Initiate with a Buy, PO of Rs1,850 - 30% potential upside Titan is a high quality, high growth domestic consumption story. Its offers strong brand equity, wide distribution & high quality mgmt coupled with strong structural growth drivers.
Titan sells watches through a mix of exclusive brand outlets (EBOs), multi brand outlets and dealers.On a pan India basis Tanishq is today the largest branded jeweler but on an individual city basis it is invariably much smaller than the city market leader. Management's focus now is to set up larger Tanishq stores in the existing cities and offer wider variety to drive higher footfalls. Titan has recently launched a new value format, Gold Plus in second tier cities. Product offerings will be limited to pure gold jewelry to drive volumes from a consumer base.latest venture, currently in pilot stage.
Titan's EPS is expected to grow 44% in FY08E, 43% in FY09E and 53% in FY10E. The acceleration in FY10E assumes turnaround in precision engineering and take-off in eyewear. Assuming this does not happen, we estimate FY10E EPS will nonetheless grow strongly by 40%. Titan is expected to report an EPS of Rs 36.34 and Rs 51.88 for FY08 and 09 respectively.On the basis of DCF valuation, Merill has set a target price of Rs 1,850 on the stock.
Friday, November 30, 2007
Subscribe to BGR Energy IPO: P-sec
Pranav Securities (P-sec) has come out with report on BGR Energy Systems IPO. The firm has recommended to subscribe the issue.
BGR Energy Systems, a supplier of systems and equipment for the power, oil & gas, refinery, petrochemical and process industries, proposes to enter the capital markets on December 5, 2007 with a public issue of 9,136,000 equity shares of Rs 10 each through 100% book building process.
Pranav Securities report on BGR Energy Systems IPO
* BGR Energy Systems offers products and solutions for the supply of systems & equipment as well as turnkey engineering project contracting catering to the power, oil & gas, refinery and petrochemical industries.
* The company clocked a CAGR of 50.5% for the topline and 50.6% for the bottomline over FY02-07. The company’s margins have been improving from 9.2% in FY03 to 11.06% in FY07 (18 mths).
* The company’s current order backlog stands at Rs 33.2 billion with 76% coming in from the power project business.
* BGR intends to raise money in order to expand its production facilities in India, China and Middle East as well as fund its working capital and general corporate r equirements.
* The issue is priced at 104.42x FY07 and 117.91x FY07 on lower and upper price band respectively. Though a bit expensive we are robust on the industry and believe the company will sustain its growth trend. We recommend Subscribe.
BGR Energy Systems, a supplier of systems and equipment for the power, oil & gas, refinery, petrochemical and process industries, proposes to enter the capital markets on December 5, 2007 with a public issue of 9,136,000 equity shares of Rs 10 each through 100% book building process.
Pranav Securities report on BGR Energy Systems IPO
* BGR Energy Systems offers products and solutions for the supply of systems & equipment as well as turnkey engineering project contracting catering to the power, oil & gas, refinery and petrochemical industries.
* The company clocked a CAGR of 50.5% for the topline and 50.6% for the bottomline over FY02-07. The company’s margins have been improving from 9.2% in FY03 to 11.06% in FY07 (18 mths).
* The company’s current order backlog stands at Rs 33.2 billion with 76% coming in from the power project business.
* BGR intends to raise money in order to expand its production facilities in India, China and Middle East as well as fund its working capital and general corporate r equirements.
* The issue is priced at 104.42x FY07 and 117.91x FY07 on lower and upper price band respectively. Though a bit expensive we are robust on the industry and believe the company will sustain its growth trend. We recommend Subscribe.
Market ends on a cheerful note
The 30-share BSE Sensex opened with a positive gap of 132.86 points at 19,136.12 and continued to trade strong for most part of the day. Heavy buying was witnessed across board. Finally it ended the day on a cheerful note by touching an intraday high of 19,424.99.
All sectors traded in the postive.
India`s wholesale price index (WPI) based Inflation moved up 3.21% for the week ended November 17, as against 3.01% in the previous week.The annual rate of inflation stood at 5.56% in 2006
BSE Sensex closed with a hefty gain of 359.93 points, or 1.89%, at 19,363.19, while the broad-based NSE Nifty closed at 5,762.75 up 128.15 points.
The BSE Midcap rose 2.38% while BSE Smallcap rose 1.31%.
Out of the total 2,860 stocks traded at the BSE, 1,745 advanced, 1,056 declined, while 59 remained unchanged.
Amongst the sectoral indices, BSE Auto rose 0.92%, BSE Realty rose 3.94%, BSE IT rose 2.74%, BSE Bankex rose 2.54%, BSE Metal rose 5.09% and BSE Power rose 2.13%.
Global Markets
Asian markets advanced on Thursday (Nov. 29, 2007), led by Toyota Motor and Samsung Electronics, on speculation that the US Federal Reserve will cut interest rates.
Movers and Shakers
Gainers at the BSE Sensex include DLF which rose 7.04% to close at Rs 943.90, followed by Reliance Energy, which rose 4.47% to Rs 1738.10, and TCS rose 3.81% to end the day at Rs 1,013.95. HDFC, Satyam, Tata Steel, Bharti Airtel, ONGC and Grasim also moved up.
Laggards at the BSE Sensex were HUL which declined 1.45% to close at Rs 207.15, Ambuja Cement declined 0.86% to Rs 150.00 and Bajaj Auto declined 0.56% to finish at Rs 2709.10.
Top Volumes
Ispat Industries topped the volume chart with 33,999,092 shares followed by with Reliance Petroleum 25,929,296 shares and IDFC with 10,599,880 shares. Ashok Leyland, Neyveli Lignite, GMR Infrastructure and Power Grid were amongst the other gainers.
Top Turnover
Reliance Petroleum topped the turnover chart with Rs 5681.8 million, followed by Reliance Energy with Rs 21,814 million.
NPA of nationalized banks reduced to 2.5%
The gross non-performing assets (NPA) of the nationalized banks lowered to 2.5% of their gross advances as on March 2007, as against 8.8% in 2003.
Reserve Bank of India, government of India and the banks led low gross NPA of the nationalized banks, said finance minister P Chidambaram.
Timely actions taken by banks to recover their dues in accordance with their board approved recovery policies led to the decline of NPA. Also, various steps taken by Reserve Bank of India, government of India and the other banks contributed to this.
To keep a tab on major defaulters of bank loans, RBI disseminates the information about borrowers of Rs 10 million and above on half-yearly basis to the banks and financial institutions for their confidential use.
Further, center is also planning to restrict the uncontrolled capital investment by foreign investors in the Indian stock market. Chidambaram said, ``A transparent policy and regulatory framework for investment by foreign institutional investors (FIIs) in the stock markets is in place.``
The government in consultation with the RBI and SEBI reviews this policy periodically viewing the current macroeconomic situation, changing market conditions, challenges faced in the management of the external sector and experience gained so far in administering the policy.
Punj Lloyd arm bags Rs 12.72 bn order
Punj Lloyd announced that a wholly owned subsidiary of the company, Sembawang Engineers and Constructors Pte, won a contract worth Rs 12.72 billion from Land Transport Authority of Singapore.
Under the terms of contract, Sembawang E&C will be constructing the Bayfront station which is key to the downtown line as it serves the mega Marina Bay Sands Integrated resort. Sembawang E&C will be responsible for the underground construction of Bayfront station and two pairs of tunnels for Downtown Line Stage 1. This includes architectural, civil and structural works.
Shares of the company gained Rs 36.25, or 7.63%, to trade at Rs 511.25. The total volume of shares traded was 771,422 at the BSE.(1.18 pm ,Friday)
Price control for life saving drugs
The Government is actively considering bringing 355 life saving drugs under price control and take a few additional measures to help the poor and below poverty line (BPL) families, once the union cabinet approves national pharmaceutical policy.
``The government is committed to ensure the availability of life saving drugs at reasonable prices. The National Pharmaceutical Pricing authority (NPPA) has taken a number of measures to this effect,`` said union minister of chemicals and fertilizers and minister of steel Ram Vilas Paswan today in the Rajya Sabha on Friday.
He said that pharmaceutical policy is under consideration of the cabinet after it has been vetted by a group of ministers (GoM) headed by union agriculture minister Sharad Pawar.
Responding to the demand of members to enumerate the suggestions of the GoM, Paswan said, ``I cannot divulge the details of the GoM till Cabinet clears it.``
The Minister informed the House that 74 bulk drugs specified in the First Schedule of the Drugs (Price) control Order (DPCO) 1995 and the formulations based thereon are under price control and their prices are fixed/revised NPPA in accordance with the provisions of DPCO.
``It is under active consideration to bring 355 additional life saving drugs under price control,`` said Paswan.
He also informed that the government has recently approved a health insurance scheme. ``The Rashtriya Swasthya Bima Yojana``, which is expected to cover all the BPL families in the unorganised sector in the next five years.
The total sum insured would be Rs 30,000 a family per annum to cover hospitalisation expenses, he said.
Reliance Power gets LoI for UMPP in AP
Reliance Power, a subsidiary of Reliance Energy (REL), was awarded a letter of intent for the 4,000 MW imported-coal based ultra mega power project at Krishnapatnam Andhra Pradesh.
This UMPP in Andhra Pradesh will have an estimated capital outlay of Rs 200 billion.
The company already has bagged 4,000 MW domestic-coal based UMPP at Sasan, Madhya Pradesh, involving an estimated capital outlay of about Rs 180 billion.
Reliance Power`s estimated capital outlay for these two projects alone aggregates approximately Rs 400 billion. In addition, Reliance Energy and its group companies are implementing several large infrastructure development projects, in the areas of metro railways, roads and real estate.
The board of Reliance Energy will meet on Dec. 02, 2007 to consider proposals for raising resources by way of preferential allotment of equity related securities / long term debt / other financial instruments.
The capital raised will be deployed for financing the large number of mega infrastructure projects that are being implemented by the REL group and also on several other projects in the pipeline.
Shares of the company gained Rs 74.4, or 4.47% to settle at Rs 1,738.10. The total volume of shares traded was 1,264,954 at the BSE. (Friday)
Forex reserves up USD 1,133 mn
Forex reserves witnessed a rise of USD 1,133 million to touch USD 272,281 million as on Nov. 23, 2007, primarily as a result of rise in foreign currency and assets collections, on a weekly basis.
As per the weekly statistical supplement of the Reserve Bank of India (RBI) released on Nov. 30, 2007, foreign currency and assets rose USD 1,130 million to USD 264,031 million.
During the same period, the reserve position in the international monetary fund (IMF) increased USD 3 million to USD 436 million.
While gold reserves and SDRs (special drawing rights) remained flat at USD 7,811 million and USD 3 million.
