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The Federal Reserve, mixing concern about the feeble economy with worries about rising inflation, reduced short-term interest rates Wednesday for the seventh time since September, while signaling a pause in any additional rate cuts for now. The Fed’s action brought the federal funds rate — the rate it charges banks for overnight loans — to 2 percent, from 2.25 percent, the lowest level since November 2004. It defended that step as necessary to counter the ailing housing sector and the “considerable stress” shadowing financial markets. The move followed new indications that the economy remained fragile at best. The Commerce Department reported early Wednesday that the economy expanded only 0.6 percent on an annualized basis in the first three months of 2008, short of an overall downturn but still far from healthy. The Dow Jones industrial average, which was trading up 178 points shortly after the Fed’s announcement, dropped sharply in late trading, ending down 11.81 points at 12,820.13.

(The Hindu Business Line 1st May 2008) In a blow to Tata Teleservices and Reliance Communications, the Supreme Court has asked the two companies to pay up Rs 700 crore to Bharat Sanchar Nigam Ltd as access deficit charges on limited mobile phones. The two companies had argued that since limited mobile phones were being provided under the fixed line telephone licence, they were not liable to pay the charges to BSNL. However, the apex court has upheld the order given by the telecom tribunal in 2005 that limited mobile phones could not be treated as fixed line phones and is a wireless mobile service and, therefore, the companies will have to pay the charges. Though ADC has been abolished now, in 2005 the Government had said that fixed line service providers need not pay the charges. Following the court’s order, the two companies have to pay the outstanding charges to BSNL for the past few years. ADC was a levy imposed on private operators for funding BSNL’s rural telephone schemes. A benc

(The Hindu Business Line 1st May 2008) Basmati rice exporting companies’ stocks fell on Wednesday as the market reacted to Tuesday’s announcement of imposition of an export tax on the item. Kohinoor Foods Ltd lost 6.31 per cent; LT Overseas Ltd (4.93 per cent), KRBL (4.97 per cent) and REI Agro shed 2.73 per cent on Wednesday. “More than half of their profits are from exports, so they are bound to take a hit under the new regulation,” said Mr Ashwani Agarwalla, Research Analyst, PINC Research. In a move to curb inflation and secure food supplies domestically, the Government decided to levy an export tax of Rs 8,000 a tonne on basmati rice, but brought down the minimum export price to $1,000 per tonne from $1,200. “These companies will suffer because they have a good realisation abroad and the operating profits and revenue will get affected,” said Mr Ram Patnaik, Research Analyst, Religare Research.Exports unviable India’s share in the world’s rice exports was 15.8 per cent in 2005, acc

Healthy growth across business segments, coupled with an expanded subscriber base, has propelled Reliance Communications to record a 46.8 per cent rise in net profit for the quarter ended March 2008. The after-tax profit increased to Rs 1,503 crore from Rs 1,024 crore in the year-ago period. Net revenues for the quarter were up by 35 per cent at Rs 5,311 crore (Rs 3,937). The company reported the maximum growth in its broadband business, which grew by 54.5 per cent to Rs 510 crore from Rs 330 crore. “RCom had a record year and we are confident of improved performance in the future,” said Mr Anil Ambani, Chairman, RCom. Responding to reporters query, Mr Ambani said the company incurred a mark-to-market loss of only Rs 18 crore in foreign exchange derivative transactions for the quarter. “We have disappointed many experts who thought that our forex losses could be anywhere upward of Rs 300 crore, Mr Ambani said. RCom imports equipment for its telecom business and hence it employs a proac

Housing Development Finance Corporation’s net profit for the fourth quarter rose 40 per cent, buoyed by higher interest margin and a one-time gain from sale of shares in a subsidiary. Net profit for the quarter ended March 31, 2008 amounted to Rs 768.12 crore, against Rs 550 crore in the corresponding year-ago quarter. The net profit is inclusive of a one-time gain of Rs 202 crore from the sale of shares in HDFC Ergo General Insurance. Profit before exceptional items and tax rose 31 per cent to Rs 889 crore, against 676 crore in the previous year. The interest spread on loans improved to 2.32 per cent in 2007-2008, from 2.18 per cent the previous year, said Mr Conrad D’souza, Senior General Manager, Treasury, HDFC. The cost of funds increased to 8.93 per cent, against 7.49 per cent. Total income for the quarter stood at Rs 2,320 crore (Rs 1,734 crore), 34 per cent higher. Interest income Interest income increased to Rs 2,240 crore (Rs 1,527 crore). However, profit on sale of investment

(The Hindu Businessline 30th April 2008) Software companies, especially the mid- and small-sized ones, can now breathe easier with the Government initiating a move to extend the Software Technology Parks of India (STPI) scheme by one more year. The proposal to extend the STPI scheme by a year till March 2010, may allow companies to continue with present tax incidence for one more year. The benefit is more pronounced for mid-tier and smaller IT services, given that they could not have easily used the option of moving to SEZs to keep their tax rates under check. Tax benefits Companies such as MindTree, Zylog Systems and Hexaware currently have a tax incidence of between 10 per cent and 12 per cent, around the MAT rate. They were all staring at a jump in incidence to 20-22 per cent, once the tax benefits under Section 10A (relating to STPI) were removed. In light of uncertain IT spends of global clients and pricing pressures, which by themselves present challenges, a higher tax incidence

