Wednesday, December 31, 2008

>Satyam - Edelweiss - 29 12 08

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Satyam - Edelweiss - 29 12 08

>Anagram 's F&O indicators 301208

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Anagram 's F&O indicators 301208

>PSU Banks Update - SSKI - 23 12 08

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PSU Banks Update - SSKI - 23 12 08

Tuesday, December 30, 2008


The current crisis, which started in the housing and financial sectors, has now led to a
strong fall in aggregate demand. There are indications that this fall could be larger than in
any period since the Great Depression. A successful policy package should address both the
financial crisis and the fall in aggregate demand, and thus, should have two components: one,
aimed at getting the financial system back to health; the other, aimed at increasing aggregate
demand. There are obvious interactions and synergies between the two. Financial measures,
from recapitalization to asset purchases, have important implications for credit flows and
aggregate demand. Measures to support aggregate demand, for example by helping
homeowners and improving the housing market, have clear implications for the health of
financial institutions. Nevertheless, our focus in this note will be primarily on measures
aimed at sustaining aggregate demand. (Financial measures have been, and will be, the
subject of other notes.)
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>Derivative Strategy 30th Dec 08

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Derivative Strategy 30th Dec 08

Monday, December 29, 2008

>United Spirits - SSKI - 24 12 08

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United Spirits - SSKI - 24 12 08

>Sugar Sector

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Sugar Sector

Sunday, December 28, 2008

> "Stock Idea" - Apollo Hospitals Enterprise Ltd. - BCCIR

Please find attached herewith the 'Stock Idea'. The stock covered this
week is "Apollo Hospitals Enterprise Limited".*
*This research report analyses the financials and business prospects of the
company and also collates the views of different analysts so that you can
take an informed decision. This news letter is published once in a week
preferably on every Saturday. We hope it will help you in identifying
fundamentally good stocks to invest for the long term.*
*Warm Regards,*
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> India Infoline Weekly Wrap - 26 12 08

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Friday, December 26, 2008

>Will Ambani brothers's patch up?

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Will Ambani brothers's patch up?

Thursday, December 25, 2008

>Anagram's F & O Indicators 24/12/08

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>Balkrishna Industries Ltd - SKP - 23 12 08

Balkrishna Industries Ltd (BIL), world's premier manufacturer of pneumatic tyres for special applications was incorporated on November 20, 1961. It focuses on the production of off-highway tyres that includes agricultural, industry, material handling, forestry, lawn and garden, construction and earth moving tyres. The company operates mainly in the business segment of tyres which by virtue becomes its core business. It's other businesses are fabric processing and paper manufacturing which has been transferred to its subsidiaries BKT Synthetic Ltd. and BKT Paper Mills Ltd.

At current market price of Rs. 174/-, the stock is trading at P/E 1.93x and EV/EBIDTA 2.30x of FY 11E earnings and EBIDTA respectively. We recommend accumulate rating at our target price of 237 (36% upside) in 18 months, it would trade at 2.6x FY11E earnings

Life is like a piano, white keys are happy moments and black keys are sad moments. But remember both keys are played together to give Sweet music in life...

To read full report Balkrishna Industries Ltd - SKP - 23 12 08

> First Call - Edelweiss

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First Call - Edelweiss

>Indian Auto Sector

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Wednesday, December 24, 2008


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> Steel Authority of India Ltd_JPM

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>Reliance Communications - GS

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Reliance Communications - GS

> Tech Mahindra Ltd._ML

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Tuesday, December 23, 2008

> Gammon India

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>Crisil - PPFAS

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Crisil - PPFAS

>Anagram's Eveninger & Bulk Deals 22/12/2008

Markets ended on a weak note dragged by selling in heavyweights and weak global cues. Sensex lost 171 points to close at 9928, while Nifty finished at 3039, down 38 points. Most of the Asian markets closed in red, while European markets too were trading down. After our markets closed China cut it's CRR by 50 bps and Lending and deposit rates by 27 bps. Rupee was trading at 48/dollar as against Friday's closing of 47.25.
Oil & Gas index was the top loser among the BSE sectoral indices, down 3%, followed by Bankex, which lost 2.5%. Consumer Durablex and FMCG indices were the top gainers, up 2.9% and 0.2% respectively. Among the sensex stocks, Tata Motors and DLF gained the most, up 4.9% and 2.7% respectively, while ICICI Bank and Reliance lost 5.5% and 4.8% respectively. BSE advance-decline ratio stood at 1.01:1.
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Anagram's Eveninger & Bulk Deals 22/12/2008

Monday, December 22, 2008

> Cement Sector Update

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>Hotel Industry Terror Impact

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>The Global Financial Turmoil and Challenges for the Indian Economy

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The Global Financial Turmoil and Challenges for the Indian Economy

Saturday, December 20, 2008


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>Steel - Edelweiss - 18 12 08

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> Bharti Airtel - Indiabulls - 17 12 08

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>Anagram Energy & Metal Update 19122008

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> Anagram's Cement Monthly Update-Nov 08

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>Motilal Oswal Value Monthly- Dec 08

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Friday, December 19, 2008

>Monthly economy review - Sharekhan Special

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Monthly economy review - Sharekhan Special

>daring derivatives-Dec19

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daring derivatives-Dec19

Thursday, December 18, 2008

>Anagram's Eveninger & Bulk Deals 18/12/2008

Market cheered better than expected inflation numbers and surged nearly 3.5% in today's trade, the highest rise among all the Asian markets. Both Sensex and Nifty closed above key psychological levels of 10000 and 3000 respectively. Sensex closed at 10076, gaining 361 points, while Nifty put on 106 points to close at 3060. Inflation for the week ended December 6 came in at 6.84% as against 8% for the previous week and Bloomberg expectation of 7.49%. Chances of Rate cut have increased after such a sharp fall in inflation. Rupee touched 46.90 against the dollar and was headed for the highest close after 1st October 2008.
All the BSE sectoral indices closed in green. Realty index and Bankex were the top gainers, up 7.3% and 7.1% respectively. DLF and JP Associate were the top gainers among the sensex stocks, surging 9.6% and 9.4% respectively. Grasim and Sterlite were the only losers among sensex stocks, down 0.3% and 0.1%. BSE advance-decline ratio stood at 1.5:1.

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Anagram's Eveninger & Bulk Deals 18/12/2008

>OIL & GAS Sector - Edelweiss - 16 12 08

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OIL & GAS Sector - Edelweiss - 16 12 08


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>commercial vehicles-sector update-12.12.08

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commercial vehicles-sector update-12.12.08

> Anagram's Eveninger & Bulk Deals 17/12/2008

After opening higher, indices retreated sharply and closed deep in the red, under performing all the Asian markets. Sensex fell by 261 points to close at 9715, while Nifty shut shop at 2954, down 87 points. Satyam plunged 30% as investors took a negative view on the company's decision of acquiring 51% in Maytas Infra and then calling it off due to strong investor reaction and resultant plunge in it's ADR yesterday. U.S. stock futures were trading down by nearly 1.5%.
All the BSE sectoral indices finished in red. Realty and Teck indices were down the most, falling 7.4% and 5% respectively. ICICI Bank and HDFC Bank were the top gainers among the sensex stocks, up 2.4% and 1.8% respectively, while Satyam Computer was the top loser, plunging 30.2%, followed by Reliance Infra, which tumbled 13.7%. BSE advance-decline ratio stood at 1:1.6.

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Wednesday, December 17, 2008

>HINDALCO(Merrill Lynch)

Downgrade to Underperform; PO cut to Rs40 (earlier Rs60)
Our global team has cut aluminum forecasts. This leads to a sharp cut to our EPS
forecasts – by 37-80% over FY09-11. Even though the stock has underperformed,
we believe there is further downside given its rich valuation – FY10E P/E of 37x
and P/B of 0.7x (excl goodwill for Novelis acquisition). Hence we downgrade our
rating from Neutral to Underperform. Our new PO of Rs40 (based on 50%
discount to DCF) suggests 24% downside and implies P/B (ex goodwill) of 0.5x, in
sync with other leveraged steel stocks in India.