Foreign currency assets expressed in USD, include the effect of appreciation or depreciation, on non-US currencies (such as Euro, Sterling and Yen) held in reserves.
Rupee rises 0.25% at 39.67/USD
The Indian Rupee rose 0.25% against the US Dollar on Nov. 30, 2007.
The Reserve Bank of India`s (RBI) reference rate for the US Dollar stood at Rs 39.67 on November 30, as against Rs 39.77 on the previous working day, i.e. November 29.
On the other hand, the domestic currency depreciated 0.81% versus the Euro on the same day. The reference rate for Euro stood at Rs 58.46 on November 30 as against Rs 58.94 on the previous working day.
As revealed in the table below, the local currency appreciated 0.82% against the Great Britain Pound (GBP), but gained 0.61% against the Japanese Yen (taking into account 100 Yen).
Rupee Exchange Rate
| Date | Currency | |
| 1 GBP | 100 YEN | |
| Nov. 29, 2007 | 82.4571 | 36.16 |
| Nov. 30, 2007 | 81.7817 | 35.94 |
Source: RBI
Note: The reference rate is based on 12 noon rates of a few select banks in Mumbai. The SDR-Rupee rate will be based on this rate. The exchange rates of GBP and Japanese Yen against the Rupee are based on the reference rate for US Dollar and middle rates of the cross currency quotes at 12 noon today.
GE Shipping orders 2 new Supramax dry bulk carriers
Great Eastern Shipping placed an order for 2 new building Supramax Dry Bulk Carriers. These vessels (of approx 57,000 dwt each) are being built at the Cosco (Zhoushan) Shipyard, and are expected to join the company`s fleet during Q4 FY 2009-10.
The objective of ordering these dry bulk vessels is with a view to enhance tonage and participate in the increasing opportunities in the dry bulk commodities trade, the company said.
In line with the same view, the company had contracted to buy 2 new building Kamsarmax dry bulk carriers in Oct` 07, which are expected to join the company`s fleet in Q4 FY10-11 & Q1 FY11 - 12 respectively.
With this contract, the company`s current new building order book comprises 8 vessels aggregating 0.57 mn dwt (4 LRI product tankers aggregating 0.30 Mn dwt & 4 dry bulk carriers aggregating 0.27 mn dwt).
Shares of the company gained Rs 19.1, or 4.02%, to settle at Rs 494.4. The total volume of shares traded was 93,169 at the BSE. (Friday)
Thursday, November 29, 2007
PGCIL bags Rs 1.92 bn order from NDMC
Power Grid Corporation (PGCIL) secured two agreements with the New Delhi Municipal Council (NDMC) for strengthening transmission system at a cost of Rs 1.92 billion.
Under the agreements, PGCIL will be responsible for upgradation of electricity infrastructure in areas which fall under NDMC. The contract involves construction and augmentation of 66 kv and 33 kv sub-stations, augmentation of transformer, and underground cabling.
In addition, System Control and Data Acquisition (SCADA) will be installed by the company to improve data communication system and energy accounting and billing in the area.
The orders will be completed within 30 months from the date of signing of the agreements.
Shares of the company closed down Rs 2.2, or 1.48%, at Rs 146.30. The total volume of shares traded at the BSE was 3,482,681. (Wednesday).
Pre-Market: Market expected to be volatile
On Wednesday, BSE Sensex closed with a loss of 188.86 points, or 0.99%, at 18,938.87, while the broad-based NSE Nifty closed at 5,617.55, down 80.6 points.
Broker`s Outlook
According to Anuj Anandwala, analyst, KJMC Capital Services, there are no pointers in the market to show where it is headed. Due to F&O expiry on 29th Nov, volatility is expected in the market. One should trade cautiously at this point of time, he recommended.
U.S. stocks advanced on Wednesday as Federal Reserve official hinted that the central bank may lower interest rates again.
The NASDAQ Composite Index advanced 3.46%, to 2,662; the Dow average rose by 2.55% to 13,289.
Asian markets opened on a positive note on Thursday (Nov. 29, 2007), on speculation that the US Federal bank will cut interest rates. Toyota Motor Co. and Samsung Electronics surged on anticipation that lower borrowing costs will increase the demand for cars as well as semiconductors.
Japan`s benchmark index Nikkei added 361.02 points, or 2.38%, to trade at 15,514.80.Hong Kong`s Hang Seng advanced 955.61 points, or 3.49%, to trade at 28,326.85.China`s Shanghai Composite added 26.70 points, or 0.56%, to trade at 4,830.09.South Korea`s Kospi advanced 46.27 points, or 2.52%, to trade at 1,880.96.
Crude oil prices fell on Wednesday (November 28), as the government reported an increase in supplies at the NYMEX delivery terminal in Cushing, Okla., which is closely watched by traders as a benchmark of oil inventory tightness.
Light, sweet crude for January delivery plunged USD 3.80, to settle at USD 90.62 a barrel on the New York Mercantile Exchange (NYMEX) following Tuesday`s drop of USD 3.28 a barrel.
Broker`s Outlook
According to Anuj Anandwala, analyst, KJMC Capital Services, there are no pointers in the market to show where it is headed. Due to F&O expiry on 29th Nov, volatility is expected in the market. One should trade cautiously at this point of time, he recommended.
U.S. stocks advanced on Wednesday as Federal Reserve official hinted that the central bank may lower interest rates again.
The NASDAQ Composite Index advanced 3.46%, to 2,662; the Dow average rose by 2.55% to 13,289.
Asian markets opened on a positive note on Thursday (Nov. 29, 2007), on speculation that the US Federal bank will cut interest rates. Toyota Motor Co. and Samsung Electronics surged on anticipation that lower borrowing costs will increase the demand for cars as well as semiconductors.
Japan`s benchmark index Nikkei added 361.02 points, or 2.38%, to trade at 15,514.80.Hong Kong`s Hang Seng advanced 955.61 points, or 3.49%, to trade at 28,326.85.China`s Shanghai Composite added 26.70 points, or 0.56%, to trade at 4,830.09.South Korea`s Kospi advanced 46.27 points, or 2.52%, to trade at 1,880.96.
Crude oil prices fell on Wednesday (November 28), as the government reported an increase in supplies at the NYMEX delivery terminal in Cushing, Okla., which is closely watched by traders as a benchmark of oil inventory tightness.
Light, sweet crude for January delivery plunged USD 3.80, to settle at USD 90.62 a barrel on the New York Mercantile Exchange (NYMEX) following Tuesday`s drop of USD 3.28 a barrel.
Asian markets open on a positive note
Asian markets opened on a positive note on Thursday (Nov. 29, 2007), on speculation that the US Federal bank will cut interest rates.
Toyota Motor Co. and Samsung Electronics surged on anticipation that lower borrowing costs will increase the demand for cars as well as semiconductors.
Japan`s benchmark index Nikkei added 361.02 points, or 2.38%, to trade at 15,514.80.
Hong Kong`s Hang Seng advanced 955.61 points, or 3.49%, to trade at 28,326.85.
China`s Shanghai Composite added 26.70 points, or 0.56%, to trade at 4,830.09.
Taiwan`s Taiex gained 161.84 points, or 1.96%, to trade at 8,438.10.
South Korea`s Kospi advanced 46.27 points, or 2.52%, to trade at 1,880.96.
Singapore`s Straits Times gained 85.24 points, or 2.53%, to trade at 3,454.96. (IST 8.15 a.m)
Oil slips further
Crude oil prices fell on Wednesday (November 28), as the government reported an increase in supplies at the NYMEX delivery terminal in Cushing, Okla., which is closely watched by traders as a benchmark of oil inventory tightness.
Light, sweet crude for January delivery plunged USD 3.80, to settle at USD 90.62 a barrel on the New York Mercantile Exchange (NYMEX) following Tuesday`s drop of USD 3.28 a barrel.
December gasoline futures dropped 9.73 cents, to settle at USD 2.2757 a gallon on the NYMEX on Wednesday.
The retail gas prices rose 0.5 cents, overnight to USD 3.096 a gallon.
In London, January Brent crude fell USD 2.71, to settle at USD 89.81 a barrel on the ICE Futures exchange.
December heating oil fell 7.96 cents, to settle at USD 2.5738 a gallon on the NYMEX on Wednesday.
December natural gas slipped 35.4 cents, to settle at USD 7.203 per 1,000 cubic feet on the NYMEX.
FIIs turn net sellers in equities worth Rs 2,637mn on Nov. 27
Foreign institutional investors (FIIs) turned net sellers in equities worth Rs 2,637 million (USD 65.40 million) on November 27. They bought equities worth Rs 34,670 million and sold equities worth Rs 37,306 million. Till November 27, they have been net sellers in equities worth Rs 46,503 million.
According to provisional data available on NSE, FIIs remained net sellers in the equity segment worth Rs 9,789.6 million on both BSE and NSE on November 28. They bought equities worth Rs 31,929.1 million and sold equities worth Rs 41,718.7 million. Total turnover in cash segment of NSE stood at Rs 161,874.5 million on November 28.
FIIs turned net sellers in debt segment on November 27 to the tune of Rs 2,253 million (USD 55.80 million). They did not buy any debt but sold debts worth Rs 2,253 million. Till November 27, they have been net sellers in debt worth Rs 5,266 million.
FIIs turned net sellers in derivatives worth Rs 46,500 million on November 27. They bought derivatives worth Rs 1,630,099 million and sold derivatives worth Rs 1,676,599 million.
As per the latest data (provisional) available on the NSE, FIIs turned net buyers in derivatives worth Rs 5,995.79 million on November 28. They bought derivatives worth Rs 181,649.44 million and sold derivatives worth Rs 175,653.65 million. Total turnover in F&O segment of NSE stood at Rs 862,875.2 million on November 28.
Wednesday, November 28, 2007
Market trades weak
The 30-share benchmark, BSE Sensex slipped into the negative terrain on back of heavy selling pressure in heavyweights in the previous trading hour. Currently the index is trading weak.
All sectors were trading in the negative except auto stock.
BSE Sensex is trading at 18,926.67, down 201.06 points, while NSE Nifty is trading at 5,609.40, down 88.75 points (3.02 p.m.)
The BSE Midcap declined 0.02%, while BSE Smallcap rose 0.26%.
Out of the total 2,854 stocks traded at the BSE, 1,428 advanced, 1,355 declined, while 71 remained unchanged.
Amongst the sectoral indices, BSE Auto rose 0.59%, while BSE IT declined 0.54%, BSE Power declined 0.88%, BSE Bankex dipped 0.78%, BSE Realty declined 1.43%, BSE Metal declined 1.64%.
Leaders at the BSE Sensex were BHEL which rose 2.74% to Rs 2726.00, Maruti rose 2.41% to Rs 960.10 and Bajaj Auto rose 1.97% to Rs 2,705.30. ITC, ICICI Bank, Ambuja Cement and Tata Motors Infosys also moved up.
