Deadpresident blog reports

Ultratech Cement
Today's Pick - Indian Bank
Technicals - July 22 2008

India Infrastructure
Daily Technicals - July 22 2008
Maruti Suzuki, ICICI Bank, Infosys, Bharti Airtel,...

Eveninger - July 21 2008
Property prices down
Bullion metals register gains

Crude rises for first time in five sessions
RCom July 2008 futures at premium
PFC

Source: Deadpresident blog

10 trends for IT cos

10 trends for IT cos

The last ten years were years of numbers and figures for the Indian IT services industry. And as the National Association of Software and Services Companies (Nasscom) President Som Mittal will tell you, they were years to project numbers and weave a strategy to get to those numbers. “But the next decade will be structurally different.

It will be more about making a change rather than following a change,” he says. With the change in business and economic landscape, IT companies will need a different tool-kit to retain the edge from here on.

Indian players can never forget that out of the total addressable offshoring market of $380 billion, less than 15 per cent has been penetrated. What are the trends that the Indian IT industry needs to catch in order to ride the next decade of growth for the software services market? Read on...... 10 trends for IT cos

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Expect a short-term rally, and that's it
Most CEOs expect govt to win trust vote: ASSOCHAM survey
Latest on trust vote
Has Indian coalition politics gone bankrupt?
UTVi outlook for the day
India Inc backs N-deal, govt

Results: BHEL, Maruti,Dr.Reddy,Indian Bk, SAIL,Wels.Guj, Petronet, Techmahindra, HDIL etc

BHEL Q1 net profit up at Rs 384.41 cr

BHEL has aanounced its first quarter results. The company's standalone net profit was up at Rs 384.41 crore versus Rs 288.91 crore, (YoY).
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ING Vysya Bank Q1 net profit up at Rs 40.63 cr

ING Vysya Bank has announced its first quarter results. The company's Q1 sandalone net profit was up at Rs 40.63 crore versus Rs 25.32 crore, (YoY).

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Aban Offshore Q1 net profit at Rs 71.51 cr 21st-Jul-2008

Aban Offshore has announced its first quarter numbers. Its standalone net profit was up at Rs 71.51 crore for the quarter ended June 2008 as against Rs 28.38 crore in same period of last year. Net sales stood at Rs 246.95 crore versus Rs 127.61 crore.

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Maruti Suzuki Q1 net profit at Rs 465 cr 21st-Jul-2008

Maruti Suzuki India has declared its first quarter results. The company's Q1 net profit was down 6.8% at Rs 465 crore versus Rs 499 crore.

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Voltas Q1 net profit up at Rs 85.1 cr 21st-Jul-2008

Voltas has announced its first quarter results. The company's standalone net profit was up at Rs 85.1 crore versus Rs 52.2 crore (YoY).

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Tech Mahindra Q1 cons net profit at Rs 258.54 cr 21st-Jul-2008

Tech Mahindra has declared its consolidated results for the quarter ended June 2008 (Q1). The company's consolidated net profit was at Rs 258.54 crore versus net loss of Rs 221.1 crore on QoQ basis.

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SAIL Q1 net profit up 20% at Rs 1835 cr 21st-Jul-2008

SAIL has announced its first quarter numbers. Its standalone net profit has increased by 20.33% at Rs 1835.19 crore for first quarter of FY09 as against Rs 1525.12 crore in same period of last year.

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Bartronics Q1 cons net profit at Rs 23.5 cr 21st-Jul-2008

Bartronics India has announced its first quarter results. The company's Q1 consolidated net profit was at Rs 23.5 crore versus Rs 20.2 crore.

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Dr Reddys Labs Q1 net profit at Rs 135 cr view table 21st-Jul-2008

Dr Reddys Laboratories has decalred its Q1 results. The company's Q1 net profit at Rs 134.6 crore versus Rs 182.5 crore.

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Welspun Gujarat Q1 net profit at Rs 71.1 cr view table 21st-Jul-2008

Welspun Gujarat Stahl Roh has declared its first quarter results. The company's Q1 net profit at Rs 71.1 crore.

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Punjab Tractors Q1 net profit at Rs 22.4 cr view table 21st-Jul-2008

Punjab Tractors has announced its first quarter results. It has reported net profit of Rs 22.4 crore for first quarter of FY09 as against Rs 3.3 crore in same period of last year.