(Business Standard 28th April 2008) Pyramid Saimira Reco price: Rs 330 Current market price: Rs 362.45 Target price: Rs 557 Upside: 53.68% Brokerage: Religare Welspun Gujarat Stahl Rohren Reco price: Rs 409 Current market price: Rs 422.70 Target price: Rs 500 Upside: 18.29% Brokerage: Asit C Mehta Megasoft Reco price: Rs 95 Current market price: Rs 96.15 Target price: Rs 158 Upside: 64.33% Brokerage: Kotak Securities Transformers & Rectifiers India Reco price: Rs 457 Current market price: Rs 453.10 Target price: N.A. Brokerage: Edelweiss Lupin Reco price: Rs 550 Current market price: Rs 576.8 Target price: Rs 800 Upside: 38.7% Brokerage: IDFC-SSKI India

Realty stocks rode high as the credit policy left repo and reverse repo rates unchanged. The BSE-Realty index rose 5.90 per cent and was the highest index gainer on the bourse. Realty major DLF jumped 8.57 per cent to Rs 725.85, Unitech Ltd was up by 8.18 per cent at Rs 317.50 and HDIL gained 6.61 per cent to Rs 775 on Tuesday. “The market was expecting interest rate changes; but, the RBI credit policy has maintained status quo on the repo and reverse repo rates. As this sector is an interest-sensitive sector, it will definitely benefit from the unchanged interest rates, which will not cause much change in the liquidity flow,” said Mr Shailesh Kanani, Realty analyst, Angel Broking Ltd.Volatile sector The strong rally in most realty stocks was a reaction to a favourable credit policy, but some marketmen felt that it was too premature a reaction. As the realty sector is a high beta sector (highly volatile sector, where the stock of that sector will fall more than the benchmark index and

The Sensex opened 35 points higher at 17,051. Nervousness in morning trades saw the index slip marginally into red to a low of 17,012. However, positive announcements - RBI leaving repo rates unchanged and FM extending tax holidays on STPI - triggered aggressive buying in financial and technology stocks. The Sensex rallied to a high of 17,425, and finally ended with a gain of 362 points at 17,378. The market breadth was positive - out of 2,770 stocks traded, 1,585 advanced, 1,123 declined and 62 are unchanged today. The NSE Nifty surged 105 points to end at 5,195. Financial stocks ended with smart gains after the RBI left repo and reverse repo rates unchanged. The central bank, however, hiked CRR by 25 bps. HDFC soared 6% to Rs 2,881. SBI rallied 3.3% to Rs 1,794, and HDFC Bank added 2% to Rs 1,548. Technology stocks, too, rallied smartly after the Finance minister extended tax holiday for STPI by a year to March 2010. Satyam zoomed over 8% to Rs 479. Infosys surged over 5% to Rs 1,751

IFCI Ltd has posted a loss of Rs 4.25 crore for the quarter ended March 31, 2008 as compared to a net profit of Rs 66.84 crore for the quarter ended March 31, 2007. The total income has decreased from Rs 109.40 crore for the quarter ended March 31, 2007 as compared to Rs 45.13 crore for the quarter ended March 31, 3008. IFCI has posted a profit after tax (PAT) of Rs 102.05 crore for the year ended March 31, 2008 as compared to Rs 89.8 crore in the corresponding period last year. The total income increased from Rs 204.66 crore to Rs 211.14 crore in the same period.

The RBI on Tuesday hiked the cash reserve ratio (CRR) by 25 basis points to suck out excess liquidity, a move aimed at tempering demand for loans and easing inflation from three-year highs. A cash reserve ratio (CRR) is the percentage of bank reserves to deposits and notes. Although it left key short-term lending and borrowing rates (repo and reverse repo) and Bank Rate unchanged, it hiked Cash Reserve Ratio for the second time in a fortnight to 8.25 per cent. Today's increase would suck out over Rs 9,000 crore excess funds from the banking system, while the 50 basis points increase in CRR announced on April 17 was aimed at squeezing out Rs 18,500 crore from the system. The move is aimed at fighting inflation, which is ruling at an intolerable 7.33 per cent. The high rate has prompted the RBI to revise its inflation comfort band from the earlier 5 per cent to 5.5 per cent. "Inflationary pressures from international food and energy prices appear to have amplified and by current

Two crucial events loom up this week. First, the RBI releases its Policy Statement for 2008-9 on April 29. The US Federal Reserve’s Federal Open Market Committee (FOMC) meets next on April 30 to decide interest rates. Indian markets are on RBI watch and global markets Fed watch. The RBI’s pre-emptive 50 bps Cash Reserve Ratio (CRR) hike a week ahead of the annual policy statement has taken out the excitement. It is now clear that policy rates do not count as much as the CRR. The RBI realised this in late 2006 when it found a complete disconnect between its repo rate and overnight money market rates. The CRR was a more effective tool to drive market rates towards policy rates. Since then there is greater CRR reliance to align the two rates.Little choice Rising inflation leaves the Indian central bank little choice but to keep pursuing its tightening mode. The latest data on industrial production hardly suggest a significant slowdown. India seems to have weathered the US economic and fin