Laggards at the BSE Sensex include ACC which declined 3.59% to Rs 1,072.05, Hindalco declined 2.85% to Rs 185.90 and Reliance Energy declined 2.59% to Rs 1,710.00. Tata Steel, TCS, HDFC Bank, DLF, ONGC and Reliance Industries also slipped.
NTPC, ICICI Bank most traded by MFs in Oct`07
NTPC and ICICI Bank witnessed much activity among the mutual fund portfolios in the month of October 2007 .
NTPC was picked up by Reliance Equity Advantage Fund - Retail (4,990,015 Shares), UTI Index Select Equity Fund (1,825,224 shares), UTI Mastergrowth 93 (700,000 shares). And the same was sold by Morgan Stanley Growth Fund (2068925 shares), DSP Merrill Lynch Equity Fund - Regular (770022 shares), ICICI Prudential Equity and Derivatives Fund - Wealth Optimiser - Regular (503,086 shares).
ICICI Bank was preferred by Bank BeES (1,698,748 shares), HDFC Equity Fund (1450,000 shares), Franklin India Flexi Cap Fund (663,271 shares) and was sold by Franklin India High Growth Companies Fund (408,283 shares), ICICI Prudential Dynamic Plan (400,000 shares) and DSP Merrill Lynch Equity Fund - Regular (253,692 shares).
Reliance Communications, RIL, ONGC, Bajaj Auto and Grasim Industries were the other most bought shares and HUL, Ambuja Cements, ITC, Satyam Computer Services and REL were the most sold shares in October 2007.
NSE bans derivative trading in Essar Oil
Trading in derivative contracts of Essar Oil, Bongaigaon Refinery and six other companies have been banned at the National Stock Exchange.
As per a NSE circular, the derivative contracts in the underlying Essar Oil, state-run Bongaigoan Refinery, Tata Teleservices (Mah), JP Hydro, Reliance Petroleum, NIIT Technologies, IFCI and Adlabs Film are currently in the ban period.
Trading in these companies were banned as they have crossed the 95% of market-wide position limit and consequently restricted from making any fresh contracts.
In the cash segment the scrip of Essar oil witnessed a whopping jump of over 312.55% in a month. From the levels of Rs 53.75 quoted on October 26, the scrip moved to Rs 221.75 as on November 27, a jump of Rs 168.
Similar movement was witnessed in the scrip of Bongaigaon Refinery. The shares of the company increased from Rs 61.85 as on October 26 to Rs 98.95 quoted on November 27, a jump of Rs 37 or 60%.
Essar Oil stock has witnessed a turnover of over Rs 420 million in the first few hours of trade today even as the scrip is trading down 2.10% at Rs 217.10 on the BSE.
While shares worth over Rs 1.57 million of Bongaigaon Refinery had changed hands at the BSE in the morning trade, the scrip was trading down 0.81% at Rs 97.75.
The circular informed that all members shall trade in derivative contracts of Tata Teleservices, JPHydro, RPL, NIIT Tech, IFCI, Adlabs Films and GMR Infrastructure only to decrease their positions through offsetting positions and any increase in open positions would attract appropriate penal and disciplinary action.
Rupee gains 0.43% to 39.85/USD
The Indian Rupee gained 0.43% against the US Dollar on Nov. 28, 2007.
The Reserve Bank of India`s (RBI) reference rate for the US Dollar stood at Rs 39.68 on November 28 as against Rs 39.85 on the previous working day, i.e. November 27.
Similarly, the domestic currency depreciated 0.68% versus the Euro on the same day. The reference rate for Euro stood at Rs 58.81 on November 28 as against Rs 59.21 on the previous working day.
As revealed in the table below, the local currency appreciated 0.61% against the Great Britain Pound (GBP) and 0.54% against the Japanese Yen (taking into account 100 Yen).Rupee Exchange Rate
Date Currency 1 GBP 100 YEN November 27, 2007 82.6170 36.75 November 28, 2007 82.1138 36.55
Source: RBI
Note: The reference rate is based on 12 noon rates of a few select banks in Mumbai. The SDR-Rupee rate will be based on this rate. The exchange rates of GBP and Japanese Yen against the Rupee are based on the reference rate for US Dollar and middle rates of the cross currency quotes at 12 noon today.
Brokers Outlook: Market may cross 19,400 on Wednesday
Bhupendra Sharma, vice president, Hornic Investments, said that market closed on a negative note as Sensex closed down 119 points at 19,127 and Nifty was down 33 points at 5,698. Indian markets have performed better than its Asian peers. ``We are trading at a higher level that is why volatility is being seen in the market,`` he added.
Hedge funds are active all over the global markets due to which heavy movement is seen across all markets. Today (November 27) selective buying and selling was witnessed in the markets.
He expects market to open firm on Wednesday and hopes it will cross 19,400 level. Stocks to be watched out are Reliance Industries, IDBI, IFCI, IDFC, State Bank of India and L&T though he remains bearish on Reliance Petroleum.
Prakash Rajdev, chief dealer, Khandwala Securities, said that market was choppy the entire day. There was more of an operator-based movement seen in the market today (November 27), he said. Sporadic buying was witnessed.
He said that FIIs selling has been absorbed in the markets. Now one should watch out for some fresh buying to happen. He expects a weak opening in the next trading session. He is bullish on power and finance sectors.
MFs remain net buyers in equities worth Rs 2,529 mn on Nov. 26
Mutual funds (MFs) remained net buyers in equities worth Rs 2,529 million on November 26. They bought equities worth Rs 7,666 million and sold equities worth Rs 5,137 million. Till November 26, they have been net buyers in equities worth Rs 9,196 million.
MFs turned net buyers in debt segment worth Rs 7,560 million on November 26. They bought debts worth Rs 12,120 million and sold debts worth Rs 4,561 million. Till November 26, they have been net sellers in debts worth Rs 67,322.98 million.
MFs turned net buyers in debt segment worth Rs 7,560 million on November 26. They bought debts worth Rs 12,120 million and sold debts worth Rs 4,561 million. Till November 26, they have been net sellers in debts worth Rs 67,322.98 million.
FIIs turn net buyers in equities worth Rs 4,702 mn on Nov. 26
Foreign institutional investors (FIIs) turned net buyers in equities worth Rs 4,702 million (USD 116.60 million) on November 26. They bought equities worth Rs 33,255 million and sold equities worth Rs 28,553 million. Till November 26, they have been net sellers in equities worth Rs 43,866 million.
According to provisional data available on NSE, FIIs turned net sellers in the equity segment worth Rs 4,983.5 million on both BSE and NSE on November 27. They bought equities worth Rs 34,082.7 million and sold equities worth Rs 39,066.2 million. Total turnover in cash segment of NSE stood at Rs 164,005 million on November 27.
FIIs turned net buyers in debt segment on November 26 to the tune of Rs 1,495 million (USD 37.10 million). They bought debts worth Rs 1,846 million and sold debts worth Rs 350 million. Till November 26, they have been net sellers in debt worth Rs 3,013 million.
FIIs turned net buyers in derivatives worth Rs 134,930.8 million on November 26. They bought derivatives worth Rs 72,360.7 million and sold derivatives worth Rs 114,468.5 million.
According to provisional data available on NSE, FIIs turned net sellers in the equity segment worth Rs 4,983.5 million on both BSE and NSE on November 27. They bought equities worth Rs 34,082.7 million and sold equities worth Rs 39,066.2 million. Total turnover in cash segment of NSE stood at Rs 164,005 million on November 27.
FIIs turned net buyers in debt segment on November 26 to the tune of Rs 1,495 million (USD 37.10 million). They bought debts worth Rs 1,846 million and sold debts worth Rs 350 million. Till November 26, they have been net sellers in debt worth Rs 3,013 million.
FIIs turned net buyers in derivatives worth Rs 134,930.8 million on November 26. They bought derivatives worth Rs 72,360.7 million and sold derivatives worth Rs 114,468.5 million.
Tuesday, November 27, 2007
Rupee drops 0.43% to 39.85/USD
The Indian Rupee weakened 0.43% against the US Dollar on Nov. 27, 2007.
The Reserve Bank of India`s (RBI) reference rate for the US Dollar stood at Rs 39.85 on November 27 as against Rs 39.68, on the previous working day, i.e. November 26.
Similarly, the domestic currency depreciated 0.71% versus the Euro on the same day. The reference rate for Euro stood at Rs 59.21 on November 27 as against Rs 58.79 on the previous working day.
As revealed in the table below, the local currency depreciated 0.81% against the Great Britain Pound (GBP) and 0.46% against the Japanese Yen (taking into account 100 Yen).
Rupee Exchange Rate
| Date | Currency | |
| 1 GBP | 100 YEN | |
| November 26, 2007 | 81.9551 | 36.58 |
| November 27, 2007 | 82.6170 | 36.75 |
Source: RBI
Note: The reference rate is based on 12 noon rates of a few select banks in Mumbai. The SDR-Rupee rate will be based on this rate. The exchange rates of GBP and Japanese Yen against the Rupee are based on the reference rate for US Dollar and middle rates of the cross currency quotes at 12 noon today.
Market closes in negative
The 30-share BSE Sensex opened at 19,128.86 and continued to trade in the negative terrain throughout the day. Selling pressure was witnessed in pivotal stocks across board. Finally, the Sensex ended the day on a negative note by touching an intraday low of 19,019.33.
Select stocks from auto, realty and IT led the advances while metal, power and banking stocks led the declines.
BSE Sensex closed with a loss of 119.81 points, or 0.62%, at 19,127.73 while the broad-based NSE Nifty closed at 5,698.15, down 33.55 points.
The BSE Midcap gained 0.11% while BSE Smallcap gained 0.28%.
Out of the total 2,843 stocks traded at the BSE, 1,299 advanced, 1,478 declined, while 66 remained unchanged.Amongst the sectoral indices, BSE Auto rose 0.99%, BSE Realty gained 1.24%, BSE IT gained 0.23%, while BSE Bankex declined 0.90%, BSE Metal declined 1.03% and BSE Power declined 0.67%.
Global Markets
Asian markets declined for the first time in 3 days on Tuesday (Nov. 27, 2007) following the US market.
Movers and Shakers
Gainers at the BSE Sensex include BHEL, which rose 2.60% to close at Rs 2672.95, followed by Bajaj Auto which rose 2.54% to Rs 2653.05, and SBI rose 1.38% to end the day at Rs 2273.25. TCS, Wipro, Tata Motors, DLF, Ambuja Cement and Grasim also moved up.