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HINDALCO(Merrill Lynch)

>Crompton Greaves - BNP Paribas

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Crompton Greaves - BNP Paribas

>FCCB Policy update - Reliance Money - 15 12 08

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FCCB Policy update - Reliance Money - 15 12 08

Tuesday, December 16, 2008

>Anagram's Derivatiave Wrap_151208

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Anagram's Derivatiave Wrap_151208

> Investing at the bottom(CLSA)

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Investing at the bottom(CLSA)

>Morning Notes - 16th December 2008

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Morning Notes - 16th December 2008

Monday, December 15, 2008

> Indian Banks

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>Q1 2009 Outlook - DBS

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Q1 2009 Outlook - DBS

>Weekly fundamental & Technical (P-sec)


Technical report

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Weekly fundamental & Technical (P-sec)

Saturday, December 13, 2008

>Anagram's Weekly Watch : 13/12/2008

The US Senate failed to reach a consensus and rejected the $14 billion auto
rescue package. Though the Dow managed to keep its head above the water as
US government said it would assist the troubled automakers and was
also considering
tapping a $700 billion financial industry bailout fund to prevent a collapse
of ailing U.S. automakers, failure of whom would result in a further job
losses and problems for the already ailing economy.

Next week the Federal Reserve is expected to cut interest rates to a record
low after it concludes a two-day policy-setting meeting on Tuesday. The Wall
Street is expecting Fed to cut key federal funds rate by 50 basis points,
which would bring it down to an unprecedented 0.5 percent.

Coming to our markets, next week markets would be awaiting the Second
Stimulus Package by the government, which this time will focus on export
sector. Nifty gained 7.60% during the week and showed resilience to rise on
bad news and closed in green on Friday even on back of negative IIP number
of –0.40%, which we think is positive going forward.

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Anagram's Weekly Watch : 13/12/2008

>DR Reddys - Indiabulls - 11 12 08

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Friday, December 12, 2008

>Derivative report(Angel)

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Derivative report(Angel)

> Indoco Remedies, Nitin Fire - Karvy - 12 12 08

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> Anagram's Daily Call:12/12/2008


The markets are likely to edge lower in the morning trade as some profit taking could creep-in as the package for the US Auto companies is still hanging fire in the Senate. The slide in the Dollar, however, will keep the embers hot for the commodities, though the related stocks may see some profit booking. But keep an eye on news channels, for that Auto package, which may be passed later today.

The markets are likely to watch with keen interest the reading of the Index of Industrial Production (IIP), which should come around 12 noon. The street expects a reading of 2% growth for the month of October. A lower growth would be disappointing. But going by the fact that the markets are showing very strong resilience, there could be a scenario, in which the markets may initially fall and then bounce back with a vengeance. In case of such an eventuality, it will mean that this rally has legs. But do not take that risk without stop losses. Things do not change materially unless we see a close below 2750.

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>GEM Strategy(Merrill Lynch)

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GEM Strategy(Merrill Lynch)

>Technical Recommendation and Commodity Outlook(Emkay)

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Technical Recommendation and Commodity Outlook(Emkay)

Thursday, December 11, 2008

>Analyst presentation Glenmark

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> Anagram's Eveninger & Bulk Deals 10/12/2008

Indices surged more than 5% in today's trade aided by index heavyweights. Sensex rose 492 points to close at 9654, while Nifty shut shop at 2928, putting on 144 points. European markets were trading lower. US markets futures were trading in positive terrain ahead of rescue package for automakers.
All the BSE sectoral indices finished in green. Realty index surged 12.6% followed by Metal index, up 8.4%. DLF and M & M were the top gainers among the sensex stocks, up 18.9% and 15.5% respectively, while Ranbaxy was the sole loser, down 1.1%. BSE advance-decline ratio stood at 1.7:1.
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>TCS(ICICI Securities)

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>Bata India(Centrum)

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>Daring derivatives(Sharekhan)

Read full report here Daring derivatives(Sharekhan)

>Divident yeild(HDFC Securities)

Read full report here Divident yeild(HDFC Securities)

Wednesday, December 10, 2008

>INDIA Outlook(UBS)

􀂄 Summary
We believe markets are close to historical trough valuations, with the Sensex
trading at 9.8x and 2.36x trailing PE and P/BV. However, we think markets are
unlikely to rally in the next six months due to the absence of positive triggers,
although we remain bullish on a medium-term view. We recommend the following
stock-picking strategies: 1) quality companies with reasonable valuation;
2) companies likely to generate free cash flow; 3) stocks trading at attractive levels
on a PVGO/PB basis.
􀂄 What are the likely key themes for 2009?
We believe the election in India, to be held by May 2009, will be the key theme
investors are likely to focus on in H109. Indian markets have generally rallied preelection
and we expect a similar pattern in 2009. Other investment themes are
likely to revolve around the performance of perceived high quality versus low
quality companies, and whether outperformance of defensives will continue.
􀂄 What may surprise on the upside or downside?
We believe the election, crude oil prices, inflation, global credit and economic
scenarios could be the key variables to watch out for as they could surprise either
way. Markets are likely to be more stable once there is more clarity on these issues.
􀂄 Market valuation & targets and highlighted stocks
We factor in 5%/0% EPS growth for FY09/FY10E and assume a trailing 12-month
recovery PE of 15x to arrive at our Sensex target of 13,500. Our most preferred
stocks are Infosys, Bharti, Hero Honda, ICICI Bank, Punjab National Bank, and Idea,
each based on one of the investment strategies we recommend. Our least preferred
stocks are HCL Technologies, HDFC Bank, State Bank of India, Reliance Power,
and Tata Motors, and reflect our view of deteriorating fundamentals in 2009E.

To read full report INDIA Outlook(UBS)

>Tata Steel(UBS)

�� Q209 results better than UBSe
Tata Steel Q209 consolidated revenues grew 36% yoy to Rs442.0bn (UBSe
Rs331.9bn), despite flat volume growth driven by improved realizations (36% yoy)
and mix improvements. EBITDA grew 79% yoy to Rs82.5bn (UBSe Rs65.4bn)
and margins improved 450bps yoy to 18.7%. Net profit grew 42% yoy to Rs47.0bn
(UBSe Rs34.4bn). Tata Steel has achieved 124% of total consolidated FY09E PAT
in 1HFY09. Corus has achieved 99% of our FY09E EBITDA estimate in 1HFY09.
�� Key takeaways from the conference call
(1) Indian volumes in 2H09 to be higher than 1H09 (2) Capex expected to be
Rs10bn in 2H09 and Rs30bn in FY10E incl. Orissa and Jamshedpur expansions (3)
Working capital will decline in 2H09 as Tata Steel will not purchase raw material
and will liquidate its inventory. (4) Tata Steel is in compliance with all covenants
in India and UK.
�� Pension funds surplus at UK increases
Tata Steel UK pension fund surplus increased by £127mn during the quarter to
£819mn. Tata Steel has reduced its pension assets’ exposure in equity markets
marginally from 26% in Mar08 to 25% in Sep08, while increased its exposure to
bonds by 4% to 69%. We believe that pension surplus/deficits can be volatile; and
are not reflective of the underlying operations.
�� Valuation: Rate Neutral with a PT of Rs230
We rate Tata Steel Neutral with a DCF-based PT of Rs230 assuming WACC of
13.5%, medium term growth rate of 10.0% and terminal growth of 5.0%.

