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RBI Hikes CRR Again by 0.5%

Tuesday, July 31, 2007

The Reserve Bank of India has done it again. They have hiked the CRR rate by 0.5% taking it to 7%. Most company CFOs were not expecting the same and this has come as a surprise. Reacting to this hike, the 30 share Sensitive Index of Bombay Stock Exchange fell by 150 points from the day's high.

RBI has left other rates unchanged. India's central bank withdraws cap of Rs 3,000 crore (Rs 30 billion) on daily reverse repo (overnight borrowing) transaction from August 6.
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Published by Webmaster @ 12:02 PM IST.

Goldman Sachs Ups Aban Offshore

Saturday, July 28, 2007

Goldman Sachs has upgraded Aban Offshore's price target to Rs 3450 from Rs 2,900. Goldman believes potentially higher than expected contract renewal rates could be positive catalysts for Aban.

At 8.5X '08E P/E & 6.9X EV/DACF, Aban's valuation remains one of the most attractive in the sector. COSL stock is currently the most expensive among all the oil services stocks globally at 24.8X '08E P/E & 15.9X EV/DACF. Goldman Sachs raises 12-m DCF-based TP on Aban to Rs 3,450 (from Rs2,900); keep Buy.
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Published by Webmaster @ 2:00 PM IST.

Bears Hug Dalal Street

Friday, July 27, 2007

With weak international markets [US Housing Data was the dampener], Dalal Street Bears are in action. Within the first 5 minutes of Trading the BSE Sensex was down 350 points.

HDFC Bank, BHEL, Tata Motors, SBI and Reliance Energy are the top losers in the SENSEX. All the SENSES stocks are hammered and positions unwound. Accordint to Hitesh Chotalia's analysis all the support levels for the day are broken and the SENSEX is currently at 15,450.

All the Indian Indices are in RED. A Blood Bath on the opening day of August Futures.

Nifty is down 110 Points
Nifty Jr is down 180 Points
Nifty Bank is down 170 Points
Midcap CNX is down 140 Points
IT CNX is down 101 Points

We wonder what will be the fate of IPOs like IVR Prime where extremely wise men invested because they couldn't read the P/E and other financials of the company :-)

Update at 12:00 Noon:
BSE SENSEX is down 500 Points. All the sensex stocks are in Red except ITC and Ranbaxy Labs. We recommended a BUY on ITC this morning. Is this is temporary correction ? Well depends on the US Data. If its just a temporary slump, its ok as Dow had also hit an all time high. However if you can see cracks appearing in the US Data, then money will flow out of Stocks. I am sure Wall Street Analysts are burning the midnight oil to analyze their course of action for Firday.

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Published by Webmaster @ 10:05 AM IST.

Citi Upgrades Kotak Mahindra Bank

Thursday, July 26, 2007

Citigroup Research has upgraded the price target of Kotak Mahindra Bank to Rs 825 but a bit too late. Kotak has swiftly moved up from Rs 640 to Rs 730 on expectations of better results.

Kotak which is also into Retail Stock Trading business had made all its clients BUY their company Futures ahead of the results. This is a matter of great concern and SEBI should investigate this matter ?

Coming back to Citi's analysis, 40% yoy profit growth, but 7% below their estimate. KTKM's loan book is up 56% yoy (4% qoq) and remains diversified across consumer loan segments, with almost no asset stress. Margins remain 5%+ in the face of funding challenges, though broking volumes are only flat.

Target price of Rs825 is based on EVA methodology. KTKM's relatively high share of securities fees suggests a valuation benchmark of an investment bank. Kotak is expected to report an EPS of Rs 19.92 for FY2008 and Rs 25.46 for FY2009.
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Published by Webmaster @ 3:17 PM IST.

Indian Hotels + Leela Venture - BUY

Wednesday, July 25, 2007

In an exclusive report released just few minutes ago by Citigroup analysts on the Indian Hotels Sector, they continue to be bullish on Indian Hotels [Taj] and Hotel Leela Ventures and a HOLD on EIH India Ltd[Oberoi Hotels].

