Indian Stock Picks - Share Ideas , News, Fundamentals

Hyundai Motor is planning to launch a small car in India by 2011 with a price tag of $3,500 (about Rs 1.45 lakh), which the company said is not aimed at competing with Tata's much talked about 'Nano' in the near future. "We do not have immediate plans to fight with Nano. It is planned keeping in mind the Indian market conditions and the interest of the general public," Mr Heung Soo Lheem, Managing Director and CEO, Hyundai Motor India said here. The low priced car, which is currently under development at its research and development centre in Korea, would also be exported to other countries from here, he said. The new small car would be manufactured in its Chennai plant, Mr Lheem said. Earlier in January, Tata Motors had launched world's cheapest car 'Nano', priced at $2,500. The country's second largest two-wheeler maker Bajaj Auto also joined hands with Ren ault-Nissan to launch a small car in India by 2011 that would be priced at the same level

Sensex on Friday recovered by over 151 points in early trade on buying by funds, triggered by firming global markets. The 30-share index, which had lost 209.11 points yesterday, rose 151.77 points to 16,468.03 points in the first five minutes of trade. The wide-based National Stock Exchange's Nifty gained 51.65 points to 4,886.95 in early trade. At the close the Sensex was up 99.31 points at 16,415.57. The Nifty was up 34.80 points at 4870.10. Marketmen said firming global stock markets boosted trading sentiments on the domestic bourses. They said, with Friday being the opening session of June month contracts in the derivative segment, speculators were making purchases at select counters. Major gainers, which supported Sensex, were Larsen and Toubro, BHEL, Grasim Industries, HDFC Bank, HDFC Ltd, Bharti Airtel, SBI, ICICI Bank, Reliance Industries, ONGC, DLF Ltd and Rcom.-

Inflation rose to a 45-month high of 8.1 per cent for the week ended May 17 on account of rising prices of fruits and vegetables, pulses, spices and some industrial fuels. The Wholesale Price Index-based inflation was 7.82 per cent a week ago and 5.3 per cent during the corresponding week last year. During the week, prices of fish marine jumped up by 6 per cent, fruits and vegetables by 3 per cent, moong 2 per cent and spi ces by 1 per cent. Among the industrial fuel, furnace oil became expensive by 3 per cent, light diesel oil 2 per cent and coke 31 per cent. Despite the ban imposed by the government on export of skimmed milk powder, it became costlier by 7 per cent. At the same time, prices of imported edible oil and khandsari went up by 1 per cent. However, cement prices came down by 0.6 per cent while iro n and steel prices declined by 0.6 per cent. The previous high, as per the provisional figures for inflation, was recorded at 8.33 per cent for the week ended August 28, 2004.

(The Hindu Business Line 30th May 2008) Larsen & Toubro has comfortably outpaced its 30-35 per cent growth expectations for 2007-08, putting to rest fears about a slowdown in the capex cycle. The company, on a consolidated basis, recorded a 43 per cent increase in its sales and 27 per cent rise in net profits (excluding exceptional gains) for the year. The quarterly numbers also reinforced this optimism. The order book also grew at a healthy pace, at a time when many companies in the engineering space witnessed a slower order intake, L&T managed a strong 37 per cent growth in orders and the order book at over Rs 53,000 crore is likely to provide steady revenue flow over the next two years.Margins held While the standalone quarterly and full-year operating profit margins have expanded, the margins on consolidated operations have been flat. Net profit margins for the full year (consolidated) took a dip on the back of increased depreciation and taxes. Interest costs declined as a

The stock markets declined in late deals on Thursday owing to renewed selling pressure. Consumer goods, power, banking and auto stocks dragged the markets lower. However, capital goods, metal and healthcare scored marginal gains which helped the market to stem sharp losses of the market. The Sensex closed at 16,316.26, down 209.11 points from the previous close of 16,525.37. Earlier, the index gained over 140 points initially touching high of 16,666.03 points. Similarly, the National Stock Exchange's index Nifty was down by 83.05 points to 4,835.30. Today being the last day of May expiry in the derivative segment, players closed out their open long positions in them. Losers include Tata Motors, Suzlon, Sun Pharma, Ambuja Cement, M&M, SBI and Tata Communications. However, stocks that gave support to the markets were Cipla, Reliance Communications, L&T, Satyam Computer, Wipro, and Sterlite.

