securities Research Team is asking investors to subscribe to the New Fund Offering of SBI Infrastructure Fund.

Close-ended growth Fund with 3 – year tenor
NFO closes on 8th June 2007
Scheme reopens for continuous repurchase from 6th July 2007
Load Structure (during the NFO) 1)Entry load will not be charged. 2)Exit load – Nil. (To be equivalent to the unamortized initial issue expenses outstanding on a daily basis in the form of repurchase NAV)
Minimum investment – Rs. 5000 and in multiples of Rs. 1
NAV and repurchase NAV to be disclosed on a daily basis
Dividend and Growth options available. Payout facility is available only during the close-ended tenor of the scheme
Dividends will be completely tax-free. Long term capital gains to be completely tax-free. Short term capital gains to be taxed at 10% (plus applicable surcharge and cess)
Automatic conversion into open-ended scheme on maturity.
SIP/SWP/ STP facilities will be made available only after the scheme goes open-ended.

We personally don’t recommend long term investors to take exposure in one particular sector and prefer to take Diversified Fund route.

Economy, Markets and Macro Views

Amtek Auto extends gain on UK acquisition

June 5, 20071 min read

Amtek Auto has acquired the entire assets of U.K. based J L French’s (Witham) (JLF), a company engaged in the business of manufacturing of HPDC aluminium for automotive application. JLF’s business has been developed to offer die-casting solutions including product design, simulation, testing, rapid prototyping, high pressure die-casting, precision machining and assembly. This is predominantly aimed at the European automotive industry. The company supplies its products to Land Rover, Jaguar, Trellborg, Ford and PSA (Peugeot).

JLF’s current sales revenues are pegged at about $ 60 Million with 60% capacity utilization.

Amtek Auto is likely to fund the acquisition through $250 million foreign currency convertible bonds (FCCBs) it issued in May 2006.

Net profit of Amtek Auto rose 47.78% to Rs 65.32 crore in Q3 March 2007 as against Rs 44.20 crore in Q3 March 2006. Sales were up 35.97% to Rs 314.64 crore ( Rs 231.41 crore).

In March 2007, Amtek Auto had inked a 50:50 joint venture with VCST Industrial Products of Belgium with headquarters in Sint Truiden, Belgium, to set up a state-of-the-art manufacturing facility for powertrain components in India. The JV will primarily focus on the manufacture of gears and shafts for automotive on- and off-road applications.

Breaking Corporate India Earnings News

Mount Everest Mineral Water fails to climb despite Tata Tea taking control

June 4, 20071 min read

The board of Mount Everest Mineral Water will issue and allot to Tata Tea 50.99 lakh shares of the company at a price of Rs 140 per share on preferential allotment basis to Tata Tea. The announcement was made by the company after trading hours on Friday, 1 June 2007.

The board also approved Tata Tea’s proposal to acquire 31.10 lakh shares of Mount Everest Mineral Water from Foresight Holdings and Vinod Sethi, promoters of MEMW, and Salim Govani, MEMW Managing Director, at Rs 140 per share.

MEMW announced on 19 March 2007, that it is entering into a distributorship agreement for marketing an energy drink under the brand name ‘Power Horse’ in India.

The net profit declined 38.2% to Rs 0.34 crore in Q3 December 2006 as against Rs 0.55 crore in Q3 December 2005. Sales soared 46.9% to Rs 6.20 crore in Q3 December 2006 (Rs 4.22 crore).

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