>BERGER PAINTS

Berger Paints India Ltd. (BPIL) is one of the India’s foremost paint companies, currently ranked as second largest on the basis of consolidated sales turnover in Indian paint industry. It enjoys about 19 percent share of the over Rs.21,000 crore of the Indian paint industry.


The company has registered smart numbers for the quarter ending March 2012. Revenues from operations stood at Rs. 746.50 crore as against Rs.592.50 crore in the corresponding quarter of the last year representing an increase of about 26%. Improved sales performance by subsidiaries and joint ventures boosted revenue for the quarter together with strong domestic performance. Operating profit too surged 29.45% in Q4FY12 at Rs.73.40 crore from Rs.56.70 crore in the like quarter last year. A comparatively sharp net profit growth of about 32% to Rs.44.60 crores was clocked for the Q4FY12 compared to Rs.33.90 crore of same quarter previous year. The increase in net profit is due to improved performance in the emulsion business and growing presence in the western part of the country. EPS stood at Rs.1.29 compared to Rs.0.98 in the same quarter last year.


Material cost to sales(%) jumped at 64.3% in quarter ended March 2012 as compared to 62.2% in the corresponding quarter last year. This increase is attributable to consistent rise in raw material prices and impact of depreciating rupee on imported raw materials. Further, there is sustained increase in advertisement and sales promotion spends in decorative business.


Valuation
With stronger market share, wide distribution network, huge capacity expansion on stream, better product mix and higher A&SP spends; Berger Paints India Ltd. growth prospects look promising. We believe BPIL is trading at an attractive valuation at 22.9x and 19.79x of FY13EPS of Rs.6.29 and FY14EPS of Rs.7.28. We initiate a ‘BUY’ on the stock with a target price of Rs.190 (appreciation of about 32%) with the medium to long term investment horizon.


RISH TRADER

>TORRENT POWER: Q1FY10 Performance Highlights (HEM SECURITIES)

Torrent Power is one of the leading brands in the Indian power sector, pro-moted by the Rs. 45 billion Torrent Group – a group committed to its mission of transforming life by serving two of the most critical needs - Healthcare and Power. Torrent Pharmaceuticals Ltd., the flagship company of the Torrent Group, is a major player in the Indian pharmaceuticals industry with a vision of becoming a global entity in the arena. The company has reported earnings results for the full year ended March 2009. For the year, the net sales for the company jumped to Rs 44249.60 million for the FY10 as against the net sales of Rs 36183.20 million for the FY09 with the growth rate of 22.29%. The net profit for the company stood at Rs 4078.90 million for the FY10 versus the net profit of Rs 2112.40 million for the FY09 with the growth rate of 93.09%.

The company posted financial figures for the quarter ended March 2009 in line of expectations. The net sales for the company gone up by 14.93% to Rs 10764.10 million for the Q1FY10 as against the net sales of Rs 10582.30 mil-lion for the Q1FY09. The company posted the EBITDA of Rs 1932.70 mil-lion for the Q1FY10 as against the EBITDA of Rs 1297.90 million for the Q1FY09 with the growth rate of 48.91%. The operating profit margin for the company stood at 18.26% for the Q1FY10 as against the operating profit mar-gin of 14.10% for the Q1FY09. The net profit for the company stood at Rs 1446.40 million for the Q1FY10 in comparison to net profit of Rs 504.60 mil-lion for the Q1FY09 with the growth rate of 152.02%. The net profit margin rose 13.67% for Q1FY10 in comparison to 5.48% for Q1FY09, which clearly shows the strength of the company. The EPS for the company stood at Rs 3.06 for the quarter ended in March 09. The cash EPS for the company stood at Rs 1.07 for Q1FY10. The EPS on TTM (Trailing twelve months) stood at Rs 8.63 for the company.