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LIC Hsg Fin Q1 net profit at Rs 104.7 cr view table 21st-Jul-2008

LIC Housing Finance has come out with first quarter numbers. Its Q1 net profit increased at Rs 104.7 crore from Rs 46.7 crore and total income went up at Rs 622 crore versus Rs 461.8 crore YoY.

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Canara Bank Q1 net profit at Rs 122.7 cr view table 21st-Jul-2008

Canara Bank has declared its first quarter results. The company's Q1 standalone net profit was down at Rs 122.7 crore versus Rs 240.6 crore.

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IL&FS Invst Mngrs Q1 net profit at Rs 13 cr view table 21st-Jul-2008

ILandFS Investment Managers has announced its first quarter numbers. It has reported net profit of Rs 13 crore for first quarter of FY09 as against Rs 9.8 crore in earlier quarter.
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Petronet LNG Q1 net profit at Rs 106 cr view table 21st-Jul-2008

Petronet LNG has declared its first quarter numbers of FY09. Its net profit declined at Rs 106 crore for quarter ended June 2008 as against Rs 108 crore in same period of last year. Net sales was up at Rs 1646 crore from Rs 1551 crore.

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HDIL Q1 net profit at Rs 317.9 cr view table 21st-Jul-2008

Housing Development and Infrastructure (HDIL) has announced its first quarter numbers. It has posted net profit of Rs 317.9 crore for quarted ended June 2008 as against Rs 202.7 crore in same period of last year.
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Indian Bank Q1 net profit at Rs 217.6 cr view table 21st-Jul-2008

Indian Bank has announced its results for the quarter ended June 2008 (Q1). The bank's Q1 net profit was up by 3% at Rs 217.6 crore versus Rs 212.03 crore.
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United Spirits net profit rises 33.74% in the June 2008 quarter

Net profit of United Spirits rose 33.74% to Rs 117.13 crore in the quarter ended June 2008 as against Rs 87.58 crore during the previous quarter ended June 2007. Sales rose 32.35% to Rs 1013.39 crore in the quarter ended June 2008 as against Rs 765.71 crore during the previous quarter ended June 2007.
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Bharat Heavy Electricals net profit rises 33.06% in the June 2008 quarter
Maruti Suzuki India net profit declines 6.76% in the June 2008 quarter
IL & FS Investsmart net profit declines 55.83% in the June 2008 quarter
Tech Mahindra net profit rises 47.97% in the June 2008 quarter
JK Paper net profit declines 16.88% in the June 2008 quarter
ING Vysya Bank net profit rises 60.47% in the June 2008 quarter

Electrosteel Castings net profit declines 48.27% in the June 2008 quarter
Aban Offshore net profit rises 151.97% in the June 2008 quarter
Steel Authority of India net profit rises 20.33% in the June 2008 quarter
Welspun Gujarat Stahl Rohren net profit rises 2.66% in the June 2008 quarter
Punjab Tractors net profit rises 580.00% in the June 2008 quarter

LIC Housing Finance net profit rises 124.16% in the June 2008 quarter
Canara Bank net profit declines 49.00% in the June 2008 quarter
Housing Development & Infrastructure net profit rises 56.86% in the June 2008 quarter
Petronet LNG net profit declines 2.20% in the June 2008 quarter
Nucleus Software Exports net profit declines 63.41% in the June 2008 quarter

Source: Indiaearnings.com, Capitalmarket.com

Sensex ends 215 pts, top stories from ET

Sensex vaults 215 pts on heavy buying

The bulls, despite some uncertain moments during the course of the day, had things going their way for the third successive session on the major Indian bourses today. Though US markets had closed on a mixed note after a choppy session last Friday, a firm trend on the Asian bourses aided the sentiment to an extent this morning.

However, after opening with a strong positive gap, the market declined sharply into the red this morning. But then, it did not stay long in the negative zone as hectic buying in bank, FMCG and a few other blue chip stocks lifted it up into the positive territory in a flash.

After moving in a volatile manner, the market did slip into the red again in early afternoon trade, but only for a short while. Frenzied buying at several front line counters saw the market gaining significant ground in the positive territory in late afternoon trade. A fairly good set of results from India Inc contributed to the buoyant mood this afternoon. Cipla, Dr. Reddy's Laboratories, SAIL, LIC Housing Finance, Punjab Tractors, HDIL and Indian Bank reported a sharp surge in their quarterly earnings. A fairly steady trend on the European markets also aided the bulls in afternoon trade.