Read full report here Tata Steel(UBS)

Tuesday, December 9, 2008

>Indian Banks(Citi Group)

 Asset quality pulls and pressures — India’s economic outlook has continued to
deteriorate, raising further questions on banks' asset quality, given that a)
industrial production growth has slowed sharply; b) corporates face a funding
crunch (especially off-shore); c) credit spreads have moved up (though rates have
started coming off); and d) loan growth has been consistently high (25%+) for 3-4
years. Where could this lead us on asset quality; we seek history as a guide.
 What does history tell us? — a) Still far from peak NPLs (25%, current 2%), and
slippages (6.7%, current 2%); b) deterioration correlates more with IIP than
GDP/loan growth; c)1-3 yr lag between economic slowdown, and NPLs peaking; d)
lending rates matter (peak 19%, current 14%), but impact limited; e) credit costs
are back-ended, they rise even after the economy bottoms; f) stocks underperform
with rising deterioration; appear better correlated to slippages than credit costs.
 Is history relevant? — It always is; but there are caveats: a) Data - limited
availability, distortions (accounting, classification, structural changes); b) BS/P&L
changes -Large bond gains, supporting NPL clean-ups; c) Structural changes -
loan mix, capital and corporate health; d) Starting point – very high base NPLs as
standardized asset quality norms and reporting introduced only in early 1990's.
 History usually repeats itself, but scale and form often vary — We believe asset
quality will hurt; though jury is probably still out on pace and extent of pain. Key
determinants: a) Severity of economic slowdown; b) Scale and timing of domestic
fiscal, monetary actions; c) Global credit and growth environment; and d) Bank
management response to environment; collectively and specifically.

To read full report Indian Banks(Citi Group)

>Reliance Industries(Morgan Stanley)

Quick Comment – What’s New: The Ministry of
Petroleum and Natural Gas released a press note on the
Govt. of India’s decision regarding Pricing and
Commercial Utilization of Natural Gas produced from
NELP blocks. Key highlights of the release are as follows:
1. The First 40mmsmd of gas from the KG-D6 fields
will be supplied to the priority sector at a gas price of
US$4.2/mmbtu (excluding the transportation tariff and
taxes) and will be applicable to all consumers.
2. The pricing of gas is linked to the crude oil (WTI) price
and is capped at US$4.2/mmbtu for a crude oil price of
US$60/bbl or above. The govt. will await the ruling on a
court case for gas pricing and sale of gas to NTPC.
Implications of First 40mmscmd being sold at
US$4.2/mmbtu: Since the GoI has allowed RELI to sell
the first 40mmscmd of gas at US$4.2/mmbtu instead of
US$2.52/mmbtu ( to NTPC and RNRL) as per our
assumptions, the weighted avg. price of gas increases
to US$4.2/mmbtu (from US$2.52) and US$4.0/mmbtu
(from US$2.71) for F09 and F10, respectively.
Implications At Crude Oil Price of US$45/bbl: There
are two impacts if oil is at US$45/bbl: 1) At US$ 45/bbl of
crude oil based on the formula, the gas price, as per
GoIs formula would reduce from US$4.2/mmbtu to
US$4.067/mmbtu; 2) The assumption of MA1 field oil
goes from US$65/bbl to 45/bbl. The impact on RELI’s
EPS, purely due this change in gas pricing is +1%,
+12% and -1% for F09, F10 and F11E, respectively.
The overall impact including the crude oil pricing
would lower earnings by 1% in F09, increase
earnings by 6% by F10 and lower earnings by 6% in
F11E as shown in Exhibit 1. The dollar assumption here
is Rs51; if the dollar fluctuates by Rs1, our EPS changes
by 3.7%.

To read full report Reliance Industries(Morgan Stanley)

Sunday, December 7, 2008

>Pharma(ICICI Securities)

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Pharma(ICICI Securities)

>RBI growth stimulus(RBI)

The global economic outlook has deteriorated sharply over the last two months. In its World
Economic Outlook, published in early October, the International Monetary Fund (IMF) forecast global growth of 3.9 per cent in 2008, and of 3.0 per cent in 2009. The IMF has since revised its forecast for global growth downwards to 3.7 per cent for 2008, and 2.2 per cent for 2009. Many economists are now predicting the worst global recession since the 1970s. Several countries, notably the United States, the UK,the euro area and Japan are all officially in recession. More worryingly, current indications are that the recession will be deeper and the recovery longer than earlier anticipated.

To read full report RBI growth stimulus(RBI)

Saturday, December 6, 2008

>Godrej Consumer Products Limited(SBIcap Securities)

Future Sales growth to remain buoyant – In line with other
FMCG companies, GCPL too has not witnessed any slow down
in demand for its products namely, soaps, hair colours and
toiletries, till September 2008 quarter. The management does not
foresee any slow down in demand for its products going
forward also due to the sheer inelastic nature of its products.

To read full report Godrej Consumer Products Limited(SBIcap Securities)


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Friday, December 5, 2008

>Siemens(ENAM Securities)

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Siemens(ENAM Securities)

>Indian Hotels(Sharekhan)

Mumbai has seen the fiercest of terrorist attacks in the last two days. The two
hotels—Taj Mahal Palace (with 565 rooms) and Oberoi-Trident—have been the centre
of terrorist activity since the evening of November 26, 2008. We believe the tragic
event has severe consequences for the hotel industry in general and Indian Hotels in

Read full report here Indian Hotels(Sharekhan)

Thursday, December 4, 2008

>Indian Banking(IIFL)

An expected spike in loan delinquencies is presently the biggest concern for the banking system. But how bad
could the situation get? We present two scenarios: moderate and bearish. In the moderate case, assuming
NPLs rise by 60% this year and the next, aggregate profit growth for all banks can slowdown to 10% in FY09
and decline by 16% in FY10. In the bearish case, assuming NPLs rise by 100% in each year, profit growth can
only creep up at 3% in FY09 and drop by 36% next year. While a profit decline is possible next year, banks’
books are expected to remain intact with healthy CAR. The BSE Bankex has corrected by 60%YTD, reflecting
some of these concerns, but any upside is likely to be capped by the negative news flow. Six major banks
presently trade at their 10-yr average PB valuation of 1.2x. Government banks appear safer than private ones.

Read full report Indian Banking(IIFL)

>Hindalco Industries(Macquarie Research)

􀂃 Aluminium outlook weakens: Our commodity team believes that aluminium
inventory build-up is happening due to a lack of demand in spite of production
cuts; this will limit any increase in aluminium prices from current levels. We
are reducing our target price by 34% to Rs73 to factor in changes to our
commodities price forecast.

To read full report Hindalco Industries(Macquarie Research)

>Indian construction sector(FIRST GLOBAL)

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Indian construction sector(FIRST GLOBAL)

Wednesday, December 3, 2008

>Tata steel(RBS)

Tata Steel posted a strong 1HFY09 performance, with operating profits up 73% yoy.
However, we expect the rapid price deterioration in the past few months to lead to a
severe earnings decline from 2HFY09. Maintain Sell with new target price Rs115

To read full report Tata steel(RBS)

>Top 20 cash rich companies(KRChoksey)

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Top 20 cash rich companies(KRChoksey)

Tuesday, December 2, 2008


We initiate coverage on Mahanagar Telephone Nigam (MTNL), a
government-owned telecom operator, with a REDUCE rating and TP of
INR55 based on a cash per share of INR39 and a core business
valuation of INR16 at 2.5x FY09 EBITDA. Historically MTNL traded close
to its book value but the valuation is now converging towards its cash
per share as its ROE has declined to 3.3%, well below its cost of capital,
and one-fourth of its book value is amount recoverable from Department
of Telecom, which is unconfirmed and outstanding for several years.

To read full report MTNL(BNP PARIBAS)


Housing Development Finance Company (HDFC) is among the better diversified
plays on financial services in India given its leadership in the under-penetrated
mortgage market and strong growth in other financial services (life insurance,
asset management and banking via HDFC Bank). We believe that HDFC’s flexible
funding franchise, efficient operating performance and consistent earnings
momentum in a tough operating environment will be key stock catalysts. Potential
divestment in subsidiaries could be a long-term trigger. At the current market
price, the stock trades at FY10E P/BV of 2.3x (unadjusted) and 1.4x after adjusting
for investments in subsidiaries and associates. We initiate coverage on HDFC
with BUY and sum-of-the-parts (SOTP) price target of Rs1,940/share.

