>Tricks that promoters play...... (NOBLE RESEARCH)

The tricks that promoters play at the expense of shareholders

In the wake of the Satyam-Maytas debacle, we highlight the three most common tricks that Indian promoters employ to enrich themselves at the expense of shareholders. In the currently depressed market conditions, the divergence between promoters’ goals (around boosting personal wealth) and shareholders’ objectives (around growing the value of the firm) has become sharper.Moreover, contrary to conventional wisdom, such shenanigans are not confined to small cap stocks; some of the largest companies in India have a penchant for such tricks. These tricks create the need for investors to use unconventional means,such as primary data and forensic accounting, to assess promoters’ probity.

I feel this would be a valuable reading for All the Investors

Read the full Report from Noble Research: here

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DLF (DLF.BO):The road less travelled; maintain Sell(GS)

What's changed :



DLF’s below consensus 3QFY2009 results (announced on January 31) confirmed a significant slowdown in property sales and construction activity in India. As a result, we push back our medium-term development pipeline projections and lower our property price assumptions. We lower our FY2009E-FY2011E EPS by 29%-62% and cut our 12-month target price to Rs124 from Rs203. We believe the recent strength in the share price, up about 20% from its recent trough post weak 3Q numbers, presents a profit taking opportunity. We maintain Sell on DLF and our cautious stance on the India real estate sector.




Implications



DLF registered four years of strong profit growth since 2004. However, we believe the company may need to realign its offerings to navigate through the current property downturn. DLF has stated that it will look to launch middle-income housing projects at lower ticket sizes. With interest rates also trending lower, we believe this strategy could revive volumes.However, we expect to see few signs of a recovery till 2HCY2009 and believe the stock would be on the sidelines in the interim


Read Full report here (DLF:Goldman)

Corporate India:Handbook on qualitative factors(CS)

■ It is clear after the Satyam incident that investors should focus on corporate governance issues, particularly because of losses incurred in the past 12 months that have failed to rise to the fore. As a result, we believe qualitative factors on management competence, honesty, a focus on core competency and internal processes will be as important as reported earnings and valuations in the next few quarters.
■ We provide one-page details on companies under our coverage to look at the softer, qualitative aspects of their make-up. While we have worked on a questionnaire-based framework, our objective has been to focus more on the spirit of the exercise rather than the letter
■ Our framework analyses corporate governance on: 1) structural risks, 2) accounting risks, 3) transactional risks and 4) events/issues that raise investor concern. Through these we cover issues such as the extent of intra-group transactions, departures from conservative accounting and provide a summary of events that may have caused concerns in the past. Most of what we report as concerns is not wrong from a legal viewpoint but flags for investors what they should know.
■ We resist needlessly quantifying the qualitative parameters and creating a contrived scorecard. The purpose of the report is to provide the first snapshot of corporate governance details, rather than arrive at any comparative list of winners and losers.

Read the full report Here(Corporate India Handbook)

The tricks that promoters play at the expense of shareholders

In the wake of the Satyam-Maytas debacle, we highlight the three most common tricks that Indian promoters employ to enrich themselves at the expense of shareholders. In the currently depressed market conditions, the divergence between promoters’ goals (around boosting personal wealth) and shareholders’ objectives (around growing the value of the firm) has become sharper.Moreover, contrary to conventional wisdom, such shenanigans are not confined to small cap stocks; some of the largest companies in India have a penchant for such tricks. These tricks create the need for investors to use unconventional means,such as primary data and forensic accounting, to assess promoters’ probity.

I feel this would be a valuable reading for All the Investors


Read the full Report from Noble Research here