National Thermal Power Corporation Ltd (NTPC) posted a net profit of Rs 1,339.50 crore for the quarter ended March 31, 2008 as compared with Rs 1,734.70 crore during the same quarter in 2007. Total income for the quarter has increased to Rs 11,487.50 crore from Rs 9,546.70 crore in the year-ago period. For the year ended March 31, 2008, the company recorded a net profit of Rs 7,414.80 crore (Rs 6,864.70 crore) on revenues of Rs 40,017.70 crore (Rs 35,380.70 crore). The Board of Directors of the company has recommended final dividend of 8% of paid up equity share capital in addition to the interim dividend of 27% of paid up equity share capital in February 2008.

The board has recommended a Dividend of Rs 15/- per share together with the Special dividend of Rs 2/- per share declared on July 03, 2007 Board of Directors of Larsen & Toubro Ltd (L&T) has decided to issue Bonus Shares in the ratio of 1:1 (1 share of Rs 2/- each to be issued for every 1 share of Rs 2/- each held) subject to the approval of the Shareholders. The board has recommended a Dividend of Rs 15/- per share together with the Special dividend of Rs 2/- per share declared on July 03, 2007, works out Rs 17/- per share for the year (previous year Rs 13/- per share). L&T today opend at Rs2735 and saw high of Rs2949 and low of Rs2715.

Larsen and Toubro Ltd (L&T) posted a profit after tax of Rs 966.76 crore for the quarter ended March 31, 2008, an increase of 38 per cent when compared with Rs 700.77 crore reported during the same quarter in 2007. Total income for the March quar ter this year has increased to Rs 8,715.92 crore from Rs 6,466.26 crore in the year-ago period. For the year ended March 31, 2008, the company made a net profit of Rs 2,173.42 crore (Rs 1,403.02 crore) on revenues of Rs 25,442.57 crore (Rs 18,066.43 crore).

Mahindra and Mahindra’s net profits (standalone basis) for the quarter ended March 2008, dipped by 3 per cent excluding extraordinary items. On a sequential basis, the fall was more pronounced, at 11.25 per cent. No fall in demand? The fall in profits cannot be attributed to a demand slowdown as net sales grew by 14.5 per cent year-on-year and about 7 per cent quarter-on-quarter. The company, being a leading player in the utility vehicles segment, was relatively better off as it was the two-wheeler and medium and heavy vehicles segment that bore the brunt of the auto slowdown. Though farm equipment sales for M&M did decline, a growth in utility vehicles backed by the re-launched Bolero and a new Scorpio variant helped the company close with reasonable sales growth. Growth in the company’s engines business also helped, making up for the decline. At the end of the year, the company’s market share in the domestic utility vehicles segment stood at more than 50 per cent. Sales of utilit

Tata Motors said on Wednesday that it would issue shares having differential voting rights as part of its plan to raise Rs 7,200 crore for the Jaguar-Land Rover acquisition. This would likely be the first instance in recent times, of an Indian company issuing such shares. Tata Motors said it would raise the amount through three separate rights issues. This would mean that the UK acquisition, which cost $2.3 billion, would be funded mainly through equity capital. The first issue would consist of normal shares on a right basis amounting to Rs 2,200 crore. The second would raise up to Rs 2,000 crore through issue of “A” equity shares having one vote for every 10 shares. A further amount of Rs 3,000 crore is proposed to be raised through a third rights issue of five-year 0.5 per cent convertible preference shares (CCPs), optionally convertible into “A” equity shares after three years but before five years from the date of allotment. Earlier, Tata Motors had announced that it would raise $5

Sensex on Wednesday snapped a five-day long falling streak by gaining nearly 250 points on emergence of buying primarily in metal and banking stocks. The Sensex, which had lost nearly 1,160 points in last five straight sessions, bounced back to record a gain of 249.78 points to 16,525.37, after touching the day's high of 16,563.30 and low of 16,217.78 points. Wider index Nifty of the National Stock Exchange moved up by 58.55 points to 4,918.35. It touched the day's high of 4,926.90 and low of 4,835.65 points. The buying activity was more confined to metal, bank and technology stocks. The metal index gained the most by 378.88 points at 16,649.65, followed by banking index at 178.86 points to 7,933.50. Information Technology index spurted by 116.02 points to 4, 566.42. Midcap index rose by 74.62 points at 6,753.53 and smallcap index by 27.01 points at 8,237.09.

