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Thursday, February 08, 2007

Karvy - City Union Bank

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Close : Consolidation process !

Market slipped into negative territory right from the word go. and continued to venture further in the negative territory with every progressing hour on selling pressures witnessed throughout the day. Sensex however ended marginally positive on the back of buying in selective Index Heavy weights. Profit taking was seen in Bajaj Auto and Hindalco who lead the yesterdays rally. There was not much support from Global front as the Asian Indices ended mixed while their European counter parts were in red. The positive is that ECB and Bank of England have both kept interest rates unchanged. ! But really this is largely expected and so markets have not taken any positive cue from the same.

Sensex is closed up by 9 points at 14652 helped up by gains in ICICI Bk (997.9,+2 percent), Maruti (963.15,+1 percent), Rel Energy (565.85,+1 percent), Ranbaxy (421.5,+1 percent) and RCVL (489,+1 percent). Restricting the gains were Hindalco (175,-4 percent), Bajaj Auto (3008.25,-2 percent), HLL (205.15,-1 percent), Hero Honda (726.2,-1 percent) and Wipro (634.95,-1 percent).

There were some concerns regarding Cement Sector in a report by CRISIL. CRISIL opined that the Cement demand is expected to grow, on an average, by 9-10 per cent each year over the next 3 years due to healthy activity in end-user segments like housing, infrastructure, commercial construction etc. According to CRISIL bright prospects in the industry had attracted players - large and small - enough to have them announce capacity expansions (either greenfield or brownfield). The announced expansion exceeds 90 million tonnes - approximately 55 per cent of the current industry size. While this expansion may not notably influence the demand-supply situation over the short term, with more capacities materialising, operating rates as well as prices in the country would be significantly affected. CRISIL research expects supply to grow by a CAGR of 11 per cent over the next 5 years, exceeding the growth in demand. This is expected to bring down operating rates all across the country. But we are positive on this sector. Valuations are at high levels and thats where we believe could bring in the profit taking on such a report. Taking profits in Cement may not be a bad idea with a trading perspective. We believe cement prices will head higher in the next 12 months. Corrections should offer an opportunity when they come.

Eveready rallied on news that Hindustan Zinc had cut prices by 8.3%. Zinc is now priced at Rs. 1,59,100 a ton against Rs. 1,73,500 a ton. Eveready had reported a loss which was mainly due to the rise in Zinc prices. Eveready stands to gain from lower prices. With a wow call on in Eveready the gains for our patrons has been good and will be good going ahead too. The Stock ended the day higher 5%.

Punjab Tractors which rallied yesterday on Mahindra and Mahindras bid saw more gains today as well. Escorts confirmed that they were bidding for a stake in the company. Other firms like Sonalika's International tractors and TAFE have also shown interest for a stake in the company. This provided enough fuel for the stock to rally as the stock ended the day higher by 11%. The acquirer would benefit from this acquisition as it would increase market share by 10% also enable it get a hold of a manufacturing facility in the potentially huge Northern market.

Technically Speaking : As expected we have reached our first target of 14,700 and witnessed some profit booking after hitting the target yet there seems to be good support at lower levels. Declines outnumbered the Advances for the day as there were 1043 advances against 1613 declines. Sensex ranged between an intra day high of 14,698 and low of 14,523. Volumes were pretty good at Rs. 4,466 cr. Levels to watch above 14,700 is 14,850. Do keep reading for more.


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Market ends flat

The Sensex touched yet another peak at 14,698 in early trades on the back of buying in front-line stocks. The index opened firm at 14,691 and immediately touched an all-time high adding 48 points to its kitty. However the Sensex slipped on weak Asian markets and shed a major portion of its early gains. Thereafter the market remained range-bound with a negative bias and slipped further to touch the day's low of 14523. Strong buying at lower levels in the afternoon saw the Sensex pare its losses and end the session at 14652, up nine points. The Nifty closed at 4223, down a point.

The market breadth was negative. Of the 2,705 stocks traded on the BSE, 1,623 stocks declined, 1,022 stocks advanced and 60 stocks ended unchanged. Most of the sectoral indices ended in the red. The BSE Metal index shed 1.60% at 9275 followed by the BSE Auto index (down 0.35% at 5789) and the BSE HC index (down 0.17% at 3901).

Among the Sensex stocks 14 stocks failed to attract buying support while 16 stocks closed with gains. ICICI Bank gained 1.58% at Rs998, Maruti Udyog added 1.28 % at Rs963 and Reliance Energy advanced 1.26% at Rs566. Ranbaxy at Rs422, Reliance Communication at Rs489, SBI at Rs1,205, BHEL at Rs2,508, HDFC Bank at Rs1,808 and L&T at Rs1,753 closed in positive territory with small gains. However, Hindalco shed 3.79% at Rs175, Bajaj Auto slipped 2.34% at Rs3,008, HLL was down 1.13% at Rs205 and Bharti Airtel declined 1.10% at Rs765. Hero Honda, Wipro, Satyam Computers and Tata Motors ended with marginal losses.

Metal scrips continued to reel under sustained selling pressure. Shree Precoated Steels tumbled 3.79% at Rs175, Jindal Steel dropped 2.27% at Rs2,524, Sterlite Industries shed 1.77% at Rs480 and Maharashtra Seamless declined 1.55% at Rs520.

Over 58.11 lakh SAIL shares changed hands on the BSE followed by IDBI (40.45 lakh shares), IDFC (24.33 lakh shares), RCF (20.92 lakh shares) and Indian Hotels (18.01 lakh shares).

Value-wise Satyam Computers registered a turnover of Rs87 crore on the BSE followed by Reliance Communication (Rs86 crore), SAIL (Rs67 crore), BHEL (Rs54 crore) and Century Textiles (Rs52 crore).

PSU stocks' day out

The Sensex finally ended in the green after suffering from a high degree of volatility right from the word go. It was in the red for a significant portion of the day’s session. PSU stocks advanced in late afternoon session of trade, buoyed by optimistic statements from the Finance Minister.

The 30-shares BSE Sensex rose a marginal 8.96 points, to an all-time closing high for the Sensex at 14,652.09. In early-trade, the Sensex struck a new all-time high of 14,697.69, surpassing its earlier all-time high of 14,663.26 attained only on Wednesday (7 February 2007).

After striking an all-time high on the back of a firm opening, the Sensex had slipped into the red partly tracking weak Asian markets, and partly on profit-taking after a solid surge of late. This continued till the benchmark index touched a low of 14,523.16, only to rebound sharply due to bottom-fishing.

The S&P CNX Nifty lost a negligible 0.85 points, to 4,223.40. It had surged to an all-time high of 4,245.30, in early-trade. The Nifty began the trading session in positive territory, but could not withstand the higher levels. It drifted into negative territory in early trade. Technically, the next resistance for Nifty is 4,250, on surpassing which the next target is 4,300 and 4,335. On the downside there is support in the 4,180 - 4,160 range. As long as the index closes above 4,160, the bias remains positive.

The market-breadth was sharply negative after being positive in the opening session, as heavy selling emerged for small-cap and mid-cap stocks. There were over 1.5 losers for every gainer on the BSE. For 1,613 shares declining on BSE, 1043 advanced. Just 59 shares were unchanged.

The BSE Mid-Cap Index ended at 6,173.55, down 13.31 points (0.22%), while the BSE Small-Cap Index settled 46.74 points (0.61%) lower, at 7,651.07.

The BSE clocked a turnover of Rs 4466 crore.

Among the 30-Sensex pack, 17 advanced while the rest declined.

Hindalco Industries was the top loser, down 3.68% to Rs 175.20, on a high volume of 13.97 lakh shares. The stock had slipped from a high of Rs 184.

Bajaj Auto slipped 2.61% to Rs 3000, on profit-taking, after Wednesday’s near 10% surge. The stock had advanced to touch a high of Rs 3100.10 in intra-day trade.

Global consulting and IT major Satyam Computer Services was down 1.10% to Rs 485. It had announced plans to launch its largest Global Delivery Campus outside India in Nanjing, a city in eastern China. The IT bigwig said it was keen to ramp up operations in China through strategic acquisitions. "We as a company firmly believe in strategic acquisitions and 97% of the people working (with Satyam) in China today are Chinese. The company will strengthen its operations in the country through strategic acquisitions," a company statement read.

Bharti Airtel (down 1.10% to Rs 765.25), HLL (down 1.41% to Rs 204.55), and Wipro (down 0.95% to Rs 635) were the other losers.

Reliance Energy was the top gainer, up 1.66% to Rs 568.05, extending a recent surge. Recently, Reliance Energy (REL) won an engineering, procurement and construction (EPC) contract worth Rs 3,800 crore for a 1,200 Megawatt (Mw) coal-fired power plant at Yamuna Nagar, Haryana.

ICICI Bank advanced 1.40% to Rs 996, after striking an all-time high of Rs 1003.90. The stock rose for the second day in a row after the nation's largest private sector bank on Tuesday said it had raised the reference rate by 1% for corporate loans and home loans, from 9 February 2007. On Wednesday, ICICI Bank's ADR gained 2.4% to $46.13.

Maruti Udyog bounced back smartly from a low of Rs 944, to finish 1.47% higher at Rs 965 on 2.14 lakh shares.

Reliance Communications rose 0.98% to Rs 490.50, on a volume of 17.86 lakh shares. It had slipped to a low of Rs 474. As per a newspaper report, Hutchison Telecommunications International had asked bidders for Indian mobile firm, Hutchisson Essar, to submit their offers by Friday (9 February 2007). Reliance Communications is in the fray to acquire Hutchisson Essar. Britain's Vodafone Group and the Hinduja group are also in the race for Hutch.