To read the full report: TORRENT POWER

>INDIAN INFRASTRUCTURE (HEM SECURITIES)

Industry Overview: The huge investments by the Government of India on development of infrastructure in the country has resulted a positive spill over effects on the economy by triggering growth in other sectors like manufacturing and service sector and helped in sustaining India's growth rate in compared to rest of the world. The investment in infrastructure in India has increased from 4.9 percent of the gross domestic product (GDP) in 2002-03 to 6 percent last fiscal. The Union Budget 2010-11 has allocated USD 37 billion for infrastructure up gradation in both rural and urban areas. This amounts to over 46% of the total plan allocation for infrastructure development in the country. As per the Budget Estimates, disbursements by the India Infrastructure Finance Company Ltd (IIFCL), established by the government to extend long-term financial assistance to infrastructure projects, are expected to touch Rs 9,000 crore by the end-March 2010 and Rs 20,000 crore by March 2011. India's Government is planning a US$ 354 billion investment in its infrastructure by 2012, with another US$ 150 billion expected to come from the private sector, according to the latest report by PricewaterhouseCoopers.
Projected spending under the Eleventh Five Year Plan (FY07-FY12) should see the electricity (US$ 167 billion), rail (US$ 65 billion), roads and highways (US$ 92 billion), ports (US$ 22 billion) and airports (US$ 8 billion) sectors receive a total of US$ 354 billion. India is expected to expand at 8 per cent in 2010, the fastest among major economies in the world, and 8.5
per cent the year after, matching China's growth rate, according to a World Bank. An estimated US$ 500 bn is required by 2012 to upgrade India’s infrastructure.

Roads
India has the world's second largest road network, aggregating over 3.34 million kilometers (km). Being well-aware of the necessity to attract FDI in the segment, the Government has allowed 100 per cent FDI under the automatic route for all road development projects, in addition to offering 100 per cent income tax exemption for a period of 10 years. According to the Planning Commission, the road freight industry will be growing at a compound annual growth rate (CAGR) of 9.9 per cent from 2007-08 to 2007- 12. A target of 1,231 billion tonne km (BTK) has been put on road freight volumes for 2011-12. According to industry sources, the road sector in the country would require an investment of US$ 80 billion in the next 3-4 years of which US$ 45 billion is anticipated from the private sector.

To read the full report: INDIAN INFRASTRUCTURE

>PRISM CEMENT LIMITED (HEM SECURITIES)

Company Snapshot: Prism Cement Limited is an ISO 9001:2000 certified company promoted by Rajan R heja Group which has diverse business interests. The company operates one of the largest single kiln cement plants in the country at Satna, Madhya Pradesh. Equipped with state-of-the-art machinery and technical support from F.L Smidth & Co., A.S Denmark, the world leaders in cement technology, the company has successfully created a niche for itself in the Indian cement industry.

The company manufactures Portland Pozzollana Cement (PPC) with the brand name ‘Champion’ and Ordinary Portland Cement (OPC). ‘Champion’, its largest selling product, is general purpose cement mainly used in housing construction. OPC is used for specialized applications like high rise buildings, bridges, AC sheets, pipes, poles, etc.

The company has the highest quality standards due to modern plant with automated controls. The strength and other characteristics of its cement are much higher than the BIS requirements. This together with brand building exercise has placed it in the premium price segment.

The company caters mainly to markets of UP, MP and Bihar which are within the radius of 340-370 kms of its plant at Satna, MP. The company has strong marketing network with over 2000 dealers serviced from 46 stocking points without any wholesalers.

Highlights/Recent updates: The Scheme of Amalgamation u/s 391-394 of the Companies Act, 1956 to amalgamate H. & R. Johnson (India) Limited and RMC Readymix (India) Private Limited with the Company has been approved with the requisite majority by the shareholders and creditors of the Company. The Scheme is subject to the approval of High Courts of Judicature at Bombay and Andhra Pradesh. The Amalgamation will be accounted from the appointed date of April 01, 2009 on getting necessary approvals.

The all-stock deal will transform the Madhya Pradesh-based company into an integrated building material supplier with a major presence in tiles and sanitary ware and readymix concrete. However, a cause for concern is the poor profitability of the tiles and RMC business, which could pull down the operating margin of the combined entity.

