Anil Ambani Invested DTDC in International Drug Scandal
Wednesday, May 30, 2007
The Karnataka Police have unearthed an International Drug Scandal involving Rs 20 crore. Anil Dhirubhai Ambani group (Reliance ADAG) holds 44% stake in DTDC Couriers the company which carried and transported banned Drugs between Belgaum and international destinations Scotland, UK, Zambia, Finland, Seychelles, USA, Costa Rica, UAE and South Africa.
The Karnataka Police have arrested 4 persons in this connection and have recovered a Mercedes Benz, an imported Bike and Drugs worth several crore rupees. The peddlers packed the drugs in the frame which was so solid that it could not be traced by X-ray machines. All their drug consignments were being sent through DTDC courier to foreign countries having fake self addresses.
Published by DalalStreet Business @ 4:25 PM
Bajaj Electricals gains ahead of bonus issue
Tuesday, May 29, 2007
Bajaj Electricals has seen a steady rally in the past few weeks ahead of this announcement. The stock had spurted 20% to Rs 503.60 in a single trading session on 16 May 2007 when the company first announced during trading hours that its board will meet on 29 May 2007 to consider bonus issue. The stock is currently trading at Rs 592, up 10%.
The company had last issued bonus in ratio of 1:2 (1 bonus share for every 2 held) in 1997.
The latest equity share capital of Bajaj Electricals is Rs 8.64 crore. The latest book value per share is Rs 90.59.
Bajaj Electricals manufactures a diverse range of products in three divisions: lighting, consumer durables and galvanised structures. It also undertakes turnkey projects of manufacturing and installing mobile, street lighting and transmission towers.
The company is a part of the Shekhar Bajaj Group with promoter holding a 66% stake in the company. It has five major strategic business units comprising home appliances, fans, lighting, luminaires and engineering & projects. It also manufactures, erect and commissions transmission line towers, telecom towers, mobile telecom towers and wind energy towers.
Published by DalalStreet Business @ 1:27 PM
Unitech Recommends a Bonus Again
Monday, May 28, 2007
FLASHNEWS: The board of Unitech Ltd has decided to issue bonus shares in the ratio of 1:1.
The board also decided to cancel the existing authorised preference share capital and decided to increase the authorised share capital from Rs 200 crore (after cancellation of preference shares) to Rs 500 crore.
Unitech had given a liberal Bonus and a stock split last year.
Published by DalalStreet Business @ 1:27 PM
Reliance Money Software Glitch Causes Huge Loss
Reliance Money, the e-Trading arm of ADAG has too many bugs in their online trading software which has causes huge loss to investors.
A customer, said that he sold 10,000 shares of Reliance Natural Resources (RNRL) at a profit and still his ledger balance was showing a debit :-(
Other Common Glitches Faced by Investors are as follows,
- Limit based orders have disappeared.
- Executed Order confirmation given on next Trading Day [They should be given the next second]
- Franchisees admit to problems in software
- Transferring amount from UTI Bank to Reliance Money takes 4 days. JeeZ!!!
HDFC Bank is another bank which doesn't understand the Online Banking needs of the User.
Published by DalalStreet Business @ 11:17 AM
BUY Ansal Properties and Infra - Merill Lynch
Thursday, May 24, 2007
Merill Lynch has initiated coverage on India's leading Real Estate Giant, Ansal Properties and Infrastructure Ltd [APIL] with a BUY recommendation and a target price of Rs 425, with potential returns of 27%. Recommendation is based on 1) Scope for strong earnings growth. 2) Potential upside of Rs127/sh to from Hi Tech City project at Greater Noida, is not included in current valuation. So effective Valuation will be Rs 425 + Rs 127 = Rs Rs 552.
APIL is expected to report an EPS of Rs 35.8 and Rs 70.7 for FY08 and FY09 respectively. EPSW growth rates are nearly 100%. APIL trades at a forward P/E of mere 9x and 5x. APIL has enough land bank to develop for the next 7 to 8 years. You may download and read the entire research report from here. [PDF]
Published by DalalStreet Business @ 10:32 AM
Sun TV under a cloud; Raj TV Shines
Wednesday, May 23, 2007
Kalanithi Maran, who is the brother of Dayanidhi Maran, holds a majority 90% stake in the south-based media major. Maran is related to Tamilnadu chief minister and DMK supremo K Karunanidhi.