Indian Hotels Company Ltd [Taj]:
Indian Hotel (IHC) is the top pick with target price of Rs187 based on 21x Sept '08E P/E (vs. 22x FY08E P/E) to factor in risk of increased room supply; but given scale, stronger earnings growth visibility, IHC's pan-India presence, it is expected to trade at premium to the sector (16x).

Expansion Plans:
Plans to add six hotels (1,656 rooms) to the portfolio over FY08-10E – key being in Bangalore, Mumbai and Hyderabad. Besides this, IHC plans to increase number of 'Ginger' hotels to 30 by FY09-10E, up from eight now. Further tied up for management contracts in domestic (2,055 rooms) and international markets (584 rooms); all should be operational by FY08-11E.

Hotel Leela Ventures Ltd:
Stock Upgraded to BUY with 1M Rating [Medium Risk]
65% earnings growth, vs. 38% for the sector, in FY08E with additional rooms operational in Mumbai and Bangalore (ahead of supply in mid-2008); and 2) the stock's 22% underperformance vs. the Sensex over the last three months. Our lower target price of Rs62 is set at 18x Sept 08 P/E, and offers 23% upside potential.

Expansion Plans:
Leela has capex of Rs19.5bn for building hotels over FY08E-11E, key locations being: Udaipur, Chennai, Pune, Hyderabad and South Delhi (recently acquired three acres at Rs6.1bn, this is a concern for ROCE, in our view).

The stock is currently trading at 15x Sept 08E P/E, at discount to sector's 16x. With strong earnings growth momentum and the stock trading at lower end of its two-year historical P/E band of 16-25x.

EIH India Ltd [Oberoi Hotels]
Citi downgraded EIH to a Hold/Low Risk (2L). While earnings growth is still strong for FY08E, with stock up 13% over last 4-months, upside appears limited at 11% even at a price target of Rs.115 based on lower target multiple of 19x Sept'08E P/E, at 19% premium to sector valuations.

With the stock already trading at 17.5x Sept'08E P/E, at a premium to sector valuations of 16x, much of the 33% earnings growth of FY08E is priced in.

Reader Comments and Suggestions can be sent to feedback @ DalalStreet.Biz
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Published by Webmaster @ 5:22 PM IST.

Reliance hints of fertiliser foray

Tuesday, July 24, 2007

Mukesh Ambani managed Reliance Industries Ltd [RIL] is planning to build the biggest greenfield fertilizer capacity in the country. The company has submitted a proposal to the fertiliser ministry to set up a manufacturing plant of global scale, up to four million tonnes.

RIL has proposed to use some of the Krishna-Godavari gas as feedstock bought at market prices. The company has been facing a huge backlash from fertiliser and power companies over the gas price it is offering them. Now, plans are afoot to take up the challenge by becoming a fertiliser player itself.

The scrip hit a high of Rs 1,932 today, 24 July 2007, also its all-time high.
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Published by Webmaster @ 3:11 PM IST.

Top 20 Holdings of Rakesh Jhunjhunwala

Friday, July 20, 2007

Speculative Investors are crazy about this guy. An Insider of Rakesh Jhunjhunwala has leaked his portfolio holdings [Believed to be TRUE, We have not verified with his Demat Account or IT Filings etc]

We are listing the Name of Company and No. of Shares held.

Praj Industries - 9 Million
Titan Industries - 2.9 Million
Nagarjuna Constructions - 13.75 Million
CRISIL - 550,000
Lupin Labs - 2,817,000
Bilcare - 1,650,000
Pantaloon Retail - 2.3 Million
Karur Vysya Bank - 2.6 Million
Geojit Finance - 18 Million
Prime Focus - 882,550
Bhushan Steel - 1 Million
BEML - 538,767
Hind Oil Exploration - 3 Million
Viceroy Hotels - 3.75 Million
Aptech Ltd - 879,000
Infomedia India - 1.05 Million
HEG - 1.273 Million
Punj Lloyd -1 Million
Provogue India -480,000
Geometric Software - 2.175 Million

Stocks quoting at less than Rs 10 that Rakesh Jhunjhunwala is believed to be owning [Unconfirmed]
Century Extrusions - 7.82 Million
Orissa Industries - 2.35 Million
Yash Papers - 708,804
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Published by Webmaster @ 11:56 PM IST.