Tata Motors on Wednesday posted a consolidated net profit of Rs 2,167.70 crore for the year ended March 31, 2008, a marginal decline compared to the previous fiscal. The company had a consolidated net profit of Rs 2169.99 crore in fiscal year 2006-07, the company said in a filing to the Bombay Stock Exchange. Tata Motors' consolidated total income stood at Rs 35,918.96 crore for the year ended March 31, 2008 against Rs 32,514.38 crore in the previous fiscal. The firm posted a net profit of Rs 2,028.92 crore for financial year 2007-08, an increase of 6 per cent compared to financial year 2006-07. It had a net profit of Rs 1,913.46 crore in the previous fiscal. Tata Motors reported a total income of Rs 29,214 crore for the year ended March 31, 2008, compared to Rs 27,715.22 crore for the year ended March 31, 2007. Shares of the company closed at Rs 634.75, up 1.30 per cent on the BSE

(The Hindu Business Line 28th May 2008) The Capital market regulator SEBI appears to have no objection in foreign institutional investors (FIIs) issuing offshore derivative instruments (ODIs) to overseas corporate bodies (OCBs). A circular issued by SEBI on Tuesday has omitted dealings by FIIs and their sub-accounts with OCBs directly or indirectly, from the monthly reporting requirements. However, FIIs have to provide monthly reports of “ODI activities” with regard to non-resident Indians and Indian residents with effect from May 2008. Fine imposed OCBs are promoted by NRIs or Persons of Indian Origin (PIOs). The SEBI circular revising the format for the undertaking required to be provided by the FIIs and their sub-accounts on ODIs, comes after the Securities Appellate Tribunal’s (SAT) recent observations in the matter of Goldman Sachs. SEBI had imposed a fine of Rs 1 crore on Goldman Sachs Investments (Mauritius) Ltd through its order issued on November 2006 for misreporting their de

Did you buy into stocks when the BSE Sensex hovered at the 14,800 mark in mid-March? If you didn’t, you probably have reason to regret your decision. While you’ve been on the sidelines, the BSE Sensex has gained 12 per cent from its March 18 low and the BSE 500 has managed a 14 per cent return. These numbers seem tame in comparison to gains managed by some B group stocks, of whom 76 stocks have managed gains of 50 per cent or more. Stocks that have gained in value over this period have easily outnumbered those that lost ground. As many as 1044 of the 1200 NSE listed stocks, or nine out of every ten, have posted gains from their March 18 levels. As many as 723 stocks have beaten the Sensex (up 12 per cent) over this period. Orchid Chemicals (up 127 per cent from March 18), Harrisons Malayalam (94 per cent), Gemini Communications (93 per cent), Mercator Lines (86 per cent), IL&FS Investsmart (80 per cent) and Praj Industries (78 per cent) are some of the better known names from the l

The Sensex opened with positive gap of 107 points at 16,455 on a strong cues from the Asian markets. Fresh buying in FMCG stocks saw the index touch a high of 16,506. Intra-day profit taking in noon deals saw the index pare gains and drop to a low of 16,238. Banking and PSU stocks were hit the most. The Sensex finally ended with a loss of 73 points at 16,275. The market breadth was negative - out of 2,763 stocks traded, 922 advanced, 1,760 declined and 81 were unchanged today. The NSE Nifty was down 15 points at a close of 4,860. SBI tumbled 4.2% to Rs 1,473. HDFC plunged over 2% to Rs 2,520. ICICI Bank slipped 1.7% to Rs 812. ONGC declined 1.3% to Rs 884, while Reliance and HDFC Bank dropped 1.2% each at Rs 2,493 and Rs 1,331. DLF and Tata Steel were down 0.8% each to Rs 596 and Rs 868, respectively. Hindalco was down 0.5% to Rs 185. Satyam surged 3.3% to Rs 499, and Cipla gained 3% to Rs 205. Wipro advanced 2.7% to Rs 492. ITC and Reliance Communications added 1.6% each to Rs 209 and