PSU engineering major, Bhel, rose 0.65% to Rs 2509, on a volume of 2.15 lakh shares. The stock had surged to a high of Rs 2572, in intra-day trade. As per reports, Bharat Heavy Electricals (BHEL) secured a contract worth Rs 400 crore for setting up a 520 Mw (4x130 MW) Hydro Electric Project in Himachal Pradesh. The order for Parbati Hydro Electric Project, Stage-III, was placed by National Hydroelectric Power Corp (NHPC).

Index heavyweight Reliance Industries (RIL) was up 0.11% to Rs 1395.90, after striking a low of Rs 1384.

Another heavyweight, Infosys, gained 0.37% to Rs 2367.50. On Wednesday, Infosys' ADR surged 3% to $60.55.

Global Broadcast News settled at a sharp premium, at Rs 510.10, on BSE. The scrip posted high volumes of 1.30 crore shares on the premier exchange. The company had issued shares at Rs 250 a piece in the recently concluded IPO. The stock surged to a high of Rs 524, while its low was at Rs 381.25. As per market sources, a lot of FIIs and institutions, who could not get any allotment, were buying heavily in the counter.

In the late-afternoon session, the Union Government approved initial public offers in three state-run power firms. The three PSUs which will be able to launch their IPOs are Rural Electrification Corp., Power Grid Corp., and National Hydroelectric Power Corp. India, on Thursday, approved a public offer of shares in Bharat Earth Movers, Finance Minister (FM) P Chidambaram revealed. This triggered a rally for a host of PSU stocks.

Select PSU stocks surged following this statement from the FM. The BSE PSU index was up 0.31%. The Shipping Corporation of India (SCI) jumped 15.75% to Rs 207.40 on a volume of 10.44 lakh shares, and was the star performer among the PSU pack.

RCF (up 9.31% to Rs 48.15), Vijaya Bank (up 5.53% to Rs 52.50), Neyveli Lignite (up 5.15% to Rs 63.25), BEML (up 2.80% to Rs 1218), HPCL (up 1.80% to Rs 297), HMT (up 1.20% to Rs 81.10) and IDBI (up 0.57% to Rs 106.50), ONGC (up 0.15% to Rs 893), and GAIL (up 0.93% to Rs 292.75) advanced.

Shares from the metal sector saw renewed selling following weak global metal prices. The BSE Metal Index was down 1.6% to close at 9,275.10, and was the biggest loser among sectoral indices. Jindal Steel (down 3% to Rs 2505.50), Sterlite Industries (down 2.24% to Rs 478), JSW Steel (down 2.10% to Rs 455.30), SAIL (down 1.60% to Rs 114.35), Maharashtra Seamless (down 0.71% to Rs 525), and Jindal Stainless (down 0.88% to Rs 123.50) ended in the red.

HOV Services, a BPO, jumped 5% to Rs 301, after one of the world’s largest telecom organisations decided to use its transaction management software. Under the terms of the pact, the telecom giant will use OASIS, the software mentioned, to manage and audit accounts receivables assigned to collection agencies and attorneys servicing bad debt throughout the US.

OASIS provides end-to-end transaction management and includes sophisticated modules to strategically distribute accounts to internal departments, or to vendors. OASIS also includes tools to work, manage, audit and dynamically analyze inventory.

Punjab Tractors (PTL) is on a roll following reports of a greater number of companies entering the fray for private equity firm Actis’ 29% stake in the north-India based tractor firm. The stock jumped 11.30% to Rs 343 on 4.88 lakh shares on BSE. A newspaper report said, Escorts was interested in buying stake in Punjab Tractors (PTL). Reports add that the stake sale is likely to be around Rs 400 per share. PTL stock had spurted 8.7% to Rs 308.20 on Wednesday (7 February 2007) to Rs 308.20, boosted by reports that Mahindra & Mahindra (M&M) had already put in a non-binding bid for Punjab Tractors.

Sasken Communication Technologies lost 1% to Rs 543, after hitting a high of Rs 577. The company announced that it expects net profit to rise 50 - 60% in 2007-08 due to cost-reduction. Operating profit margins will improve 2%, to reach 24% of revenue. The communication services firm expected a loss of about $5-6 million from its product business in 2006/07 and hoped to break-even the next year.

KEI Industries surged 4.62% to Rs 106.50, after the company purchased approximately five acres for expanding the cables facility at Bhiwadi, Rajasthan. KEI Industries bought approximately five acres at its existing LT / HT cable making unit for capacity expansion, as also to upgrade HT power cable manufacture up to 132 KV (up from 66 KV at the existing plant) by installing balancing equipments.

The cost of the expansion project is estimated at around Rs 30-35 crore including the cost of land, plant and machinery. The revenue expectations from the project are approximately around Rs 150 - Rs 200 crore. The project is expected to commence operations within the next 7 - 8 months.

Deccan Cements rose 2.73% to Rs 175, after the company approved setting up a 1 million-tonne cement plant along with a captive power plant. The mini-cement plant enjoys lower excise duty than large plants. While large plants are levied duties at Rs 400 per tonne, mini-cement plants are levied excise duties at Rs 250 per tonne.

Hindustan Zinc rose 0.13% to Rs 670, after slipping to a low of Rs 635.20. The company said on Thursday it had cut zinc prices by 8.3% with immediate effect to Rs 1,59,100 a tonne, its second reduction in February.

The Nikkei average closed flat on Thursday, as investors sold Nippon Yusen KK and other shipping firms after their earnings reports, offsetting gains led by high-tech shares. The Nikkei closed up 0.16 points, at 17,292.48. The broader TOPIX index lost 0.47% to 1,720.18. The market will be closed on 12 February 2007 for a national holiday.

US technology stocks rose on Wednesday, as Cisco Systems' profit and outlook reinforced optimism over earnings, while blue-chips ended little changed after a slump in oil prices weighed on energy plays.

The Dow Jones industrial average inched up just 0.56 points, to end at 12,666.87, after touching an intraday record of 12,700.28. The Standard & Poor's 500 Index gained 2.02 points, or 0.14%, to finish at 1,450.02, just shy of its six-year high at 1,452.99 reached earlier in the day, while the Nasdaq Composite Index climbed 19.01 points, or 0.77%, to close at 2,490.50.

Crude oil fell after failing to break above $60 a barrel in New York for a third-straight day and as a government report showed ample US fuel stockpiles. Crude oil for March delivery fell $1.17, or 2%, to close at $57.71 a barrel on the New York Mercantile Exchange. Futures are 8.5% lower than a year ago. Brent crude oil for March settlement fell $1.19, or 2%, to close at $57.23 a barrel on the London-based ICE Futures exchange.

As per provisional data, FIIs were net buyers to the tune of Rs 543 crore on 7 February, when the Sensex surged 165 points.

Q3FY2007 earnings review: Sharekhan Special dated February 07, 2007

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Sharekhan Commodities Buzz dated February 08, 2007

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Edelweiss - PCG DAILY MARKET CALL 08-FEB-2007

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Sharekhan Highnoon dated February 08, 2007

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Kotak Morning Call + Mather Platt and Pumps

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PowerYourTrade Trading Calls

Ashwani Gujral

Buy Reliance Capital with stop loss of Rs 680 for target of Rs 800

Buy Punjab Tractor with stop loss of Rs 260 for target of Rs 450

Deepak Mohoni

Short sell Balrampur Chini above Rs 66.50 with stop loss of Rs 68; This is a day-trading recommendation.

Buy Indiabulls below Rs 452 with stop loss of Rs 442; This is a day-trading recommendation.

Rajat K Bose

Sell Amtek Auto around the last close with stop loss above Rs 414.10 for target of Rs 394-385

Buy Bharat Electronics around the last close with stop below Rs 1643 for target of Rs 1746 - 1767.

Anagram - Daily Call

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Upmove may continue

The market is likely to stay firm on overnight gains in US markets and the encouraging advance estimates from Central Statistical Organization. Further increasing FII fund inflows may boost the sentiment. However, weak Asian indices in morning trades may put pressure on domestic indices. The Nifty could test higher levels between 4250 and 4280 and may dip around 4180, while the Sensex has a likely support at 14580 and may face resistance at 14720

US indices ended firm on Wednesday, with the Nasdaq gaining by 19 points to close at 2491 and Dow Jones ended 0.56 points higher at 12667

Indian ADRs had a mixed outing on the US bourses. Infosys soared over 3% and ICICI Bank jumped 2.49% while Satyam, Wipro, HDFC Bank, Rediff were up around 1-2% each. However Dr Reddy's, Tata Motors,MTNL and Patni Computers ended in the red with steady losses.

Crude oil prices in dipped further, with the Nymex light crude oil for March delivery slipped by $1.17 at $57.71 a barrel. In the commodity segment, the Comex gold for April series dipped $1.40 to settle at $657.30 an ounce.

Intra-day Stock Ideas

NIFTY (4224) SUP 4195 RES 4253

BUY Shasun Chem (125)
SL 121 T 133, 135

BUY Hexaware (170)
SL 166 T 178, 181

BUY Cipla (258)
SL 254 T 266, 269

@ 125 SL 129 T 117,115

SELL Balaji Tel (137)
@ 140 SL 144 T 131, 129


Daily Market Strategy - Don't just aim

Next in importance to having a good aim is to recognize when to pull the trigger.