Laggards at the BSE Sensex were Bharti Airtel which declined 3.32% to close at Rs 916.50, ICICI Bank declined 2.18% to Rs 1132.40 and Reliance Energy declined 1.91% to finish at Rs 1755.45. Maruti, NTPC, Hindalco, ACC and Reliance Industries also slipped.
Top Volumes
Ashok Leyland topped the volume chart with 21,223,979 shares followed by Ispat Industries with 13,507,610 shares and Reliance Energy with 12,271,869 shares. IDBI, MRPL and IDFC were amongst the other gainers.
Top Turnover
Reliance Petroleum topped the turnover chart with 2,427.5 million followed by Jindal Steel with 1,859.5 million.
New Listing:
Adani Group promoted Mundra Port and Special Economic Zone (MPSEZL) after listing on bourses today closed at 118.57% premium on the Bombay Stock Exchange (BSE).
Shares opened at a premium of Rs 330, or 75%, at Rs 770 as compared with the issue price of Rs 440 a share. It touched a high of Rs 1,150, a low of Rs 770. Shares finally closed with a premium of Rs 521.7, or 118.57%, at Rs 961.7. Total volume of shares traded was 14,721,792.
Mundra Port debuts with 75% premium; hits high of Rs 1100
Mundra Port and Special Economic Zone, India's largest non-government cargo terminal, has listed at Rs 770, a premium of 75% over its offer price of Rs 440 and touched a high of Rs 1050 on the NSE.
The company had entered capital market with an IPO of 40.25 million shares and got subscribed 115.84 times.
Public issue of Mundra Port has seen commitment for bids worth USD 51.5 billion and QIBs applied for USD 42.83 billion worth of shares. Total amount of money received in IPO was at USD 13 billion as against actual issue size of USD 450 million.
The Adani Group, founder of Mundra Port, has interests in commodities trading, coal mining, power generation, real estate development and agriculture processing.
The company had entered capital market with an IPO of 40.25 million shares and got subscribed 115.84 times.
Public issue of Mundra Port has seen commitment for bids worth USD 51.5 billion and QIBs applied for USD 42.83 billion worth of shares. Total amount of money received in IPO was at USD 13 billion as against actual issue size of USD 450 million.
The Adani Group, founder of Mundra Port, has interests in commodities trading, coal mining, power generation, real estate development and agriculture processing.
Brokers` Outlook: Market to open with upward gap
Bharat Thakur, assistant manager, Karvy Stock Broking said that market moved up strongly ahead of short covering in the markets before F&O expiry. Mid-caps participated in today`s (November 24) upward rally. Bhushan Steel was up by more than 50%. Nalco, JP Hydro, JSW Steel and IT stocks like TCS and I-flex were among the major gainers.
Markets are expected to open positive on Tuesday but volatility will continue to hover, said Bharat. According to him, market support is at 18,750 and is likely to test 19,750 in the near future.
Stocks to be watched out are IFCI, L&T and Reliance Petroleum for Tuesday.
Anuj Anandwala, analyst, KJMC Capital Services said that Sensex closed with a hefty gain of 394 points, at 19,247.54 and Nifty closed at 5,735.20, up 126.6 points. Indian stock market mirrored the strong global markets.
Strong buying was seen across the board. Metal, realty, power and banking stocks performed well at the bourses.
Some amount of selling pressure is likely during the week, said Anuj, though markets may open with an upward gap in the next trading session. According to him, markets may not sustain at 20,000 level but can go up to 19, 500 before this F&O expiry and from those levels it can again pull back.
He is bullish on power and banking sectors.
Markets are expected to open positive on Tuesday but volatility will continue to hover, said Bharat. According to him, market support is at 18,750 and is likely to test 19,750 in the near future.
Stocks to be watched out are IFCI, L&T and Reliance Petroleum for Tuesday.
Anuj Anandwala, analyst, KJMC Capital Services said that Sensex closed with a hefty gain of 394 points, at 19,247.54 and Nifty closed at 5,735.20, up 126.6 points. Indian stock market mirrored the strong global markets.
Strong buying was seen across the board. Metal, realty, power and banking stocks performed well at the bourses.
Some amount of selling pressure is likely during the week, said Anuj, though markets may open with an upward gap in the next trading session. According to him, markets may not sustain at 20,000 level but can go up to 19, 500 before this F&O expiry and from those levels it can again pull back.
He is bullish on power and banking sectors.
Market closes on a strong note
The 30-share BSE Sensex opened positive at 19,171.25 and proceeded to trade strong throughout the day. Heavy buying was witnessed in pivotal stocks across board. The index was rangebound. Finally, the Sensex ended the day on a strong note by touching an intraday high of 19,360.23.
BSE Sensex closed with a hefty gain of 394.67 points, or 2.09%, at 19,247.54 while the broad-based NSE Nifty closed at 5,735.20, up 126.6 points.
The BSE Midcap gained 1.89% while BSE Smallcap gained 1.69%.
Out of the total 2,865 stocks traded at the BSE, 1,820 advanced, 986 declined, while 59 remained unchanged.
Amongst the sectoral indices, BSE Auto rose 0.74%, BSE Bankex rose 1.70%, BSE Realty gained 3.05%, BSE IT gained 2.02%, BSE Metal gained 5.61% and BSE Power rose 2.20%.
Global Markets
Asian markets advanced the most in nine weeks on Monday (Nov. 26, 2007) after the U.S. retail sales jumped, raising the prospects for exports to the region`s biggest overseas market.
Movers and Shakers
Gainers at the BSE Sensex include HDFC Bank, which rose 5.18% to close at Rs 1,643.70, followed by Bharti Airtel, which rose 3.78% to Rs 948.00, and Reliance Energy rose 3.74% to end the day at Rs 1,789.55. Tata Steel, ONGC, Hindalco, Grasim, DLF, TCS and RIL also moved up.
Laggards at the BSE Sensex were Tata Motors, which declined 0.62% to close at Rs 710.20 and SBI shed 0.40% to finish at Rs 2,242.25.
Top Volumes
Reliance Petroleum topped the volume chart with 24,663,272 shares followed by Ispat Industries with 15,652,025 shares and Neyveli Lignite with 6,621,917 shares. GMR Infrastructure, Power Grid, MRPL and IDFC were amongst the other gainers.
Top Turnover
Reliance Petroleum topped the turnover chart with Rs 5,167.9 million, followed by Jindal Steel with Rs 3,128 million.
New Listing
Shares of Chennai- based Empee Distilleries, a manufacturer of Indian made foreign liquor, after listing on bourses today, settled at 20.52% premium on the Bombay Stock Exchange (BSE).
The shares opened at an issue price of Rs 400 a share. It touched a high of Rs 489 and a low of Rs 301. Shares finally closed at a discount of Rs 82.1, or 20.52%, at Rs 317.90. Total volume of shares traded was 5,125,457.
NTPC board clears investments worth Rs 72.45 bn
India`s biggest thermal power generator, National Thermal Power Corporation (NTPC) announced on Monday that the board approved investment proposals worth Rs 72.45 billion.
The board has given the investment approval for Mauda thermal power project (2 X 500 MW) in the State of Maharashtra at an appraised estimated cost of Rs 54,592.79 million.
Further the board has given the investment approval to undertake renovation and modernisation works at Kawas gas power station (645 MW) in the state of Gujarat at an estimated cost of Rs 5,974.90 million.
In addition, the board approved the company`s equity investment in Bhartiya Rail Bijlee Company, a subsidiary of the company, upto Rs 11,882.60 million (equivalent to 74% of equity contribution) to enable it to implement 4X250 MW Nabinagar thermal power project in the state of Bihar, subject to prior proportionate equity contribution by railways.
Shares of the company gained Rs 2, or 0.85%, to settle at Rs 238.6. The total volume of shares traded was 2,738,114 at the BSE. (Monday)
FIIs remain net sellers in equities worth Rs 1,734 mn on Nov. 23
Foreign institutional investors (FIIs) remained net sellers in equities worth Rs 1,734 million (USD 43 million) on November 23. They bought equities worth Rs 27,563 million and sold equities worth Rs 29,297 million. Till November 23, they have been net sellers in equities worth Rs 48,568 million.
According to provision data available on NSE, FIIs remained net sellers in the equity segment worth Rs 504 million on both BSE and NSE on November 26. They bought equities worth Rs 30,195 million and sold equities worth Rs 29,691 million. Total turnover in cash segment of NSE stood at Rs 145,188.2 million on November 26.
FIIs turned net sellers in debt segment on November 23 to the tune of Rs 1,934 million (USD 47.90 million). They bought debts worth Rs 1,740 million and sold debts worth Rs 3,674 million. Till November 23, they have been net sellers in debt worth Rs 4,508 million.
FIIs remained net sellers in derivatives worth Rs 8,014.1 million on November 23. They bought derivatives worth Rs 72,360.7 million and sold derivatives worth Rs 64,346.6 million.
According to provision data available on NSE, FIIs remained net sellers in the equity segment worth Rs 504 million on both BSE and NSE on November 26. They bought equities worth Rs 30,195 million and sold equities worth Rs 29,691 million. Total turnover in cash segment of NSE stood at Rs 145,188.2 million on November 26.
FIIs turned net sellers in debt segment on November 23 to the tune of Rs 1,934 million (USD 47.90 million). They bought debts worth Rs 1,740 million and sold debts worth Rs 3,674 million. Till November 23, they have been net sellers in debt worth Rs 4,508 million.
FIIs remained net sellers in derivatives worth Rs 8,014.1 million on November 23. They bought derivatives worth Rs 72,360.7 million and sold derivatives worth Rs 64,346.6 million.
Bulk deal: Shree Rama Multi-Tech rules the chart on NSE
As at NSE, following bulk deals took place on Nov. 26, 2007:
DG Patel Trust bought 1,400,000 shares at Rs 6.38 a share and KD. Patel Trust bought 1,500,000 shares at Rs 6.35 a share while Pan Emami Cosmed sold 500,000 shares at Rs 6.4 a share and sold 2,450,000 shares at Rs 6.36 a share of Shree Rama Multi-Tech.
ABN AMRO Bank NV London BR Sold 155,000 shares at Rs 384.21 a share and DB International Asia sold 129,121 shares at Rs 341.71 a share of Empee Distilleries.
Maim A/C Mirae Asset India Solomon Equity Inv Trust sold 830,000 shares at Rs 77.45 a share of Hexaware Technologies.
Shivam Investment Pro.Sushma Kapur bought 170,000 shares at Rs 31.04 a share of Soma Textiles & Industries.
Marg Construction - Multibagger
Marg Construction is a South based realty company, engaged in property development and infrastructure development like SEZ and Sea port. The present equity of the company is Rs.20.63 crores, with face-value of Rs.10 per share. This is after a preferential allotment of 12.20 lakh shares to promoters, 2 lakh shares to Benett Coleman & Co. and 6.80 lakh shares to non-promoters.