(Business Standard 27th May 2008) The 4000 Mw each Ultra Mega Power Projects (UMPP) being set up at Sasan in Madhya Pradesh by the Anil Ambani Group promoted Reliance Power and at Mundra in Gujarat by Tata Power Company (TPC) are likely to be fully commissioned by 2013. Reliance Power has committed to the Union Ministry of Power and the Central Electricity Authority (CEA) to advance the commissioning schedule of Sasan UMPP by three years, at a review meeting on UMPPs held in New Delhi, last week, said sources. The project, with captive coal mines, was scheduled to be commissioned between May 2013 and April 2016 as per the Power Purchase Agreement (PPA). Informed sources said Reliance Power was close to announce details on service contractors for the project and was gearing up for financial closure by October, this year. Tata Power had achieved financial closure for the Mundra project during the last month. The first of Mundra's six units are likely to be commissioned by September 2

(The Hindu Business Line 27th May 2008) The acquisition of Vanco Group by Reliance Globalcom, a subsidiary of Reliance Communications’ (RCom), gives the company access to lucrative markets and a good roster of enterprise clients, at a relatively modest acquisition price. The acquisition (100 per cent) would cost Reliance Globalcom $76.9 million (Rs 327 crore), free of debt. This suggests that the company may not takeover the debt component of Vanco. Vanco did carry net debt of about £35 million in its balance sheet as of July 31 2007. Vanco is a virtual network operator in the UK. Virtual network operators do not own network infrastructure, but buy it from telecom operators and resell voice, data and video services. For Reliance Globalcom, this acquisition holds several possible benefits. Market access One, it gives access to Western European and the US markets as Vanco derives 90 per cent of its revenues from the UK, the US, Germany and France. These regions offer superior margins. Se

(The Hindu Business Line 27th May 2008) Reliance Globalcom, a subsidiary of Reliance Communications (RCom), has acquired London-based managed network services provider, Vanco Group, for about $77 million (Rs 324 crore). The acquisition of Vanco would add $365 million (Rs 1,550 crore) to the annual revenues of Reliance Globalcom through secure long-term contracts with large enterprise customers, RCom informed the stock exchanges in a statement issued on Monday. Vanco is considered to be amongst the world’s top five managed global network players with over 220 multinational customers, according to research firm Gartner Inc. Vanco managed network services are available in over 40,000 locations across 163 countries with 90 per cent of its revenue from developed markets of the UK, the US, France and Germany. The Vanco acquisition will increase Reliance Globalcom’s tally of enterprise customers to over 1,400, the company statement said. “The combination of Reliance Globalcom’s extensive capa

(The Hindu Business Line 27th May 2008) Reliance Communications which has initiated talks with South Africa-based MTN is believed to be open to the idea of establishing a special purpose vehicle which would act as a holding company for all joint investments in emerging telecom markets. The second largest domestic telecom operator swiftly moved in where Bharti Airtel left off, announcing a 45-day commitment with MTN for what it called “a potential combination of their businesses.” During this period, neither company will talk to any other suitor. Sources in RComm said the company was open to accepting a holding structure, including the possibility of MTN picking up a sizeable stake. If RComm does not get the stake in MTN that it desires, it is also open to forging an alliance with MTN and leveraging each other’s strengths, sources said. But what this would be they would not elaborate. Both RComm and Bharti are looking to expand their operations overseas, especially in the emerging marke

The Sensex opened with a negative gap of 182 points at 16,468 on global weakness. Unabated selling in the banking, metal and capital goods stocks saw the index tumble to a low of 16,300 - down 349 points from its previous close. The Sensex finally ended with a loss of 301 points at 16,348. The market breadth was negative - out of 2,758 stocks traded, 667 advanced, 2,043 declined and 48 were unchanged today. The NSE Nifty settled with a loss of 71 points at 4,875. Jaiprakash Associates tumbled 5.6% to Rs 224, while Ambuja Cements plunged 5.4% to Rs 97. BHEL and Reliance Communications declined over 5% each to Rs 1,656 and Rs 543, respectively. ICICI Bank slipped 4.3% to Rs 827. HDFC was trading at Rs 2,573 - down 3.9%. Maruti shed 3.8% to Rs 760. ITC was down 2.7% to Rs 206. Grasim dropped 3.5% to Rs 2,209. Hindalco, Larsen & Toubro and Reliance Infrastructure declined over 3.3% each to Rs 186, Rs 2,750 and Rs 1,249, respectively. Tata Steel dipped 2.4% to Rs 875. SBI and Cipla drop