(The Hindu Business Line 29th April 2008) The new BHEL-NTPC joint venture could virtually create a brand new player in the equipment manufacturing space in the country. The new venture, christened NTPC-BHEL Power Projects Pvt Ltd., is likely to aim at setting up greenfield facilities with an annual capacity for manufacturing generation sets totalling 5,000-MW by 2012. The venture could set up manufacturing base across three possible sites — Visakhapatnam for boilers, Pune for turbines and a possible site in West Bengal for balance-of-plant equipment, according to Government sources. “BHEL is set to take over Visakhapatnam-based Bharat Heavy Plate and Vessels Ltd. and hence that could be the logical location for making boilers. The engineering hub of Pune could well be the location for manufacturing turbines while possible sites in West Bengal are being considered for setting up a facility for balance-of-plant equipment, including coal handling plants,” a Government source involved in t

The Sensex opened with a positive gap of 126 points, and soon touched a high of 17,272. Profit-taking at higher levels forced the index pare gains and slip into the negative zone. The index after gyrating between zones drifted to a low of 16,979 - down 293 points from the day's high - as the day progressed. The Sensex finally ended with a loss of 110 points at 17,016. The market breadth was marginally negative - out of 2,740 stocks traded, 1,371 declined, 1,297 advanced and 72 were unchanged today. The NSE Nifty shed 22 points to close at 5,090. Reliance Energy surged 5% to Rs 1,426. Jaiprakash Associates rallied over 2% to Rs 251. Reliance Communications and HDFC Bank advanced 1.3% each to Rs 585 and Rs 1,518, respectively. Cipla plunged over 4% to Rs 215. Tata Steel dropped over 3% to Rs 778. ICICI Bank shed 2.3% at Rs 895. ACC and Maruti slipped 2% each to Rs 767 and Rs 722, respectively. Wipro declined 1.8% to Rs 458, and Hindalco shed 1.5% at Rs 186. Infosys, Ambuja Cements a

Anil Ambani group firm Reliance Natural Resources (RNRL) today announced a stand alone net profit of Rs 68.6 crore for financial year ended March, over two-fold growth from a year ago. The firm had a net profit of Rs 28.87 crore for the fiscal ended March 31, 2007, RNRL said in a filing to the Bombay Stock Exchange (BSE). The total income rose to Rs 367.31 crore for the fiscal ended March 31, from Rs 243.08 crore in the corresponding period last year. The figures for the year ended March 31, 2007 are unaudited, while that of March 31, 2008 are audited, the filing added. RNRL has announced a consolidated net profit of Rs 68.58 crore for the fiscal ended March 31, 2008. Further, the register of members and share transfer books of the company would remain closed from July 29 to August 5 for the purpose of the annual general meeting, it added. Shares of RNRL closed at Rs 123.60 on the BSE, down 0.28 per cent.

Bank suffers MTM losses on credit derivatives exposure; Q4 net profit rises 39 per cent. ICICI Bank today said it has made additional provisions of around $45 million (Rs 180 crore) for mark-to-market losses (MTM) on its credit derivative obligations (CDOs) and credit-linked note (CLN) portfolio during February and March 2008. This takes the bank's total provision for these instruments to $170 million (Rs 680 crore) during the year. "We have no sub-prime assets but only exposure to CDOs and CLNs. We have seen no deterioration of our portfolio. The provisioning is only for the MTM losses due to widening of credit spreads. In fact, post March 31, the credit spreads have tightened and we have made a saving of $16 million (Rs 64 crore)," Chanda Kochhar, joint managing director and chief financial officer, said. For the fourth quarter of 2007-08, India's largest private bank reported a 39 per cent growth in net profit to Rs 1,150 crore, as against Rs 825 crore in the co

(Business Standard 28th April 2008) ANG Auto's niche focus in the trailer segment translates into major upsides in the medium-term. The share prices of auto component companies have nosedived over the last one year and are currently trading close to their 52-week lows. The rise in interest rates and the hike in input costs have raised doubts about the ability of these firms to post robust numbers going forward. In this context, companies which are operating in a niche and are dominant in their product segment will be able to better overcome these external shocks than commodity plays. Delhi-based ANG Auto, which makes auto components and trailers, is one such stock going at an attractive price. Integration and expansionTo cater to the increasing demand for trailers (freight carriers attached to motor vehicles), estimated at 24,000 for FY08, the company is eyeing scale as well as integration. It plans to hike its manufacturing capacity of trailers from 300 per month currently to

(The Hundu Busienss Line 27th April 2008) The sector, not long ago, was the symbol of India’s consumption story, but today is a key contributor to the industrial slowdown. India’s automobile industry has had nothing much to cheer about in the just concluded financial year. Battered by model fatigue and uninviting interest rates, two-wheelers ended the year with a decline of about 8 per cent in sales compared to the April 2006-March 2007 period. Stiff competition from the sub-one tonne LCVs (light commercial vehicles) and spiralling costs of financing have also seen three-wheeler sales lose steam. Sale of three-wheeled goods carriers in 2007-08 fell as much as 20 per cent on a year-on-year basis. And there was little respite for the MHCV (medium and heavy commercial vehicles) segment as goods carriers registered a six per cent fall in sales. In this turbulent year, the passenger car segment was the only bright spot, growing by about 12 per cent; but this too, was a moderation from the 2