The pre-budget rally which we mentioned seems to be well underway. The bulls are ignoring all warnings about expensive valuations and an imminent correction. Even the spiraling inflation and the consequent hardening of interest rates have not had any impact on the bulls. The stronger than expected GDP estimate for FY07 yesterday added fuel to the fire. The aim of those who come into the market can't be anything more than making money. But set your goals and then aim. With markets having run up substantially, it pays to rejig not just your portfolio but also ensure that your assets are comfortably allocated.

FIIs have pumped in $366.4mn in three sessions starting Feb. 2 till Feb. 6. Yesterday, overseas investors were net buyers of Rs5.43bn (provisional) in the cash segment. In the F&O space, they were net buyers at Rs3.41bn. As long as FIIs keep the money tap open, it will pour gains. Having said that, one should 'bear' in mind irrational exuberance can lead to heavy losses and a lot of heartburn. For today, we see the momentum continuing at least at the start. But, beware of any cooling at higher levels.

Global cues remain mixed. In the US, the Nasdaq managed some gains while the Dow closed flat. Oil prices have come off after hitting $60 per barrel. In Asia, the Nikkei in Tokyo is up slightly while other indices are in the red. The Hang Seng has slid by nearly 300 points. Asian benchmarks open for trading fell, except in Australia and China. Metal prices on the London Metal Exchange (LME) fell overnight. A measure of six metals traded on the LME, including copper and zinc, was down 1.1%.

The Cabinet Committee on Economic Affairs (CCEA) will meet today. A proposal for disinvesting 10% Government stake in Rural Electrification Corporation (REC) and 5% each in Power Grid Corporation of India Ltd (PGCIL) and National Hydroelectric Power Corporation (NHPC) is expected to be considered.

We mentioned about NIIT Technologies and a couple of stocks in this column. NIIT hit a high of Rs460 after opening at Rs406. Today some more intra-day action is expected as the company announces its entry into the insurance vertical later in the day. Pyramid Saimira has been on a one-way journey upwards. While market expectations are that the counter could cross Rs700 in the near term, we advice extreme caution as the stock has run up significantly in a short period.

Satyam could witness some action on reports that it has bid for 20 contracts worth about $2bn. The new orders are expected to be announced post April 1, 2007. Wipro's Chief Strategy Officer was quoted as saying that the company expects to close at least one acquisition in the current quarter. GlaxoSmithKline Consumer Healthcare (GSKCH) said that it plans to acquire nutritional and over-the-counter (OTC) medicinal brands, businesses and technologies.

Shares of Global Broadcast News will get listed on the BSE and NSE today. The IPO of Mudra Lifestyle, Vijayeswari Textiles and Oriental Trimex will open today. The IPO of SMS Pharmaceuticals will close today. So far, it hasn't received a good response.

Abbott India will announce its results for the year ended November 30, 2006 and recommend dividend. FAG Bearings, Oswal Spinning and Rain Commodities will also declare their results today. Berger Paints will announce an interim dividend. Diamond Cables' Board will meet today to consider expansion into HT Power Cables.

Major Bulk Deals:
Morgan Stanley has bought Aftek; Merrill Lynch has picked up Cambridge Technology while Reliance Vision Fund has sold the stock; Deutsche Securities has purchased Ceat; Macquarie Bank has sold Crew BOS; Bear Stearns has sold Country Club; Templeton MF has bought Federal Bank; Morgan Stanley has picked up Lloyd Electric; Reliance Capital has picked up Orient Paper; HDFC Prudence Fund has bought Punj Lloyd while New York Life Investment has sold it; Goldman Sachs has sold RPG Transmission but has picked up Sujana Metal.

Insider Trades:
Mahindra & Mahindra Ltd: Mr. Nadir B Godrej, Director has purchased from open market 9500 equity shares of Mahindra & Mahindra Ltd on 2nd February, 2007.

Market Volumes:
The turnover on NSE was up by 5% to Rs103.3bn. The BSE Metal index was the major gainer and gained 2.19%. BSE Auto index (up 1.48%), BSE Technology index (up 1.45%) and BSE Bank index (up 1.35%) were among the other major gainers.

Delivery Delight:
ABB, APIL, ACC, Bajaj Auto, Bata India, Cipla, Greaves Cotton, HDFC Bank, Hero Honda, Hindalco, Hindustan Motors, Infosys Technologies, Jet Airways, L&T, Nicholas Piramal, Prism Cement, Reliance Capital, Shasun Chemicals, Siemens, Taneja Aerospace, Unitech and Wipro.

Volume Toppers:
IFCI, Aftek Ltd, SAIL, IndusInd Bank, IDBI, IDFC, Reliance Communication, Shree Ashtavinyak, Hindustan Motors, Hindalco, Ashok Leyland, Indiabulls, Unitech, Syndicate Bank and NTPC.

Upper Circuit Filters:
Goldstone Technologies, Auto Industries, Pyramid Saimira, Kew Industries, Swan Mills, Anant Raj Industries, BPL, HOV Services and Taneja Aerospace.

Long Term Investment:
Bata India

Major News Headlines:
Taneja Aerospace forms JV with France's TAT for Aircraft MRO
Cabinet gives initial approval on chip-making incentives
BSEL Infra secures order worth Rs21bn
Jupiter Bioscience receives order from Bachem AG
Subex Azure to raise $200mn via GDRs, bonds
Reliance Life Sciences buys GeneMedix of UK
Lupin gets USFDA approval for Sertraline
Northrop, BEL to explore joint production opportunities
M&M makes bid to buy Punjab Tractors

From Research Desk - Madras Cements Ltd. (MCL) – Result Update Q3 FY07.

CMP – Rs3,418
Rating – BUY
Target – Rs4,270

MCL’s cement volumes increased by 27% y-o-y to 1.48mn ton and on sequential basis it went up by 1%. MCL has increased its despatches despite monsoon in the Southern States. We expect MCL’s despatches to be at 5.78mn ton for FY07, up from 5.66mn ton as per our previous estimation. We retain our FY08 and FY09 cement volume at 6.02mn ton and 7.49mn ton as new capacities comes in at FY08/FY09.

MCL’s OPM increased by 1560 bps to 32.7% on y-o-y basis but went down 620 bps on sequential basis due to increase in cost per ton of cement. Cost per ton increased by 4.8% sequentially to Rs1784 in Q3FY07. On y-o-y basis it increased by 3.0%. Higher coal prices in international market and increase in freight charges has led to increase in costs. Power & Fuel expenses per ton went up by 6.7% sequentially to Rs551 and freight charges increased by 9.8% to Rs374. Realization per ton fell by 4.7% sequentially to Rs2651. We have factored 2.3% fall in our estimations for the quarter. Cement price have rebound in Southern markets post monsoon and hovering at pre-monsoon levels at present.

Interest cost for the quarter has come down 24.6% y-o-y to Rs85mn. Sequentially it has more than doubled. Higher requirement for working capital due to fund requirement for ongoing expansion and interest rates firming up has increased the interest burden for Q3FY07 over Q2FY07.

We revise our FY07 earnings estimate from Rs291.2 to Rs280.7 and retain our FY08 and FY09 earnings estimates at Rs339.3 and Rs355.8 respectively. We consider MCL as better play in Southern region going forward. MCL is expanding cement capacity by 4mn ton to take the total capacity to 10mn ton by FY09. MCL is putting up 18MW CPP at Jayanthipuram facility by Q1FY08. MCL is trading at 10.1x and 9.6x of its estimated FY08 and FY09 earnings of Rs339.2 and Rs355.7 respectively. We maintain our BUY rating with target price of Rs4270. Our target price discounts FY09 earnings by 12.0x and EV/EBIDTA by 7.6x.

How Market Fared

Momentum likely to continue

Bulls today conquered new heights reversing yesterdays Loss. The frontline stocks were at the fore front lifting the benchmark Sensex over the 14600 level for the first time. The Auto index was the major gainer and others Bank, Metal and Technology index followed suit. The heavy weights like Infosys, ICICI Bank and ACC were among the major gainers, however Tata Motors, ONGC and HLL were among the major losers. Finally, the BSE benchmark Sensex surged 164 points to close at 14643. NSE Nifty advanced by 28 points at 4224.

Bajaj Auto today was the star performer, with the scrip gaining over 9% to Rs3078 being the top gainer among the 50-scrip’s of NSE Nifty it touched an intra-day high of Rs3093 and low of Rs2795.

Wipro advanced 1.2% to Rs642 as the company is looking at acquisitions in Healthcare, travel sectors. The scrip touched an intra-day high of Rs646 and a low of Rs631 and recorded volumes of over 5,00,000 shares on NSE.

Lupin advanced 2.3% to Rs630 after the company announced they got approval from US FDA for Sertraline Hydrochloride Tablets. The scrip touched an intra-day high of Rs645 and a low of Rs610 and recorded volumes of over 2,00,000 shares on NSE.

Subex Azure advanced 1.6% to Rs725 after the company announced their plans to raise $200mn selling GDRs, bonds. The scrip touched an intra-day high of Rs746 and a low of Rs680 and recorded volumes of over 29,000shares on NSE.

Telecom stocks today were a mixed bag. Heavy weight Bharti Airtel gained 0.3%o Rs772 and MTNL advanced 2.9%to Rs502. However, Reliance Communication lost 0.9%to Rs485 and MTNL was down 0.5% to Rs164.

After being on the receiving end for couple of trading session the Metal stocks today shined. Hindalco gained 4.3% to Rs182, SAIL surged 4.8% to Rs116, Nalco advanced 0.2% to Rs234 and Sterlite Industries gained 1.3% to Rs489.