Marg Construction
Marg Construction is a South based realty company, engaged in property development and infrastructure development like SEZ and Sea port.
The present equity of the company is Rs.20.63 crores, with face-value of Rs.10 per share. This is after a preferential allotment of 12.20 lakh shares to promoters, 2 lakh shares to Benett Coleman & Co. and 6.80 lakh shares to non-promoters. Of this, promoters stake is 51%, MF,Banks and FIIs at about 15%, while remaining 34% with the public.
The company is developing Karaikal Port near Pondicherry by its wholly owned subsidiary Karaikal Port Pvt. Ltd. This subsidiary has also entered into an MoU with Pembinaan Redzai Sah Bhd a Malaysian company, for development and management work of this port, as also has recently purchased a cutter suction Dredger which can work on draught of 5 meters to 25 meters depth. Karaikal is one of the four regions of Pondicherry and is 300 kms south of Chennai and about 135 kms. from Pondicherry. The port is being developed in three phases with total investments of Rs.1,000 crores. The first phase is of Rs.416 crores, and shall be operational by end 2008, 2nd phase would start in Jan. 2009 with outlay of Rs.250 crores and third phase thereafter with outlay of Rs.350 crores. The port is on 600 acres land with a concession period of 30 years.
The company has estimated total cost of development of 1st phase of the port at Rs.416 crores, for which, Rs.302 crore loan has been sanctioned by various banks and financial institutions. Work on development of the port has commenced.
The company has acquired 4.40 acres of land at Old Mahabalipuram Road, near Chennai for a residential project.
The company is developing an SEZ on 312 acres of land in Kancheepuram near Mahabalipuram through its wholly owned subsidiary New Chennai Township Pvt. Ltd.
Another SEZ on 300 acres of land, for service sector, is also being developed in Kancheepuram near Mahabalipuram.
Developing one more SEZ at Tirupati for which land acquisition process has been initiated.
Developing Serviced Airport at Kancheepuram through its wholly owned subsidiary Marg Business Park P. Ltd.
For FY 07, total income of the company was placed at Rs.142 crores with PAT of Rs.29.90 crores, resulting in an EPS of Rs.18.
For quarter ending September 07, topline was at Rs.49 crores with PAT of Rs.6.60 crores. Based on this performance, the company should be able to post a 30% growth in FY 08, over its FY 07 performance.
The present market capitalization of the company is about Rs.650 crores, which is very low. Post listing of Mundra Port, the company would get vastly re-rated because of its Karaikal Port, near Pondicherry.
The share is presently ruling at Rs.315 and can rise to Rs.1,000 levels in the next 12 months. Those who have long term view, can buy the stock, purely from investment angle.
Marg Construction
Marg Construction is a South based realty company, engaged in property development and infrastructure development like SEZ and Sea port.
The present equity of the company is Rs.20.63 crores, with face-value of Rs.10 per share. This is after a preferential allotment of 12.20 lakh shares to promoters, 2 lakh shares to Benett Coleman & Co. and 6.80 lakh shares to non-promoters. Of this, promoters stake is 51%, MF,Banks and FIIs at about 15%, while remaining 34% with the public.
The company is developing Karaikal Port near Pondicherry by its wholly owned subsidiary Karaikal Port Pvt. Ltd. This subsidiary has also entered into an MoU with Pembinaan Redzai Sah Bhd a Malaysian company, for development and management work of this port, as also has recently purchased a cutter suction Dredger which can work on draught of 5 meters to 25 meters depth. Karaikal is one of the four regions of Pondicherry and is 300 kms south of Chennai and about 135 kms. from Pondicherry. The port is being developed in three phases with total investments of Rs.1,000 crores. The first phase is of Rs.416 crores, and shall be operational by end 2008, 2nd phase would start in Jan. 2009 with outlay of Rs.250 crores and third phase thereafter with outlay of Rs.350 crores. The port is on 600 acres land with a concession period of 30 years.
The company has estimated total cost of development of 1st phase of the port at Rs.416 crores, for which, Rs.302 crore loan has been sanctioned by various banks and financial institutions. Work on development of the port has commenced.
The company has acquired 4.40 acres of land at Old Mahabalipuram Road, near Chennai for a residential project.
The company is developing an SEZ on 312 acres of land in Kancheepuram near Mahabalipuram through its wholly owned subsidiary New Chennai Township Pvt. Ltd.
Another SEZ on 300 acres of land, for service sector, is also being developed in Kancheepuram near Mahabalipuram.
Developing one more SEZ at Tirupati for which land acquisition process has been initiated.
Developing Serviced Airport at Kancheepuram through its wholly owned subsidiary Marg Business Park P. Ltd.
For FY 07, total income of the company was placed at Rs.142 crores with PAT of Rs.29.90 crores, resulting in an EPS of Rs.18.
For quarter ending September 07, topline was at Rs.49 crores with PAT of Rs.6.60 crores. Based on this performance, the company should be able to post a 30% growth in FY 08, over its FY 07 performance.
The present market capitalization of the company is about Rs.650 crores, which is very low. Post listing of Mundra Port, the company would get vastly re-rated because of its Karaikal Port, near Pondicherry.
The share is presently ruling at Rs.315 and can rise to Rs.1,000 levels in the next 12 months. Those who have long term view, can buy the stock, purely from investment angle.
Kirloskar Brothers - Multibagger
KBL has recently taken over the management control of TKSL by inducting a majority of directors on the board of the subject company. TKSL, incorporated in 1965, is engaged in manufacturing of alloy steel castings catering to sugar, cement, steel, pumps/valves, marine, earth moving and other general engineering industries sectors.
Investment Rationale
KBL, the flagship company of the Rs 3660 crore Kirloskar Group incorporated in 1920, is the largest manufacturer and exporter of Centrifugal Pumps in India. It manufactures power driven pumps, valves, turbines, electric motors, anti-corrosion products and alloy iron castings at its five manufacturing plants located in the states of Maharashtra and Madhya Pradesh. KBL has five Strategic Business Units (SBUs) namely, Industrial Pumps (IP), Projects & Engineered Pumps (PEP), Agriculture & Domestic Pumps (ADP), Valves and Others of which PEP is the highest contributor to the revenues followed by ADP and IP. Besides, the Company also has strategic tie-ups in form of JVs and subsidiaries either specializing in niche categories or in their geography. KBL is transforming itself into a total water solution company from a mere product company by spreading its wings in the domestic and global markets. KBL has reputed companies and state & Central governments of various countries as its customers. All the five SBUs of KBL have witnessed strong double-digit growth ranging from 30% to 130% and pending orders in FY2007. Robust construction & infrastructure development in the economy has been the major growth driver for KBL’s businesses. High pending orders and a buoyant outlook for the user industries makes us confident of the sustainability of the high growth rates in future. An unexciting quarterly performance in Q1 and Q2FY2008 marked by aberration has beaten the stock substantially on the bourses. We however, consider this a good buying opportunity considering the bullish outlook for the company’s performance going ahead on the back of strong order book position and a buoyant outlook for the user industries.
Key Developments and Impact:
Capacity Expansion
KBL is undertaking major capacity expansion in the current year by investing to the tune of Rs 150 crore for setting up a greenfield facility for manufacturing hydel turbines as also increasing its capacity of manufacturing large capacity pumps. The new Capex is almost entirely for building new capacities resulting in a 60% increase in its Gross Fixed Assets.
Management control of The Kolhapur Steel Ltd (TKSL)
KBL has recently taken over the management control of TKSL by inducting a majority of directors on the board of the subject company. TKSL, incorporated in 1965, is engaged in manufacturing of alloy steel castings catering to sugar, cement, steel, pumps/valves, marine, earth moving and other general engineering industries sectors. TKSL’s steel casting manufacturing capacity will be utilized for KBL’s captive consumption as well as for selling in the external market.
Financials:
Net sales during Q2FY2008 grew by 14% to Rs 318.12 crore from Rs 279.07 crore in Q2FY2007. Domestic sales grew by 28% due to robust demand scenario. However, Export sales declined by 66% due to high base year effect. Exports during the year-ago quarter were higher on account of spill over of FY2006 order into Q1FY2007. Lower Other Income restricted the Total Income growth to 8.9%. Operating Profit declined by 24.2% to Rs 22.6 crore due to sharp rise in RM and Staff cost. EBITDA declined at a sharper rate, 30.5% to Rs 42.6 crore due to lower Operating Profit coupled with lower Other Income. Higher depreciation charge, steep rise in interest cost and higher tax rate affected the already low profits. Profit After Tax was also affected by absence of extraordinary income (profit on sale of & dividend from investment in Kirloskar Copeland Limited) which was present in the year ago quarter. PAT thus declined by 88.2% to Rs 27 crore. Despite an unexciting quarterly performance in Q2FY2008, we remain bullish on the company’s performance going ahead due to strong order book position and a buoyant outlook for the user industries.
Industry Scenario:
The domestic pump market valued at Rs 3500 crore can be categorized into: agricultural, industrial, utilities and services. Being fragmented in nature, the unorganized segment accounts for 30% of market. The fortune of pumps industry depends on the performance of and outlook for its user industries namely, refining, petrochemical, fertilizer, drugs & pharmaceutical, agriculture, cement, etc. There are various types of pumps like centrifugal pumps, reciprocating pumps, diaphragm pumps, gear pumps and dosing pumps. Indian pump and valves industry is on upswing with all its industry majors registering impressive double-digit growth rate. Major demand drivers for this industry are as follows:
• Investment and thrust on agriculture, development of drinking water supply & drainage system
• Performance of the fluid handling industries like petrochemicals, etc
• Investment in infrastructure development and construction activities
Financial Analysis:
Profits affected due to higher Operating Expenses, reduced Other Income & absence of Extraordinary Income as in year-ago quarter. Net sales during Q2FY2008 grew by 14% to Rs 318.12 crore from Rs 279.07 crore in Q2FY2007. Domestic sales grew by 28% due to robust demand scenario. However, Export sales declined by 66% due to high base year effect. Exports during the year-ago quarter were higher on account of spill over of FY2006 order into Q1FY2007. Lower Other Income restricted the Total Income growth to 8.9%. Operating Profit declined by 24.2% to Rs 22.6 crore due to sharp rise in RM and Staff cost. EBITDA declined at a sharper rate, 30.5% to Rs 42.6 crore due to lower Operating Profit coupled with lower Other Income. Higher depreciation charge, steep rise in interest cost and higher tax rate affected the already low profits. Profit After Tax was also affected by absence of extraordinary income (profit on sale of & dividend from investment in Kirloskar Copeland Limited) which was present in the year ago quarter. PAT thus declined by 88.2% to Rs 27 crore.