(Business Standard 25th May 2008) Valuations of broking companies have halved since January 2008. Patient investors can start accumulating selective stocks with a long-term perspective. After giving stupendous returns, stock prices of broking companies took a sharp U-turn since the markets crashed in mid-January 2008. Within three months of touching their respective 52-week highs, stock prices of broking firms such as Motilal Oswal, Edelweiss Capital and IL&FS Investsmart touched their 52-week lows in the last week of March. While companies such as India Infoline and IL&FS Investsmart are down by 55 per cent and 33 per cent, respectively in 2008 till date, newly listed companies such as Motilal Oswal, Edelweiss Capital and Religare are not far behind with their stock having tanked by 52 per cent, 49 per cent and 26 per cent, respectively from the closing price of their listing day (between September and December 2007). Oodles of bad newsThere has been bad news on the domestic a

(The Hindu Business Line 25th May 2008) Investors with a long-term perspective can buy the stock of Entertainment Network India (ENIL), which operates the radio channel, Radio Mirchi 98.3 FM. Within the media sector, radio is poised to record the fastest growth in advertising spends, although on a low base. It is also likely to be less vulnerable to any slowdown in advertising spends given its lower advertising rates compared to television and print. As a market leader with a 47-48 per cent share of the radio industry and an increasing presence in the other emerging and promising media platforms – outdoor advertising and event management – ENIL is a unique play within the listed media space. However, all three platforms – radio, out-of-home media and event management – are yet to mature as advertising platforms. Radio as yet accounts for only 3 per cent of the advertising pie. Hence, a three-five year holding period is necessary to reap the full benefits of this investment. The valuati

bagasse-based cogeneration option, which started as a cost-saving measure by sugar companies when the industry was reeling under margin pressure a few years ago, is fast turning into a money-spinning option. Co-generation is the concept of producing two forms of energy from one fuel, of which one is heat and the other may be electricity or mechanical energy. Sugar producers across the country, who are fast shifting to bagasse-based generation option to meet captive power needs, are increasingly exporting surplus to the grid from their plants and claiming CDM (Clean Development Mechanism) benefits in return. Among manufacturers exploiting the cogeneration option, DCM Shriram Consolidated Ltd (DSCL) is ramping up its bagasse-based generation and exporting surplus power to the tune of 27.5 MW to the Uttar Pradesh Power Corporation Ltd (UPPCL) and getting CDM benefits in return. Sri Chamundeswari Sugars is building a 26-MW cogeneration plant at its factory in Karnataka, of which 18 MW will

The Bombay Stock Exchange benchmark Sensex dropped for the second straight session on Friday by losing over 257 points on heavy selling by funds. The Sensex, which suffered a loss of 336 points in previous day's trading, dropped further by 257.47 points to 16,649.64. It touched the day's low of 16,626.11 and high of 17,054.34 points. Wide-based National Stock Exchange's index Nifty fell by 76.50 points to 4,948.95, after dipping to 4,940.70 points. It rose to 5,059.05 points during the day as selling spread over a wide front.

Inflation remained little changed at 7.82 per cent for the week ended May 10 in the face of surging international crude oil prices, even as the government battles the menace on various fronts. The rate of rising prices was much higher at over eight per cent even as of March 15, a period for which the government now released final inflation figures. According to the updated figure, inflation stood at 8.02 per cent for the week ended March 15 against the provisional 6.68 per cent. The inflation was 7.82 per cent for the week ended May 10 as compared to 7.83 per cent for the previous week, said the of ficial figures released on Friday. During the corresponding week a year ago, the inflation stood at 5.62 per cent. Amid speculation of rise in prices of petroleum products, inflation is likely to remain high for the next 3-4 months, while the Reserve Bank and government may have to take additional monetary and fiscal measures, said analysts. Industrial fuel prices, which are linked to intern

Federal bank's net profit surged 3.63 per cent to Rs 102.86 crore in the fourth quarter as compared to Rs 99.25 crore in the previous quarter. Its total income increased 32.26 per cent to Rs 842.06 crore versus 636.63 crore.