The Hindu Business Line Investors can retain their holdings in Birla Top 100 Fund. The fund has underperformed the benchmark S&P CNX Nifty and the category average sharply over a one-year period and since its inception as well. Large cap focussed peers such as DSPML Top 100 Equity Fund and HDFC Top 200 Fund have managed a much better performance during this period. It is best to evaluate the performance of any fund over a complete market cycle, encompassing a bull as well as bear phase. Seen in this backdrop, as this fund has a relatively short track record, it is advisable for investors to wait and watch for an improvement in performance before making any fresh commitments. However, the fund’s sedate performance so far suggests that if this happens to be your only equity fund, you should consider a switch into other large cap funds. Birla Sun Life Frontline Equity may be a good option. Suitability: The fund predominantly invests in stocks of the top 100 companies as measured by ma

(The Hindu Business Line 27th April 2008) Investments with a two-three year perspective can be considered in the stock of PSL. The company’s strengthening order book, expansion in capacities and healthy demand from user industries also suggest strong growth prospects. With an installed capacity of over a million tonnes per annum, PSL appears best placed to benefit from the rising global acceptance of helical pipes. At the current market price of Rs 320, the stock trades at about 10 times its likely FY-09 per share earnings on a fully diluted basis. This appears fairly reasonable considering PSL’s growth potential. Investors, however, can consider buying the stock in lots given the broad market volatility. PSL has the largest HSAW (helical submerged arc welded) pipe manufacturing facility in the country. Further, the company also has an integrated pipe coating and an in-house engineering facility that makes pipe manufacturing and coating equipment. PSL enjoys a significant share of the

Reliance Power Ltd posted a profit after tax of Rs 94.66 crore for the year ended March 2008 on a total income of Rs 132.86 crore for the year ended March 31, 2008. The Group has posted a profit after tax & minority interest of Rs 85.38 crore for the year ended March 2008. Total income for the year was Rs 132.89 crore.

CESC Ltd posted 41 per cent rise in net profit at Rs 86 crore for the fourth quarter ended March 31, 2008 as compared with a profit of Rs 61 crore shown during the same quarter of previous year. Total income for the quarter has increased to Rs 680 crore from Rs 574 crore in the year-ago period. For the year ended March 2008, the company recorded a net profit of Rs 354 crore as compared to Rs 301 crore during previous year. Total revenue has increased to Rs 2,898 crore from Rs 2,577 crore during fiscal year 2007.

(The Hindu Business Line 28th April 2008) Reliance Industries Ltd (RIL) is set to acquire majority stake in an oil block in Peru. The company is understood to have recently inked an agreement with Pan Andean for acquiring stake in Block 141 in Peru. Sources told Business Line that an agreement has been signed between RIL and Pan Andean and now necessary approvals from higher authorities in Peru is awaited. Pan Andean Resources explores and produces oil and gas in South America and the Gulf of Mexico. Farm-in concept Indications are that RIL is likely to acquire 90 per cent stake. Block 141 in the Lake Titicaca area of Peru is a large early stage oil exploration play. RIL has been pursuing contracts for farm-in activities in two oil blocks in Peru. Farm-in concept is a well accepted practice in the international scenario. Under this practice, a company does not acquire the property directly, but rather develops the oil and natural gas properties by taking participating interest in the b

A provision for anticipated losses on certain projects amounting to Rs 109 crore has drastically pulled down the net profit of Siemens Ltd for the quarter ended March 31, 2008, compared to the year-ago period. Siemens reported a net profit of just Rs 1.6 crore against Rs 108 crore in the year-ago period. Dr Armin Bruck, the company’s Managing Director, said, in the quarter, the company’s profitability took a “one-time hit” mainly due to the provision that it made for anticipated losses on certain projects. “However, we have already charted out corrective measures for better risk management in future. Going forward, we are confident that we will be able to deliver results within the planned corridor for the year-end,” he said. The company said in accordance with the established practice in relation to construction contracts, contract revenue is calculated based on the ratio of costs incurred to total estimated costs to complete the project. “Consequent to the revision of the costs to co

(The Hindu Business Line 25th April 2008)The telecom sector saw renewed buying interest on Friday, after going through major corrections during the market meltdown that started in January. Bharti Airtel gained 9.61 per cent to close at Rs 925.30. During the intraday trade, the scrip gained more than 11 per cent, touching a high of Rs 941.90. Reliance Communications shares surged 8.31 per cent or Rs 44.25 from its previous close to end the day at Rs 577.05. Idea Cellular rose 4.47 per cent to close at Rs 107.55. Among other telecom stocks that gained were, Spice Communications (1.15 per cent), MTNL (3.31 per cent), Tata Teleservices Maharashtra (4.23 per cent) and Tata Communications gained 1.48 per cent. Subscriber additions Telecommunications analysts say that the sector has received a shot in the arm from the strong numbers declared by the heavy weights in the sector. “Strong subscriber additions, declining losses and improved usage are some of the positives for this sector now,” sai