FMCG stocks witnessed selling pressure towards the end. Mid-Cap stocks like McDowell fell 3.1% to Rs916, Tata Tea was down by 1.5% to Rs705 and Godrej Consumer slipped 0.5% to Rs150. however ITC and Dabur were among the major gainers

Firmness to prevail due to strong FII inflow

The market is on a roll due to strong growth in corporate earnings in a booming Indian economy. On Wednesday 7 February 2007, the two key indices, the Sensex and the Nifty, set their third records in the last four trading sessions. The government on Wednesday estimated GDP growth of 9.2% in the financial year ending March 2007, above RBI’s forecast between 8.5 - 9%, spreading more cheer in the market.

Although the RBI raised short-term interest rates by 25 basis points in its quarterly monetary policy review on 31 January 2007, it also raised its GDP growth forecast for the current fiscal year. A day before, ratings agency Standard & Poor's (S&P), on 30 January 2007, raised India's sovereign local currency credit ratings to investment grade BBB-/A-3, with a stable outlook, citing strong economic prospects and an improving fiscal situation.

A lot of funds, for instance, pension funds in foreign countries, which were not allowed to invest in Indian equities hitherto, will now become eligible to purchase Indian equities. FIIs have stepped up buying following the S&P upgrade. Their inflow was Rs 1665.60 crore in three trading sessions, from 2 February to 6 February 2007. As per provisional data, FIIs were net buyers to the tune of Rs 543 crore on 7 February, the day when Sensex had surged 165 points.

FIIs were net buyers to the tune of Rs 328 crore in index-based futures on 7 February. They were net sellers to the tune of Rs 70 crore in individual stock futures on that day

The near-term trend on the bourses will be determined by expectations regarding the Union Budget 2007-08. Market men expect the finance ministry to give a big impetus to agriculture and infrastructure in the budget. According to a pre-budget report of Man Financial, though the 10% surcharge on corporate tax may be eliminated, the effective tax burden for corporates may go up if certain open-ended exemptions are removed.

Asian markets were mostly in the red on Thursday 8 February 2007. Key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan were down by between 0.31% to 1.3%. Japan’s Nikkei 225 average was up 0.26%.

US technology stocks rose on Wednesday as Cisco Systems' profit and outlook reinforced optimism over earnings, while blue chips ended little changed as the slump in oil prices weighed on energy plays. The Dow Jones industrial average inched up just 0.56 of a point to end at 12,666.87, after earlier touching an intraday record high at 12,700.28. The Standard & Poor's 500 Index gained 2.02 points, or 0.14 percent, to finish at 1,450.02, just shy of its six-year high at 1,452.99 reached earlier in the day, while the Nasdaq Composite Index climbed 19.01 points, or 0.77 percent, to close at 2,490.50.

Crude oil futures for March delivery rose 16 cents to $57.87 a barrel on Thursday after falling more than a dollar in overnight trade.

Emkay - Morning Notes, Sujana Metal, Larsen Tourbo, Four Wheeler Update

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Wednesday Telefolio - Vol. No. : 5 Issue No. : 33 Wednesday, February 07, 2007

Foseco India

Current Price Rs 367

BSE Code 500150

Face Value Rs 10


Foseco India is the leading supplier of metallurgical chemicals for the ferrous and non-ferrous foundry industry, which are expected to grow strongly going forward. The parent company Foseco, UK holds 66.5% equity stake in the company. The company is also high dividend paying company and is available at attractive valuation

Actual EPS for year ended December 2005 Rs 21.6

Projected EPS for year ended December 2007 Rs 31.7

Actual EPS for year ended December 2006 Rs 25.5

MindTree Consulting IPO

MindTree Consulting (MindTree), promoted by a group of 10 professionals (lead by Ashok Soota, CMD), is an international technology company that delivers business and technology solutions through global software development. MindTree currently has three development centers: one each in Bangalore, Chennai, and New Jersey in the US. It is planning to develop a new facility in Bhubaneshwar, India, which is to be completed in FY2008.

End December 2006, MindTree had 18 sales offices across the globe with a sales force of 46 and headcount of 4006. There were 153 active clients. Of these, 30 were million-dollar customers. From these, four clients accounted for revenue in excess of US$ 5 million. The US region accounted for 62.7% of the revenue share, Europe 23% and Asia Pacific Countries 14.3%. The top client contributed 9.9%, top five 32.2% and top10 45.2% of the revenue.

MindTree has two divisions: Information Technologies Services (IT Services) contributed 76%, and Research and Development Services (R&D Services) 24% of the total revenue in the nine months ended December 2006. IT Services has strong focus on manufacturing (30.1%), travel and transportation (22.6%), banking financial services and insurance (BFSI) (17%) and hi-technology (18.5%). R&D Services, including engineering and research, enable faster product realisation by leveraging the expertise in hardware design, embedded software, middleware and testing and through MindTree’s IP building blocks in Bluetooth, VOIP, IVP6, iSCSI and others in computing.

In September 2004, MindTree took over the software divisions of ASAP Solutions and its subsidiary Arachno Solutions, providing SAP implementation and maintenance, data management and customised application development in Asia and the US. In June 2005, it snapped Linc Software Services in the business of application development and maintenance, ERP product support and web development. In January 2007, MindTree signed a no-binding term sheet to acquire an IC design company for all-cash consideration.

The proceeds of the issue are to be utilised to fund the new Rs 120.74-crore development centre in Chennai, and prepayment of Rs 18.77-crore loans.


  • In FY 2006, the R&D Services earned export revenue of approximately US$ 3.9 billion, comprising about 22% of the overall IT services and software exports. The Nasscom Strategic Review 2006 has projected the estimated US $27-million outsourced product-engineering services globally to increase by 100% over the next four to five years.
  • Between FY 2004 to FY 2006, revenue registered a CAGR of 85.5% with operating profit margin (OPM) improving from 3.9% in FY 2004 to 17.3% in FY 2006. Net profit reported a CAGR of 500%. The FY 2006 net profit has been surpassed in the nine months ended December 2006, and there has been a 110 basis-point improvement to 17.3% in OPM. The management believes there is scope for improvement in margin on better utilisation and flattening of employee pyramid from the current average experience of 4.6 years.
  • With domain knowledge in R&D services. MindTree has positioned itself as a comprehensive solutions provider. The company has the capability to create opportunities to cross-sell its R&D engineering services to its clients and also supplement its IT services capabilities.
  • MindTree has a management team of professionals with an average of 20 years’ industry experience with different areas of specialisation within the IT industry. The co-founders are from leading IT consulting companies Wipro, Cambridge Technology Partners and Lucent Technologies.


  • The revenue may vary significantly from quarter to quarter as the revenue is project based and there can be variations in the duration, size and scope of projects.
  • Options convertible into similar number of shares issued under the employee stock option plan (ESOP) and director stock option plan DSOP total 26,53,977. If exercised, the shares will amount to 7% of the post-issue equity.


The annualised EPS for the nine months ended December 2006 works out to Rs 23.4. At the price band of Rs 365-425, PE is 15.6–18.1. The TTM PE of Computers – Software Medium/Small is 25.7.

Idea Cellular

Idea Cellular is part of the Aditya Birla group and is the sixth largest wireless operator in India with an 8.5% market share in total wireless subscribers. It currently operates in 11 circles, which comprise one metropolitan circle of Delhi, three category A circles of Andhra Pradesh, Gujarat and Maharashtra, six category B circles of Haryana, Kerala, Madhya Pradesh, Rajasthan, Uttar Pradesh (UP) (East) and UP (West) and one category C circle of Himachal Pradesh.

The present operations of Idea Cellular in 11 of the total 23 circles cover 57.7% of India’s population and about 57.9% of India’s current subscriber base. End December 2006, the company had 12.44 million subscribers, with network coverage of 1,627 census towns and 1,980 other population centers.

Idea Cellular has received unified access services (UAS) licences for metropolitan circle of Mumbai and category C circle Bihar. In addition, the company has nine license applications pending for further circles, which, if obtained, would give it complete access to the entire Indian market. It intends to roll out services in Mumbai circle shortly by installing a network comprising about 1,597 cell sites covering the entire city. The company will expand and strengthen its network in recently rolled out circles of Himachal Pradesh, Rajasthan and UP (East) and install about 105, 810 and 1,247 additional cell sites, respectively, in these circles.

Recently, Idea Cellular was awarded a National Long Distance (NLD) licence by the Department of Telecommunications. It will set up the NLD network by March 2008.

Idea Cellular wants to redeem the outstanding 483 cumulative non-convertible preference shares of Rs 10 million each.

To fund this expansion plan, Idea Cellular has lined up a public issue to raise Rs 2125 crore (excluding the greenshoe option) at a price band of Rs 65 to 75. The company has already made a pre-IPO placement of Rs 375 crore to its promoters/promoter group, Aditya Birla Nuvo and Birla TMT Holdings, and will finance some part from internal accruals.


  • The Indian telecom market (including GSM and CDMA) is one of the fastest growing in the world, adding nearly six million subscribers a month. Mobile subscribers are estimated to increase to approximately 210 million by FY 2008, from 146.54 million subscribers end December 2006. Factors like falling handset costs, attractive tariffs and extensive reach have reduced the entry barriers for new subscribers and, thus, expanded the market available to telecommunication service providers.
  • Idea Cellular has received UAS licences for the Mumbai and Bihar circles. Soon, it will launch its services in these circles. As the mobile penetration level in Bihar is quite low, there are market opportunities and good growth potential for the company.
  • Idea Cellular’s NLD licence will allow the company to carry intra-circle as well as inter-circle traffic on its own network, resulting in saving of significant carriage charges that the company currently pays and reduction in operating costs.