To read the full report: PRISM CEMENT

>YES BANK LIMITED (HEM SECURITIES)

Banking Industry - Funding the Economy

Banking Industry is an essential part of any economy. In fact, banks are the single most important supplier of credit. The banking industry has the capital and commitment to support the financial needs of individuals, businesses and all levels of government. Banks make loans to
consumers to finance purchases of homes, education, cars and major appliances. Bank credit helps small businesses get started, grow and prosper. Banks help state and local governments fund a variety of public improvements like schools, roads, water & sewer and public health
facilities. In each of these roles, banks support the creation of jobs and the growth of our economy.

Banking Industry is the most dominant sector of the financial system in India, and with good valuations and increasing profits, the sector has been among the top performers in the markets. But currently worldwide the banking industry is facing a tough time due to the failure of
financial system in the biggest economy i.e. United State of America. The problem arises due to default in sub prime mortgage lending clubbed with rising national debt, current account deficit, and fiscal policies of US. This has led to the failure of some big investment banking firm leading to file bankruptcy. Financial Institutions are the one to face the toughest challenge.

Indian Industries has witness an indirect, knock-on effect of the global financial situation and is a reflection of the uncertainty and anxiety in the global financial markets. While no country in world remained completely insulated from the global financial crisis, Indian banking industry
was better placed to cope with the adverse consequences of the financial turmoil. India is relatively better placed due to its robust policy framework, stricter prudential regulations with respect to capital and liquidity and strong growth performance. Recently we have experienced
few positive signs that indicate the recovery of the economy. Increase in primary demand clubbed with stable government has built a strong confidence in the mind of investor.

An added obstacle to the sustained improvement of the banking system is the fact that banks are mandated to provide funding to government- defined priority sectors dominated by small-scale business and agriculture. Loans to these sectors are at high risk of be-coming nonperforming. Private-sector banks must ensure that 25 per cent of their loans are directed towards these priority sectors; for state-owned banks, the figure is 40 per cent. These thresholds restrict the level of credit available to more efficient companies in non-priority sectors.

The level of bad loans has been falling in recent years as a result of the creation of asset-reconstruction companies and a rapid expansion in lending. Non-performing assets (NPA) fell to less than 1.0 per cent for the fiscal year 2008-09. In the near future, for a stint, we expect to
see an increase in Non-performing Assets.

To see full report: YES BANK

>GAIL INDIA LIMITED (HEM SECURITIES)

Company Snapshot
Gas Authority of India Ltd. is India’s flagship Natural Gas company. India's principal gas transmission and marketing company, was set up by the Government of India in August 1984 to create gas sector infrastructure for sustained development of the natural gas sector in the country. GAIL today has diversified into Petrochemicals, Telecom and Liquid Hydrocarbons besides gas infrastructure. The company has also extended its presence in Power, Liquified Natural Gas (LNG) re-gasification, City Gas Distribution (CGD) and Exploration & Production (E&P) through equity and joint ventures participations.

Quarterly Financial Highlights
GAIL posted decent results for the quarter ended March 2009. There was an increase in the net sales by 26.11% from the corresponding quarter last year standing at Rs.62339.50 million up from Rs.49430.70 million. The operating profits for the company have fallen from Rs.11677.40 million to Rs.10871.30 million from Q4FY08 showing a dip of 6.90% from the same quarter last year. The company’s net profit has surged from Rs.2533.60 million in Q3FY09 to Rs.6300.20 million in Q4FY09 and dropped from Rs.7223.80 million in Q4FY08 depicting a fall of 12.79%. This fall can be attributed to lower price realization and exploration & production costs. Both the margins have shown a decline. The Operating Profit Margin fell from 23.62% to 17.44% this fiscal and the Net Profit Margin stood at 10.11% as compared to last financial year’s 14.61%. EPS for the quarter ended March 2009 stood at Rs.4.97. as compared to Rs.8.54 last fiscal. The EPS is calculated based on the equity standing in the corresponding quarter.