Valuations:
At the CMP of Rs 385.95, KBL is trading at about 2.9x MCap/Sales, 3x EV/Sales and 21.7x EV/EBITDA on TTM basis.
Risks:
Financial and integration risk arising from inorganic growth initiatives: KBL in order to achieve its target of becoming one of the top 15 companies in the world is considering acquisitions in the domestic and international markets. However, acquisitions could lead to integration risk to a certain extent and financial distortion for some time.
Growth:
Healthy industrial growth, boom in construction & infrastructure development, rapid urbanization leading to escalating need of drinking & waste water management, Government’s thrust on agricultural development & irrigation and its target of “Power for all by 2012” ensures strong revenue visibility from domestic market.
KBL is one of the only three manufactures of primary moderator circulation Canned Motor Pump over 200 kW. The Indo-US nuclear treaty would open up huge opportunity for KBL. Besides, its association with Bechtel, USA will be an added advantage to win new global power projects.
KBL is expanding its global presence (70 countries at present) by focusing on countries like Africa. Thus, geographical expansion would ensure additional revenue stream and hence would further boost the top line of the pumps major.
The stock is moving downwards. The support for the stock exists at around 369 levels. The MACD indicator for the stock is moving sideways in negative zone. Investors can buy the stock at declines.
Investment Rationale
KBL, the flagship company of the Rs 3660 crore Kirloskar Group incorporated in 1920, is the largest manufacturer and exporter of Centrifugal Pumps in India. It manufactures power driven pumps, valves, turbines, electric motors, anti-corrosion products and alloy iron castings at its five manufacturing plants located in the states of Maharashtra and Madhya Pradesh. KBL has five Strategic Business Units (SBUs) namely, Industrial Pumps (IP), Projects & Engineered Pumps (PEP), Agriculture & Domestic Pumps (ADP), Valves and Others of which PEP is the highest contributor to the revenues followed by ADP and IP. Besides, the Company also has strategic tie-ups in form of JVs and subsidiaries either specializing in niche categories or in their geography. KBL is transforming itself into a total water solution company from a mere product company by spreading its wings in the domestic and global markets. KBL has reputed companies and state & Central governments of various countries as its customers. All the five SBUs of KBL have witnessed strong double-digit growth ranging from 30% to 130% and pending orders in FY2007. Robust construction & infrastructure development in the economy has been the major growth driver for KBL’s businesses. High pending orders and a buoyant outlook for the user industries makes us confident of the sustainability of the high growth rates in future. An unexciting quarterly performance in Q1 and Q2FY2008 marked by aberration has beaten the stock substantially on the bourses. We however, consider this a good buying opportunity considering the bullish outlook for the company’s performance going ahead on the back of strong order book position and a buoyant outlook for the user industries.
Key Developments and Impact:
Capacity Expansion
KBL is undertaking major capacity expansion in the current year by investing to the tune of Rs 150 crore for setting up a greenfield facility for manufacturing hydel turbines as also increasing its capacity of manufacturing large capacity pumps. The new Capex is almost entirely for building new capacities resulting in a 60% increase in its Gross Fixed Assets.
Management control of The Kolhapur Steel Ltd (TKSL)
KBL has recently taken over the management control of TKSL by inducting a majority of directors on the board of the subject company. TKSL, incorporated in 1965, is engaged in manufacturing of alloy steel castings catering to sugar, cement, steel, pumps/valves, marine, earth moving and other general engineering industries sectors. TKSL’s steel casting manufacturing capacity will be utilized for KBL’s captive consumption as well as for selling in the external market.
Financials:
Net sales during Q2FY2008 grew by 14% to Rs 318.12 crore from Rs 279.07 crore in Q2FY2007. Domestic sales grew by 28% due to robust demand scenario. However, Export sales declined by 66% due to high base year effect. Exports during the year-ago quarter were higher on account of spill over of FY2006 order into Q1FY2007. Lower Other Income restricted the Total Income growth to 8.9%. Operating Profit declined by 24.2% to Rs 22.6 crore due to sharp rise in RM and Staff cost. EBITDA declined at a sharper rate, 30.5% to Rs 42.6 crore due to lower Operating Profit coupled with lower Other Income. Higher depreciation charge, steep rise in interest cost and higher tax rate affected the already low profits. Profit After Tax was also affected by absence of extraordinary income (profit on sale of & dividend from investment in Kirloskar Copeland Limited) which was present in the year ago quarter. PAT thus declined by 88.2% to Rs 27 crore. Despite an unexciting quarterly performance in Q2FY2008, we remain bullish on the company’s performance going ahead due to strong order book position and a buoyant outlook for the user industries.
Industry Scenario:
The domestic pump market valued at Rs 3500 crore can be categorized into: agricultural, industrial, utilities and services. Being fragmented in nature, the unorganized segment accounts for 30% of market. The fortune of pumps industry depends on the performance of and outlook for its user industries namely, refining, petrochemical, fertilizer, drugs & pharmaceutical, agriculture, cement, etc. There are various types of pumps like centrifugal pumps, reciprocating pumps, diaphragm pumps, gear pumps and dosing pumps. Indian pump and valves industry is on upswing with all its industry majors registering impressive double-digit growth rate. Major demand drivers for this industry are as follows:
• Investment and thrust on agriculture, development of drinking water supply & drainage system
• Performance of the fluid handling industries like petrochemicals, etc
• Investment in infrastructure development and construction activities
Financial Analysis:
Profits affected due to higher Operating Expenses, reduced Other Income & absence of Extraordinary Income as in year-ago quarter. Net sales during Q2FY2008 grew by 14% to Rs 318.12 crore from Rs 279.07 crore in Q2FY2007. Domestic sales grew by 28% due to robust demand scenario. However, Export sales declined by 66% due to high base year effect. Exports during the year-ago quarter were higher on account of spill over of FY2006 order into Q1FY2007. Lower Other Income restricted the Total Income growth to 8.9%. Operating Profit declined by 24.2% to Rs 22.6 crore due to sharp rise in RM and Staff cost. EBITDA declined at a sharper rate, 30.5% to Rs 42.6 crore due to lower Operating Profit coupled with lower Other Income. Higher depreciation charge, steep rise in interest cost and higher tax rate affected the already low profits. Profit After Tax was also affected by absence of extraordinary income (profit on sale of & dividend from investment in Kirloskar Copeland Limited) which was present in the year ago quarter. PAT thus declined by 88.2% to Rs 27 crore.
Valuations:
At the CMP of Rs 385.95, KBL is trading at about 2.9x MCap/Sales, 3x EV/Sales and 21.7x EV/EBITDA on TTM basis.
Risks:
Financial and integration risk arising from inorganic growth initiatives: KBL in order to achieve its target of becoming one of the top 15 companies in the world is considering acquisitions in the domestic and international markets. However, acquisitions could lead to integration risk to a certain extent and financial distortion for some time.
Growth:
Healthy industrial growth, boom in construction & infrastructure development, rapid urbanization leading to escalating need of drinking & waste water management, Government’s thrust on agricultural development & irrigation and its target of “Power for all by 2012” ensures strong revenue visibility from domestic market.
KBL is one of the only three manufactures of primary moderator circulation Canned Motor Pump over 200 kW. The Indo-US nuclear treaty would open up huge opportunity for KBL. Besides, its association with Bechtel, USA will be an added advantage to win new global power projects.
KBL is expanding its global presence (70 countries at present) by focusing on countries like Africa. Thus, geographical expansion would ensure additional revenue stream and hence would further boost the top line of the pumps major.
The stock is moving downwards. The support for the stock exists at around 369 levels. The MACD indicator for the stock is moving sideways in negative zone. Investors can buy the stock at declines.
Monday, November 26, 2007
Gold sees 2-week peak as investors run for safety
Gold prices jumped to two-week highs on Monday as investors sought refuge from financial market uncertainty, the dollar slipped and oil prices held firm near record highs.
Platinum was at $1,485/1,489 an ounce from $1,468/1,473 in New York on Friday, palladium edged up to $358/363 an ounce from $353/357 and silver was at $14.99/15.04 from $14.71/14.76 in New York.
Platinum hit a record high of $1,486 an ounce on worries about falling supplies from South Africa after the country's biggest union said last week it was planning a strike against the mounting number of mine deaths.
Spot gold hit $836.70 a troy ounce, the highest since November 9 and was up at $836.15/836.85 by 5:43 a.m. EST, compared with $821.20/821.90 late in New York on Friday. Earlier this month it hit a 28-year high of $845.40.
The dollar was within striking distance of record lows against the euro as investors sold on concern about the health of the U.S. economy and expectations of further rate cuts from the U.S. Federal Reserve.
A falling U.S. currency makes dollar-denominated metals cheaper for holders of other currencies, while gold is seen as a hedge against financial market turmoil and inflation, which is often sparked by rising oil prices.
Crude oil was trading above $98 a barrel, within sight of the all-time high of $99.29 hit last.WATCHING EQUITIES
Traders expect gold prices to stay at current levels and possibly test the record high of $850 an ounce set in January 1980, but they think that another downturn in equity markets could see gold prices fall.
Over the course of this year, many investors have sold gold to cover stock market losses, while others have cut their holdings of the precious metal alongside other investments to take their portfolios back to neutral.
But for now, gold markets around the world are taking their cue from the dollar and oil prices as can be seen in the rising value of gold in other currencies such as the euro and Australian dollars.
Japanese precious metals futures rallied after traders returned from the long weekend. The benchmark October 2008 gold contract on the Tokyo Commodity Exchange ended 60 yen per gram higher at 2,906 yen.Platinum was at $1,485/1,489 an ounce from $1,468/1,473 in New York on Friday, palladium edged up to $358/363 an ounce from $353/357 and silver was at $14.99/15.04 from $14.71/14.76 in New York.
Earlier in the session, silver tracking gold hit $15 an ounce, the highest since November 15, but traders said the metal used in many industrial applications could come under selling pressure as economic growth slows.
Dr Reddys & Argenta Discovery achieve breakthrough
Leading drugmaker, Dr Reddys Laboratories and Argenta Discovery, the respiratory drug discovery and development company, announced on Monday a major milestone in their development programme targeting a novel disease-modifying approach to treat the underlying cause of certain chronic respiratory diseases including chronic obstructive pulmonary disease (COPD) and severe asthma.
Argenta`s chief executive officer, Dr Christopher Ashton said, ``Just 18 months after signing the deal with Dr Reddy`s, the team has already selected the first candidate drug to proceed into pre-clinical development. We are very excited by the exceptional progress this programme has made within such a short timeframe. With GMP material already manufactured we are on target to enter Phase I in mid-2008 and Phase II in 2009. We believe we are first-in-class for this inhaled anti-inflammatory approach to treat chronic respiratory disease.``
Under the terms of the licensing agreement announced in February 2006, Argenta and the company are collaborating to identify clinical candidates against an undisclosed but proven anti-inflammatory drug target and to develop these candidates to Phase II proof-of-concept.