Satyam Revises EPS Guidance Downwards

Satyam Computer posted 2.1% fall in net profit to Rs 389.14 crore in Q1 June 2007 over March 2007. Total income rose 6.5% to Rs 1820.93 crore over Q4 March 2007

Satyam Computer has cut FY 2008 EPS guidance in rupee terms. It has now projected a between 12.5% to 14% growth in EPS to between Rs 24.14 and Rs 24.46. It had earlier guided of 18% to 20% EPS growth in rupee terms for FY 2008.

It has, however, raised FY 2008 revenue guidance in rupee terms. It now expects 21.1% and 22.5% growth in revenue in rupee terms compared to earlier guidance of 20% to 22%.

The stock hit a low of Rs 471 and high of Rs 489.80 so far during the day
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Published by Webmaster @ 11:39 AM IST.

BUY KPIT Cummins - Citi Research

Wednesday, July 18, 2007

KPIT Cummins has declared results inline with expectations from Citigroup Research Analysts. Citi has recommended a BUY with a price-target of Rs 180. Prabhudas Liladhar had recommended a BUY on this stock last November.

KPIT has secured $55 Million, one of the largest BPO contracts in the offshore space. The company reported revenue of Rs.1.35bn –- 3.8% qoq growth (expectations of Rs.1.3bn) and net profit declined 10% qoq to Rs.127mn (exp. of Rs.122mn).

Revenue guidance was upwardly revised to US$145-148mn (from US$143-144mn earlier) due to better visibility while net profit guidance was downwardly revised to Rs.630-680mn (from Rs.700-730mn earlier) due to stronger INR.

KPIT is expected to report an EPS of Rs 7.91 and Rs 10.97 for FY08 and FY09, a growth of 39% for each year over its last year. 12-month target price is Rs180 based on 16x our FY09E EPS. Target multiple is derived by applying a ~15% discount to multiple for peer Satyam Computers.
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Published by Webmaster @ 12:03 PM IST.

Pyramid Saimira Theatres - New Business Initiatives

Tuesday, July 17, 2007

Pyramid Saimira Theaters Ltd [PSTL] which hopes to be the largest Theater Chain operator in the world has set some ambitious plans with new business tactics to make the best use of its resources. PSTL operates 402 screens in 340 cities in India.
PSTL hopes to have 700,000 seats by the end of this year thus beating World's Number One Theater chain, Regal which has 600,000 seats.

PSTL's new Business Initiatives are as follows,
Way to go PSTL. Now their are copycats in the Ambani camp who are all set to copy this idea and tune it to suit their business.
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Published by Webmaster @ 1:24 AM IST.

SBI Cap Securities Bullish on Bharti + ABG Shipyard

Monday, July 16, 2007

SBICAP Securities just a while ago have released a research report on the Ship Building industry in India. SBICAPs is bullish on the prospects of the same. You might recall that Citi had upgraded Bharti Shipyard and ABG Shipyard just last month.

SBICAPS research on these two companies is no different from Citigroups. SBI recommends a BUY on Bharti Shipyard and ABG Shipyard with target price of Rs 660 and Rs 570 respectively.

Bharti Shipyard Ltd:
The government has initiated an array of measures to promote the shipyard industry and make it internationally competitive. Bharati had a healthy order book of 38,500 mn as on July 8, 2007 which is one the highest amongst the private sector shipyards in India. The Company has undertaken a new Greenfield shipbuilding facility at Mangalore. The new yard will have a capacity to build ships with capacity of 60,000 DWT and facility to manufacture jack-up rigs. Offshore vessels (AHTS, PSVs and rigs) remain the mainstay of Bharati Shipyard limited - comprising about 70 % of the order book.

Going forward Bharati is likely to show a robust growth. The stock, at the current price of Rs 530 trades at a FY08 PER of 14x and at a FY09 PER of 10x. In terms of EV/EBIDTA it trades at 8.4x FY08E and 6.3 FY09E. At the target price of Rs 660, the stock would be trading at PER of 17x its FY08E, thus providing an upside potential of 24% from current levels.