Segmental Outlook
The Oil and Gas industry has been playing a major role in the rapid growth of the Indian economy. The natural gas sector along with petroleum including their transportation, refining and marketing constitute more than 15% of the GDP. The production of Natural Gas has only increased year on year. The New Exploration Licensing Policy (NELP) designed to address the increasing gap in the demand and supply gap of Gas in India has attracted both domestic and foreign players. Demand for Gas in India is dominated by the power and fertilizer sectors that accounts for 66% of consumption. The demand for oil and gas is likely to increase from 176.40 million tonnes in 2007-2008. The gas sector is set for a major upturn due to the increase in availability of gas as a result of large scale gas finds in India. The share of natural gas in the overall fuel mix is expected to increase to 20% by 2025. Apart from RIL and GSPL’s network in Gujarat, Gail has a monopoly in long distance gas transmission. Reliance industries is planning to invest between US$5.45 billion to US$6.54 billion in the coming three years to lay a 10,000 km pipeline. ONGC also plans to invest US$696 million to increase its facilities at their Assam and Western Offshore oilfields to boost the output.

To see full report: GAIL

>TORRENT POWER (HEM SECURITIES)

Company Snapshot
Torrent Power is one of the leading brands in the Indian power sector, pro-moted by the Rs. 45 billion Torrent Group – a group committed to its mission of transforming life by serving two of the most critical needs - Healthcare and Power. Torrent Pharmaceuticals Ltd., the flagship company of the Torrent Group, is a major player in the Indian pharmaceuticals industry with a vision of becoming a global entity in the arena. The company has reported earnings results for the full year ended March 2009. For the year, the net sales for the company jumped to Rs 44249.60 million for the FY10 as against the net sales of Rs 36183.20 million for the FY09 with the growth rate of 22.29%. The net profit for the company stood at Rs 4078.90 million for the FY10 versus the net profit of Rs 2112.40 million for the FY09 with the growth rate of 93.09%.

The company posted financial figures for the quarter ended March 2009 in line of expectations. The net sales for the company gone up by 14.93% to Rs 10764.10 million for the Q1FY10 as against the net sales of Rs 10582.30 mil-lion for the Q1FY09. The company posted the EBITDA of Rs 1932.70 mil-lion for the Q1FY10 as against the EBITDA of Rs 1297.90 million for the Q1FY09 with the growth rate of 48.91%. The operating profit margin for the company stood at 18.26% for the Q1FY10 as against the operating profit mar-gin of 14.10% for the Q1FY09. The net profit for the company stood at Rs 1446.40 million for the Q1FY10 in comparison to net profit of Rs 504.60 mil-lion for the Q1FY09 with the growth rate of 152.02%. The net profit margin rose 13.67% for Q1FY10 in comparison to 5.48% for Q1FY09, which clearly shows the strength of the company. The EPS for the company stood at Rs 3.06 for the quarter ended in March 09. The cash EPS for the company stood at Rs 1.07 for Q1FY10. The EPS on TTM (Trailing twelve months) stood at Rs 8.63 for the company.

Business Details
Torrent Power Ltd. (TEL) was incorporated on Apr. 29, 2004 as Torrent Power Trading. The name of the company was changed to Torrent Power on Jan. 25, 2006. Consequent to the conversion of the company into a public sector company on Feb. 8, 2006, the company came to be called as TEL. It came into existence after the merger of Torrent Power AEC, Torrent Power SEC and Torrent Power Generation. Gujarat-based TEL is a part of Rs. 45 billion Torrent Group and is engaged in genera-tion, transmission and distribution of power. Torrent’s venture into power sector began with the acquisitions of utilities, the Surat Electric-ity Company and the Ahmedabad Electricity Company. It turned them into first rate power utilities in terms of operational efficiencies and re-liability of power supply. The company has a generation capacity of 1600 MW and distributes over 7 billion units of power annually to Ah-medabad, Gandhinagar and Surat. The company also bagged the Gold Shield for two consecutive years, 2004-05 and 2005-06, for outstanding performance in power distribution by the Government of India. Distri-bution franchise business is one area which Torrent Power has been aggressively pursuing as part of its current expansion plans. The com-pany created history by entering into the country’s first distribution franchisee agreement with Maharashtra State Electricity Distribution Company Limited for Bhiwandi Circle in December2006.