To read full report HDFC(ICICI Direct)

Monday, December 1, 2008

>JP Associates(Citi)

 Impressive big picture, as in the next 10 years JPA could be — 1) One of the
top three Indian cement companies; 2) Power portfolio of 7,515MW (3) Inhouse
EPC with a backlog of ~ Rs420bn; 4) One of the largest real estate
developers in India; and 5) Have 1,212km of expressways with tolling rights.
 However, getting there will be extremely tough — The success of JPA’s asset
heavy business is pinned on easy access to capital. On the capital side we
believe Yamuna Expressway needs an incremental ~ Rs36.6bn of funding,
mobilizing ~ Rs450bn for the Ganga Expressway. This is going to be a
Herculean task and financially closing all power projects will be extremely
difficult. Further the poor demand outlook for real estate and cement makes
the situation that much tougher for the company.
 Cutting target price to Rs87 (from 300 earlier) to factor in — 1) 21-22%
earnings cut; 2) Cut in construction EV/EBITDA 7x (12x); 3) Cut in cement
EV/ton to US$75 (US$120); 4) Cut in power assets value to Rs35bn (Rs69bn);
5) Cut in Jaypee Greens value to Rs5.4bn (Rs11.7bn); 6) Cut in Jaypee Hotels
value to Rs1.5bn (Rs4.9bn) and 7) Cut in Jaypee Infratech value.
 But we still maintain a Buy because — 1) Underlying parent businesses will
still generate Rs8-10bn average annual CFO; 2) Stock looks attractive as the
parent (cement, EPC and Jaypee Greens) business trades at adjusted P/E
multiples of 4.9x FY09E, which we believe is extremely cheap; and 3) Most of
the value in our new target price of Rs87 comes from cement, power and
construction, and not real estate.

To read full report JP Associate(Citi)


 Management view: Short-term uncertain but medium-term positive — Deal
pipeline remains strong and while ramp-ups are happening, there are certain
ramp-downs as well. Management is positive over the medium term – believes
that this environment throws up opportunities for Wipro. Our view –
Uncertainty/delay in decision making will impact near-term outlook.
 Focus on "just in time" hiring — Wipro has made ~8,000 campus offers till
Sep-end (compared to ~14,000 last year till Dec-end). Wipro is focusing on
optimizing the employee supply chain, improving productivity and growing
revenues without a proportionate increase in headcount. Our view – Lower
hiring partially reflects lower visibility and partly easing supply scenario.
 Initiatives to drive higher growth — 1) Customer centricity; 2) Integrated multiservice
offering; 3) Consulting to proactively help clients cut costs; 4) Taking
existing services to new areas; and 5) “Hunting” for new customers and
focusing on emerging markets. Our view – Wipro’s strength across multiple
service lines and emerging markets should help drive better growth rates.

To read full report Wipro(Citi)

>Sail(JP Morgan)

Sharply lower earnings likely over the next two to three quarters, but
building in gradual recovery from H2FY10E: We expect sharp earnings
erosion over the next two to three quarters, driven by lower volumes and
higher coking coal costs. We expect H2FY09E earnings decline of 79% y/y.
However, we expect earnings to improve from June-09 as lower coking coal
kicks in. We cut our EPS estimates sharply over FY09E-11E (13-43%).
• Domestic demand recovery critical: Given the dependence on imported
coking coal, we believe most of India's steel companies are less competitive
in the export market compared to CIS/Chinese steel exports, and therefore
we believe demand recovery in the domestic market is critical to earnings
recovery in H2FY10E. However, we project extremely weak steel demand
over the next few months, and we cut our India steel demand growth
estimates to 4.5% for FY10E.

To read full report Sail(JP Morgan)

Sunday, November 30, 2008

>Gwalior Chemical(LKP SHARES)

Gwalior Chemical Industries Ltd. (GCIL) is a producer of toluene - based (derivative of crude oil) specialty
chemicals. Toluene being sensitive to crude oil prices, GCIL enters into price fixing contracts with suppliers
on a monthly/quarterly basis for requirements for upto 3 months to hedge its position against rising prices.
What once was beneficial to the company in the face of ever increasing crude oil prices has turned
detrimental due to steep fall in prices.

Read full report here Gwalior Chemical(LKP SHARES)


Triveni Engineering and Industries Ltd. (TEIL) reported a YoY
growth of 41% in net sales to Rs4.3bn for Q4FY08, led by
healthy performance across its divisions. The company changed
the accounting policy relating to recognition of carbon credit
income, thus impacting profits to the extent of Rs90mn. OPM
expanded by 330bps to 18.6%, led by turnaround of sugar
operations coupled with improved margins in distillery division.
Net profits surged by 5.4x to Rs270mn.
! Sugar sales higher by 35%
Sugar despatches rose 35% to 143.8k mt whereas realisations improved
by 21% to Rs16.2k/mt. As on Sep’08, TEIL is carrying ~256k mt of
sugar inventory against 186.5k mt as on Sep’07. This should help the
company capitalise on firm sugar prices.
! Margins expand by 330bps to 18.6%
OPM expanded 330 bps to 18.6% on back of turnaround in sugar division
and improved contribution from distillery segments. Accordingly,
operating profits surged 71% to Rs796mn.
! SAP for SS 08-09 at Rs140/quintal
In Oct’08, UP government announced SAP of Rs140/quintal for
SS 08-09 against Rs125/quintal in SS 07-08 and Rs110/quintal paid by
sugar mills as per the Supreme Court order. The UPSMA has contested
the SAP announcement in the Allahabad High Court questioning the
methodology in arriving at the SAP.



Triveni Engineering and Industries Ltd. (TEIL) reported a YoY
growth of 41% in net sales to Rs4.3bn for Q4FY08, led by
healthy performance across its divisions. The company changed
the accounting policy relating to recognition of carbon credit
income, thus impacting profits to the extent of Rs90mn. OPM
expanded by 330bps to 18.6%, led by turnaround of sugar
operations coupled with improved margins in distillery division.
Net profits surged by 5.4x to Rs270mn.
! Sugar sales higher by 35%
Sugar despatches rose 35% to 143.8k mt whereas realisations improved
by 21% to Rs16.2k/mt. As on Sep’08, TEIL is carrying ~256k mt of
sugar inventory against 186.5k mt as on Sep’07. This should help the
company capitalise on firm sugar prices.
! Margins expand by 330bps to 18.6%
OPM expanded 330 bps to 18.6% on back of turnaround in sugar division
and improved contribution from distillery segments. Accordingly,
operating profits surged 71% to Rs796mn.
! SAP for SS 08-09 at Rs140/quintal
In Oct’08, UP government announced SAP of Rs140/quintal for
SS 08-09 against Rs125/quintal in SS 07-08 and Rs110/quintal paid by
sugar mills as per the Supreme Court order. The UPSMA has contested
the SAP announcement in the Allahabad High Court questioning the
methodology in arriving at the SAP.


>Balrampur chinni (ICICI Direct)

Balrampur Chini’s results were below our estimates. The company reported
its Q4SY08 (sugar year 2008) results with a topline growth of 40.0% to Rs
416.7 crore from Rs 297.8 crore in Q4SY07, supported by volume growth
and improvement in price realisations. The quarter has also witnessed a 15.2% increase in raw material costs to Rs 287.3 crore from Rs 249.5 crore in Q4SY07. The company is currently holding a large sugar inventory, in anticipation of higher sugar prices, going forward. The rise in sugar prices resulted in a significant improvement in EBITDA margins this quarter to 17.3% from 0.8% in Q4SY07. Interest costs rose drastically by 115.3% to Rs 28.3 crore in Q4SY08 on account of higher interest rates. The company reported a net profit of Rs 14.6 crore in Q4SY08 as against
a net loss of Rs 33.7 crore in the corresponding quarter of last year.

To read full report Balrampur chinni (ICICI Direct)

Saturday, November 29, 2008

>Sun pharma , Shoppers stop(BRICS)

Major Setback for Sun as USFDA grants Osmotica's citizen petition
In a major setback to the prospects of Sun Pharma’s launch of generic tablet
version of EffexorXR (Venlafaxine extended release tablets), USFDA has granted
Osmotica's citizen petition. The USFDA has advised Sun to submit a new ANDA
if it wishes to pursue approval of the aforesaid tablets. However, our prima
facie analysis suggests that even if the company re-submits the ANDA application
with Osmotica's venlafaxine extended release tablet being the reference drug, it
would take at least one - one and half years before it gets the approval. On the
flip side, as per the settlement with Wyeth, Teva is expected to launch the
aforesaid generic capsules in July 2010. In this scenario, there may be very little
incentive for Sun Pharma to resubmit the ANDA application.