The battle lines between cement companies and the Government seem to have been drawn. Cement majors ACC and Ambuja Cement on Friday accused the Government of helping cement companies in Pakistan by allowing duty free imports rather than facilitating Indian companies. Mr A.L. Kapoor, Managing Director of Ambuja Cement, said: “The Government withdrew both Customs duty and 18 per cent countervailing duty on cement imports. On the other hand, Indian companies pay an excise duty of Rs 600 a tonne. Pakistan companies exporting to India do not pay any duty in their country either. This has put them in an advantageous position.” If the Government gives Indian companies 35 per cent abatement on excise duty as recommended by the Commerce Ministry, it would bring down prices by Rs 300 a tonne immediately, he said. Mr Sumit Banerjee, Managing Director of ACC, said despite all the concessions, the Pakistani companies had increased prices from $74 per tonne (free-on-board) to $83 a tonne. While maki

Inflation rate grew by a faster 7.33% in the week ended 12 April 7.14% in the previous week, on higher prices of food items, including jaggery and fish. The price rise is expected to prompt Reserve Bank of India (RBI) to further tighten money supply in its annual credit policy slated to be announced on 29 April. RBI has already increased CRR, the mandatory amount that banks keep with the central bank, by 0.5% check money supply. The hike will come into effect in two tranches on 26 April and 10 May. The annual rate of inflation, which dipped from a 40- month high of 7.41% to 7.14% for week ended 5 April, again rose despite a host of measures announced by the government to control prices. Inflation for the corresponding period last year was at 6.34%. The prices of certain essential commodities like vegetables, cereals, pulses and edible oils, however, softened during the week. The average rate of inflation, according to the official data, worked out to be 4.51% during 2007-08 as compared

The Sensex opened with a positive gap of 61 points at 16,782. Agressive buying in telecom and financial stocks helped the index cross the 17,000-mark today. The Sensex rallied to a high of 17,151, and finally ended with a gain of 405 points at 17,126. The market breadth was marginally negative - out of 2,763 stocks traded, 1,459 declined and 1,248 advanced today. The NSE Nifty moved up 112 points to close at 5,112. Bharti Airtel zoomed 9.6% to Rs 925. Reliance Communications (RCom) soared 8.3% to Rs 577. ICICI Bank surged 4.5% to Rs 916. HDFC and SBI rallied 4% each to Rs 2,694 and Rs 1,750, respectively. HDFC Bank advanced 3.5% to Rs 1,498. Reliance Energy gained 4% at Rs 1,359. Wipro moved up 3.7% to Rs 466, and Tata Steel added 3.5% to Rs 803. ONGC advanced over 2% to Rs 1,055. Reliance and ITC gained 1.7% each at Rs 2,625 and Rs 213, respectively. Satyam, NTPC and Larsen & Toubro were up over 1% each at Rs 445, Rs 193 and Rs 2,971, respectively. BHEL and Mahindra & Mahindra

United Bank of India (UBI) today reported 19.5 percent rise in net profit at Rs 318.95 crore in the last financial year ending in 31 March, 2008 against Rs 267.28 crore reported a year ago. PK Gupta, CMD of UBI admitted that the bank had taken a hit of Rs 82 crore under AS-15 norms apart from the other provisioning norms.In the period between January-March 2008 the net profit of the bank stood at Rs 11.7 crore.

ABB Ltd recorded 35.85 per cent increase in net profit at Rs 117.69 crore for the first quarter ended March 31, 2008 as compared to Rs 86.63 crore during the same quarter last year. Total income for the quarter has increased to Rs 1,553.80 crore from Rs 1,327.61 crore in the year-ago period.

Bharti Airtel Ltd posted a net profit of Rs 1,792.30 crore for the fourth quarter ended March 31, 2008, an increase of 39 per cent as against Rs 1,286.84 crore during the same quarter in 2007. Total revenue for the quarter has increased to Rs 7,446.82 crore from Rs 5,250.77 crore in the year-ago period. For the year ended March 2008, the company recorded a net profit of Rs 6,244.20 crore as compared to Rs 4,033.22 crore in 2007. The revenue for the year 2008 has increased to Rs 25,939.37 crore from Rs 17,887.99 crore shown during previous year.

The Hindu Business Line recommends a buy in Parsvnath Developers from a short-term perspective. It is evident from the charts of Parsvnath Developers that the stock was on medium-term downtrend from its 52-week-high of Rs 598 (touched in January 2008) to its 52-week-low of Rs 170 touched in March. The stock has also crossed over the 21-day moving average recently. We notice that there is an increase in volume over the past three trading sessions. The daily momentum indicator is likely to enter the bullish region and weekly momentum indicator has entered the neutral region from the bearish zone. We notice a positive divergence in the moving average convergence and divergence and it is constantly rising towards the positive territory. We expect the stock to move up to our price target of Rs 260 in the short-term. Investors can buy the stock, while keeping the stop-loss at Rs 214.