Industry Outlook
In recent years, the Government of India (GoI) has taken significant action to restructure the power sector and attract investments. The most significant reform package has been the introduction of the Electricity Act, 2003 which has modified the legal framework governing the electricity sector and has been designed to alleviate many of the problems facing India's power sector and to attract capital for large scale power projects. Eleventh Plan of GoI envisages a capital expenditure of more than Rs.10, 00,000 crore in power sector to ensure "Power for All". The Common Minimum Program of the GoI focuses on 100 % village elec-trification by 2009 and 100 % household electrification by 2012. Last year marked the commencement of the I I th Five Year Plan. About 21,200 MW of capacity got added in the 10th Plan against a target of 41,100 MW. Focused efforts are, therefore, required to implement the targeted 80,000 MW in the I I th Five Year Plan by 20I 2. Given the growing demand-supply gap, the Indian Power Sector continues to be fundamentally attractive. The additional capacity required to be built is huge. In this context, we believe that the Generation sector would be of great interest to investors. A lot will depend however upon the Central and State Governments' resolve to address issues concerning Distribution sector reforms, expeditious clearances (land and environment in particular) and allocation/ linkage of fuel.

To see full report: TORRENT POWER

>Pfizer India Ltd (Hem Securities)

Company Snapshot
Pfizer India Ltd has a market share of 2.2%, and is currently ranked 14th (ORG-IMS MAT Dec. 2008) after the divestment of 4brands of the Consumer Health portfolio to M/s. Johnson & Johnson Ltd. The company has reported earnings results for the full year ended November 2008. For the year, the net sales grew marginally from Rs.6726.6 million in the previous year to Rs.7006.1 million. The company has achieved growth despite the sale of four Consumer Healthcare Brands to M/s. Johnson & Johnson Limited. The Com-pany has achieved a net profit of Rs. 2991.2 million as compared to Rs.3389.3 million for the previous year showing a decline of 11.75%. This decline is due to the impact of other income and exceptional items in the pre-vious year and the year under review respectively.

Q1FY09 Performance Highlights

The company posted excellent financial figures for the quarter ended Febru-ary 2009. The net sales for the company gone up by 26.51% to Rs 1902.40 million for the Q1FY09 as against the net sales of Rs 1503.70 million for the Q1FY08. The company posted the EBITDA of Rs 436.40 million for the Q1FY09 as against the EBITDA of Rs 315.70 million for the Q1FY08 with the growth rate of 38.23%. The operating profit margin for the company stood at 22.94% for the Q1FY09 as against the operating profit margin of 20.99% for the Q1FY08, clearly showing the strength of the company. The net profit for the company rose to Rs 390.10 million for the Q1FY09 in comparison to net loss of Rs 192.90 million for the Q1FY08. The net profit margin stood at 20.51% for Q1FY09. The EPS for the company stood at Rs 13.07 for the quarter ended in February 09 versus the negative EPS of Rs 6.46 for the quar-ter ended February 08. The EPS on TTM (Trailing twelve months) stood at Rs 48.67 for the company.


INVESTMENT RATIONALE

Pfizer India plans to set up 600 smoking cessation clinics across the country in the next two years. The company has already tied up with 150 clinics in 17 cities, including Max Healthcare, and is in talks with more hospitals for partnerships. The company is also in talks with the government to use this as a treatment op-tion in the 600 clinics that they plan to set up. Pfizer is also in talks with Masina Hospital for a possible partnership.

Pfizer targeting off-patent medicines for the growth has signed a series of agreements with Aurobindo Pharma to market medi-cines that are no longer patent protected and do not have market exclusivity in the US and Europe. The company expects to gar-ner revenues up by US\$200 million till 2014. Pfizer's deal with Aurobindo is its first in-licensing deal where the US-based pharma company takes on licence, products from Aurobindo.

