Who is Hurt by Rupee Appreciation ?
Monday, April 30, 2007
For the first time, RBI is out of the Forex market and the Dollar had a free fall against Rupee. This is surely going to hurt the exporters. Merill Lynch in a report released just a while ago states that global commodities and software sectors are the worst hit.
Global Commodities majors such as Reliance [RIL] Hindalco, Tisco will be the worst hit until the rupee recovers. Patni Sasken and Infosys are the worst hit in Software sector because of no forward hedge. Tech Mahindra and is the least hit because major sources of its revenues are from Europe.
Other losers include Cairn, pharma stocks like Dr Reddys, Divi’s Lab and textile names (Welspun and Gokaldas).
Tags: Invest India, Dalal Street, Forex, Dollar
Labels: Rise of Indian Rupee
Published by DalalStreet Business @ 10:28 AM
RIL Plays Havoc on BSE Sensex
Friday, April 27, 2007
After sliding from late-February to early-March 2007, the Reliance Industries (RIL) stock had staged a solid rebound and the pre-results rally took the stock to a record high above Rs 1600, at Rs 1624.80, on Thursday (26 April).
The pre-results' surge was mainly due to a huge build of positions in the stock in the derivatives segment. From Rs 1313.50 on 2 April 2007, the stock had risen 21.8% to a record closing high of Rs 1599.85 on Wednesday (25 April 2007). RIL is currently trading at Rs 1550 and the BSE Sensex down 250 points.
RIL reported a lacklustre 14% growth in net profit in Q4 March 2007 at Rs 2853 crore compared to Rs 2520 crore in Q4 March 2006, on the back of strong refining margins. Net sales rose mere 5.5% to Rs 25895 crore from Rs 24542 crore.
RIL posted a net profit of 10908 crore for FY 2007, compared with a net profit of Rs 9069 crore in FY 2006. Net sales rose to Rs 105363.30 crore from Rs 81211 crore. The company's earnings per share (EPS) rose to Rs 78.3 in FY 2007 from Rs 65.10 in FY 2006.
RIL is targeting sales of more than $24 billion by 2011 from the retail business. The company has set up 135 retail stores in 16 cities during FY-2007, the company said on Thursday.
Labels: Reliance Results
Published by DalalStreet Business @ 11:03 AM
Eicher Motors advances on US Acquisition
Thursday, April 26, 2007
Eicher Motors has paid a total consideration of $ 3.5 million to acquire 100% equity from the shareholders of Hoff and Associates. Hoff & Associates had reported a consolidated turnover of $ 5.2 million for the year ended 31 December 2006.
Eicher Motors recently forayed into heavy commercial vehicles (HCVs) about three years back. Demand in this segment has increased due to a Supreme Court ban on overloading of trucks.
Eicher Motors also launched tipper, Terra 16, which was well received by the market. The company claims that the product is extremely suitable for mining, construction and other off-road applications. Eicher Motors has the best CNG technology in the world.
Besides commercial vehicles, Eicher Motors is also into auto components and engineering services. The auto components business mainly manufactures gears. In July 2006, Eicher Motors acquired a Detroit-based engineering services provider, Design Intent Engineering, for $2.5 million. The acquired firm brings expertise in surface design engineering, and design software for Eicher Motors.
Eicher Motors for the quarter ended December 2006 reported 26.50% rise in net sales to Rs 493.82 crore and a net profit of Rs 17.79 crore.
Reliance Mutual Fund has acquired 7% stake in Eicher motors.
Labels: Eicher Motors
Published by DalalStreet Business @ 10:06 AM
SunTV to Launch Kids Channel
Wednesday, April 25, 2007
Sun TV Network will be launching a kid's channel "Chutti TV" from 29th April 2007 onwards.
Chutti TV will be the first of its kind 24 hours channel from the company targeting the childrens in the age group of 2 to 14 years with regional and international flavour, versatile and rich mix of programming which includes best cartoons like Jackie Chan adventures, He-Man and pre school contents, etc. The programmes are designed to engage and stimulate the kids' imagination during the early formative age.
Labels: Sun-TV
Published by DalalStreet Business @ 2:33 PM
Affordable Housing - Realty Scrips Sky Rocket
Tuesday, April 24, 2007
At a monetary policy meeting today, RBI kept its key borrowing rate, known as the reverse repo, steady at 6% and held the bank rate, used to price long-term lending, steady at 6%. The RBI is likely to consider a proposal where housing loans less than Rs 20 lakh will cost lesser than prevailing rates for other Real Estate lending.
There was no change to the cash reserve ratio (CRR) beyond a previously announced increase to 6.5%, due on 28 April 2007.