The Sun TV stock had plunged 7.2% on 14 May 2007 after Maran had resigned from the Union cabinet late evening on Sunday, 13 May 2007, following a directive from the DMK boss. The stock is off from a high of Rs 1,700 to Rs 1,300 currently. Read about the Dark Side of Dayanidhi Maran here.
The stock is currently trading 1:1 cum-bonus and also cum stock-split in the ratio of 2-for-1. As a result, the face value of the scrip will become Rs 5 instead of the present Rs 10.
Sun TV's integrated growth strategy is to build a dominant presence in south India. It is a leading television broadcaster in all southern states of India. It offers four Tamil language channels Sun TV, Sun News, Sun Music and KTV as also two Malayalam channels Surya TV and Kiran TV, apart from Telugu and Kannada language channels.
The stock of Raj TV is consistently moving up after the fall of Dayanidhi Maran. From Rs 186 on May 14th currently the Raj TV stock is locked in upward circuit at Rs 318. It is rumored that the Karunanidhi Family is now backing Raj TV as DMK channel to counter any challenges from Jaya TV.
Published by DalalStreet Business @ 11:52 AM
NSE Nifty strikes all-time high
Monday, May 21, 2007
At 10:08 IST, the Nifty was up 43.85 points, or 1%, to 4,258.35. It hit a high of 4,259.65 in early trades today, 21 May 2007, surpassing its previous all-time high of 4,245.30, which it had stuck on 8 February 2007.
The 30-share BSE 30-share Sensex was up 134 points to 1,4437. The Sensex is till about 287 points away from its all-time high of 14,723.88 that it had struck on 9 February 2007.
Bank shares extended last week’s gains due to easing of inflation worries. State Bank of India (SBI) moved up 1.5% to Rs 1346, ICICI Bank nearly 1% to Rs 960 and HDFC Bank 1.3% to Rs 1086.50.
India's wholesale price index rose 5.44% in the 12 months to 5 May 2007, lower than the previous week's increase of 5.66% due to a high base the year before, data showed on Friday, 18 May 2007. The annual inflation rate was 4.37% in the corresponding week of the previous year.
Index heavyweight Reliance Industries (RIL) edged up 1% to Rs 1717.90. The stock hit a new all-time peak of Rs 1720. The scrip shrugged off media reports it is likely to miss the June 2008 deadline for commercial production of gas from the Krishna Godavari basin. The delay is mainly due to late deliveries of deepwater drilling rigs by Transocean Inc. RIL is relying on these oil rigs to the start the commercial production of gas from the basin.
The market had surged last week ended 18 May 2007 on firm global markets and on reports that there will be early onset of monsoon. Rally in two bank shares SBI, ICICI Bank and in index heavyweight RIL aided the rally.
The 30-share BSE Sensex 507.25 points, or 3.67%, to settle at 14303.41 in the week ended Friday, 18 May 2007. The S&P CNX Nifty rose 137.85 points, or 3.3%, to 4214.50 in the week.
Published by DalalStreet Business @ 10:37 AM
Morgan Stanley Downgrades Bajaj Auto
Thursday, May 17, 2007
Just a while ago JM Morgan Stanley hasdowngraded Bajaj Auto to Equal-Weight from OverWeight. he Target Price has also been downgraded from Rs 3,000 to Rs 2,600.
The research note said, investors should focus not only on the valuation of non-automotive operations if the de-merger proposal goes through, but, more importantly, the value of the underlying core automotive operations.
The downgrade essentially reflects concerns on core implied automotive operations. With core earnings (down to 17.3% CAGR F2007-09E from 20% CAGR in F2003-07) and volume (down to 10.9% CAGR F2007-09E from 21.4% in F2003-07) growth coming off, the valuation multiple on core operations could potentially get de-rated.
Published by DalalStreet Business @ 4:54 PM
Merill Lynch BUY on Tech Mahindra
Saturday, May 12, 2007
Merill Lynch [ML] in a report released just a while ago has retained a Buy on Tech Mahindra Ltd (TML) with a PO of Rs 2125, given strong earnings CAGR of 45% on adjusted EPS basis and robust spend by Telecom service providers.
