September, 2010 | Dalal Street

Peek into Satyam’s Restated Results – Merger ?

September 30, 2010September 30, 20102 min read

Ramalinga Raju’s erstwhile Satyam Computer Service now Mahindra Satyam after a whopping 500 day accoutning marathon has re-stated results. Here is a take on ~~them~~ it from the investor’s perspective.

Company recorded revenues of Rs54.8 bn for FY2010; (2) EBITDA margin of 8.3%; (3) net loss of Rs1.2 bn after including extraordinary item of Rs4.2 bn. Extraordinary items pertained to severance compensation for employees (Rs0.9 bn), forensic investigation expenses (Rs1.1 bn) and write down in value of assets of subsidiaries (Rs2.2 bn), (4) cash and cash equivalent of Rs22 (more…)

Economy, Markets and Macro Views

Sensex @ 20,000 – What FII Strategy Reports Suggest ?

September 21, 20102 min read

The FII have bought into the Indian Equities as if their is no tomorrow and have made the BSE Sensex breach the historical 20,000 levels. What next ?

BNP Says – The Liquidity Driven Market Rally – typically drives markets and stock prices above fair valuation. During times of high liquidity (March-May’06 and Jan-December ’07 for example), the market tends to trade at large premium compared to fair value. During May 2006 and Feb 2007 Sensex traded at 17-19% premium compared to our fair value, while at the peak liquidity of January 2008, it traded at 65% premium. We believe if the current run rate of FII flows continue (i.e. 0.4-0.5% of free float market cap), (more…)

Breaking Corporate India Earnings News

Impact of New Mining policy on Indian Miners

September 21, 20102 min read

Mines – The Natural Resources Wealth of Indians is in the hands of few Politicians and Mafia Dons. In order to curb il-legal mining, the center has proposed a new bill Mines and Minerals (Development and Regulation) Bill, 2010 headed by Finance Minister Pranab Mukherjee. [ This could be a complete eye wash for innocent Indians as il-legal mining is across all Political Parties across the nation]

Some important provisions in the Bill, especially those relating to sharing of 26% equity/profits, are vaguely drafted. Read verbatim, (more…)

India IPO Reviews and Updates

Race for the Public Money – Eros + Career Point + Ramky + Orient etc

September 21, 20102 min read

Let me quench our faithful readers thirst first – Yes! undoubtedly all the IPOs are fully priced on the basis of fundamentals. However, don’t be under the impression that there is very little left little on the table for investors wanting to make a quick buck on listing, you still can, look at the Grey Market Premiums – Safest Way is to SELL your application in Grey Market.

Now have you ever wondered why the 15 year High Rush to raise funds ? We should be thankful to SEBI. I had written in the past on (more…)

Equity Research

United Spirits + Tilaknagar Industries – Ready to get Indians High in Party Mood

September 16, 2010September 16, 20103 min read

As Indians continue to get affluent and spend on Lifestyle, unfortunately they do a mistake of enjoying Alchol, which is definitely injurious to health. However, those who want can create some wealth here.

United Spirits – USL’s brand equity is unparalleled across cities and socio economic classes. Brand loyalty is high across all alcohol segments. The combination of easy availability, local tastes and affordability will likely continue to drive the high incidence of consumption of local brands in India. The IMFL/spirits industry is likely to grow at a 16% CAGR over the next five years, (more…)

Equity Research

LIC Housing Finance Review

September 15, 20101 min read

Mortgage affordability in India has improved in the past three years – while income levels have gone up, home prices and mortgage penetration levels have been broadly stable through this period. As a result, we expect continued strength in mortgage loan growth.

With a market share of about 8% (in outstanding loans), LICHF has made significant strides in both growth and profitability since it was re-organized by management in F2007. Improving asset quality and operating costs have lifted ROA from 1.3% in F2005 to an (more…)

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