  • In the absence of pan-India presence like other integrated operators, Idea Cellular is unable to provide seamless roaming services and is forced to share its revenue with other operators with whom it has roaming arrangement for its subscribers. Beside, the company is largely dependent on a number of relevant fixed-line, NLD, ILD and other mobile operators for its interconnection arrangements and leased-line arrangements. However, in future, both these concerns will be resolved as it starts operations in newer circles, expanding its presence throughout India, and commissions its own NLD network.


At the price band of Rs 65 - Rs 75, the annualised EPS for the nine months ended December 2006 on post-issue equity (assuming the greenshoe option is exercised in full), works out to Rs 1.5 - Rs 1.6. PE works out to 42.3 – 47.8, respectively. Bharti Airtel, with a pan-India presence in GSM (in all 23 circles), trades at 39.9 times of annualised nine months consolidated earning. Reliance Communication (RCom), with CDMA presence in 21 of the 23 circles and GSM presence in eight circles (thereby constituting a pan-India presence in all 23 circles), is trading at 34.5 times annualised nine-month consolidated earning. Notably, RCom is a fully integrated telecom service provider with significant presence in almost all telecom services including NLD and international.

On the basis of annualised nine-month consolidated revenue, the market capitalisation to sales works out to 8.39 for Bharti Airtel, 7.12 for RCom, 3.64 for Tata Teleservices (Maharashtra), and 4.28 - 4.85 for Idea Cellular. The market capitalisation per wireless subscriber for Bharti Airtel and RCom works out to about Rs 45684 and Rs 33360, and for TTML Rs 20352, while that for Idea Cellular it is about Rs 14030 – Rs 15886.

Forecast - No hitch for the market till budget

I do not foresee any major correction in the market till the budget. Budget related triggers are yet to pour in, as there is some time to go before the event.

The Sensex has added more than 500 points in the past five sessions. Firm global markets have contributed their bit to the party. Many of them are trading at their all-time high levels. So there were no major correction concern from that facet.

There is a possibility for the market to remain flattish tomorrow, after all the bullishness seen over the past few days. ITC, Reliance Industries and HLL among the Sensex stocks could move up tomorrow considering that they were dull in today’s trading.

- Samir Porecha, Director, Porecha Global Securities

B&K - Idea Cellular IPO

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Sharekhan Eagle Eye (equities) & Derivatives Info Kit for February 08, 2007

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Geojit Reports

Foseco India Ltd

Foseco India, a 66.48% subsidiary of Foseco, UK, has put up an impressive performance for Q4 CY 2006. Net Sales grew @ 20.6% to Rs.34.49 crore. OPM% improved to 21.1% (18.1%) as decline in other heads of expenses due to operational efficiencies more than offset increase in raw material costs to 56.7% of Net sales (54.8%). Consequently PBT (before extraordinary items) spurted by 61.7% to Rs.6.83 crore. In Q4 CY 05, there was extraordinary income of Rs.1.18 crore on account of excess provision of earlier years written back. In absence of extraordinary income in Q4 CY06, growth in PBT (after extraordinary items) was subdued at 26.4% to Rs.6.83 crore. A higher tax rate of 40% (37%) further restricted growth in PAT to 20.5% at Rs.4.10 crore.

Foseco India is the leading supplier of metallurgical chemicals for ferrous and non-ferrous foundry industry. Company adds value to its customers through provision of products and expertise that improves customer’s productivity and product quality.

Foundries manufacture castings which in turn find application in a wide spectrum of industries – automotive, steel, petrochemicals, construction and mining, agricultural and textile machinery etc. With Indian economy growing at 7-8% p.a., there is an uptrend in infrastructure & construction and mining sector. Automobile industry too is on an upswing. Growth in its user segment in turn augurs well for foundry industry. Moreover, India is emerging as a key outsourcing hub for various casting products that emerge from foundry industry. Higher demand for castings from global as well as domestic market has led to increasing investment in expanding foundry capacity.

Foseco is well positioned to benefit from these trends through implementation of Solutions Partner strategy, supported by global Foseco network and access to foundry process best practice that it provides.

At CMP of Rs 348.45/-, share (Rs 10/- paid up) is trading at 13.7 times CY 2006 EPS of Rs.25.5 and 10.5 times CY 2007 expected EPS of Rs.33.1. At CMP, dividend yield works out to be 5.2% (Total dividend – 180%). In view of sound business prospects, we recommend to “BUY” the share at CMP.

Bharat Heavy Electricals Limited (BHEL)

BHEL, an engineering behemoth, has posted stellar performance for Q3 FY 2007.

Sales grew @ 30.3% to Rs 4,710 crore (Rs 3,615 crore) due to strong & growing order book. OPM% expanded to 21.4% (18.3%) due to efficiency improvement and fixed overheads getting spread over larger production volume. Further boosted up by 56% higher other income of Rs. 186 crore (Rs. 119 crore), PBT spurted up by 60.4% to Rs 1,036 crore (Rs 646 crore), while PAT jumped up by 57.8% to Rs 668 crore (Rs 423).

Going ahead, BHEL is expected to sustain the growth in view of:-

Ø Whopping order book position of Rs. 46,700 crore (~ more than 3x FY 2006 sales of Rs. 14,587 crore) driven by power equipment business. This will further augment as targeted addition of power generation capacity in 11th plan (2007-2012) is likely to be greater than 70,000 mw. Owing to its dominant position in domestic power generation and equipment electrical market with ~ 65% of Indian total installed capacity in power generation, BHEL will be core beneficiary of such continued momentum in power capex.

To cater to burgeoning order backlog, BHEL is implementing brownfield capacity expansion of 10,000 MW (6000 mw) and is also building up capability (e.g. has tied up technology for higher capacity & more efficient supercritical boilers used in thermal power).

Ø Following passage of US legislation on civil nuclear cooperation to India, BHEL (who has set up 80% of country’s installed nuclear power generation capacity of ~ 3300 mw) is focusing on this segment. It is in talks with global players such as Siemens, GE and may invest upto Rs. 500 crore to enhance nuclear capacities.

It should be noted that growing market has encouraged other global players to enter in India. Thus, company has to face competition from Chinese, Korean equipment suppliers such as Dong Fang Shanghai Electric (Lanco Infratech / Globeleq project at Sasen), Doosan Heavy Industries & Construction Co. Ltd, Korea, Siemens Ag Germany (partner of Tata). It is apprehended that earlier virtual monopoly enjoyed by BHEL, globally benchmarked as least cost efficient supplier of power generation equipments, is under threat.

It should be noted that company has declared 1:1 bonus as well as Rs. 12.50 interim dividend.

At cum-bonus CMP of Rs 2,506/-, share (Rs 10/- paid up) is trading at 25 times FY 2007 estimated EPS of Rs 100/- and at 18 times FY 2008 expected EPS of Rs 140/-. Considering sustained GDP growth of 7-8% and correspondingly higher demand for power generation which will augur well for power equipment supplier like BHEL, we recommend to “BUY” at CMP.

ANG Auto Limited

ANG Auto, India's leading multi-product manufacturers and exporters of automobile components to OEMs in the US and Europe, has reported excellent performance for Q3 FY 2007.

Net Sales more than doubled to Rs. 29.6 crore (Rs. 14.2 crore). OPM% declined slightly to 26.2% (27%) due to increase in Other expenditures. PBT jumped up by 105.3% to Rs. 6.41 crore (Rs. 3.12 crore). Further aided by lower tax rate, PAT zoomed to Rs. 5.84 crore (Rs. 2.54 crore).

ANG Auto manufactures products for trailer axles, transmission and air-brake components like anchor pins, rollers and axle spindles for various applications. The company has been moving up the value chain and now also manufactures air brake assemblies. It exports its products to global majors like Arvin Meritor, Daimler Chrysler, Dexter Axles, Dayton Parts and Bosch Group in USA, Europe and Latin American markets. Company earns ~ 90% of its revenues from exports.

During FY 2006, company consolidated by merging ANG Auto and listed ANG Exports. This was later followed by acquisition of ANG Automotive Industries.

In July 2006, Ashok Leyland entered into 5-year manufacturing and supply contract with ANG Auto Tech, 75% subsidiary of ANG Auto, for manufacture of tractor-trailers which ALL will market as a co-branded product. The deal is valued at Rs 1,500- 1,800cr. Trailers are manufactured at the company's Sitarpur facility in Uttranchal. Deal envisages total investment of Rs. 61crore, to be invested in two phases.

ANG Auto currently has seven facilities out of which three are located in Noida. It is setting up an integrated automotive component facility at Bhiwandi, Rajasthan at capex Rs 37 crore and is expected to commence operations by April 2007. New plant will account for majority of company's revenues in FY 2008 and will significantly boost bottomline as it is eligible for 10-year tax holiday.

At CMP of Rs. 306/-, the share (Rs. 10/- paid up) is trading at 13.9 times FY 2007 expected EPS of Rs. 22 and 10.93 times FY 2008 expected EPS of Rs. 28/-. In view of robust business prospects, we recommend to “BUY” the share at CMP.

Blue Star Limited (BSL)

Central air-conditioning and commercial refrigeration major, Blue Star has reported superb performance for Q3 FY 2007.

Net sales grew by 41% to Rs. 365.7 crore (Rs. 259.5 crore) backed by strong performance across various business segments. Central air conditioning system reported 40.4% higher sales of Rs. 276.16 crore (Rs. 196.66 crore), while cooling product division turnover perked up by 50.5% to Rs. 69.30 crore (Rs. 46.06 crore). OPM% improved to 6.5% (6%) mainly due to sharp rise in cooling product PBIT% to 6.5% (PBIT loss 4.9%). Consequently, PBT jumped to Rs.16.25 crore (Rs.9.97 crore). PAT at Rs. 11.50 crore (Rs. 6.91 crore) registered 66.4% increase.