Ashton added,``The programme is also likely to deliver high quality back-up candidates in the near future, which is testament to the overall strength and depth of the approach. This rapid progress towards the clinic is further validation that Argenta`s innovative `fast forward` strategy for the rapid development of new respiratory medicines against well validated, precedented drug targets has achieved significant momentum. We are building a strong pipeline and have the funds to take all our programmes as far as clinical proof-of-concept.``
Argenta`s chief executive officer, Dr Christopher Ashton said, ``Just 18 months after signing the deal with Dr Reddy`s, the team has already selected the first candidate drug to proceed into pre-clinical development. We are very excited by the exceptional progress this programme has made within such a short timeframe. With GMP material already manufactured we are on target to enter Phase I in mid-2008 and Phase II in 2009. We believe we are first-in-class for this inhaled anti-inflammatory approach to treat chronic respiratory disease.``
Under the terms of the licensing agreement announced in February 2006, Argenta and the company are collaborating to identify clinical candidates against an undisclosed but proven anti-inflammatory drug target and to develop these candidates to Phase II proof-of-concept.
Ashton added,``The programme is also likely to deliver high quality back-up candidates in the near future, which is testament to the overall strength and depth of the approach. This rapid progress towards the clinic is further validation that Argenta`s innovative `fast forward` strategy for the rapid development of new respiratory medicines against well validated, precedented drug targets has achieved significant momentum. We are building a strong pipeline and have the funds to take all our programmes as far as clinical proof-of-concept.``
Shares of the company gained Rs 10.95, or 1.82%, to trade at Rs 613. The total volume of shares traded was 26,022 at the BSE. (3.17 pm, Monday)
Rupee drops 0.28% to 39.68/USD
The Indian Rupee weakened 0.28% against the US Dollar on Nov. 26, 2007.
The Reserve Bank of India`s (RBI) reference rate for the US Dollar stood at Rs 39.68 on November 26, as against Rs 39.57, on the previous working day, i.e. November 23.
Similarly, the domestic currency gained 0.42% versus the Euro on the same day. The reference rate for Euro stood at Rs 58.79 on November 26 as against Rs 59.04 on the previous working day.
As revealed in the table below, the local currency remained steady against the Great Britain Pound (GBP) , but gained 0.44% against the Japanese Yen (taking into account 100 Yen).
Rupee Exchange Rate
Date Currency 1 GBP 100 YEN November 23, 2007 81.9594 36.74 November 26, 2007 81.9551 36.58
Source: RBI
Note: The reference rate is based on 12 noon rates of a few select banks in Mumbai. The SDR-Rupee rate will be based on this rate. The exchange rates of GBP and Japanese Yen against the Rupee are based on the reference rate for US Dollar and middle rates of the cross currency quotes at 12 noon today.
Sensex trades rangebound
The 30-share benchmark, BSE Sensex continues to trade in a rangebound manner as sustained buying is being witnessed in heavyweights.
All sectors were trading in the positive terrain.
BSE Sensex is trading strong at 19,248.59, up 395.72 points, while NSE Nifty is trading at 5,727.40, up 118.8 points (3.02 p.m).
The BSE Midcap added 1.78% and BSE Smallcap added 1.60%.
Out of the total 2,839 stocks traded at the BSE, 1,861 advanced, 920 declined, while 58 remained unchanged.
Amongst the sectoral indices, BSE Auto rose 0.65%, BSE IT rose 1.97%, BSE Power rose 2.04%, BSE Realty moved up 2.55%, BSE Metal surged 4.35% and BSE Bankex rose 1.85%.
Leaders at the BSE Sensex include: HDFC Bank which rose 6.29% to Rs 1661.00, Reliance Energy rose 4.05% to Rs 1795.05 and Hindalco rose 3.99% to Rs 195.55. Bharti Airtel, HDFC, TCS, Grasim, ONGC, Reliance Industries and Wipro.
Tata Motors which declined 0.38% to Rs 711.95 is the only loser at the BSE Sensex.
Empee Distilleries closes at 20.52% discount on BSE
Shares of Chennai- based Empee Distilleries, a manufacturer of Indian made foreign liquor, after listing on bourses today, settled at 20.52% premium on the Bombay Stock Exchange (BSE).
Shares opened at an issue price of Rs 400. It touched a high of Rs 489, a low of Rs 301. Shares finally closed at a discount of Rs 82.1, or 20.52%, at Rs 317.90. Total volume of shares traded was 5,125,457.
Promoted by MP Purushothaman, EDL is engaged in the manufacture of Indian made foreign liquor (IMFL). The company entered into the beverages and distillery Industry in the year 1984 by starting manufacture of IMFL products by means of setting up of the first distillery unit at Mevaloorkuppam, Tamil Nadu. Presently, it has two facilities to manufacture various IMFL products with total capacity of 5,992,800 cases per annum. It is one of the major suppliers of IMFL products to the Tamil Nadu State Marketing Corporation (TASMAC) and one of the top ten selling brands of IMFL 180 ML pack.
Shares opened at an issue price of Rs 400. It touched a high of Rs 489, a low of Rs 301. Shares finally closed at a discount of Rs 82.1, or 20.52%, at Rs 317.90. Total volume of shares traded was 5,125,457.
Promoted by MP Purushothaman, EDL is engaged in the manufacture of Indian made foreign liquor (IMFL). The company entered into the beverages and distillery Industry in the year 1984 by starting manufacture of IMFL products by means of setting up of the first distillery unit at Mevaloorkuppam, Tamil Nadu. Presently, it has two facilities to manufacture various IMFL products with total capacity of 5,992,800 cases per annum. It is one of the major suppliers of IMFL products to the Tamil Nadu State Marketing Corporation (TASMAC) and one of the top ten selling brands of IMFL 180 ML pack.
MRF board to consider final dividend
A meeting of the board of directors of MRF will be held Dec. 14, 2007 to consider recommendation of final dividend, if any.
The board at the same meeting will also consider, approve and publish the annual audited results for the year ended Sep. 30, 2007, along with the figures for the last quarter ended Sep. 30, 2007.
MRF reported a phenomenal jump in net profit for the quarter ended June 2007. During the quarter, the company`s net profit climbed 5.20 times to Rs 425 million from Rs 81.70 million in the same quarter, last year.
Net sales for the quarter surged 13.94% to Rs 11,334.30 million when compared with the corresponding quarter, a year ago.
Shares of the company gained Rs 105.1, or 1.57% to trade at Rs 6,785. The total volume of shares traded was 1,832 at the BSE. (12.57 p.m., Monday)
Mayur Leather board declares 8% interim dividend
The board of directors of Mayur Leather Products, at its meeting held on Nov. 26, 2007, declared interim dividend of 8% or Rs 0.80 a share of Rs 10 each for the financial year 2007-2008.
The company is engaged in manufacturing natural leather shoe uppers specialized in industrial use for international market.
Shares of the company were last trading down Rs 0.2 , or 0.71% at Rs 28.05. The total volume of shares traded at the BSE was 460.(1.13 p.m. ,Monday ).
Sensex surges 354.42 pts; IT, realty, banking, metal stock advance
The 30-share benchmark, BSE Sensex having shed some of its gains in the earlier session, continues to trade in the positive terrain. Heavy buying spree is seen across board. It touched an intraday high of 19,360.23.
All sectors were trading in the positive terrain.
BSE Sensex is trading strong at 19,207.29, up 354.42 points, while NSE Nifty is trading at 5,712.40, up 103.8 points (1.08 p.m).
The BSE Midcap added 1.59% and BSE Smallcap added 1.52%.
Out of the total 2,745 stocks traded at the BSE, 1,912 advanced, 776 declined, while 57 remained unchanged.Amongst the sectoral indices, BSE Auto rose 1.01%, BSE IT rose 2.43%, BSE Power rose 1.92%, BSE Realty moved up 2.47%, BSE Metal inched up 2.49% and BSE Bankex rose 2.05%.
Leaders at the BSE Sensex include: HDFC Bank which rose 4.82% to Rs 1638.00, TCS rose 3.18% to Rs 990.50 and ONGC rose 2.98% to Rs 1179.95. HDFC, Satyam, Reliance Energy, Bajaj Auto
SBI which declined 0.32% to Rs 2244.00 and Tata Motors declined 0.23% to Rs 713.00 were the only two losers at the BSE Sensex. Shares of Chennai-based alcoholic beverages manufacturer Empee Distilleries (BVCL) on Monday (November 26) opened for trading at its issue price of Rs 400 a share on the Bombay Stock exchange (BSE). The company is listed in the `B1` group.
The scrip touched a high of Rs 489. However, the company pared all its gains to touch a low of Rs 301.
The scrip was last trading at Rs 333.70. A total of 3202609 shares changed hands on BSE. (12.58 p.m)
The company had come out with an initial public offering (IPO) of 4.8 million shares of Rs 10 each, at price band of Rs 350-400 a share. The issue was open for subscription from Nov. 1, 2007 to Nov. 6, 2007, and was subscribed 6.87 times.
Reliance Power wants to hike IPO value
Reliance Power, which is awaiting regulatory nod for its IPO, that could be the largest in the Indian history, is willing to convert the par value of its shares to Rs 10 from the current Rs 2. Last week the company wrote a letter to Sebi to this effect, sources said.
When contacted by TOI , a Reliance Power spokesperson declined to comment.
The move on the part of the Anil Dhirubhai Ambani Group (ADAG) company comes even as its application to Sebi to allow it an exemption to go ahead with the IPO with Rs 2 par value but priced below Rs 500, was pending approval.
As per current Sebi rules, all companies tapping the market whose par value of shares is Rs 5 or less, has to take the book building route and price its shares at a minimum of Rs 500. However, as per a July amendment to the IPO rules, this does not apply to government run companies from the infrastructure sector.
Market sources said that while filing its prospectus with Sebi on October 3, Reliance Power had asked the regulator for a similar exemption as enjoyed by PSU companies in the infrastructure sector. Its reasoning was since Reliance Power is also an infrastructure company, so the regulator could allow it to price its Rs 2-par-value shares at below Rs 500 per share in its IPO.
Amid controversies that was associated with the IPO, this point was also raised if the regulator would allow an exemption to the ADAG company an exemption from the IPO rules. On the part of the company, the reasoning was that a lower par value means lower priced shares in the IPO, which in turn would attract more retail participation.
In the meanwhile, the regulator mooted the idea of allowing all companies free pricing of its shares irrespective of the par value.