Merill Lynch has established a Price Objective of Rs2125 is at 0.7PEG (FY08PE to FY07-09e) vs our target PEG of ~1 for leading majors like Infosys, implying a target P/E of 21x. ML believe this is fair given sharp earnings growth of 45% (FY07-09e), robust IT spends by telecom service providers and increasing trend in offshoring. This is the only big league IT company that will grow at such momentum.
ML expects Tech Mahindra to report an EPS of Rs 76 and Rs 106 for FY08 and FY09.
Published by DalalStreet Business @ 6:49 PM
Bajaj Auto to hive of financial services business
Friday, May 11, 2007
The Bajaj Auto stock had risen 1.7% to Rs 2609 on Thursday, 10 May 2007, ahead of the announcement by the company that its board would meet on 17 May to consider dividing the company into manufacturing and financial services businesses to unlock shareholder value. The news hit the market after trading hours.
Dalal Street Business Analysts have valuation of Bajaj's Financial Services Business here.
The market has been agog with talks of a split since the last two years. Transferring some of the Rs 6500-crore cash will improve the finance and insurance businesses, chairman Rahul Bajaj had said in the past.
Bajaj Auto is in both general as well as life insurance businesses through Bajaj Allianz General Insurance Company and Bajaj Allianz Life Insurance Company, respectively. Bajaj Auto holds a 74% stake in both firms with the rest held by Allianz. Bajaj Auto is also into the business of lending money through Bajaj Auto Finance, a listed entity. Bajaj Auto holds over 38% stake in Bajaj Auto Finance.
Bajaj Auto sales are on decline and the company will also announce its FY 2007 results on 17 May 2007.
Published by DalalStreet Business @ 9:54 AM
Ansal Properties Deal with UAE-based Deyaar
Thursday, May 10, 2007
Ansal Properties & Infrastructure just a while ago announced that it has signed a memorandum of understanding (MoU) with Deyaar Development PSC, a real estate company in UAE. The MoU is for developing a mixed township, comprising of residential, commercial, institutional and industrial properties in India. As per the MoU, Deyaar would hold up to 40% stake in the project.
Ansal API was badly looking for a foreign partner with deep pockets and it has found one to scale and implement its ambitious projects.
Published by DalalStreet Business @ 10:30 AM
FirstSource Solutions - Top Midcap Pick by Merill Lynch
Tuesday, May 08, 2007
Merill Lynch [ML] is adding Firstsource to top mid-cap picks. ML forecast a 38% EPS
CAGR growth (post IPO dilution) over next 2 years led by a 44% CAGR revenue growth which has high visibility given the annuity nature of BPO. ML is correspondingly removing Sasken which is likely to see poor stock performance till key product shipments start in 2HFY08.
ML forecast 50% PAT growth and 38% EPS CAGR over the next two years. 44% revenue growth driven by mining of existing clients as well as inorganic moves like the partnership with US banking tech major Metavante and the recent BPM Inc. acquisition in Jan 07. Q1FY08 is likely to be seasonally weak given wage hike and continued ramp costs of Hutch / Vodafone, a 4000 person account.
FirstSource is trading at 25x FY08 PE and 17x FY09 PE which we believe is reasonable given the high 50% PAT CAGR over FY07-09. Moreover, BPO is a more nascent business with high growth potential and operating leverage and is a sticky and annuity business model.
Other top Midcap picks from Merill Lynch are IVRCL, Welspun India, Biocon and Panacea Biotech.
Published by DalalStreet Business @ 8:52 AM
JP Morgan Downgrades Reliance Communications
Monday, May 07, 2007
JP Morgan [JPM] in a research note has downgraded Reliance Communications from Overweight to Neutral. The main reasons cited by the analysts are poor operating performance and higher valuations.
RCOM's operating results were below estimates for the second consecutive quarter; 4Q FY07 consolidated revenues/EBITDA came in 2.7%/1.7% below estimates. JPM trims forecasts but raised price target to Rs525 from Rs475 previously, because of a 10% premium to DCF (to partly capture upside from the FLAG listing) and rollover to Jun-08 from Dec-07.