To read to full report Sun pharma , Shoppers stop(BRICS)


Petrochemical margins have corrected due to the huge fall in demand on account of
the ongoing global slowdown and demand destruction. Reliance Industries (RIL),
however, is better off than its peers because of its focus on the domestic market and
high level of integration, which shields it from offtake risks. We consider negative-tozero
cracker margins unsustainable and expect them to improve as crackers cut
operating rates. Margins are, however, likely to remain below FY07 and FY08
averages, as cracker operating rates are expected to reach 85% only by FY12.

Read full report here Reliance(Edelweiss)

Friday, November 28, 2008

>Steel sector (Edelweiss)

Globally, with the financial crisis spilling into the real economy, demand outlook for steel has
taken a severe beating. We expect Chinese steel demand to decline 10% in Q4CY08E, and
virtually stall at 0.8% in CY09E, led by slowdown in construction, appliances, and auto
sectors. With recession/recession-like conditions in the developed world (the US, Japan, and
a few European countries), we see their steel consumption declining 5-20% over CY09-10E;
past recessions have seen US steel consumption drop 10%, on an average. Though growth in
developing nations is likely to mitigate this impact to some extent, global steel consumption
is slated to decline 5.0% in CY09E, contrary to earlier assumption of 6% growth. This will be
first decline since CY98. Recovery in CY10E is likely, but there will still be a decline of 1.0%.

Read full report here Steel sector (Edelweiss)


�� We believe investors should take the open offer as an
opportunity to exit
�� Stretched balance sheet and expensive transition to GSM
model pose challenges; cut FY10e EPS by 8%
�� Retain negative outlook; trim target price from INR19 to INR12

To read full report TATA TELE (HSBC)

Thursday, November 27, 2008

>Reliance capital(ICICI Direct)

The consolidated PAT was in line with expectations at Rs.2.3bn a jump of
15% y-o-y. Reliance capital (Rcap) with its recent past exorbitant rate of
growth in all streams of businesses got itself a position in top 5 in Life and
General Insurance too, apart from asset management business

To read full report Reliance capital(ICICI Direct)

>INDIA Strategy (Merrill Lynch)

Still bearish; expect index of 7000 in early 2009
We felt comfortable with our bearish views on the market last year when it was anti-consensus. We are concerned about the current
consensus bearishness but think it is too early to turn bullish and expect markets to fall to 7000 in 1st quarter of 2009 led by:

To read full report INDIA Strategy (Merrill Lynch)

>Two wheeler(First Global)

Data released by the Society of Indian Automobile Manufacturers (SIAM) for
the month of October 2008 shows that the combined two wheeler and three
wheeler industry volumes declined significantly by 10% Y-o-Y for the first
time in FY09
􀂉 Despite the festival period falling in the month of October 2008, sales at the
companies’ end plunged sharply due to a huge pile up of inventory of the
previous month at the dealer network, though retail sales recorded an

To read full report Two wheeler(First Global)

Wednesday, November 26, 2008

>Sensex 16000(Feb 2009) Financial Astrologer

The sensex will start rising from December 10, 2008 onwards
and will reach 16000 points by the end of February 2009.
India will outperform the American economy.

Read full report here >Sensex 16000(Feb 2009) Financial Astrologer


Q209 results: NTPC posted Q2 revenue growth of 20%, driven by higher fuel cost (which is a
pass-through cost to the consumer). Generation declined by c7% (qoq) to 47bn units owing to
lower plant load factor (PLF), of c83% as compared to 86% in FY08 achieved by its coal fired
thermal power plants. The wage revision provision continued in Q209, resulting in a 47%
jump in employee cost and a 27% rise in other expenditures. Employee costs include
INR3,170mn in provisions for pending employee pay revisions and other employee benefits.

Read full report here NTPC (HSBC)

>Onmobile (Citi)

New Rs337 target price — We are reducing FY09-11E EPS by 5-16% with 1)
delays in new product deployments particularly outside India; and 2) higher
cost pressures as OnMobile continues to invest heavily on projects/new product
development, whose revenue streams have yet to start flowing. Our target price
is based on 16x Mar-10 P/E (25x earlier), and is in-line with multiples of
comparable peers. Target P/E while appearing high in this environment, is
justified given its strong growth prospects (37% EPS CAGR over FY08-11E).

To read full report Onmobile (Citi)

>United phosphorus(GS)

We reiterate Buy on United Phosphorus (Uphos) with a new 12-month TP
of Rs120 (earlier Rs220) implying potential upside of 33% from the current
level. Our calculations indicate that Uphos share price implies a 25%/18%
decline in revenues and net income over FY10E-12E which we view as
unjustified. We believe Uphos to have a steady earnings profile as 1)
Unlike fertilizers, agchem is relatively well positioned to withstand the
agriculture downcycle; 2) Demand for agchem is less elastic to economic
cycles; 3) Industry is consolidated with strong entry barriers; and 4)
Benefits of Cerexagri integration would start reflecting from FY2010E.

To read full report United phosphorus(GS)

Tuesday, November 25, 2008

>McNally Bharat(ANAND RATHI)

Re-iterate Buy. McNally Bharat reported strong revenue and
earnings growth for 2Q. Faster execution of projects helped
revenue beat our estimates, while earnings were in line. We reduce
earnings estimates (mainly to account for higher interest costs)
and cut our target price to Rs85 from Rs168. Maintain Buy.

Read full report here McNally Bharat(ANAND RATHI)

>Infosys ADR (FSA)

Fundamental research indicates a 14% upside in the common stock over the next 6-12 months. We
have calculated the target price based on fundamental factors, using a weighted average of target
prices obtained using DCF and comparative valuation methodologies.
We reiterate the common stock a BUY, with a 6-12 month target price of INR1,400.

To read full report Infosys ADR (FSA)

>Vikasha ind(Sunidhi)

Andhra Pradesh-based VIL was incorporated in the name of Visaka
Asbestos Cement Products in Jun 81 and acquired its present name in
Aug 1990. It came out with a rights issue in 1992 aggregating Rs.5 crore
(29.85 lakh equity shares at a premium of Rs 7) to part-finance the
Rs.23 crore expansion project at it's synthetic yarn facility at Nagpur.
During FY2006-07, it made preferential issue of shares, which raised its
equity capital to Rs 15.9 crore.
It manufactures asbestos cement sheet and synthetic blended yarn.
The cement sheet division contributes 80% of the total revenue with
20% coming from yarn division.

To read full report Vikasha ind(Sunidhi)

Monday, November 24, 2008

>NTPC(Hem Securities)

NTPC, the largest power generation company in India has announced its Q2FY09 results and has surprised the investors again. NTPC has an installed capacity of 29394 MW which equals nearly 19% of total capacity in the coun-try. Apart from core business of power generation, the company has also ven-tures into various other verticals, it also provides consultancy in the area of power plant constructions and power generation to companies in India and abroad. The company is presently operating 15 coal based plants, 7 gas based and 4 joint venture power projects with nation wide presence.

To read full report NTPC(Hem Securities)

>Monthly economic Review(SHAREKHAN)

For the period November 1–14, 2008, the BSE Bankex has seen a rise of 2.9% compared with a decline of 4.1% in the Sensex in the same period. However, against the backdrop of the ongoing global credit crisis, domestic liquidity crunch and a likely strain on the quality of domestic banking assets, the fundamental outlook for the banking sector remains bleak. The credit demand is likely to remain strong in the near term due to the drying up of the alternate sources of funds; however, the credit demand may decline going forward due to the anticipated slowdown in the economic activity. Besides, deceleration in the economic growth poses the risk of higher delinquencies and further deterioration in banks’ asset quality. Hence, we believe that though most of the banking stocks are trading at attractive valuations currently, further downside risks persist in the near to medium term.