The world's biggest drug maker -Pfizer Inc has acquired rival Wyeth for around US\$68 billion in a cash-and-stock deal. The company’s US\$68-billion acquisition of Wyeth is all set to get the operations rolling in India within 2-3 months after the global guidance is received. The deal seems to be an ideal merger as the two companies are complementary and there seem to be no major product overlaps. Acquisition of Wyeth would rope in interesting products in the animal health and vac-cine segments besides a very strong consumer healthcare divi-sion that has the popular hair-removing cream Anne French, among other products. This would be a boost to Pfizer's con-sumer division that had some time back sold a clutch of con-sumer products to Johnson and Johnson.

Pfizer is in a fray to acquire substantial stake in Wockhardt's biotechnology business in a strategic business tie-up estimated at around Rs. 250 crore. Wockhardt with a market cap of Rs. 780 crore possibly would have to hive off its biotech business into a separate company for another company to pick up stake.

To see full report: PFIZER

>Novartis (HEM SECURITIES)

COMPANY OVERVIEW
Novartis India Limited is a leading provider of innovative solutions to improve health and well-being through activities to manufacturing and marketing of products & services in the areas of pharmaceuticals, over-the-counter (OTC) products, nutrition, eye care and animal health. The Company is a subsidiary of the Swiss giant Novartis AG, which is world’s second largest pharmaceutical company.

The company Business activities comprises of pharmaceuticals, generic and OTC drugs in the therapeutic areas of immunology and transplantation, oncology, gynaecology, central nervous system, respiratory, pain and inflammation, ophthalmics and orthopaedics; animal health in the areas of poultry, cattle and pets.; and has a presence in medical nutrition. The company product portfolio consists of key brands such as Sandimmun, Neoral®, and Visudyne in pharmaceuticals with new introductions like Benace®, Tegrital®, and Zaditen®, and holds leadership positions in Voveran®, Methergin®, Syntocinon® and Sandimmun Neoral®.

In generics category the focus of the company is to reduce the TB trade business and sustained in gynecology. The OTC business revolved around the vitamins, minerals and supplements category of products. Key brands include Otrivin®, a nasal decongestant and the T-minic® range of products in the segment of cough, cold and allergy. The new products and line extensions introduced in FY07 included Calcium Sandoz® Suspension, Calcium Sandoz® Woman Mix Fruit, Otrinoz™ and Benefiberm®. Spearheading growth in the animal health business were flagship brands of Tiamutin, Calborol™, Mifexm® and Mifex Oral® with Chelated Milmor Forte® being a new product. The company manufacturing facilities are located at hane, Kalwe, Turbhe and Mahad in Maharashtra.

Recommendation
Novartis India Limited has registered a continuous growth rate over past few years when most of the company’s competitor has registered a decline in revenue. The company is trading at a PE of around 10.3x. We expect the company to be de-listed in the future which could result in a high share premium for minority share holder and we reiterate “BUY” on the stock.

Highlights/Recent Updates
Novartis AG offers to buy more 39 per cent stake in Novartis India at INR 351 per Share
Novartis AG has offered to raise the stake in Novartis India Limited to nearly 90 per cent from the current level of 50.93 per cent. The offer is expected to open in May 2009.

Novartis gets USD 486 Million contract for build flu vaccine manufacturing facility in USA
Novartis announced that the US Department of Health and Human Services, Biomedical Advanced Research and Development Authority has awarded Novartis Vaccines a contract for up to USD 486 million over eight years to support the design, construction, validation, and licensing of US cellbased influenza vaccine manufacturing facilities to provide a prepandemic supply of influenza vaccine.

Novartis collaborates with USV to market Galvus in India
Novartis has collaborated with healthcare company USV to market its anti-diabetic product Galvus, in a move that would pitch the pharma company directly against Merck. Novartis plans to pitch this against Merck’s Januvia by pricing it lower in the Indian anti-diabetic market which saw total sales of INR 16.72 billion till June 2008.

To see full report: NOVARTIS

>Aban Offshore Limited (HEM SECURITIES)

Company Snapshot
Aban Offshore Ltd., formerly Aban Loyd Chiles Offshore Limited, is an off-shore oil and gas drilling company. The Company has two business segments: Offshore Oil Drilling and Production services, and Wind Power generation. The company has reported earnings results for the full year ended March 2008. For the year, the net sales for the company jumped to Rs 6579.21 mil-lion for the FY09 as against the net sales of Rs 4974.75 million for the FY08 with the growth rate of 32.35%. The net profit for the company stood at Rs 1648.65 million for the FY09 versus the net profit of Rs 915.41 million for the FY08 with the growth rate of 80.10% as compared to 9.22% for FY08.