Leadership position and capability to offer expert solutions coupled with differentiated products has enabled company to win several prestigious orders during the quarter under review. Demand for central air-conditioning business (largest growth driver) is expected to grow @ healthy pace of 25% (+) considering mega growth trends in user industries i.e. IT/ ITES, retail & entertainment (malls, multiplexes, fast food chains, coffee shop chains, etc.), SEZs and cold chain, BSL, being market leader is expected grab major chunk of this growing pie. Cooling product business (led by split air conditioners and commercial refrigeration products) has emerged as the fastest growing segment and is expected to see significant growth with entry of corporates in farm related business.

To cater to growing demand, company is enhancing capacities at its Himachal Pradesh plant. As this plant enjoys tax concessions, higher contribution from this plant would boost bottomline considerably.

At CMP of Rs. 225/-, share (Rs. 2/- paid up) 27.5 times FY 2007 expected EPS of Rs. 8.16 and 19.5 times FY 2008 expected EPS of Rs. 11.82. With promising outlook for sustained growth in all business segments, we recommend to “BUY” the share at CMP.

Bharat Electronics Ltd (BEL)

Bharat Electronics Ltd. (BEL), a mini-ratna and largest defense equipment manufacturer in India has posted excellent numbers for Quarter ended December, 2006 (Q3 FY 2007).

Net sales surged by 28.8% to Rs. 863.79 crore (Rs. 670.86 crore). OPM% improved to 22.9% (21.6%) despite a 6% rise in raw material cost as % of sale. PBT zoomed by 48.2% to Rs. 271.74 crore (Rs. 146.95 crore) further aided by doubling of other income to Rs. 40.72 crore (Rs. 21.72 crore). Lower average tax rate saw PAT soar by 52.7% to Rs. 148.18 crore (Rs. 97.01 crore).

BEL has a very healthy order book (over 2 times FY 2006 sales) at Rs. 7,330 crore (Rs. 6,600 crore as on March 2006) (inclusive of both civilian and defense) executable over a period of next 2-3 years depending on customer requirements.

BEL is actively looking at aviation sector to benefit from the offset agreement entered into by government of India, offering potential of US $16-20 billion to Indian companies. It already interacts with Boeing, Raytheon and Lockheed-Martin, giving it strong footing to be one of principal beneficiaries of offset agreements.

It is also de-risking its portfolio (presently ~80% of total revenues comes from defense sector) by increasing focusing on exports and civilian electronics (like direct to home set top boxes, smart and citizen cards electronic voting machines, broadcasting equipment, non-defense telecommunication systems) by leveraging its strengths. This will also help company to better withstand competition from private players with the opening of hitherto restricted defense sector.

At CMP of Rs. 1395/-, share (Rs. 10/- paid up) is trading at 16.37 times FY 2007 expected EPS of Rs. 85/- and 13.64 times FY 2008 expected EPS of Rs. 102/-. In view of excellent business prospects, we recommend to “BUY” the share at CMP.

Bank of Baroda (BoB)

Bank of Baroda (BoB), has come out with good numbers for Quarter ended December, 2006 (Q3 FY 2007).

Standalone Net Interest Income (interest income less interest expense) grew by a moderate 18.1% to Rs. 961 crore (Rs. 813 crore) due to higher interest expense growth @ 48.6% to Rs. 1,426 crore (Rs. 960 crore) against that of interest income @ 34.6% to Rs. 2,387 crore (Rs. 1,773 crore). This is despite surge in total advances by 46.8% to Rs. 77,661 crore. Total deposits increased by 31.0% to over Rs. 112,298 crore.

PBT (before extraordinary items), however zipped ahead by 143.9% to Rs. 515 crore (Rs. 211 crore) as provisions & contingencies halved to Rs. 142 crore (Rs. 298 crore) (attributed mainly to negligible provisioning for NPA, reflecting better recovery, against Rs. 116 crore in Q3 FY 2006) as well as robust fees growth and better operating efficiency. PBT (after extraordinary items) went up by 62.8% after giving effect to write back of provision for NPA Rs. 73 crore in Q3 FY 2006. Higher average tax rate stunted PAT @ 62.8% to Rs. 329 crore (Rs. 202 crore).

BoB has received RBI approval to set shop in 8 more countries (presently has 60 offices across 21 countries); this will augment profitability as presently bank’s international operations contribute 18% to total business and 35% to net profit.

BoB has come out with innovative concepts like loan factories (for retail and SME sectors), has over 500 8am to 8pm branches (leader in public sector banks), increased technology adoption as part of its customer (internal and external) centric approach, which will put it in good stead to brace competition. However, bank’s ability to manage steadily rising deposit costs, expected interest rate hike by RBI and impact of implementation of Basel II norms on declining CAR continue to be key concerns going forward.

At CMP of Rs. 246/-, share (Rs. 10/- paid up) is trading at 7.45 times FY 2007 consolidated expected EPS of Rs. 33/- and 5.47 times FY 2008 expected consolidated EPS of Rs. 45/-. At CMP, it is available at 1.27 (x) adjusted book value. In view of good business prospects, we recommend to “BUY” the share at CMP.

Balmer Lawrie & Co. (BLCL)

Balmer Lawrie & Co. Limited (BLCL), manufacturer of industrial packaging, barrels and drums, LPG cylinders, greases and lubricants, leather chemicals, functional additives and marine freight containers has declared decent numbers for Quarter ended December, 2006 (Q3 FY 2007). BLCL also undertakes tea exports and trading, travel, tours, and cargo and engineering services such as turnkey projects, energy-audit and consultancy and freight-container repairs.

Stand-alone Net Sales grew by 6.5% to Rs 318.3 crore (Rs 299 crore) while PAT jumped by 93.8% to Rs 18.8 crore (Rs 9.7 crore) due to savings in interest and depreciation.

BLCL offers a wide range of logistics & cargo services through its offices in India and with over 40 associates in different parts of the world. BLCL thru its century old expertise in this industry with a modern infrastructure base is all set to leverage the growing opportunities in logistics and cargo business in India.

BLCL is the largest manufacturer of Mild Steel (MS) barrels and drums in India with a market share of around 60%. The user industries of company’s Industrial Packaging products (oil & gas, refineries, chemicals, pharma etc.) are growing at a fast rate thus presenting good growth opportunity for BLCL for its products.

BLCL also offers personalized and comprehensive services in travel & tourism through its offices at all major business centers of India. It is one of the oldest IATA accredited travel agency in India. Indian Airlines, Air India and several leading international airlines rank BLCL as one of their top agencies. Travel & Tourism industry will immensely benefit from the unprecedented growth in inbound and outbound travel as country's popularity as a tourist destination is on the rise which will benefit BLCL.

BLCL is looking at the retail automotive market to turn around the fortunes of its lubes business. While the base oil prices are expected to come down on the back of soft crude oil prices, the company is now planning to reduce its emphasis on industrial segment by way of enhancing sales in the retail automotive segment to improve margins. Emphasis is also laid on export of speciality lubricants where margins are relatively higher.

BLCL’s expansion programme of Rs 24 crore is presently under implementation. The expansion plan envisages (i) setting up of a Steel Barrel Plant at Asaoti in Haryana for Rs 12 crore and (ii) expansion of its Container Freight Station in Chennai at a cost of Rs 12 crore. Both these expansion plans will start contributing to revenues and profits from FY 2008 onwards.

At CMP of Rs 425/-, share (Rs 10/- paid up) is trading at 8.5 times FY 2007 expected stand-alone EPS of Rs 49.8/- and 6.7 times FY 2008 expected stand-alone EPS of Rs 63.4/-. Looking at favourable future outlook, we recommend to “BUY” the share at CMP.

Ennore Foundries Ltd (EFL)

Ennore Foundries (belonging to Ashok Leyland of Hindujas) is one of the biggest foundries in the country manufacturing both ferrous and non-ferrous (aluminum) castings catering to major automotive customers.

In Q3 FY2007, company has put up a good performance. Net sales grew @ 28.9% to Rs.104.6 crore. OPM% improved to 10.4% (9.5%) as operational efficiencies offset increase in raw material cost. Growth in sales coupled with improved margins led to 56.1% jump in PAT to Rs.4.86 crore.

Company has undergone major restructuring and has been consolidating its operations after having merged Ductron Casting Unit of Ashok Leyland with itself in FY 2006. Company is in the process of major capacity expansion by setting up a new hi-tech greenfield unit in Tamil Nadu with installed capacity of 50,000 TPA grey iron castings by July 2007, which together with revamping of existing units; will take total capacity to 140,000 TPA from 75,000 TPA on March 31, 2006. Company is incurring capex of Rs 190 crore on capex for the same.

Ensuing quarters are expected to show excellent growth with impact of expansion and stabilization of production at Ductron Unit (From 24,000 tpa to 36,000 tpa). Company has also started revamping of its existing Ennore unit which will lead to productivity improvement without major increase in fixed cost. Moreover, EFL is changing its product mix in favour of high margin machined castings. The new unit will also manufacture hi-end machine castings which find application in windmills. This will lead to improved profitability.

India is all set to be a major outsourcing destination for automobile industry. This in turn will increase demand for company’s products. Moreover, there are good export prospects in view of high quality and cost-competitiveness of Indian castings. EFL is all set to exploit these emerging growth opportunities.