Though the market appeared a bit slippery at times due to some cautious moves by the investors ahead of the crucial trust vote in parliament, good corporate earnings, a few big order wins reported by some top notch companies and short-covering kept the market in the positive territory for a considerable length of time today.

So sharp were the gains posted by blue chip stocks that the Sensex signed off with a handsome gain of 214.64 points or 1.57% at 13,850.04 today. In intra-day trades, the barometer touched a low of 13,581.19 and a high of 13,878.88. The Nifty, which swung in a range of around 95 points - it hit a high of 4168.15 and a low of 4072.75 in intra-day trades - closed with a gain of 67.25 points or 1.64% at 4159.50.

Bank and pharma stocks were among the biggest gainers today. Reflecting investor interest for stocks from these sectors, the Bankex and HC indices moved up by 3.88% and 3.03% respectively. Realty stocks bounced back after a mild setback in morning trade and mirroring the gains posted by key stocks in that space, the BSE Realty index advanced by 2.44%. The Auto, FMCG, PSU and Power indices moved up by 1% - 1.75%. Select metal and oil stocks edged higher. IT stocks turned easy after a fairly good show early on. Capital goods stocks found support elusive.

Pharma majors Cipla and Ranbaxy Laboratories ended stronger by 5.2% and 4.75% respectively. HDFC Bank (4.8%), ICICI Bank (4.3%) and State Bank of India (3.7%) remained firm right through the session.

NTPC shot up by 4.7%. Maruti Suzuki gained nearly 4%. Hindustan Unilever (3.8%), Jaiprakash Associates (3.75%), Reliance Communications (2.65%), Tata Consultancy Services (2.35%) also ended with impressive gains. Wipro, Reliance Industries, ITC, Mahindra & Mahindra, DLF, ONGC and Tata Steel gained 1% - 2%. Infosys Technologies, HDFC, ACC and Reliance Infrastructure finished with modest gains.
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Rupee up against dollar, gold recovers by Rs 60
Stocks rise ahead of trust vote
Max takes control in life insurance JV
Nuclear deal could benefit over 400 companies
Bombay High Court to hear RIL-RNRL gas dispute

UPA banks on 10 NDA abstentions
PEs, FIIs ready for big realty plunge
ExPolitical executive & corporate feuds

As good as it gets: Rel Petroluem

As good as it gets: Rel Petro

Despite a decline in investors’ confidence in the stock market and the turmoil in global financial markets over the past six months, there remain a few events which are eagerly awaited by all. One such event is the commissioning of Reliance Petroleum (RPL)’s refinery in Jamnagar special economic zone (SEZ) — which is being tracked not just by its 2 million shareholders and stock market experts, but by global energy analysts as well.

The project is expected to serve as an example for its speed of execution, low capital cost and high complexity. However, the strength in global gross refining margins (GRMs) is unlikely to persist going forward, due to rising refinery capacity across the world. Though the positives associated with RPL’s refinery are obvious, we believe its current valuations have limited upside left.

ADVANTAGES GALORE Low Capital Cost:
RPL is being set up at a capital cost of only Rs 27,000 crore, i.e. around $6.5 billion, but a similar-sized refinery will currently require almost twice this amount. This is due to the fact that over the past three years, a number of refinery projects have been launched across the world, resulting in higher costs of equipment and engineering services.

Fast Project Execution:
The project was originally scheduled to be completed in 36 months by September ’08, with commercial production due to start in December ’08. However, the company intends to prepone the deadlines. It has already completed more than 90% of the work and the pre-commissioning activities in the main process units are progressing rapidly. In fact, Mukesh Ambani assured shareholders at the company’s annual general meeting (AGM) last month that “the refinery is expected to be completed ahead of schedule.”

Ability To Earn Higher GRMs:
RPL’s refinery will have the ability to handle very heavy and high sulphur crude to produce the best quality products. Similarly, its product slate will be better, thanks to its ability to totally eliminate lowvalue products such as fuel oil. Considering that the heavy-light differential in crude prices has reached $20 a barrel, RPL will be able to earn higher GRMs compared to its peers.