Goldman Sachs last week picked up an 8.16 per cent stake in New Delhi Television Ltd (NDTV). This comes when an open offer by the company is around the corner. Mr Prannoy Roy and his wife Ms Radhika Roy, promoters of NDTV, had, end of last year, announced an open offer to acquire 20 per cent equity stake i.e 12,525,446 shares of the company for Rs 438.98 a share, worth Rs 550 crore.Open offer The open offer followed the promoters’ acquisition of 7.73 per cent stake from GA Global Investments in December. Mr Prannoy Roy bought the stake of 48,36,000 shares from the PE Fund. This increased the stake of the promoters to 61 per cent from 53.3 per cent in the company. The open offer was supposed to commence on February 12 and close on March 3, 2008 but has been delayed. After the acquisition of 7.73 per cent stake in the company by the promoters from GA Global Investments Ltd, a foreign company, NDTV had informed the BSE that the limit to the extent of 7.73 per cent stands released and acco

(The Hindu Busienss Line 25th April 2008) More buybacks of shares have been announced during the four months of 2008 than the full-year of 2007, when there was a bull run in the market. So far, eight companies — Reliance Energy, Great Offshore, Sasken Communications, Surana Telecom, Madras Cements, Patni Computers, Gujarat Flourochemicals, Polaris Software Lab — have announced buyback plans. Against this, there were only two prominent buyback announcements last year. The big correction in stock prices, during the recent market meltdown, seems to have prompted the buyback plans. “These companies are sending signals that their intrinsic value is more than what is indicated by their market price. I would not be surprised if there are more buybacks,” said Mr Srinivasan Subramanian, Head, Investment Banking, Enam Financial Consultants. “Buyback indicates that there is fair amount of value in the company shares and reflects companies own perspective of the business in the next 2-3 years,” sa

(The Hindu Business Line 25th April 2008) The Anil Ambani-controlled Reliance Communications has acquired 90 per cent stake in a UK-based WiMax operator, ‘eWave World’. RCom intends to invest $500 million in eWave to build and acquire WiMax networks in the emerging markets of Asia, Europe, Latin America and Africa, Mr Punit Garg, CEO of Reliance Globalcom, the global arm of RCom, said at a news conference today. RCom will also use this acquisition as a springboard to extend WiMax services to 50 countries by 2012, he said. Though the companies refused to disclose the financial details of the acquisition citing a non-disclosure agreement, it is learnt that RCom will pay $110 million for the 90 per cent stake. eWave World is a telecom operator focused on wireless telephony services using the WiMax technology standard, especially in emerging geographies. The company has already won WiMax licences in 18-20 countries. As an immediate benefit, Reliance will be able to launch WiMax services in

(The Hindu Busienss Line 25th April 2008) Soaring depreciation costs combined with currency derivatives loss have led Maruti Suzuki to post a decline in its net profit for the fourth quarter ended March 2008, even as its net sales grew. However, for the fiscal 2007-08, the company recorded a healthy increase in its profits as well as sales. The board of directors recommended a dividend of 100 per cent for 2007-08 as against 90 per cent in the previous fiscal. Maruti said that the newly adopted depreciation policy since April 1, 2007, under which the company made an additional provision of Rs 212 crore for fiscal 2007-08, impacted the profit figures for the quarter. The depreciation policy has brought down the lifecycle of its tools and equipment to eight years instead of 13 years and for dies four years instead of five. "The primary reason for changing the depreciation policy is because the lifecycle of various products is now getting shortened. So new tools and technologies are r

Private sector lender HDFC Bank on Thursday posted a net profit of Rs 471.1 crore for the quarter ended March 31, 2008, up by 37.1 per cent from Rs 343.57 crore in the corresponding quarter last year. The bank earned a total income of Rs 3,505.5 crore for the quarter as against Rs 2,321 crore in the corresponding quarter, an increase of 51.2 per cent, the bank said here in a release. For FY'08, the net profit stood at Rs 1,590.2 crore as against Rs 1,141.45 crore, up by 39.3 per cent. Total income for the year stood at Rs 12,398.2 crore as against Rs 8,164.2 crore in the previous year. The bank's board has recommended an enhanced dividend of 85 per cent for the year ended March 31, as against 70 per cent for the previous year, subject to approval by shareholders. The net interest income for the fourth quarter increased by 55.7 per cent to Rs 1,642.1 crore, driven by average asset growth of 50.3 per cent and a core net interest margin of around 4.4 per cent. The other income of

The Sensex opened with a positive gap of 67 points at 16,796. After advacing to a high of 16,844, the index slipped into the red to 16,668 - down 176 points from the day's high. The Sensex was trading in the red in afternoon trades and finally ended at 16,721 points, 23 points higher. The market breadth was marginally negative - out of 2,785 stocks traded, 1,266 advanced, 1,464 declined and 55 were unchanged today. The NSE Nifty settled with a loss of 23 points at 4,999. Hindustan Unilever was the biggest gainer, up 3.12% to Rs 249.35. The IT pack was also in demand. Infosys gained 2.86%, Satyam was up 2.06% and Wipro rose 1.46%. ICICI Bank, L&T, Jaiprakash Associates and Bhel gained over 1%. Reliance Industries gained 0.14%, while Tata Motors was up 0.54%. TCS remained unchanged. ACC was the biggest loser on the Sensex, down 5.5% to Rs 798. Reliance COmmunication and Reliance Energy were down 2.89% and 2.73%. NTPC and Tata Steel declined 2.68% and 2.65% respectively. Maruti w