ABG Shipyard Ltd:
ABG had a healthy order book of Rs 40740 mn as on June 25, 2007 which is the highest amongst the private sector shipyards in India. These orders are expected to be executed by, November 2011. Offshore vessels (AHTS, PSVs and rigs) remain the mainstay of ABG Shipyard limited - comprising about 70 % of the order book. Company's Dahej facility is expected to be commissioned in FY09. The new facility will consist of two dry docks capable of accommodating eight bulk carriers up to a maximum weight of 120,000 DWT.

Going forward ABG is likely to show a robust growth. The stock, at the current price of Rs 450 trades at a FY08 PER of 14x and at a FY09 PER of 9. In terms of EV/EBIDTA it trades at 7x FY08E and 4.8 FY09E. At the target price of Rs 560, the stock would be trading at PER of 17x its FY08E, thus providing an upside potential of 24% from current levels.
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Published by Webmaster @ 11:41 AM IST.

Citi Us BHEL Target Price

Friday, July 13, 2007

In a research report released just a while ago, Citigroup has revised the target price for BHEL to Rs 1,923 from Rs 1,672.

India's generation capacity additions are set to move from a 5GW/year over the last five years to a 14GW/year over the next five years. As the generation capacity addition opportunity grows in size, BHEL could make do with a 50–60% market share vis-a-vis the earlier 65 -70% market share to meet its growth target of 20% sales CAGR over the next five years.

BHEL is our top Indian electric equipment pick. Citi Increases target price to Rs1,923 (from Rs1,672 earlier) as we increase our target P/E multiple to 23x FY09E (20x FY09E earlier) on par with other Indian capital goods majors (L&T/ Suzlon). Our target multiple is well supported by EPS CAGR of 27% over FY07-10E with RoEs in the 25–30% range.

BHEL is expected to report a fully diluted EPS of Rs 66.33 and Rs 83.61 for FY2008 and FY2009 respectively.
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Published by Webmaster @ 12:05 PM IST.

Aban Offshore gains as HEPI extends contract

Thursday, July 12, 2007

Aban Offshore announced today, 12 July 2007, during market hours that Hardy Exploration & Production (India) Inc (HEPI) has extended the contract for utilization of floating production unit Tahara Japan for a further period of 2 years with effect from 28 July 2007. The revenues estimated during the extended period amounts to $63.875 million, the company said.

The scrip had hit a high of Rs 3135 and a low of Rs 3083 so far during the day. It touched an all time high of Rs 3144 on 2 July 2007. It had hit a 52-week low of Rs 854.25 on 24 July 2006.
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Published by Webmaster @ 12:44 PM IST.

Infosys Technologies Results + Guidance

Wednesday, July 11, 2007

Infosys Technologies missed the street expectations and marked the end of an era of QoQ. QoQ Net Profits Fell to Rs 1079 crore in the first quarter of FY08 against Rs 1,144 crore in the previous quarter.

Infosys Q2 and FY08 guidance
The company is expected to post growth of 16.9-18.3% in the revenues in FY08 at Rs 16,238-16,433 crore. Infosys is expected to deliver growth of 13-14.1% in FY08 EPS at Rs 78.20-79.

FY08 EPS (Excluding tax write back) is seen at Rs 77.31-78.11.

This FY08 revenue outlook is based on rupee rate of 40.58 per USD.
The Q2 revenues are seen at Rs 3,952-3,993 crore, a growth of 4.74-5.83% and EPS seen at Rs 18.88. Net profit is expected to go down 0.05% at Rs 1078 crore. Infosys revised guidance in the dollar terms in upward and in Rupee terms down.
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Published by Webmaster @ 9:58 AM IST.

BSE Sensex Short Term View - Citi

Tuesday, July 10, 2007

This is according to Citigroup's Technical Research [Click on the chart to expand]

Taking price extreme at 12,316 (16 March 2007), the index completed Wave (1) at 14576 (30 May 07). Wave (2) corrected the advance in Wave (1) towards 13,946 (low of 12 June 07). Currently we are into Wave (3) of the advance, which has a minimum price target of 16,206 (taking Wave (1) = Wave (3) in "Price Movement". Wave (3) target of 16206 is derived as 2,260+ 13,946.The levels of 2,260 is derived as the distance between start of Wave (1) at 12,316 and end of Wave (1) at 14,576: [i.e. 14,576-12,316=2,260].The level of 13,946 is the assumed end of corrective Wave (2).