US-based Providence Equity Partners has picked up 20 per cent stake in Aditya Birla Telecom (ABTL), a subsidiary of Idea Cellular, for $640 million (Rs 2,748 crore). ABTL owns a telecom licence for the Bihar service area and it is all set to launch GSM services there in the next three-four months, said Mr Sanjeev Aga, Managing Director, Idea Cellular. ABTL will issue compulsorily convertible preference shares aggregating $640 million to an affiliate of Providence Equity Partners. On conversion, Providence will have 20 per cent stake in ABTL, Idea said in a communication to the stock exchanges. This is said to be one of the largest private equity investments in the telecom sector. A major portion of the fund raised from the stake sale will be utilised for launching telecom services in Bihar, Mr Aga told presspersons here on Thursday. The stake sale to the Rhode Island-based Providence values ABTL at 13,744 crore, according to an analyst. The deal, which is subject to FIPB approval, is e

(The Hindu Business Line 23rd May 2008) Market is trying to price-in a possible slowdown in auto sector in the backdrop of soaring crude oil prices and manufacturers’ falling margins in view of cost pressures. Even as the general sentiment is negative, some of the analysts, however, do not find the situation grim, for all the players. According to Mr Arun Kejriwal of KRIS, Indian consumers are a protected lot; they are only paying half of the actual price for petrol or diesel. Mounting losses “Even if the Government allows the oil marketing companies a token rise, it would be way below the international price. For whom the vehicle is a necessity or part of the life, demand for is largely inelastic.” However, according to Mr V.K. Sharma, Head of the Research at Anagram Stock broking, issue is now of availability, not of price alone. “For the oil marketers, small price increase may not be enough to sustain mounting losses.” The market is expecting that the Government may forego additiona

(The hindu Business Line 23rd May 2008) Praj Industries appears to be strengthening its presence in the European market. BioCnergy Europa B.V., which is the company’s 60 per cent joint venture with Netherlands-based Aker Kvaerner, has recently won a contract for the supply of key equipment to Vivergo Fuels, a leading supplier of renewable fuels in the UK. T he contract value for Praj has been pegged at about Rs 120 crore. The plant will be designed to produce approximately 400 million litres of fuel ethanol a year from wheat sourced from within the Europe.Gaining presence in EU This order win assumes significance on two counts. For one, it points at the strengthening demand scenario in the bio-ethanol market in the European Union. This inspires some confidence in light of the food against fuel argument gaining ground as in recent times. This order win clearly suggests otherwise, putting to rest apprehensions among investors about weakening demand for Praj’s products in the region. Seco

Praj Industries Ltd has informed BSE that the Company has received a contract for supply of key equipment to Vivergo Fuels, UK through its subsidiary, BioCnergy Europa B. V. (a Joint Venture with Aker Solutions, Netherlands). The plant is designed to produce approximately 400 million litres of fuel ethanol a year (1,200,000 litres per day). The contract value for Praj is approximately Rs 120 crores (GBP 15 million). This will be the fourth bioethanol plant by Praj in Western Europe.

Oil prices smashed past $135 a barrel for the first time on Thursday. New York's main oil futures contract, light sweet crude for July delivery, briefly rose to a high of $135.04 a barrel before easing to $134.59 in Asian afternoon trade, up $1.42 from its US close. The benchmark futures contract had closed a whopping $4.10 higher at a record $133.17 on the New York Mercantile Exchange, and continued its upward spiral. London's Brent crude contract for July was also busting records, rising to a high of $134.50 before pulling back to trade at $134.36, smashing its intraday peak of $133.34 set a day earlier.

The markets closed the day with modest gain amid mild volatility, after showing strong recovery from day's low in second half of session, which is in line with Asian markets. Oil & gas, metal, capital goods and auto stocks were the movers while banking and pharma stocks draggers. Market breadth remained positive for major part of the day. The Sensex recovered nearly 200 points and the Nifty 70 points from day's low. The Sensex remained above 17000 and Nifty above 5000 mark. Markets was opened on a weak note and traded in red for first half of session due to weakness in Asian and US markets. But strong buying in oil & gas and metal stocks and good European cues have helped the markets in latter part of the day to show recovery. The Sensex has touched an intraday high of 17,293.34 and low of 17,041.63 before ending the day at 17,243.16, up 12.98 points or 0.08%. The Nifty has hit a high/low of 5135.55 and 5048.70, which closed at 5117.65, up 12.7 points or 0.25%. Market b