Tax Sops:
The SEZ location and focus on exports will exempt RPL’s profits from income tax (IT) fully for the first five years. The I-T exemption will be 50% for the next five years.

LIMITED UPSIDE
After enjoying a high tide in the past few months, Asian GRMs are now weakening. The International Energy Agency (IEA) in its monthly report for June ’08 elaborated on this fact. “While diesel remains highly profitable, gasoline cracks remain subdued and fuel oil cracks have reached record lows.” Even production of naphtha is generating losses. When overall GRMs turn weak, it is feared that commissioning of RPL’s refinery will lead to a glut situation, thereby further bringing down GRMs. The supply from RPL’s new refinery will represent almost 50% of the estimated incremental global oil demand in ’09. Nearly 2 million bpd of global refining capacity (including RPL) is expected to commence in ’09, which will weigh heavily on the GRMs. RPL operates in a business where there is little scope for volume-led growth compensating for a fall in margins. Hence, if GRMs turn weak from the current levels, the company’s bottomline may shrink.

VALUATIONS
We estimate the refinery will earn a premium of around $9 per barrel over Singapore benchmark complex refining margins, which are expected to remain at around $8 per barrel during FY10. Considering interest and depreciation charges, the company’s full-year net profit at 85% capacity level will stand at Rs 6,365 crore. This translates into a price-to-earnings (P/E) multiple of 10.9 on the current market price of Rs 154. Since petroleum refining is a capital-intensive cyclical business, it has traditionally commanded a single-digit P/E globally. Another way of looking at valuations , is the replacement cost of the refinery. RPL’s current market capitalisation of Rs 69,300 crore is around 38% higher than the estimated cost of setting up a similar refinery. Similarly, at current m-cap , RPL’s enterprise value (EV) is 8.5 times its estimated EBIDTA for FY10, which is slightly on the higher side compared to the global average. Hence, we believe that the upside in RPL’s scrip is limited in the short run.

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Other INVESTOR GUIDE articles from ET

Perfect picks even in the worst of times
Jubilant Organosys’ good bet for long-term investors

Book your copy: Vishal Information Technologies’ IPO
Long-term investors can hold, others can exit KSK Energy stock

Hospitality sector on the rise
Ratnamani Metals & Tubes attractive bet for investors

The mad world of gyrating equity market
Glimmer of hope in volatile markets

Source: ET

Market glued to Tuesday's trust vote

Market glued to Tuesday's trust vote
D-St Outlook


The outcome of the crucial trust vote on Tuesday, which will not only decide the fate of the UPA government, but also Indo-US nuclear deal, will set the tone for equities this week. If the government fails the vote, it is expected to trigger the next major bout of selling, as investors are generally uncomfortable with unstable regimes. Going by the euphoria in the market in the last couple of sessions, also aided by declining global crude prices, it appears that investors expect the Congress-led UPA government to win the trust vote. Sentiment has been boosted by expectations that surviving the trust vote will prompt the UPA government to speed-up the languishing economic reforms process.

But, not everyone thinks the government’s survival in the trust vote would change India’s real economic conditions “Overall, it may well be that the Congress-led government survives the vote of confidence and limps on until 2009. However, there will be plenty of demand for populist action as each party, in what is likely to be a very unwieldy coalition, attempts to quickly make its mark before the general election,” said HSBC’s economists and strategists in a recent note.

Even if the market rallies, driven by the government’s survival in the trust vote, analysts believe upsides will be short-lived, as concerns such as inflation along with slowing economic and corporate profit growth remain. So far, for the first quarter, companies’ earnings have not sprung any positive surprises, with sales growth remaining stable, while profit growth getting squeezed.

“History suggests that the government’s ability to control growth and inflation is fairly limited and we suspect that it will go into the election with still high WPI (wholesale price index) inflation and softening economic activity,” the report added. As the week progresses, investor bets will likely shift to the outcome of RBI’s monetary policy review on July 29. Given that inflation has not mellowed, analysts expect the central bank to hike the repo rate as part of its attempts to contain prices. In the week to July 5, inflation, represented by the WPI index, rose to 11.91%, as against expectations of over 12% and up from 11.89% in the previous week. Banks and real estate shares may see build-up of short positions in the futures and options (F&O) markets ahead of the monetary policy review.