Technically, the sensex is headed towards 16,206.
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Published by Webmaster @ 10:05 AM IST.

BSE Sensex Target of 18,400 for DEC-08

Monday, July 09, 2007

The Indian market bounced back during 1H07 after jitters caused by inflation,
rate hikes, tightening liquidity and currency appreciation, but it still lagged
regional peers. Citi believes the worst is over on the above concerns and growth remains robust (though less spectacular than recent years), Citi is positive on Indian equities over the next 6-12 months. Citi sets a Sensex target of 16,000 for Dec-07 (at the upper end of our earlier 14,700-16,000 target) and 17,500-18,400 for Dec-08, the market would be trading at a 12-month forward P/E of 17.3x and 16.3-17.1x for Dec-07 and Dec-08, respectively.

The average growth of EPS for SENSEX stocks is expected to be 15.08% for FY08 and 12.4% for FY09. Here is Historical Chart of BSE Sensex Stocks based on their forward Earnings Projections. If you want to read the full report send an e-mail to feedback @ dalalstreet.biz

NOTE:
In our view Sensex is a notional value. Keep BUYING wherever you find value. Small investors should take the Mutual Fund SIP route.
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Published by Webmaster @ 11:18 PM IST.

JK Cement + Tata Chemicals - BUY

ICICI Research has an Outperform recommendation on JK Cements Ltd and Tata Chemicals Ltd.

JK Cement Ltd:
JK Cement is a play on the booming cement market in the northern region. The company's aggressive expansion-cum-cost-cutting plan coupled with low valuations make the stock a good medium to long-term investment.

On EV/tonne basis, JK Cement is quoting at $65 per tonne, which is lowest compared to the deals that have happened recently ($150-$200 per tonne). The scrip currently quotes at 3.29x EV/EBITDA of FY09E. ICICI has valued JK Cement at 4.83x EV/EBITDA of FY09E, which yields a value of Rs 255 per share. At the target price, the stock would be valued at an EV/tonne of $107, which is still at a considerable discount to the market. Buy with a 12 Month target price of Rs 255, 71% upside potential from current levels. JK Cement is expected to report an EPS of Rs 27 for FY08 and Rs 33 for FY09.

Tata Chemicals Ltd:
Tata Chemicals Q3FY07 results were in line with expectations. Standalone net sales grew 4% y-o-y to Rs 1307 crore while standalone net profit was 19% higher (y-o-y) at Rs 117 crore on the back of better realizations and higher volume.

Tata Chemicals consolidated revenue to grow at a CAGR of 25% to Rs 6,044.01 crore over FY05-FY08E. Consolidated net profit should grow at a CAGR of over 20% to Rs 593.10 crore during the same period.

Tata Chemicals is trading 8.32x FY08E consolidated EPS of Rs 27.57 and 9.58x FY07E consolidated EPS of Rs 24. ICICI is not changing estimates and sticks to sum-of-parts valuation, wherein the fair value is Rs 374. Target price gives us an upside of 65% from the current levels. ICICI reiterates an OUTPERFORMER rating.
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Published by Webmaster @ 1:57 PM IST.

Stone India up on orders from Indian Railways

Stone India announced during market hours today, that the company had received an initial development order from the Indian Railways for supply of five sets of 180 kilo volt-ampere (KVA) static converter for locomotive application. This is a high-value, solid-state product to be supplied under collaboration with SMA Technologies AG, Germany.

On 23 April 2007, Stone India entered into an exclusive understanding with ZRJC, China, to supply air-conditioning systems for trains. This product will be manufactured at its upcoming plant in Nalagarh, Himachal Pradesh, which enjoys tax benefits.

On 14 April 2007, Stone India had received an order for refurbishment and upgradation of 1,115 wagons from the Union Ministry of Defence. The order, valued at about Rs 14 crore, to be executed over the next eight months.