JPM forecast 2-year (FY07-09) EBITDA CAGR of 35% for RCOM versus 44% for Bharti. At JPM's price target, RCOM would trade at a 16% discount to Bharti on FY08E EV/EBITDA. RCOM stock is likely to trade in a narrow range without further rerating in sector (Bharti) valuations or until the company starts exceeding consensus estimates. JPM downgrades RCOM to Neutral from Overweight noting unattractive relative valuations and only 10% absolute upside potential versus our revised target price of Rs525/share for Jun-08.
Buy RCOM stock at/below Rs400 level. On the other hand, if the share price were to exceed Rs500 level in the near term, book some profits.
Published by DalalStreet Business @ 6:07 PM
IFCI jumps to 52-week high. Mega Block Deals
Friday, May 04, 2007
The IFCI stock surged to Rs 50 in intra-day trade, a 52-week high for the counter.
On the back of recoveries and sale of investments, the Industrial Finance Corporation of India (IFCI) reported a net profit of Rs 644.12 crore for the fourth quarter ended March 2007, against a loss of Rs 105.11 crore, in the corresponding period a year ago.
For the fiscal ended March 2007, IFCI's net profit stood at Rs 898 crore compared to a loss of Rs 74 crore, a year ago.
While operational income for the quarter ended March 2007 rose by 40% to Rs 1052.62 crore (Rs 748.68 crore), other income for the quarter increased by 40% to Rs 41.47 crore (Rs 29.61 crore). The financial institution (FI) saw a huge dip in total expenditure from Rs 883.32 crore to Rs 86.82 crore on the back of reversal of provisioning.
The FI earned around Rs 730 crore through the sale of its stake in the National Stock Exchange and another Rs 60 crore through the sale of stake in ICRA. IFCI still has a 5.5% stake in NSE, which is valued at Rs 550 crore. The book value of its investments is at around Rs 1000 crore while the market value of these investments are more than Rs 2000 crore.
IFCI chief executive officer RM Malla said, “We have focused our attention on recoveries, reducing the cost of our borrowings and unlocking the value of our investments. The net NPAs have now been reduced to zero, while gross NPAs are now at Rs 6500 crore. All future recoveries will go straight to the bottomline. The accumulated losses eased from Rs 4800 crore to Rs 800 crore. This financial year, there was NPA resolution of over Rs 1000 crore. The state-run financial instituion also paid back liabilities of Rs 900 crore in the year, reducing them to Rs 13,000 crore.”
In three separate block deals on the NSE, about 3.88 crore IFCI shares were purchased by Clean Finance & Investment, Jaypee Capital Services and Latin Manharlal Securities, respectively. About 10.76 crore shares changed hands on NSE's counter on that day.
Published by DalalStreet Business @ 5:32 PM
Intra Day Trading Calls for May-03
Thursday, May 03, 2007
Tech Mahindra(1588) Buy for target of 1640,1678, 1700
Divis Lab(3681) Buy for a targt of 3850 in short term. Stop Loss 3610
Tera Software(78) Buy with Stop Loss of 76.5
Pratibha Ind(198) Tgt of 209..Stop Loss 194
Ashok Leyland May-31st Call Option. Buy around 0.45 Paise.
Published by DalalStreet Business @ 9:16 AM
Glenmark Pharma - ABN Amro
Wednesday, May 02, 2007
ABN Amro research has put a HOLD on Glenmark Pharma. Glenmark's Q4 results were in expectations but thinks the FY08 guidance as aggressive.
ABN Amro says the stock is fairly valued and stocks to a price target of Rs 656. Glenmark is expected to report an EPS of Rs 29.3 for FY08 and Rs 37.3 for FY09. Glenmark derives 40% of its income from India.
Glenmark has gudied for 80% increase in revenue growth from the US market for FY08. This seems too ambitious with the recent erosion of prices in the US generics market. Glenmark has been into the US for little over a year and adding to its woes is the appreciation of Indian Rupee against USD.
ABN Amro has raised its SOTP based target price from Rs 603 to 656. The stocks is fairly valued at 18x core earnings with a valuation of USD 1 Billion for out licensing deals.
Published by DalalStreet Business @ 11:52 PM
