>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.

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>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.

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>TRIVENI ENGINEERING(PINC RESEARCH)

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.

To read full report TRIVENI ENGINEERING(PINC RESEARCH)

>TRIVENI ENGINEERING(PINC RESEARCH)

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.

To read full report TRIVENI ENGINEERING(PINC RESEARCH)