The scrip had hit a high of Rs 199.85 and a low of Rs 180 so far during the day. Its 52-week high was Rs 278.80 on 29 August 2006 and 52-week low Rs 104.30 on 30 April 2007.

The Stone India stock had risen 18.31% over the last one month to 6 July 2007 compared to the Sensex’s return of 5.48%. The scrip had outperformed the market over the past quarter, gaining 22.88% compared to the Sensex’s rise of 16.40%.
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Published by Webmaster @ 1:33 PM IST.

BSE Sensex Hits 15,000 - New High

Friday, July 06, 2007

The Bombay Stock Exchange Sensex hit a new all time high today - 15,000. Top gainers amongst Sensex stocks are - Satyam Computers, TCS Infosys Technologies, Bharti TeleVentures and Gujarata Ambuja Cements Ltd.

ICICI Bank and Tata Power are the major losers in SENSEX stocks.
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Published by Webmaster @ 2:08 PM IST.

Sell - Hero Honda+TVS Motors. Hold Baja Auto

Thursday, July 05, 2007

Citigroup in a its research report releases just a while ago is negative on the prospects of two wheeler manufacturers - Bajaj Auto, Hero Honda and TVS Motors.

Citi sees declining price points at the lower end of the motorcycle market, do not augur well for the sector as a whole. With over 93% of the motorcycle industry consolidated among the top three players, further market share gains among them as a group are capped.

Citi downgraded Bajaj Auto's price target from Rs 2,600 to Rs 2,275 with a Hold recommendation. EPS estimates for current year is Rs 136.36.

Citi reiterates Sell recommendation on Hero Honda (Rs655 target price) and TVS Motors (Rs56 target price). We also maintain our Hold recommendation on Bajaj Auto (Rs 2275 target price)
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Published by Webmaster @ 12:55 AM IST.

IDFC scales record high on fund raising plan

Tuesday, July 03, 2007

Infrastructure Development Finance Company (IDFC) is planning to shortly raise about $500 million through a qualified institutional placement.

Earlier on 25 April 2007, the board of directors of the company had approved a plan to raise capital through issue of equity or quasi-equity instruments up to $ 500 million subject to the approval of the shareholders.

The scrip hit a high of Rs 135.80 today, which is a lifetime high for the scrip. It hit a low of Rs 132.2 so far during the day. It had touched a 52 week low of Rs 43.35 on 24 July 2006.

Infrastructure Development Finance Company (IDFC) scrip had declined 16.07% over the last one month to 2 July 2007 compared to the Sensex’s return of 0.64%. The scrip outperformed the market over the past quarter, gaining 71.17% compared to the Sensex’s rise of 16.16%.
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Published by Webmaster @ 1:37 PM IST.

India Quarterly Results Expectations + Sectoral Performance

Monday, July 02, 2007

Most Indian companies will report their earnings for the first quarter ended June-30th in the next few weeks. This is also the quarter where corporate India will measure the impact of rate hikes in the past few months.

According to Citi research, the top 3 sectors to outperform on basis EBITDA margins are Media, Cement and Telecom. The worst 3 sectors are Sugar, Metals and Textiles.

Autos:
One of the worst hit sectors from top-line deceleration due to base effect, higher interest rates and tighter liquidity. Despite INR appreciation, auto ancillary
exporters expected to do well due to exposure to non-USD markets like Europe.

Banks:
Loan growth slowed, but should still be healthy for the quarter at around 27%

Capital Goods:
Continued strong order flow and order execution momentum to keep earnings growth robust here.

Cement:
Despite government intervention in pricing, average prices should still be up 10-11% yoy, driving better margins and strong profits.

Consumer:
Steady top-line growth. Margin pressure in home and personal care segment.

IT Services:
Currency appreciation of 6.4% during the quarter and wage hikes for many companies will weigh on margins.

Metals:
Aluminum saw lower domestic prices yoy due to currency appreciation. Steel Profitability better this quarter due to 10-11% higher prices.

Telecom:
Strong momentum on subscriber addition sustained at 6.1m/month. Margins will expand a bit further on scale economies and operating leverage. Another sector with significant foreign exchange gain on INR appreciation due to forex debt with companies.
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Published by Webmaster @ 11:54 AM IST.