To read full report Monthly economic Review(SHAREKHAN)

Sunday, November 23, 2008


Company updates
Larsen & Toubro (LT IN; Rs790; Buy) – announced large order wins
L&T announced three large order wins totaling Rs16bn yesterday.
1) Rs7bn order from HPCL-Mittal refinery in Bhatinda – Follow-up order for hydrogen
generating units.
2) Rs3.6bn order for urban water supply project from Delhi Jal Board.
3) Rs5.8bn order for urban water supply project from Hyderabad.

Read full reports L&T(ABN.AMRO)

>VST Tillers Tractors(Sunidhi)

VST Tillers Tractors (VSTTL) is a Bangalore-based farm equipment manufacturer
of power tillers and low horse power (HP) (sub 20 HP) tractors with three
factories in Karnataka: Bangalore, Mysore and Hosur.
Tractors and tillers offered by VSTTL find application in dry tilling, cultivating,
deweding, water pumping, ploughing, riddging, wet pudlling and transportation
of goods. The Diesel engines find application in the manufacture of tractors and
Power tiller is the two-wheeled version of the tractor is meant for farmers with
smaller land holdings and for those who cannot afford expensive tractors (cost of
the tiller is almost one-third of the tractor cost).

To read full report VST Tillers Tractors(Sunidhi)


Market opened on a positive note, with the Sensex higher
by 200 points and Nifty up by 60 points. The market was
volatile all through the day with a low of 8,442 and closed
at the day’s high of 8,970. Bulls filled the bearish gap,
which was a crucial resistance at 8,726 and gave a close
above this level. Nifty has given a close above 20-hourly
moving average, ie 2,640, which is a positive sign going
forward. The momentum indicator on the daily chart is
on the verge of giving a positive crossover, but is trading
below the zero line. The 20- and 40-day moving average
is at 9,466 and 10,621 respectively for the Sensex, which
are strong resistances on the upside. Further, good support
levels are around 8,600 and 8,400. The market breadth
was positive with 6,42 advances and 47 declines on the
NSE and with 1,186 advances and 1,311 declines on the
BSE. Our short-term bias is up with support at 8,700 and
target at 9,175.
To read full report Eagleeye(SHAREKHAN)

>Equity weekly watch(ANAGRAM)

To read full report Equity weekly watch(ANAGRAM)

Friday, November 21, 2008

>Punj lloyd(BNP PARIBAS)

Oil & gas projects delayed – growth estimates at risk
We initiate coverage on Punj Lloyd, a global firm specializing in
Engineering, Procurement and Construction (EPC) projects for the oil &
gas industry, with a REDUCE rating and TP of INR146. The mid-anddownstream
oil & gas industry contributes approximately 70% of the
company’s revenue. The sudden sharp decline in crude oil and natural
gas prices, demand, and the global credit crunch has resulted in delays
and cancellations of several new projects across the Middle East and
Southeast Asia. We expect the slowdown to gather momentum over the
near term; so, new projects may be deferred until the prevailing
conditions improve.

Read full report Punj lloyd(BNP PARIBAS)

>Textile sector outlook(CLSA)

Our meetings with textile and apparel majors and outsourcing arms of US
retailers indicates that outsourcing out of India is still on the increase
even as US retailers are brutally hurt. India is seeing incremental benefit
as growth in China slows, cost pressures in China increase and Pakistan
remains embroiled in social strife and tension. However, over the last 12
months, vendor consolidation has accelerated and even as larger vendors
gain market share, smaller ones are losing out. The outlook for 2009 is
very challenging given cost pressures and lower growth than the last five
years. We expect both prices and volumes to be under pressure in 2009.
While textile sector has underperformed, there is no reason to merit
investment given the medium term outlook.

To read full report Textile sector outlook(CLSA)

>India Telecom(BNP PARIBAS)

GSM net adds at new high, cross 8m in October
Indian GSM operators continued to exhibit healthy subscriber growth in
October, taking the GSM subscriber base to 242m. GSM subscriber
additions in August came in at 8.08m, compared with 7.69m in
September 2008 assuming steady net additions for RCOM GSM. Aircel
and BPL maintained their run rate. BSNL continued to lose market
share, adding 669,551 subscribers.
Bharti maintains lead; under pressure in Bihar circle
Bharti maintained its run rate adding 2.72m subscribers but remains well
ahead of the competition in terms of subscriber additions. Bharti
witnessed pressure in net additions in Bihar circle with the launch of
operations by Idea and Vodafone. Bharti’s marketshare of GSM net
additions has declined to 33.7% from 40.4% in August 2008. Decline in
marketshare for Bharti due to expansion of operations by regional
players is already built into our estimates.

To read full report India Telecom(BNP PARIBAS)

Thursday, November 20, 2008


Aban Offshore’s (Aban) standalone PAT was at INR 1.6 bn vis-à-vis INR 1.2 bn for
consolidated entity. High financing expenses and losses in a few subsidiaries subdued
�� Losses reported in a few subsidiaries were significantly higher than their respective
revenues (please refer subsidiary analysis section for details).
High leverage: Future incremental cash flows will be key to deleveraging BS
�� The debt-equity (DE) ratio as at end-FY08 was 16x; however, on considering nonconvertible
redeemable preference shares as debt, D/E would stood at 26.3x. D/E for
the standalone entity as at the end of FY08 was at 1.4x and on considering nonconvertible
redeemable preference share as debt , D/E was at 2.5x. Preference shares
are redeemable at par during 2011 & 2012
�� Loan book has increased from INR 11 bn in FY06 to INR 130 bn in FY08, primarily due
to the USD 2.2 bn Sinvest acquisition.
�� Loan repayable in FY09 is INR 17.02 bn, which is ~8 times net cash from FY08
operations. However, with delivery and full-year contributions of many new-build rigs,
future cash flows may be significantly higher, facilitating debt repayment. Also, the
company had significant cash and cash equivalents of INR 8.4 bn.

Read full report here ABAN(EDELWEISS)

>INFOSYS (William Blair & company)

Dominant Provider of Offshore IT Services. Infosys is the leading provider of
offshore IT services, with what we believe is the strongest brand and one of the
largest talent pools, and arguably the best technology resources. The company’s
customers include 99 of the U.S. Fortune 500 and 47 Fortune 100 companies.
Existing customers accounted for 97% of fi scal 2008 revenue—important in the
technology space, since IT buyers often make vendor selections based on which
company is the market leader and has a strong referenceable customer base.

Read full report here INFOSYS (William Blair & company)

Wednesday, November 19, 2008


Leverage remains uncomfortably high
Unitech has one of the highest debt-equity ratio among Indian real
estate developers. Even adjusting telecom-related debt, gross debt of
property business is approximately INR80b. The company’s interest
coverage ratio (EBITDA/Gross interest) remains dangerously high at
2.2x declining to 1.9x by FY10. We believe that weak pricing and slow
execution are likely to stretch Unitech’s balance sheet. The company
has launched only about five new projects (6m sqft) this year. We are
still skeptical about the company’s ability to drive volumes in the
residential segment in FY09 due to weak market sentiment.

To read full report UNITECH(BNP Paribas)

>Daring derivatives(Sharekhan)

To read full report

Daring Derivatives

Monday, November 17, 2008


With the introduction of VAT, an increase in excise duty for
non-filtered cigarettes and a recent smoking ban in public
places (2 October), the tobacco sector is getting hit hard and
fast. These measures are part of an overall global plan to
reduce tobacco consumption, spearheaded by the WHO.
While it is true that, in India, the vigour of implementation
may change depending on political or other factors, we
believe the tobacco sector is in for a tough time in the long
term. The halcyon days of FY05-07 averaging 7.5% volume
growth pa may be over.