Unitech (up 9.20% to Rs 435.55), Indiabulls Real Estate (up 6% to Rs 322), Ansal Housing (up 9.48% to Rs 282.45), Mahindra Gesco Developers (up 7.85% to Rs 658), Parsvnath developers (up 7.16% to Rs 318.20), Akruti Nirman (up 4.66% to Rs 397.50), and Sobha Developers (up 4.86% to Rs 855.35) had surged.
Published by DalalStreet Business @ 2:14 PM
Holcim hikes stake in Gujarat Ambuja Cements
Holcim, the world's second-biggest cement maker, has raised its stake in Gujarat Ambuja Cements (GACL) to nearly 30% in a deal worth approximately Rs 322 crore. Around 27.96 million GACL shares, constituting roughly 1.8% of its equity, was traded in a block deal on the Bombay Stock Exchange at a price of Rs 115 per share on Monday (23 April 2007).
Holcim owns nearly 28 per cent in Ambuja Cements and this stake would rise to nearly 30 per cent after the latest deal.
In another development, Matsushita Electrics of Japan has bought an 80% stake in Anchor Eelectricals for more than Rs 2,000 crore. Anchor shouldn't have sold their stake and taken the IPO route because India will witness organised retailing of Electrical products with the construction boom in the next 2 decades. What Matsushita paid Anchor is priceless.
Published by DalalStreet Business @ 8:50 AM
Indian Pharm Acquistions - Cadila, Stride Acrolab
Thursday, April 19, 2007
Cadila Healthcare has acquired Japan's Nippon Universal. The Japanese acquisition will provide critical access to a ready manufacturing and marketing base as well as a strong distribution reach. The Japanese generics market, valued at $3 billion, has tremendous growth potential as it currently stands at just 5% of the total pharma market in the east Asian country in value terms, and 17% by volume, Cadila informed. The Indian drug maker said it will be looking at leveraging upon Nippon's strong relationship with key wholesalers, which spans over three decades.
The present takeover marks Cadila's second overseas acquisition, the first being Alpharma France in 2003. Cadila Healthcare had recently acquired Mumbai-based Liva Healthcare, a mid-sized Indian pharma company with a dermatology-focused product portfolio.
Strides Arcolab has decided to invest Rs 100 crore for acquiring Grandix Pharmaceuticals and will hold an EGM to seek shareholder approval. It is also alloting 56 lakh convertible warrants to promoters on preferential basis.
Published by DalalStreet Business @ 1:48 PM
Rayban Sun Optics India Open Offer Revised
Wednesday, April 18, 2007
The revised open offer will now open on 25 April 2007, and close on 14 May 2007. The open offer price is fixed at Rs 185.25 per share (Including interest of Rs 80.95 per share only for shareholders who were holding shares on 27 August 1999 and still continue to hold them).
Luxottica gained control over 44% stake in Rayban through a 1999 takeover of Bausch & Lomb, US. However, the group did not follow up the takeover with an open offer. The Italy-based eyewear giant, Luxottica, is a global leader in premium eyeglass frames and owns several well-known brands such as Giorgio Armani, Ferragamo and Vogue.
In late-February, Rayban informed BSE that its board of directors had received a proposal from Luxottica Group, Italy, (Luxottica) indicating their intention to set up wholly-owned subsidiaries in India for wholesale distribution of various luxury & fashion brands in the eyewear industry, including the distribution of spectacle frames and sunglasses. Luxottica Group S.p.A, seeks a no-objection certificate from the company for this purpose.
For Q4 December 2006, Rayban Sun Optics India registered an 8.30% fall in net profit to Rs 3.33 crore compared to Rs 3.63 crore in Q4 December 2005. Net sales for the quarter ended December 2006 rose 18.30% to Rs 17.21 crore (Rs 14.55 crore).
However, for FY ended December 2006, Rayban’s net profit rose 17.60% to Rs 11.94 crore compared to Rs 10.15 crore during FY ended December 2005. Net sales for FY-2006 rose 29.30% to Rs 62.98 crore (Rs 48.71 crore).
Ray-Ban commands nearly 50% of the Rs 150 crore eyecare market in India.
Published by DalalStreet Business @ 2:01 PM
ICRA Lists at Rs 570 on NSE
Friday, April 13, 2007
The shares of ICRA listed on NSE at Rs 570. Currently trading at Rs 615, 86% premium to the issue price. If you are one of those lucky allotees, you can book profits. Analysts recommend a BUY at Rs 425 for long term investors.
Published by DalalStreet Business @ 9:55 AM
Infosys FY2008 Guidance at 22.8%
Infosys Q4 net jumps 14.34% to Rs 1124cr. It has declared final dividend of Rs 6.5 per share. The company reported net profit of Rs 1,124 crore in the fourth quarter versus Rs 983 crore in the previous year.