(The Hindu Business Line 21st May 2008) Cement manufacturers are in a fix due to skyrocketing coal prices, which is pushing up the cost of the commodity even as the Government is determined to bring down cement prices. The industry is facing shortage of domestic coal supplies, coupled with a sharp rise in the import price of coal, according to industry sources. “The permits (coal allocation to individual companies) of Coal India have been lowered last month due to shortage of coal. A cement company will now get only 64 per cent of the coal originally allocated to it. This is the second cut in the permit of coal after a 20 per cent cut some time ago,” Mr Ramesh Chandro, Managing Director, Ckoramaandel Cements, told Business Line here. The e-auction of coal, recently introduced by Coal India, is also adding to the irregularities in coal prices increasing the production costs, he added. According to Mr Srikant Reddy, General Secretary, All India Mini Cement Manufacturers Association, coal

(The Hindu Business Line 21st May 2008) Headwinds in the form of defective blades supplied and issues of enhancing stake in REpower did not deter the wind turbine maker Suzlon Energy from posting consolidated revenue growth of 71 per cent for the year ended March 2008. While consolidated sales for the year stood at Rs 13,679 crore, net profits before exceptional items grew 34 per cent to Rs 1,168 crore. Order book, excluding Hansen and REpower, stood at Rs 1,8308.5 crore with 95 per cent from international markets. The revenue growth assumes significance at a time when the industry (globally) has grown by an average of 24 per cent.Higher realisation Suzlon’s operating profit margins continued to hover around 13 per cent for the March quarter and full year. Operating profit margins have been on the decline since the company made global acquisitions. However, profit margins remain superior to global players. The company has seen increase in realisations, both in the domestic and export m

Wind energy major Suzlon Energy Ltd posted a 10 per cent increase in net profit for the quarter ended March 2008 at Rs 482.55 crore from Rs 437.82 crore in the year ago period. Income from operations rose by 33 per cent to Rs 2,744.40 crore from Rs 2,055.48 crore The consolidated net profit for the quarter was Rs 456.51 crore as against Rs 358.98 crore in the corresponding quarter last year. Outside India, Suzlon has manufacturing units in the US, Belgium and China. Suzlon said it will sell part of its stake in REpower, Germany, which it acquired in May 2007 after five months of high-profile bidding at € 1.35-billion (about Rs 7,314 crore). Suzlon is the major shareholder in REpower, holding almost 34 per cent in the wind turbine maker, and was considering selling some of its stake as valuations were attractive, Mr Tulsi Tanti, Chairman and Managing Director of the company, said. “It is lucrative for us right now,” he said. REpower shares had risen more than 90 per cent this year at Mo

Lloyd Electric & Engineering’s (LEEL) acquisition of Prague-based Luvata Czech is likely to provide the former with easier access to the high-potential European markets as well as enable superior technology absorption. Luvata Czech is a maker of customised coils for heat ventilation, air conditioning and refrigeration. The acquisition for an undisclosed amount has been routed through LEEL’s special purpose vehicle Lloyd Coils Czech. Customised Solutions Lloyd Electric makes air-conditioner coils and also contract manufactures air conditioners for companies. Increase in the product range of ACs in India may require Lloyd Electric to provide more customised solutions. The current acquisition may provide the much-needed sophistication. The acquisition would also provide geographic expansion in the European market, which is said to be at a nascent stage of ‘coil manufacture outsourcing’ by original equipment manufacturers (OEMs). Further, while LEEL has maintained strong profit margins

(The Hindu Business Line 15th May 2008) Adani Group company Mundra Port and Special Economic Zone (Mundra Port) is a buzzing counter at the stock market these days; the stock has outperformed the market by a huge margin during the last one month. Even after paring some of the gains of the last two trading sessions, the only listed private port in the country showed a gain of close to 30 per cent compared with the major BSE indices, which gained just over 7 per cent in the last one month. According to brokers, the plan for an IPO by the group company Adani Power has been influencing the Adani group scrips. Another listed company of the group Adani Enterprises too has gone up by over 20 per cent in the past one month.Car terminal In the recent past, the Mundra Port also signed an agreement with domestic auto major Maruti Suzuki for a mega car terminal for exports of cars. This car terminal is expected to be operational by December 2008. Expectation of good results from the company for th