The company posted excellent financial figures for the quarter ended Decem-ber 2008. The net sales for the company gone up by 54.88% to Rs 2618.68 million for the Q3FY09 as against the net sales of Rs 1690.74 million for the Q3FY08. The company posted the EBITDA of Rs 1557.77 million for the Q3FY09 as against the EBITDA of Rs 897.42 million for the Q3FY08 with the growth rate of 73.58%. The operating profit margin for the company stood at 59.49% for the Q3FY09 as against the operating profit margin of 53.08% for the Q3FY08, clearly showing the strength of the company. The net profit for the company rose to Rs 558.72 million for the Q3FY09 in comparison to net profit of Rs 477.67 million for the Q3FY08 with the growth rate of 16.97%. The net profit margin stood at 21.34% for Q3FY09 in comparison to 28.25% for Q3FY08. The EPS for the company stood at Rs 14.79 for the quarter ended in December 08 versus the EPS of Rs 12.64 for the quarter ended December 07. The EPS on TTM (Trailing twelve months) stood at Rs 66.23 for the company.

Business Details
Aban Offshore Ltd, formerly known as Aban Loyd Chiles Offshore Limited was incorporated in 1986. The Company together with its sub-sidiaries, provides oil field services for offshore exploration and pro-duction of hydrocarbons in India and internationally. It owns and oper-ates offshore drilling rigs, as well as provides drilling services to vari-ous oil and gas operators. The company also engages in the generation of wind energy and provides wind energy services. The Company pos-sesses twenty offshore assets including fifteen jack-up offshore drilling rigs, two drill ships, one floating production platform and a jack-up rig and drill ship each on bareboat charter. It enjoys the privilege of part-nering with several global players in the oil and natural gas industry by offering them reliable, state-of-the-art drilling services. Its notable cus-tomers include ONGC, Hardy Exploration & Production (India) Inc., Oriental Oil Co. (Dubai), Shell Burnei, Shell Malaysia, Hind Oil Explo-ration Co. Ltd, Cairn Energy, Petronas Carigali etc. It is India`s largest offshore drilling entity in the private sector. Its innovative and cost ef-fective solutions make the company one of the most efficient interna-tional drilling contractors. Aban Singapore Pte. Ltd. (ASPL) was formed as a wholly owned subsidiary of Aban Offshore Ltd. to offer drilling services to large global oil and gas operators. The company has obtained ISO 9001:2000 for its drilling operations.

Industry Outlook
The oil and gas industry has been instrumental in fuelling the rapid growth of the Indian economy. It contributes about 45 % of the total energy consumption of the country, which is the fifth largest energy consumer in the world. The oil exploration & production (E&P) space has been consolidating with strong momentum. With the announce-ment of NELP in the second half of 2009-10, the companies are expect-ing to get more oil & gas exploration blocks for auction by 2010. Off-shore vessels such as jack up rigs, anchor handling tugs, accommoda-tion barges and supply vessels which play a key role in the hunt for oil & gas have seen huge demand spurt due to increased global activity. According to DGH (Director General of Hydrocarbons) the shortage will rise further as India drills more wells estimated at 498 by 2012. The demand for rigs is going up strongly due to rise in oil prices on widen-ing demand - supply gap which is spurring the pursuit of additional re-serves. There is a huge worldwide shortage for exploration equipment. At present, the day rate for deep water rigs has gone up from $1,00,000 to over $7,00,000 in the last couple of years. The sector is attracting huge investments in order to meet the rising demand from oil & gas firms and is expected to show outstanding performance in medium to long term with Aban Offshore being a valuable pick in the industry.