Dalal Street analysts were expecting net profit of Rs 1039.08 crore (Rs 10.39 billion) in fourth quarter versus Rs 983 crore (Rs 9.83 billion) in the previous quarter, a growth of 5.7%.
FY2008 guidance at 22.8% is in-line with Street expectations.
Published by DalalStreet Business @ 9:50 AM
Jet Airways to Crash. Citi Puts Aggressive SELL
Wednesday, April 11, 2007
Media reports suggest that Jet has sealed a deal to acquire Air Sahara at enterprise value of $450 million, marginally lower than $500 million that was decided upon when the two had inked the buy-out agreement in January 2006. The final price will only be clear after the formal announcement which is expected today, reports add.
Reports also suggest that Jet is willing to stick to its commitment to pay off outstanding creditors worth Rs 400 crore of Sahara which was part of the original enterprise value. After the January agreement, Jet had sought reduction in deal value. It had finally walked out of the deal in June 2006 after operating Air Sahara for about three months.
I may have never seen a research report recommendation as this one from Citigroup on Jet Airways. 3H - SELL because of High Risk. Target Price of Rs 390.
Citi analysts expect combined entity to report an EPS of Rs 23.83 for FY2008 and Rs 32.94 for FY2009. Visibility on Jet's international operations remains limited; domestic market conditions are not expected to improve meaningfully over the next 12 months. Sahara integration another imponderable.
Target price of Rs390 is based on a 7.5x FY07E EV/EBITDAR multiple. Our multiple is based on a 15% discount to the average 8.8x CY06E EV/EBITDAR multiple of our regional airline universe (ex Air Asia). We believe the discount to the Asian airlines is justified given: a) the very competitive domestic landscape; b) delays in stabilization of Jet's international operations; and c) soaring fuel costs (which Indian carriers cannot hedge).
Published by DalalStreet Business @ 12:07 PM
SRF jumps on bulging proceeds from carbon credit sales
Tuesday, April 10, 2007
The rally in SRF was on a high volume of 22.1 lakh shares on BSE.
The scrip of SRF had risen 17.1% to Rs 139.65 on Monday (9 April), boosted by the news of the company raising large money from the sale of carbon credits in the last financial year.
The scrip of SRF had declined sharply in the market fall during the period from early February 2007 to early March 2007, when traders offloaded derivative positions in the counter. From Rs 204.85 on 5 February 2007, it had tumbled to Rs 116.70 on 6 March 2007. The scrip moved in a tight band of Rs 116 - Rs 126, from 7 March to 5 March.
SRF has been one of the early movers in India to cash in on the carbon emission trading (CET) opportunity. Under the Kyoto Protocol, industries in developed countries can offset carbon dioxide emissions by buying carbon credits from projects that cut emissions in developing countries.
SRF’s solid surge in net profit in Q3 December 2006, was due to a huge revenue of Rs 122.28 crore from the sale of carbon credits. Its net profit jumped 417.8% to Rs 70.11 crore from Rs 13.54 crore. Net sales rose 11% to Rs 328.08 crore.
SRF has just finished doubling its capacity to produce engineering plastic, which finds varied application in several industries from auto component to electrical appliances to mobile handsets.
SRF is also banking big on coated fabrics. It is looking at procuring technology from abroad to stay ahead of the competition in this business.
SRF produces refrigerant gases — Fluorochemicals and Chloromethanes — which are used for refrigeration and air-conditioning. SRF has also formed a joint venture (JV) for making anhydrous hydrogen fluoride in China. The project will cost $9 million.
Published by DalalStreet Business @ 2:33 PM
Bears Occupy Dalal Street
Monday, April 02, 2007
The BSE Sensex opened 350 points down and their was a war between the Bulls and Bears. The Bears mercilessly hammered all the SENSEX stocks around 2:00PM and the Index slipped by another 150 points. Weak hearted bulls joined the bears and bought the index down by 615 points to 12,400 levels. Sensex suffered the worst intra-day debacle since 28 Feb '07.
This was expected because of the surprise CRR hike by RBI on Friday evening. Auto, Banking, Real Estate stocks were the worst hit. It was no good a day for IT stocks too. Mindtree, Wipro, HCL-Tech and Infosys were all dumped by fund managers.
I recommend Long Term Investors to stay away from the market. Are you Fu&*ing crazy ? Yes I am Fu&*ing insane. Long Term investors, keep away as you will get Indian stocks at still cheaper valuations. SIP investors need not worry at all.
Published by DalalStreet Business @ 10:37 PM