At CMP of Rs160.40, share (Rs 10) is trading at 19.3 times estimated FY 2007 EPS of Rs 8.3 and at 7.9 times estimated FY 2008 EPS of Rs 20/-. In view of excellent growth prospects, we recommend a BUY the stock at CMP.

Century Enka Limited (CEL)

Century Enka (CEL), a BK Birla group company and producer of nylon and polyester filaments yarn has come out with mixed numbers for Quarter Ended December 2006.

Net sales marginally increased to Rs. 252.59 crore (Rs. 247.89 crore), despite decline in gross sales, helped by removal of anomalies in CENVAT credit availment. OPM% improved significantly to 4.6% (0.7%) due to various cost control measures (company has undertaken a modernization project for upgrading its conversion facilities to reduce conversion cost and improve product acceptability and quality); consequently operating profit tripled to Rs. 13.13 crore (Rs. 4.33 crore). However, after providing for higher interest cost of Rs. 5.15 crore (Rs. 1.79 crore) and depreciation charge of Rs. 13.28 crore (Rs. 12.94 crore), loss before tax (before extraordinary items) was Rs. -5.30 crore (Rs. -10.40 crore). After accounting for extraordinary income of Rs. 7.12 crore on sale of land and building and taxes PAT was Rs. 1.92 crore against loss of Rs. 6.84 crore in Q3 FY 2006.

CEL has completed expansion of Nylon Tyre Cord Fabric (NTCF) (2nd largest domestic player with market share of 15%) and increased overall capacity to 22,000 MT from 14,000 MT at a cost of Rs. 160 crore. CEL enjoys robust relationships with most of its client (Apollo Tyres, MRF, JK Industries, etc.) and can leverage this to benefit from surge in demand from automobile industry as well as replacement market.

Post opening of global textile industry, Indian textile industry is expected to grow from US $15 billion to US $50 billion over next 5 years. This in turn will boost demand for domestic synthetic textile yarn industry as synthetic fibre is well on its way to become ‘people’s fibre’ and company will be a direct beneficiary of this. Higher demand for Nylon Filament Yarn (NFY) is also expected from fashion fabric, ready made garments and technical textile exports.

Cheap imports of NTCF from China, crude oil prices, and competition from alternatives like cotton (based fabrics) however are the key concerns for the company.

At CMP of Rs. 155/-, share is trading at 19.4 times FY 2007 expected EPS of Rs. 8/- and 12.9 times FY 2008 expected EPS of Rs. 12/-. In view of excellent future prospects, we recommend to “BUY” the share at CMP.

Carborundum Universal Ltd(CUMI)

CUMI has reported good results for Quarter ended December 2006 (Q3 FY 2007). Standalone net sales increased by 25.0% to Rs. 118.9 crore (Rs. 95.1 crore) backed by strong performance across its various business segments (gross sales from abrasives rose by 20.3% to Rs. 95.0 crore, that from ceramics went up by 31.9% to Rs. 26.3 crore and that for electrominerals by 18.4% to Rs. 23.5 crore). Exports spurted 70% to Rs. 19.3 crore (Rs. 11.3 crore). OPM% remained unchanged at 20.8% as better operating efficiency was negated by higher raw material costs (up to 35.2% from 32.7% as % of sale). PBT (before extraordinary item) went up by only 17.7% to Rs. 20.1 crore (Rs. 17.1 crore), being affected by higher interest cost of Rs. 2.3 crore (Rs. 0.6 crore). After accounting for extraordinary income of Rs. 32.4 crore on sale of shares in Q3 FY 2006, PBT (after extraordinary item) declined by 59.4% to Rs. 20.1 crore (Rs. 49.5 crore). Higher average tax rate restricted PAT at Rs. 12.6 crore (Rs. 43.4 crore).

CUMI’s consolidated net sales was Rs. 140.1 crore and PAT was Rs. 17.8 crore for Q3 FY 2006.

Future growth prospects:

¨ Commenced commercial production of world class products at its coated abrasives plant at Sriperumbudur, Chennai in December ’06 (capacity of 15 million square metres). This will boost company’s export initiatives (plans to export 50% produce). This facility is expected to contribute ~Rs. 200-250 crore (at optimum capacity) to revenues in 2-3 years time.

¨ New facility for bonded abrasives at tax heaven Uttaranchal (to supply to ancilliaries of Hero Honda, Bajaj Auto, M&M, Tata Motors) is on target to commence production in Q3 FY 2008.

¨ Has entered into joint venture with China Engineering and Exploration Bureau to acquire 49% stake in Chinese company Jingri Industrial Diamond Company for Rs. 23 crore; Jingri will set up 3,000 tonne greenfield bonded abrasives plant in China expected to be operational by Q3 FY 2008. CUMI will have competitive edge from low cost outsourcing opportunities for its relatively high cost Indian manufacturing facilities, enhanced product basket and facing threat from cheap Chinese imports in domestic market.

¨ Acquisition of 2 ceramic plants at Jabalpur in December ’06 (@ Rs. 3.20 crore) and likely commissioning of new facility for manufacture of industrial ceramic tiles at Hosur in Q4 FY 2007 to boost ceramic sales significant.

At CMP of Rs. 185/-, share is trading at 23.1 times FY 2007 expected consolidated EPS of Rs. 8/- and 15.6 times FY 2008 expected consolidated EPS of Rs. 12/-. In view of strong demand from major user industries (like auto, auto anciliary, steel, metals, refractories, etc.) and increased thrust on exports (by leveraging presence in various geographies and key world markets through its subsidiaries and joint ventures), we recommend to “BUY” the share at CMP.

Everest Kanto Cylinder (EKC)

Everest Kanto Cylinder is (EKC), India’s largest high-pressure industrial and CNG cylinders manufacturer, has declared excellent numbers for Quarter ended December, 2006 (Q3 FY 2007).

Stand-alone Net Sales grew by 22.8% in Q3 FY 2007 to Rs 70.83 crore (Rs 57.69 crore) while PAT grew by 93.3% to Rs 16.87 crore (Rs 8.73 crore). Consolidated Net Sales (including figures of EKC International FZE, a wholly owned subsidiary from this quarter) was at Rs 111.78 crore while reported consolidated PAT was Rs 20.38 crore.

EKC is well poised to take advantage of increased usage of Compressed Natural Gas (CNG) as an alternate fuel in automobiles in countries like India and China. As CNG is cheaper than petrol and diesel, more and more vehicles are converted into CNG resulting in huge replacement demand for EKC. EKC is also exporting CNG cylinders to many countries like Pakistan, Malaysia, and Thailand etc. thru its Dubai plant. These countries offer huge potential due to shift from petrol / diesel to pollution free and cheaper CNG. EKC has a strong order book and is booked for next 12 months.

EKC is aggressively expanding capacity by setting up a 1.5 mn cylinder plant in China at a cost of US $ 75 mn (Rs 337.50 crore). This plant will commission in phases running over 4 years, of which 1st phase will commence production from Q1 FY 2008. China will be a next growth driver as there is tremendous untapped local demand.

EKC has transferred Dubai fixed assets to wholly owned subsidiary, EKC International FZE, in this quarter, which will help lower tax rate of EKC going forward. Also, expansion of 1 lakh cylinders at Dubai plant was completed in Q2 FY 2007 (total capacity of subsidiary 1.96 cylinders) and has started contributing to revenues.

EKC has raised Rs 92 crore by issuing 18.97 lakh shares (9.72% of equity) @ Rs 485/- per share in October 2006 to Brighwill Ltd., a subsidiary of a fund managed by CLSA Pvt. Equity Management Ltd., to part finance expansion plans at Dubai and China.

Crude oil price have fallen recently and is hovering around US $ 50-52 per barrel at present. If the price stabilizes at current level, it will result in reduction in petrol and diesel prices and it may impact the economics of CNG and CNG cylinders in turn.

At CMP of Rs 778/-, share (Rs 10/- paid up) is trading at 22.9 times FY 2007 consolidated expected EPS of Rs 34/- and 13 times FY 2008 expected consolidated EPS of Rs 59.7/-. In view of sound business prospects and good earning visibility, we recommend to “BUY” the share at CMP.

Fiem Industries (FIL)

Fiem Industries Limited (FIL), manufacturer of automotive lighting, signalling equipment and rear-view mirrors, has declared strong set of numbers for Quarter ended December, 2006 (Q3 FY 2007).

FIL registered Net Sales of Rs 47.8 crore and PAT of 4.2 crore in Q3 FY 2007.

FIL supplies to growing automotive sector (2-wheeler and 4-wheeler) in India and has set up new units to encash growing demand. It has recently commenced commercial production at a unit at Nalagarh, Himachal Pradesh for automotive lighting and signaling and rear view mirrors. FIL has also commenced commercial production of mirror plates in EOU (Unit V) situated in Hosur, Tamil Nadu for Ichikoh Industries Ltd., Japan. Plus, FIL is in the process of expanding its capacities at existing units at Hosur, Tamil Nadu and at Sonepat, Haryana.

FIL has 3 agreements to set up joint venture with Aspock Holding, GmbH, Austria (for signalling equipment), Lchikoh Industries Ltd. (for mirrors) and Korea Air-Conditioners Co. Ltd. (for car A/C componenets). These agreements will help FIL to expand its product portfolio and can fetch new business from new car manufacturers going forward.

At CMP of Rs 125/-, share (Rs 10/- paid up) is trading at 10.8 times FY 2007 expected EPS of Rs 11.6/- and 8.3 times FY 2008 expected EPS of Rs 15/-. Considering decent growth prospects, we recommend to “BUY” the share at CMP.