Though leading cement makers are in the race to acquire engineering major Larsen and Toubro’s ready-mix-concrete business, French cement major Lafarge is said to be ahead with Holcim running a close second. The deal is estimated at around Rs 1,200 crore. If Lafarge is successful, the company will acquire a pan India presence. L&T has 66 RMC plants and commands a 25 per cent market share with revenues from this division at about Rs 1,000 crore. Total capacity of the units is pegged at 30-40 lakh cubic metres a year. In 2001, L&T sold its cement business to the Aditya Birla Group, but held back the RMC unit, which it later spun off into a separate entity – L&T Concrete. Growth expectations The ACC Chairman, Mr N.S. Seksheria, had said the potential and scope for future growth of this industry was enormous. In the developed world, RMC formed 70 per cent of the cement consumed by the construction industry. The overall usage in India was quite low at about 2.5 per cent, but it w

The Hindu Business Line recommends a buy in CESC from a short-term perspective. The charts of CESC show that it has been on a medium-term up trend form its March 2008 low of Rs 360 level. The stock conclusively penetrated the medium-term down trendline (that commenced from the January high of Rs 715) in mid-April and progressed upwards. This up-move has also taken the stock above its50-day moving average. The daily momentum indicator has re-entered the bullish zone form the neutral region and the daily moving average convergence and divergence is featuring in the positive territory. The fact that the stock is sustaining above the medium-term up trendline, is also a positive for the stock. We expect it to rally to our price target level of Rs 552 in the forthcoming trading sessions. Investor with short-term perspective can buy CESC while keeping the stop-loss at Rs 460.

(The Hindu Business Line 13th May 2008) For the quarter ended March 31, 2008, IT bellwether Infosys Technologies recently announced a consolidated net profit of Rs 4,659 crore a 20.82 per cent growth over the corresponding period a year ago. It has given a guidance (always conservative) of 16.3-18.3 per cent growth in earnings per share (EPS) to Rs 92.32-93.92 for the fiscal year ending March 2009. This, despite a challenging economic environment in the US (where the main customer base of Infosys is located) as well as a downturn in its major vertical of financial services, is indeed commendable and displays the resilience of Infosys to weather the impending storm and continue to grow. Even after the dotcom bust, Infosys had managed to keep its head above water. The pressure on IT budgets of US clients have caused companies such as Infosys to move substantial work offshore and thus safeguard their operating margins. They have also increased their footprint into Continental Europe and A

The rupee crossed the psychological mark of 42, on Monday, due to lower industrial production data, high oil price and inflation. The lack of dollar supply combined with continuing dollar demand from domestic oil companies, also made the greenback dearer in the currency market. On Monday, the rupee ended at 42.05 against the dollar, about 46 paise lower than the previous close of 41.59/60. The rupee was last seen at 42 levels in April 2007. Dealers said it may hover around 42 for the next two to three months.

(The Hindu Business Line 13th May 2008) Lacklustre performance by the manufacturing sector pulled down the growth in Index for Industrial Production (IIP) to a six-year low of three per cent in March 2008 as against 14.8 per cent in March 2007. However, for fiscal 2007-08, the IIP registered a modest growth rate of 8.1 per cent as against 11.6 per cent in fiscal 2006-07. Growth in the manufacturing sector, which carries 79.3 per cent weight in the IIP, dipped to a meagre 2.9 per cent in March 2008 as compared with 16 per cent in March last year, while for the full year the sector grew by 8.6 per cent as against 12.5 per cent in 2008-07. The growth rates have fallen also for electricity (3.7 per cent in March 2008 as against 7.9 per cent in March 2007) and mining (3.8 per cent versus 8 per cent). However, for fiscal 2007-08, the mining sector has been able to post a growth of five per cent, only marginally lower compared with 5.4 per cent in 2006-07.Capital goods shine The only silver l

(Business Standard 12th May 2008) A combination of value and growth helps in achieving healthy returns, yet keeping the margin of safety. The Indian markets had fallen by almost 30 per cent between January and March, 2008. Since then, they have recovered half the lost ground. The impact of the fall was so hard that many stocks were beaten down to levels disproportionate with their fundamentals and growth prospects. Interestingly, even as the markets have risen, many stocks are still quoting well below their worth and provide investment opportunities. The ways of identifying value stocks are many, including looking at ratios like price-to-earnings (PE) and price-to-book-value (P/BV) besides, factors like replacement cost and dividend yields. But if factors like company management and track record, healthy growth prospects and sound business model, are also considered, it only increases the margin of safety. To put it differently, a low PE or low P/BV does not necessarily mean cheap but,