To read full report ITC(HSBC)

>Dr Reddy (JP Morgan)

We recently hosted the management of Dr Reddy’s as part of our India
Conference 2008. Key takeaways from the various investor meetings are
as follows:
• Generics pipeline remains strong; CIS business robust: Dr Reddy’s
reiterated a strong growth pipeline in the US as demonstrated by the
ANDA pipeline. The company had 66 ANDAs waiting approval from
the US FDA as of October 2008. The company maintained that the CIS
business remains robust with receivables under control from that
particular region.
• AOK tender results expected some time in November end; market
to become more competitive: The company expects the AOK tender
results to come out some time in November end. The AOK tender
addresses around 60 molecules and approximately 40% of the German
market. While management remains hopeful of some wins in the AOK
tender, the company expects price competition to remain severe in
Germany. The company did not give any guidance for Betapharm
profitability for next year.

Read the full report here Dr Reddy (JP Morgan)


Our brief inquiries with key Indian retailers about sales during the
Diwali festive season indicate that consumer spending was satisfactory.
Categories that saw some weakness include Furniture and Watches,
whereas sales in Apparel and Jewelry were encouraging.
• Although it is difficult to gauge consumer sentiment accurately we
believe sales for Dec’08 quarter should be satisfactory if interest rates
and inflation trends continue to show improvement from current levels.
• We maintain our Overweight rating on key retailers Titan Industries,
Pantaloon Retail, and Gitanjali Gems, and believe that the current credit
crisis should accelerate the shift towards organized retail.
Here are some direct quotes on Diwali sales made by various retailers:

Read full report here INDIA RETAIL(JP Morgan)

>Reliance Infra(EDELWEISS)

Reliance Infrastructure’s (Rel Infra) return on average equity (ROAE) was 9.0% and
return on net operating assets (RNOA) was 9.2% in FY08 (ROE analyser analyses the

Investment in associate companies stands at INR 61.1 bn as at end-FY08 (INR 1.2 bn
as at end-FY07), generating a meager return of 1.3%. This is primarily on account of
investment made in Reliance Power (RPL; INR 60.8 bn), which is currently under
gestation and not fully operational.

Investments made by the company increased 124.0% from INR 52.2 bn in FY07 to INR
117.0 bn in FY08. The additional investment of INR 59.8 bn was primarily due to
investment in RPL’s initial public offer (IPO). Return on investment, other than
investment in RPL, comes to 6.5% for FY08.

Read full report here Reliance Infra(EDELWEISS)

Sunday, November 16, 2008

>Equity Weekly Watch (ANAGRAM)

To read full report

Equity Weekly Watch (ANAGRAM)

>BHEL(Angel Broking)

Bharat Heavy Electricals Ltd (BHEL), one of the largest Engineering and Manufacturing
Enterprise in India, dominates the Power Generation Equipment market of the country with
about 64% share of the Total Installed Capacity. The company is in the midst of a rapid
capacity expansion plan. It has already ramped up its capacity from 6,000 MW p.a. to
10,000 MW p.a. in December 2007 and is further scaling it up to 20,000 MW p.a. by
FY2012. However, going forward the company faces diverse set of challenges both from the
weak economic environment as well as the structural changes in the Sector, which could
limit further upside on the stock. At the price of Rs1,405, the stock is commanding
valuations of 15.2x FY2010E EPS and 9.4x FY2010E EBITDA. Given the overall
concerns, we Initiate Coverage on the stock with a Neutral View.

Read full report here BHEL(Angel Broking)

>IT Sector update(MOTILAL OSWAL)

Downgrading estimates to factor ~13% cross currency movement in 3Q
Cross currency woes — worsening: Adverse impact of cross currency, has continued
into 3Q as well. We expect the impact of this phenomenon to hit 3Q US$ revenues if the
exchange rate for the GBP and Euro do not reverse in the latter half of 3Q.
While average depreciation of the GBP and Euro against the US$ was ~4% during
2QFY09, the depreciation has been sharper at ~13% in 3Q (until date). With nearly 50%
of working days already concluded in 3Q, we note that IT companies would not have
anticipated such sharp currency movements when they provided guidance in mid-October.
We believe this sharp cross currency movement will put pressure on 3QFY09 US$
revenue guidance of Infosys and Satyam, unless a sharp reversal occurs in the remaining
part of the quarter. The substantial volatility in key currencies across the globe versus
the US$ would mean IT companies effectively have to contend with an additional challenge
— cross currency — besides the existing ones such as global slowdown, hedging, pricing
pressure, outsourcing backlash, MNC competition etc. Infosys had guided for 3Q revenue
growth of 0.3% (upper end) QoQ at an assumption of 1.86USD/GBP and 1.36USD/
EUR. At the current rates, we believe 3QFY09 US$ revenues will be negatively impacted
by ~3%.

Read full report here IT Sector update(MOTILAL OSWAL)

Saturday, November 15, 2008


What's new? — Press reports (ET, Mint) indicate Jet is negotiating to sell a 10%
equity stake to Temasek Holdings for consideration of Rs2.5bn. The company
is also reportedly raising debt funds of Rs10bn from Abu Dhabi-based
Mubadala Development Corporation to help fund working capital requirements.

Management denies this development — Management has indicated these talks
are speculative, and that the company has no plans to infuse equity or debt
(from Mubadala). However, management has said that Jet plans to raise fresh
debt funds to meet its working capital requirements.

What are Jet's funding requirements? — We forecast Jet's cash losses at
Rs31.3bn (over FY09E-10E) (after interest payments, but before principal
repayments of c.US$280m). The company is trying to curb operational losses
through various initiatives – cutting loss-making flights, reducing ticket
commissions, etc. The biggest positive is the sharp fall in crude oil prices
(<$60 vs. our FY10/11 estimates of $75/bbl). If crude prices continue to
decline, there could be a substantial positive upside to our current numbers.

Read full report here JET(CITI)

>Hindlever(Merrill Lynch)

Rising concern on demand but relative safe haven; Buy
Our mgmt meeting revalidated our view that margin outlook is improving but we
were surprised by mgmt's rather sombre outlook for demand. Our 2009 forecast
of margin expansion of 150bp remains intact. However our sales forecast of 11%
could be at risk should macro environment continue to deteriorate. Nonetheless
overall, we believe HUVR is well placed to grow earnings in mid teens, way ahead
of average Sensex growth. Hence we reiterate our Buy rating.
Margin outlook is improving
We estimate lower input cost benefits will begin to flow in partly from March Q and
fully from June Q. The benefits will differ category to category - Soaps will witness
benefits being passed on, detergents will see benefits being retained.
Key issue #1: Is there risk to volumes?
HUVR’s volume growth has been slowing down from 10% in March Q to 7% in
Sept Q in response to rising prices. Despite stabilizing retail prices, the macro
environment is not favourable enough to suggest that volume acceleration is likely
near term. Key concern is falling employment in 2nd tier cities and uncertain
economic outlook. Yes, HUVR’s products are non discretionary but down-trading
is likely as was the case during the drought years of 2002/2003.
Key issue #2: Will low price competition be rekindled?
Lower commodity prices invariably come in with the negative of reenergizing low
price competitors. This is most likely the case in soaps as margins here will
expand the maximum. We expect HUVR to withstand higher competitive activity
through its diversified portfolio which gives it the flexibility to cut prices and retain
margins more effectively versus competitors.

Read full report here Hindlever(Merrill Lynch)

Friday, November 14, 2008

>Technical & Derivative strategy(EMKAY)

Read full report here

Technical & Derivative strategy(EMKAY)

>Daily call(ANAGRAM)

Global markets are going through turmoil of enormous proportions. Large amount of shares are changing hands everyday with extreme price volatility. On one side we have Mutual fund and Hedge fund as sellers who face redemption and needs to get out of markets soon and on the other side are the traders who earlier went short and want to lock in their profits by reversing their positions or long term investors who appear on the scene when they perceive a bargain.

Take an example of US markets. While we were closed on Thursday, US markets fell shapely on their Wednesday session and for most part of Thursday's markets, albeit to recover all its losses in the last few hours of trading. From Tuesday's close to Thursday's low Nasdaq was down almost 10% and Dow almost 8%. In two hours of the trade yesterday, they surged back 12% and 10% respectively. To put these numbers in perspective, US market first lost as much market cap as India's size of Economy and recovered more than that by the closing.