(Live mint.com 14th April 2008) For the first time this year, foreign institutional investors (FIIs), the main drivers of Indian equity markets, turned net buyers (in terms of value, they bought more stocks than they sold) for six days in a row, between 15 April and 22 April, raising hopes among analysts that the worst could be over for the Indian market and that some large investors have started a new phase of buying. However, such hopes dimmed a bit after FIIs turned net sellers on Wednesday. After recording its lifetime high of 21,206.77 on 10 January, the Bombay Stock Exchange’s (BSE) benchmark index, Sensex, slipped around 31% to 14,677.24 on 18 March. Since then, the index has recovered 13.77% to close at 16,698.04 on Wednesday. With this, the Sensex has fallen around 18% since the beginning of the year, recovering a large portion of its losses. RENEWED INTEREST “There is an upturn,” said Rashesh Shah, founder and chief executive of publicly traded institutional brokerage Edelwei

Container Corporation of India Ltd (CCI) posted a net profit of Rs 202.98 crore for the fourth quarter ended March 2008, showing an increase of 19.90% as against Rs 169.24 crore during the same quarter in 2007. Total income for the quarter has increased to Rs 953.10 crore from Rs 841.92 crore in the year-ago period. For the year ended March 2008, the company recorded a net profit of Rs 757.09 crore as compared with Rs 703.82 crore last year. Total revenue for the year has increased to Rs 3,500.20 crore from Rs 3141.94 crore during previous fiscal.

Car manufacturer Maruti Suzuki India on Thursday reported net profit of Rs 297.7 crore for the fourth quarter ended December 2008. Although the company's net profit in the corresponding quarter the previous fiscal stood at Rs 448.6 crore, it said the figures were not comparable due to the adoption of a new depreciation policy, which has shortened cycles for its equipment and tooling assets. Total income, net of excise stood at Rs 5,069.9 crore during the quarter, it said. For the fiscal 2007-08, net profit stood at Rs 1,730.8 crore, while the total income for the fiscal stood at Rs 18,823.8 crore. Under the new policy adopted by the company, the full depreciation for equipment and tooling assets will now be eight years instead of 13 years previously.

The Hindu Business Line 24th April 2008 The Hindu Business Line recommends a buy in IVRCL Infrastructures & Projects from a short-term perspective. From the charts of IVRCL Infrastructures & Projects, we see that it has been on a long-term uptrend from its July 2006 low of Rs 164. However, after reaching a life high of Rs 575 in early January 2008, the stock witnessed selling pressure and was on a medium-term downtrend till it took support at around Rs 350 levels in late March. The stock bounced off this level and subsequently crossed over the 21-day moving average and then the medium-term down trendline. On April 23, the stock breached the 50-day moving average, accompanied with above average volume. The stock appears to have resumed the long-term uptrend. The daily relative strength index is on the brink of entering the bullish zone. The moving average convergence and divergence is also showing signs of bullishness and is likely to enter the positive territory. We are bullish

(Economic Times 24th April 2008) Asian shares got a lift on Thursday after a stamp duty cut to slash dealing costs gave the flagging Shanghai index a boost, while a modest dollar rebound supported exporters and kept oil prices from bubbling over. But investors, still anxious about rising inflation in Asia, were daunted by the soaring price of rice, which hit a record high. Asian equity markets made a cautious and slightly negative start to the day until the Shanghai Composite Index opened up 8 percent on the strength of a cut in stamp tax, to 0.1 percent from 0.3 percent. The Shanghai market has fallen by 51 percent from its October peak, dragged down by high inflation, the possibility of an economic slowdown this year and heavy supplies of fresh equity, and analysts said the tax change could fuel a 20 percent bounce. Shanghai's surge, which drove some stocks such as China Life Insurance to their 10 percent daily limits, injected some optimism into Japan's Nikkei average, which

(The Hindu Business Line 23rd April 2008) Standard & Poor’s Ratings Services on Wednesday revised its outlook on Tata Steel to stable from positive and affirmed its ‘BB’ corporate credit rating on the company. At the same time, the ‘BB’ rating on Tata Steel’s senior unsecured bank loans of $750 million and $500 million have been affirmed. The outlook revision reflects the persisting uncertainty on the infusion of additional equity, as envisaged in the initial funding plan for the acquisition of Corus (Corus Group PLC, not rated), and some increases in the capital commitments of the company, specifically for its expansion projects in India. “Tata Steel’s initially-proposed plan of issuing hybrid securities ($2.56 billion) and equity ($500 million), to partially fund the $14 billion acquisition of Corus, has been deferred due to prevailing credit market conditions,” said Standard & Poor’s credit analyst Mr Anshukant Taneja. Although Tata Steel intends to raise incremental equity

(The Hindu Business Line 23rd April 2008) The losses suffered by the corporate clients of State Bank of India on account of currency derivatives could range between Rs 600 crore and Rs 700 crore in the just ended fiscal, said Mr O.P. Bhatt, Chairman of SBI. While the bank has a fair amount of derivatives transactions, it has not done any ‘exotic deals’, he said. Speaking at a seminar organised by FICCI, Mr Bhatt said that SBI has structured derivative deals only for its customers and each deal has an underlying clause. “In our books there is no provision on this account,” he said. No customer has taken legal action against SBI, Mr Bhatt said. Some companies have gone to court against private banks such as ICICI Bank, Axis Bank and Kotak Mahindra Bank over the losses suffered in currency derivatives. The companies have alleged that banks had ‘mis-sold’ the derivative products to them, without explaining the impact of possible losses. SBI will make a provision of $10 million (approximate