CLSA notes the 3,688-3,781 level marks an important pivot point for the Nifty, which closed at 4092.25 on Friday. Key corporate results this week include BHEL, Maruti Suzuki, Bharti Airtel, Reliance Industries, ACC, SAIL and Sesa Goa, among others. “These technical levels are important to take note of as they often mark the end of corrections. We would lighten up on existing short positions here. Initial resistance is provided by the August 2007 lows at 3,953-4,021 with key resistance found at 4,412-4,471,” the French brokerage said, in its recent trading strategy note.

Source: ET

Want to See CNBC18 Live

Want to see CNBC18 Live

Live CNBC TV

Source: Deadpresident blog.

Sensex companies valuation halved in six months

Sensex companies valuation halved in six months

BL Research Bureau For every rupee of earnings managed by BSE Sensex companies, investors are today willing to pay only half of what they paid in January 2008.

The market meltdown of 2008 has seen the Sensex value fall by 35 per cent till date, but it has halved the price-to-earnings multiple (PE multiple) for companies in the bellwether index.
The PE multiple of the Sensex, which was at a rich 28 times (based on historic 12-month earnings) at 21,000 levels, has plunged to a staid 14 times now, Bloomberg data shows. The lower valuation indicates that investors now expect Sensex companies to grow at only half the rate that they factored in, in January.

World over, investors value companies based on potential growth and the PE multiple is one of the widely used tools to evaluate how expensive or cheap stocks are, relative to their growth prospects. Worst in a decade

The erosion in Sensex PE multiple in this meltdown may be the worst in a decade, even including the dotcom crash of 2001. Banking and realty companies have been worst hit, with SBI seeing its PE multiple fall from 20 times to just 6, while DLF has seen its PE plunge from 90 times to 8 times.

Reliance Industries, Jaiprakash Associates, SBI, Tata Steel, Reliance Infrastructure (formerly Reliance Energy) and DLF, are among companies that have seen their PE multiples trimmed to half their January level.

Many of these companies have seen their valuation fall even as they managed a sharp ramp-up in their earnings for 2007-08. DLF (earnings per share grew from Rs 13 to Rs 47 between FY07 and FY08), Bharti Airtel (Rs 21 to Rs 34), HDFC (Rs 69 to Rs 100) are key instances. ‘De-rating’ stocks While concerns about rising interest rates have prompted investors to tone down growth expectations from bank and realty companies, worries about the economy slowing down have made them ‘de-rate’ infrastructure and capital goods stocks.

Companies in the Sensex basket that have managed to escape this bout of de-rating are Infosys, Satyam, Ranbaxy Labs, Cipla and Hindalco, which have more or less held on to their PE multiples.

Related Stories:
Indian market sheds more value than other emerging onesForeign brokerages downgrade Indian firmsAnalysts see investment opportunities as stocks take a sharp beating

Source: BL

Stock Analysis from BusinessLine

STOCKS: Sanghvi Movers: Buy
Investors with a two-three year perspective can consider taking exposure to the stock of Sanghvi Movers, an established player in the business of renting out cranes.

STOCKS: Bajaj Auto: Hold
Shareholders can continue to hold the Bajaj Auto stock. Better domestic sales volumes in the first quarter, robust export growth and planned launches in the executive segment may positively impact the near-medium term ...

STOCKS: HCC: BuyA strong order pipeline, improved profit margins, benefits from recent business restructuring and removal of uncertainty surrounding the unique Bandra-Worli Sealink project, provide better visibility to the earnings growth of Hindustan ...

STOCKS: Shree Renuka Sugars: Buy
The domestic sugar cycle is set to enter a favourable phase for producers, with output expected to decline sharply over the next two years, lending support to sugar prices. ...

INCOME TAX: Tax liabilities on futures and options
TECHNICAL ANALYSIS: Index Outlook
FINANCIAL MARKETS: The long and short of rupee futures
INSIGHT: Why oil is on the boil
MUTUAL FUNDS: Franklin India Prima Fund: Switch

IPOS: Vishal Information Technologies - IPO: Avoid
STOCK MARKETS: Politics of the market
DERIVATIVES MARKETS: Nifty future at critical juncture
ECONOMY: Winding down
STOCK MARKETS: Baskets of X / STOCK MARKETS: Bull's Eye



Source: BL