While the proposal was expected to be discussed at Sebi's November 15 board meeting, it was not taken up. Since Reliance Power was awaiting clearance for IPO, and the exemption to the issue of par value was still pending with Sebi, the company wrote to Sebi about its willingness to increase par value of its shares to Rs 10 from Rs 2, sources said. If this request is accepted by Sebi, the regulatory nod for Reliance Power's IPO could come soon, they said.
When contacted by TOI , a Reliance Power spokesperson declined to comment.
The move on the part of the Anil Dhirubhai Ambani Group (ADAG) company comes even as its application to Sebi to allow it an exemption to go ahead with the IPO with Rs 2 par value but priced below Rs 500, was pending approval.
As per current Sebi rules, all companies tapping the market whose par value of shares is Rs 5 or less, has to take the book building route and price its shares at a minimum of Rs 500. However, as per a July amendment to the IPO rules, this does not apply to government run companies from the infrastructure sector.
Market sources said that while filing its prospectus with Sebi on October 3, Reliance Power had asked the regulator for a similar exemption as enjoyed by PSU companies in the infrastructure sector. Its reasoning was since Reliance Power is also an infrastructure company, so the regulator could allow it to price its Rs 2-par-value shares at below Rs 500 per share in its IPO.
Amid controversies that was associated with the IPO, this point was also raised if the regulator would allow an exemption to the ADAG company an exemption from the IPO rules. On the part of the company, the reasoning was that a lower par value means lower priced shares in the IPO, which in turn would attract more retail participation.
In the meanwhile, the regulator mooted the idea of allowing all companies free pricing of its shares irrespective of the par value.
While the proposal was expected to be discussed at Sebi's November 15 board meeting, it was not taken up. Since Reliance Power was awaiting clearance for IPO, and the exemption to the issue of par value was still pending with Sebi, the company wrote to Sebi about its willingness to increase par value of its shares to Rs 10 from Rs 2, sources said. If this request is accepted by Sebi, the regulatory nod for Reliance Power's IPO could come soon, they said.
Sunday, November 25, 2007
Indian Rupee weakens on high oil price
Indian Rupee dropped on November 22 weighed on high oil prices and speculation that the Reserve Bank of India will not hesitate to take up monetary measures to ensure price stability.
Deputy governor Rakesh Mohan, Reserve Bank of India (RBI), said that the main objective remains price stability, financial stability and maintenance of growth. All monetary instruments will be used as and when necessary for price stability.
With the crude oil prices rising nearing USD 100 a barrel, Planning Commission`s deputy chairman Montek Singh Ahluwalia said that the burden of rising oil prices in the international market need to be passed to customers and simultaneously protect the interests of the underprivileged.
Sentiments of the investors were affected on speculation that if retail oil prices rise then it may cause inflationary risks and widen the trade deficit.
India`s import bill can increase 5%, if the international oil prices increase over USD 80 a barrel followed by the current account deficit. Further, the unabsorbed prices were hitting the bottom lines of the oil PSUs.
Also the Foreign institutional investors (FIIs) remained net sellers in equities worth Rs 22,224 million (USD 550.90 million) on November 21. They bought equity worth Rs 32,466 million and sold equity worth Rs 54,690 million. Till November 21, they have been net sellers in equities worth Rs 38,395 million.
Indian Rupee closed weak at 39.53/54 a dollar, as against the previous day`s close of 39.390/395.
Deputy governor Rakesh Mohan, Reserve Bank of India (RBI), said that the main objective remains price stability, financial stability and maintenance of growth. All monetary instruments will be used as and when necessary for price stability.
With the crude oil prices rising nearing USD 100 a barrel, Planning Commission`s deputy chairman Montek Singh Ahluwalia said that the burden of rising oil prices in the international market need to be passed to customers and simultaneously protect the interests of the underprivileged.
Sentiments of the investors were affected on speculation that if retail oil prices rise then it may cause inflationary risks and widen the trade deficit.
India`s import bill can increase 5%, if the international oil prices increase over USD 80 a barrel followed by the current account deficit. Further, the unabsorbed prices were hitting the bottom lines of the oil PSUs.
Also the Foreign institutional investors (FIIs) remained net sellers in equities worth Rs 22,224 million (USD 550.90 million) on November 21. They bought equity worth Rs 32,466 million and sold equity worth Rs 54,690 million. Till November 21, they have been net sellers in equities worth Rs 38,395 million.
Indian Rupee closed weak at 39.53/54 a dollar, as against the previous day`s close of 39.390/395.
Result analysis: Jyoti net rises 5.30 times in Q3
Jyoti announced a phenomenal jump in net profit for the third quarter ended September 2007. During the quarter, the company`s net profit went up 5.30 times, to Rs 23.30 million from Rs 4.40 million in the same quarter, last year.
Net sales for the quarter rose 47.94% to Rs 459.20 million compared with the corresponding quarter, a year ago.
Operating margins improved to 13.70% during the quarter, a rise of 287.30 basis points compared with the corresponding quarter, a year ago. Net Margins, on the other hand, rose to 5.05%, during the quarter from 1.42%.
The company`s earnings per share on a trailing twelve month basis stood at Rs 5.52.
At the closing price of Rs 131.70 on Oct. 9, 2007 at the BSE, the company`s shares were valued at 23.84 times earnings on a trailing twelve month basis.
Net sales for the quarter rose 47.94% to Rs 459.20 million compared with the corresponding quarter, a year ago.
Operating margins improved to 13.70% during the quarter, a rise of 287.30 basis points compared with the corresponding quarter, a year ago. Net Margins, on the other hand, rose to 5.05%, during the quarter from 1.42%.
The company`s earnings per share on a trailing twelve month basis stood at Rs 5.52.
At the closing price of Rs 131.70 on Oct. 9, 2007 at the BSE, the company`s shares were valued at 23.84 times earnings on a trailing twelve month basis.
| As at | September 2007(3) | September 2006(3) | %Change |
| Rs million | Rs million | ||
| Sales of Products/Services | 459.20 | 310.40 | 47.94 |
| Other Income | 2.00 | 0.40 | 400.00 |
| Total Income | 461.20 | 310.80 | 48.39 |
| Total Expenses | (396.30) | (276.80) | 43.17 |
| Stock Adjustments | 0.00 | 0.00 | |
| OPBDIT | 62.90 | 33.60 | 87.20 |
| Operating Margin(%) | 13.70 | 10.82 | 287.30 bp* |
| Interest | 37.30 | 25.70 | 45.14 |
| Depreciation | 4.10 | 3.50 | 17.14 |
| ExtraOrdinary Items | 0.00 | 0.00 | |
| Prior Period Adjustments | 0.00 | 0.00 | |
| Provision for Tax | 0.20 | 0.40 | (50.00) |
| After Tax Profit | 23.30 | 4.40 | 429.55 |
| Net Margin(%) | 5.05 | 1.42 | 363.63 bp* |
| EPS in reported Period (Rs) | 1.84 | 0.00 |
Edelweiss Capital IPO subscribed 13.79 times on penultimate day
Initial public offering of Mumbai-based financial services provider, Edelweiss Capital (ECL) received 13.79 times subscription on penultimate day. It received 115.68 million bids as against issue size of 8.38 million shares. A total of 3.31 million bids were received at the cut off price.
The issue is open till November 20. The price band has been fixed between Rs 725 to Rs 825 a share. The issue would constitute 11.19% of the post issue paid-up capital of the company. Shares of the company, offered through this IPO, are proposed to be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Kotak Mahindra Capital, Citigroup Global Markets India and Lehman Brothers Securities will help the company to raise maximum of Rs 6,918.57 million via this equity issue.
CRISIL assigned a CRISIL IPO Grade,`4/5` (pronounced `four on five`) to the proposed initial public offer of Edelweiss Capital (ECL). This grade indicates that the fundamentals of the issue are above average, relative to other listed equity securities in India.
Incorporated in 1995, ECL is a diversified financial services company in India promoted by Rashesh Shah and Venkatchalam Ramaswamy. The company is predominantly engaged in institutional equities broking, investment banking and proprietary arbitrage trading activities. It also has a small presence in insurance broking, asset management and investment advisory services, wealth management and wholesale financing activities. As of September 2007, the company had over 150 institutional investors actively doing business. It had more than 5,000 active accounts under private client brokerage, which offers brokerage and advisory services to high networth and other individuals through 38 offices in 19 cities as of September 2007.
The issue is open till November 20. The price band has been fixed between Rs 725 to Rs 825 a share. The issue would constitute 11.19% of the post issue paid-up capital of the company. Shares of the company, offered through this IPO, are proposed to be listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Kotak Mahindra Capital, Citigroup Global Markets India and Lehman Brothers Securities will help the company to raise maximum of Rs 6,918.57 million via this equity issue.
CRISIL assigned a CRISIL IPO Grade,`4/5` (pronounced `four on five`) to the proposed initial public offer of Edelweiss Capital (ECL). This grade indicates that the fundamentals of the issue are above average, relative to other listed equity securities in India.
Incorporated in 1995, ECL is a diversified financial services company in India promoted by Rashesh Shah and Venkatchalam Ramaswamy. The company is predominantly engaged in institutional equities broking, investment banking and proprietary arbitrage trading activities. It also has a small presence in insurance broking, asset management and investment advisory services, wealth management and wholesale financing activities. As of September 2007, the company had over 150 institutional investors actively doing business. It had more than 5,000 active accounts under private client brokerage, which offers brokerage and advisory services to high networth and other individuals through 38 offices in 19 cities as of September 2007.
Saturday, November 24, 2007
Brokers Outlook: Market expected to open positive on Monday
Anuj Anandwala, analyst, KJMC Capital Services, said that market had a extremely volatile session today (November 23), but closed on a strong note. Sensex was up 326 points at 18,853 and Nifty ended up 89 points at 5,608.
Realty, power and metal sector outperformed markets today. Three bomb-blasts at UP affected market only for few minutes, said Anuj. Overall, it was a troubled week for the markets. Pressure was there due to weak global markets, recession in US economy and Rupee Dollar issue. In this entire week selling was seen at higher levels pulling markets down.
He expects an upside opening on Monday as the government has sanctioned pension funds.
Since banking sector ended weak, some buying can be seen in them and movement would be there in fertilizer stocks. Markets are likely to trade above 19,000 on Monday, he added.
Rohit Mehta, Head Equities, Dimpi Investments, stated that after a pretty volatile session market closed firm. Realty and power stocks performed well at the bourses.
He says that overall market looks good and expects a positive opening on Monday but will continue to take cues from other global markets. Inflows are still strong, International markets are not much worried about recession in US and sub-prime crisis. There are no major outflows seen from domestic fund houses, which is a positive sign for the economy.
One can do value picking from FMCG and pharma sector and also from IT which has been battered down, he added.
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