The Sensex opened with a positive gap of 40 points at 16,824. After advacing to a high of 16,871, the index slipped into red to 16,589 - down 282 points from the day' high. The Sensex, thereafter, moved in a narrow range, and finally ended with a loss of 86 points at 16,698. The market breadth was marginally positive - out of 2,780 stocks traded, 1,428 advanced, 1,295 declined and 57 were unchanged today. The NSE Nifty settled with a loss of 26 points at 5,023. ACC surged 3% to Rs 844. Infosys and Wipro also rallied nearly 3% each to Rs 1,646 and Rs 443, respectively. Grasim and Tata Steel gained over 2% each at Rs 2,656 and Rs 798, respectively. Hindustan Unilever and DLF moved up over 1.5% each to Rs 242 and Rs 684, respectively. HDFC Bank plunged 3% to Rs 1,443. Hindalco and BHEL shed 2.5% each at Rs 188 and Rs 1,827, respectively. SBI, ICICI Bank and Ranbaxy dropped 2% each to Rs 1,696, Rs 864 and Rs 477, respectively. Bharti Airtel declined 1.5% to Rs 844. Satyam, Reliance, O

Oriental Bank of Commerce (OBC) posted a net loss of Rs 99.44 crore for the quarter ended March 31, 2008 as compared to profit of Rs 54.86 crore shown during the same quarter in 2007. Total revenue, however, has increased to Rs 2,071.01 crore for the quarter from Rs 1,577.29 crore in the year ago period. For the year ended March 2008, the bank made a net profit of Rs 353.22 crore as compared to Rs 580.81 crore in previous fiscal. Total revenue has increased to Rs 7,454.84 crore from Rs 5,652.91 crore during last year.

Indian Bank has posted a net profit of Rs 241.67 crore for the fourth quarter ended March 2008 as compared with Rs 235.30 crore shown during the same quarter last year. Total income for the quarter has increased to Rs 1,672.85 crore from Rs 1,563.59 crore in the year-ago period. For the year ended March 31, 2008, the bank recorded a net profit of Rs 1,008.74 crore as compared to Rs 759.77 crore during previous year. The revenue for the quarter has increased to Rs 6,218.67 crore from Rs 5,017.86 crore during last fiscal.

PLL reported a PAT of Rs1.2bn for Q4 FY08 which was down 8.4% qoq and up 13.2% yoy. The qoq decline was on account of 7.4% drop in operating profit and 219bps increase in effective tax rate. Net sales up 13.9% on higher volumes and realizations OPM down 50bps qoq and 240bps yoy India Infoline recommends Market Performer with a target of Rs80 available at

(The Economic Times 23rd April 2008) The government has revised the norms for merger between telecom companies within a circle, making consolidation among existing players more difficult and expensive, and, in the process, facilitating entry by new players that have not acquired a licence so far. Specifically, merger conditions have been made more stringent in four areas: pre-approval by the department of telecom (DoT) is required for any merger; the threshold market share of merged entity beyond which a merger will be prohibited has been lowered from 67% to 40%; a licensee must complete three years of operations before it can contemplate merger; and, finally, the merged entity will have to pay extra for spectrum. Interestingly, the new guidelines deviate from regulator TRAI’s recommendations in two ways. The regulator had ruled out M&As till rollout obligations were met. In the revised guidelines, there is no mention of rollout obligations, they seek three years of operations, and

(The Hindu Business Line 23rd April 2008) The Hindu Business Line recommends a buy in Torrent Power from a short-term perspective. We observe that the stock’s medium-term downtrend, that began from its January 2008 high of Rs 269, got arrested at around Rs 93 in late March. The stock had almost lost 65 per cent from its January high to March low. However, after finding support around Rs 93 level, the stock commenced to move up progressively. During this up move, Torrent Power penetrated the medium-term down trendline and later on crossed over the 21-day moving average, indicating signs of bullishness. The daily momentum indicator is on the verge of entering the bullish zone from the neutral region. The moving average convergence and divergence is steadily rising towards the positive territory. From a short-term perspective we are bullish on the stock. We expect the stock to move up to our price target of Rs 145 in the upcoming sessions. Investors with short-term perspective can buy th

(The Hindu Business Line 23rd April 2008) Rating agency Crisil has revised its GDP growth forecast to 8.1 per cent for 2008-09 from the earlier forecast of 8.5 per cent in view of the worsening inflation, interest rate and global growth outlook. Despite some moderation, the overall growth scenario is expected to remain strong with investment as the main driver, said the Crisil report. Growth for sectors such as industry and services has also been adjusted downwards to 8 per cent and 9.8 per cent respectively. Agriculture sector will grow at 3 per cent assuming a normal monsoon this year. As the current inflationary expectations are way beyond the Reserve Bank of India’s comfort zone of 4-5-5 per cent, a cut in key interest rates has been ruled out, said the report. Also, the recent scaling down of global growth projections has led to revising growth projections downwards for 2008-09. High commodity prices The report said that inflation would remain high in the next few months due to hi