To see full report: ABAN OFFSHORE

>Indian Power Sector (HEM SECURITIES)

Power is a critical component of any economy’s infrastructure without which its development and growth is a big hindrance. An economy’s growth, development and ability to handle global com-petition, all depends on the availability, reliability and quality of the power sector.
The demand for power is growing exponentially so the scope of growth of this sector is immense. This sector is dominated primarily by Public Sector Undertakings (PSU). The State and Central Government account for 58% and 32% of the generation capac-ity respectively while the private sector accounts for a mere 10%. A major part of the transmission and distribution factors are han-dled by the state utilities. The private sector is gradually making its presence felt in the power sector in distribution and is making a foray into transmission. Power sector is mainly funded through budgetary support and external borrowings were opened to private sector in 1991.

Segments of the industry

• Power Generation
• Power Transmission
•Power Distribution

To see full report: INDIAN POWER SECTOR

>AIA Engineering Ltd. (HEM SECURITIES)

COMPANY OVERVIEW: AIA Engineering Limited specializes in design, development, manufacture, installation and servicing of high chromium wear, corrosion and abrasion resistant parts used in cement, mining and thermal power generation industries. The company has no competitors in India and has few globally. This ensures a near monopolistic status for the company. Even nearly 70 per cent of the company’s business comes fromreplacement demand which give the company a better picture in terms of future revenue. The company profit margins are on a cost plus basis, due to which profits could decline when input costs fall.

INDUSTRY SNAPSHOT: The industry offers high chromium wear, corrosion and abrasion resistant parts used in diversified industry. It is a highly fragmented industry where it is characterized by few small and some large players who normally manufacture according to the customers specifications and requirements. Majority of the products manufactured are required due to replacement of products which gets wear and tears while daily operational activities. The major contributor of revenue to this industry is through replacement sales.

Recommendation
AIA Engineering Limited has a scalable business model, good growth visibility, high operating margin and limited competition. The company has registered a continuous robust growth rate over past few years. As discussed with the management, the Company has a strong order book position of around INR 415 Crores which provides a strong visibility to their revenues. The company is trading at a low PE of around 5.5X. We expect the company to outperform in the future and we reiterate “BUY” on the stock with a target of INR 178.00.

Highlights/Recent Updates
Special Economic Zones (SEZ) project getting delayed Currently the company has a capacity to manufacture 65,000 tonnes per annum (tpa) of high chrome grinding media, liners, vertical mill spares and mining liners. The new plant in SEZ near Ahmedabad is getting delay due to approval where the company had planned to increase the manufacturing capacity to 1,65,000 tonnes per annum (tpa). To meet the increase in demand, the company has now planned to ramp up capacity in their existing plants. By this the company can increase the production to 2,00,000 tonnes per annum (tpa) by March 2011.

Stock Split at 5 for 1
The company has split the share of face value INR 10.00 to INR 2.00. The total outstanding share after the split stands at 9,39,83,940.

To see full report: AIA Engineering Ltd.

>ICSA India Limited (HEM SECURITIES)

Recommendation: ICSA India Limited has registered a robust growth rate over past few years. The company has a strong order book position of more than INR 700 Crores which provides a strong visibility to the revenues. The company is trading at a very low PE of around 1.5X. We expect the company to outperform in the future and we reiterate “BUY” on the stock with a Target of INR 348.00.

Highlights/Recent Updates

ICSA to acquire US power company
ICSA India Limited is keen on acquiring a power firm in the US with an investment of $20-30 million. The company is planning to acquire a power sector player with front-end marketing capabilities to tap the $16 billion power transmission and distribution infrastructure spends being planned by the US government in the coming years.

ICSA India Limited got approval to set up Wind Project
ICSA India Limited has been permitted by the Board of Non-Conventional Energy Development Corporation of Andhra Pradesh Limited (NEDCAP) to set up a 20 MW Capacity Wind power project in Andhra Pradesh.

ICRA assigns LA+, A1 to fund based, non-fund based limits
ICRA assigns the ratings of LA+ and A1 for INR 2,300 million funds based and non fund based limits of ICSA India Limited. ICRA has also assigned rating of A1 to the short term non fund based limits indicating lowest credit risk in the short term.

To see full report: ICSA