The reverse is likely to happen in our markets, we may open higher with the world markets, but sustaining opening gains looks daunting. 10300 is the resistance now, on our way up and 9300 and 9000 are the supports for the Sensex.

Read full report here Daily call(ANAGRAM)


For Q2FY09, ZSL reported 1.4% growth in the consolidated revenues to Rs
1800.5 mn, In USD term revenues were lowered by 6.1% sequentially to $42
mn. EBITDA margins for the quarter expanded by 160bps to 16.9%. Net profit
for the quarter was up by 4% sequentially and 26% yoy to Rs 264.8 mn.
During the quarter, ZSL has announced two new acquisitions namely PEQ
consulting (IMS space) and FAIRFAX (Content Processing) and completed
the acquisition of Dubai based Ducont FZ LLC, Ducont is a leading
application provider in internet and wireless applications.

Read full report here ZYLOG(RelianceMoney)

Thursday, November 13, 2008

>India Equity Strategy(CITI)

Easy foreign money (part of the India story so far) no more — India has been a big
beneficiary of freely flowing foreign capital. In FY08 the flow was equivalent to
26% of domestic savings and almost 25% of gross capital formation – accelerating
India’s economic growth. The capital inflow scenario has changed for now, and
probably the medium-term, which will have implications for growth, interest rates,
corporate balance sheet risks, and leverage.

1 Debt rather than equity flows could be the bigger issue — Debt inflows have
exceeded equity inflows (1.2x), growing more rapidly (2.1x, over 2 years) and
accessed by more sectors. We believe debt flows, and the outlook, would have
greater implications for the economy than would equity flows (US–$12b YTD, the
market’s focus). Debt inflow-outflow cycles are usually longer than equity ones,
and could have more meaningful medium-term implications.

2 Foreign debt skewed toward long end; chunky trade credits near-term pressure —
Corporate India’s FX loans are predominantly long-term (by regulation), so
medium-term global (rather than short-term) credit trends will determine
availability and price. However, chunky short-term trade credits ($40b+) appear to
be facing some refinancing, and significant pricing, pressures. This is straining
corporates, banks and the currency, and is a near-term issue.

3 Overall corporate leverage OK, FX share less so, and there are skews and risks —
India’s corporate sector leverage is fairly modest (24%). Its foreign debt share,
however, is 34%. With incremental FX debt rising (46%), credit spreads hurting
(400-800bps, from 50-150bps in Jan), and sectors and companies differently
exposed, we detail corporate macro and micro FX and leverage issues.

Read full Report here India Equity Strategy(CITI)

>Sharekhan Special(November)

Q2FY2009 earnings review

Key points

The Sensex’ earnings (adjusted for the one-time items) grew by nearly 10.1% in Q2FY2009 on the back of the strong performance of the financial service companies (earnings up 30% year on year [yoy]), telecommunications (telecom) companies (earnings up 28% yoy) and capital goods companies (earnings up 18% yoy). However, the Sensex (excluding the oil companies) saw an earnings growth of 13.4% yoy during the quarter and the same is ahead of our estimate of a 10.1% earnings growth for the quarter.
Notably, the revenue growth for the Sensex companies (ex-oil and banking companies) was healthy at 28.3% yoy. However, the same could not translate into an equally good operating performance largely due to a 228-basis-point contraction in the operating profit margin (OPM) and a higher capital cost. The margins in most sectors were affected by the rising input cost, employee cost (especially provisions for wage hikes by the public sector undertakings [PSUs] as per the Sixth Pay Commission’s recommendations) and a steep spike in the cost of power & fuel (both coal and oil). The margin contraction was more pronounced in case of automobile, cement, real estate (read DLF), pharmaceutical, cement and oil & gas sectors. On the other hand, metal and information technology (IT) companies registered an expansion in their EBITDA (earnings before interest, tax, depreciation and amortization) margin on an annual comparison basis.

Read full Report Sharekhan Special

Wednesday, November 12, 2008

>Bharti Airtel(ANAGRAM)

At CMP of Rs690, the stock is trading at 20 x its Q2FY09 annualized EPS of Rs34. We think that Bharti is well placed to capitalize on the opportunities offered by telecom sector going forward. However, with new players entering sector, competition will be intense & margins will come under pressure. Bharti has a strong balance sheet as compare to its peers – Low leverage and all its capex plans is adequately funded. We have a “Neutral” rating on the stock.

Read full report Bharti Airtel(ANAGRAM)

>Time Technoplast(PINC Research)

PINC Research has maintained its buy rating on Time Technoplast with a price target of Rs 100 in its November 5, 2008 research report. "Time Technoplast Ltd. (TTL) reported a 26% YoY jump in net sales to Rs 2 billion in Q2FY09 on back of steady performance from the polymers and composites businesses, as well as increased inflows from NED Energy. We maintain our view that TTL’s business model offers huge scalability potential, strong visibility of earnings and stability of margins."

"The enormous growth potential of its core packaging business coupled with the ramp up in other verticals viz. auto, and infrastructure (i.e. batteries, HDPE pipes & Prefab structures) inspire confidence in the outlook for the stock. Hence, we maintain our ‘BUY’ recommendation but marginally reduce our price target to Rs 100 on an 18-month investment perspective on back of revised earnings estimates," says PINC's research report.

To read full report Time Technoplast(PINC Research)

>Gujarat NRE Coke(MF Global)

As expected Gujarat NRE Coke came out with another strong quarter for Q2FY09.

v Net sales increased by 386% to Rs.4,961 mn driven by higher coke prices, which were up by 187% in Q2FY09 and volume growth of 108%. The company produced 165,127 ton of coke up by 108%. Coke business contributed 83.6%, against 60.3% last year to the top line.

v Standalone numbers don't include sales from Australian subsidiary, which grew by 7.4x in Q2FY09 to Aus $53.8 mn. Australian subsidiary mined and dispatched 213,000 ton of coal in Q2FY09 as compared to 127,000 ton last year. It sold coal at average realization of Aus $253 per ton as compared to Aus $58 per ton last year.

v Standalone EBIDTA increased by 739.2% to Rs.1,464 mn in Q2FY09 and by 256% to Rs.2,728 mn in H1FY09.

v EBIDTA margin increased by 1,242bps to 29.5% in Q2FY09 and by 69bps to 31.2% in H1FY09 on account of higher coke price and low price coal inventory. Since the price of raw material i.e. coking coal is fixed for entire year while sells of coke happen in spot, we expect the company to face margin pressure here onwards.

Read full report here Gujarat NRE Coke(MF Global)

Tuesday, November 11, 2008


Markets snapped two days of rally and saw sharp cuts in today’s trade. Sensex plunged 696 points to close at 9839, while Nifty shut shop at 2938, losing 209 points. Indian markets lost the most among all the Asian markets. Rupee closed at 48.12 against the dollar as against yesterday’s close of 47.38. September Index of Industrial Production (IIP) data will be announced tomorrow and is expected to show a growth of 3.6% as against 1.3% for the previous month.

All the sectoral indices finished in red. BSE Realty and Metal indices were down the most, losing 10.2% and 8.4% respectively. ITC was the sole gainer among the sensex stocks, up merely 0.06%, while JP Associate and Sterlite lost 12.2% and 11% respectively. BSE advance-decline ratio stood at 1:2.3.

To read full report 11112008(ANAGRAM)

>BHEL Q2(anagram)

Stock has corrected 50% from its peak and trading at 16x FY10E earnings provides long term investors an attractive entry point. We are keeping our estimates unchanged and are quite confident about its FY09E and FY10E earnings.
At CMP, stock trades at 21x FY09E and 17x FY10E earnings with an EPS of Rs.72 and Rs.89 Respectively. We recommended Accumulate rating on the stock

Read full report here BHEL Q2(anagram)

>Technical & Derivative Recommendations(EMKAY)

Read full report here

Technical & Derivative Recommendations(EMKAY)

>Currency corner(ANAGRAM)

Read the full report here

Currency corner(ANAGRAM)