Finolex Cables (FCL)

Finolex Cables Limited (FCL), provider of total cable solution and manufactures Electrical Cables and Communication Cables, has declared decent numbers for Quarter ended December, 2006 (Q3 FY 2007).

Net Sales grew by 18.5% in Q3 FY 2007 to Rs 253 crore (Rs 213 crore) while PAT grew by 49.2% to Rs 16.10 crore (Rs 10.8 crore).

Communication cables of FCL generate good demand from booming telecom sector. India has lot of untapped potential as it lags far behind China & USA who have tele-density of over 50% and 100% respectively.

FCL plans to capture entire value chain in electrical segment by augmenting existing product range. To begin with, it has launched Electrical Switches and Compact Fluorescent Lamps (CFL) recently and the response is exceedingly well. These products will cater to growing housing, retail, mall markets and will benefit from domestic consumption story. FCL expects annual topline growth of 30% from these products. It has also ventured into High Voltage Cable (HVC) manufacturing of 66 KVA & 132 KVA by adding extra unit at its existing plant near Pune. HVC will be supplied to various needs of power sector and FCL will be one of the major beneficiaries due to huge investments planed in power sector. Production is expected to commission by March 2007 and is expected to contribute Rs 100 crore to revenue in the first year of operation.

FCL is setting up a manufacturing unit at Uttaranchal for light duty electrical cables, communication cables and modular electrical switches at a project cost of Rs 200 crore. 1st phase of production is expected to commission by end of FY 2007. Geographic spread of exports has also widened to include countries in the European region in addition to traditional Asian, Middle Eastern and African regions. All these developments and expansion plans are expected to contribute handsomely to revenues and profits in next 12-18 months.

At CMP of Rs 107/-, share (Rs 2/- paid up) is trading at 19.9 times FY 2007 expected EPS of Rs 5.4/- and 13.4 times FY 2008 expected EPS of Rs 8/-. Looking at buoyant future outlook, we recommend to “BUY” the share at CMP

Hikal, preferred long term outsourcing partner for leading global life science companies, has reported not so encouraging performance for Q3 FY 2007 as anticipated.

Standalone Net Sales (excl. excise) inched up by 1.3% to Rs. 55.7 crore (Rs. 55 crore) entirely led by 20.2% growth in Pharma sales of Rs. 22.6 crore (Rs. 18.8 crore). Agro sales declined by 8.6% to Rs. 33.1 crore (Rs. 36.20 crore). OPM% declined to 26% (28.5%) due to significant erosion in PBIT% of Agro chemical business to 19.6% (23.5%). PBIT% of Pharma division improved slightly to 42.5% (41.5%). After accounting for higher other income of Rs. 1.7 crore (Rs. 60 lakh), PBT dipped by 6.4% to Rs. 8.8 crore (Rs. 9.4 crore) and PAT by 8.1% to Rs. 9.1 crore (Rs. 9.9 crore)

Marsing, has reported Net loss (after minority interest) of Rs. 4.12 crore (after accounting for exceptional expenditure of Rs. 1.8 crore and other restructuring costs) on sales of Rs. 51.6 crore in Q3 FY 2007.

Hikal has changed its business model i.e. from working with generic to innovators, a less crowded segment, instead of generic drug makers that will give substantially higher margins and reduce uncertainty resulting from influx of competition in generic market. This will drive company’s topline as well as bottomline at faster pace from FY 2008 onwards.

Company is also doing high value added R&D and contract research work (custom synthesis). It is setting up new R&D facility at Pune. Though profitability is not good in such R&D works, it gives entry into MNCs business at an entry stage.

In case of agrochem segment, company has changed its focus to “high activity, low dosage” products. It has started working with Innovator companies for products under patent. Advantages being large supply, stable prices, continuity of supply etc. Hikal has already signed agreements for patented agro products. Currently it is working with 4 out of largest 5 agro companies in the world. Thus, this business is on take-off stage now.

In view of above mentioned factors, company is set for promising future. At CMP of Rs. 385/-, share is trading at 17.2 times FY 2007 expected consolidated EPS of Rs. 22.5 and 9.5 times FY 2008 expected consolidated earnings of Rs.40.50. Strongly recommended for investment over 2-3 years of horizon.

Gulf Oil Corporation Limited (GOCL)

GOCL, part of Hinduja group, is transforming from an explosive maker into diversified company catering to lubricants, explosives, mining, specialty chemicals and real estate. GOCL has come out with decent numbers for Quarter ended December 31, 2006 (Q3 FY 2007).

Net Sales grew by 35.2% to Rs 149.22 crore (Rs 110.37 crore) while PAT improved by 27.8% to Rs 6.53 crore (Rs 5.11 crore).

Company has huge real estate assets spread across southern cities in the heart of Hyderabad (800 acres), Bangalore (40 acres), Vaizag (1.5 acres) and Rourkela (~ 1,100 acres) with an estimated market value of Rs. 15,000-20,000 crore. GOCL is set to diversify into realty by developing these properties to unlock the potential of its real estate assets. Land at Hyderabad is in proximity to new Infotech / Hitech City and new international airport which will fetch higher market price compared to other properties. It intends to release 100 acres out of 800 acres in first phase for developing it into a knowledge park.

Company has forayed into speciality chemical business in this year and its focus is to concentrate on active pharmaceutical ingredients (APIs) in quest for becoming a vertically integrated organisation catering to contract research (CR), custom synthesis (CS), and contract manufacturing CM) for pharma MNCs and other overseas companies over a period of time. Its plant is cGMP approved and located 30 km from Hyderabad. It has achieved turnover of Rs 17.66 crore in 9M FY 2007 and incurred loss of Rs 2.90 crore due to higher depreciation charge. Going forward, this business will be one of the growth drivers for GOCL and it is expected to contribute to profits positively from 2nd year onwards.

Recently, GOCL has bagged 2 orders of mining projects totaling to Rs 300 crore taking the order book of mining projects to Rs 400 crore. Company expects growth momentum to continue as more and more mining orders are now outsourced by Coal India and other players.

At CMP of Rs 1,239/-, share (Rs 10/- paid up) is trading at 67.4 times FY 2007 expected stand-alone EPS of Rs 18.4/- and 45.2 times FY 2008 expected stand-alone EPS of Rs 27.4/-. At CMP, market capitalization works out to Rs 1,718 crore which is 11-12% of real estate valuation. Considering huge value locking potential in future, we recommend to “BUY” the share at CMP

Hanung Toys and Textiles Limited (HTT)

HTT, one of the largest manufacturers & exporters of soft toys in India, has reported outstanding performance for Q3 FY 2007. Net Sales grew @ 70.2% to Rs. 79.86 crore led by growth in both businesses - toy sales were up by 71.5% to Rs. 42.14 crore, while Textile turnover spurted up by 68.7% to Rs. 37.71 crore. OPM% enhanced to 16.8% (15.2%). PBIT% of toy division improved significantly to 20.2% (17.4%). Further aided by 86.4% higher other income of Rs. 1.86 crore, PBT more than doubled to Rs. 12.32 crore (Rs. 6.01 crore). PAT jumped up by 106% to Rs. 8.21 crore (Rs. 3.98 crore).

HTT exports soft toys, typically associated with teddy bears and bunnies, to retailers in USA and Europe. It also has licence to manufacture soft toys resembling characters such as Mickey Mouse and Nemo, fish from Disney. Moreover, company has tied up with Percept Picture Company for manufacturing and selling rights of characters in hit Indian animation, Hanuman. This business is poised for great future in view of :-

© Focus on domestic market. It already has presence in India through brands like Play-n-Pets and Muskan.

© Greater thrust on selling soft toys through departmental stores, provide access to customers with higher disposable incomes and willingness to spend on quality products. Presently, HTT sells its products through distribution network and also through multi-brand outlets such as Lifestyle, Pantaloon, etc

As far as homes furnishing business is concerned, HTT focuses on niche children's line of products - floor rugs and pillows shaped like anything from fish to football. To cater to growing demand, company is setting up Rs. 170 crore integrated home textile facility, spinning weaving, processing and made-ups, in Uttaranchal. The capacities are likely to be operational in Q4 FY 2007. Post expansion, processed fabric capacities would go up more than six times to 41 million meters p.a. (6 million meters).

At CMP of Rs. 132.20, share (Rs. 10/- paid up) is trading at 11 times FY 2007 expected EPS fo Rs. 12 and 8.3 times FY 2008 expected EPS of Rs. 16/-. In view of bright prospects in toys business and niche product range in home textiles business, we recommend to “BUY” the share at CMP.

International Combustion (India) Limited (ICIL)

ICIL, a niche player in material processing & handling equipment and industrial gears, has posted decent results for Quarter ended December 31, 2006 (Q3 FY 2007).

Net Sales grew by 19.7% to Rs 19.54 crore (Rs 16.33 crore). OPM% expanded to 17.9% (16.9%) due to operating efficiency and also fixed overheads were spread out over larger volumes. PAT grew by 37.6% to Rs 1.94 crore (Rs 1.41 crore) after provision for write off of bad debts of Rs 31 lakh. OPM% would have been substantially higher at 19.5% excluding bad debts write off.

Company has the most diversified range of product offerings, mainly for mining companies, power plants, steel plants, etc. Recent introduction of new product B-2000 series of gear box and gear motors has been well received by the market. Also, the sale of Sugar Grader, a product introduced few years back, has now started showing positive results. To cater to growing demand, Company is expanding capacities at the existing plants and has planned to spend Rs 6-7 crore p.a. for next 3-4 years on expansion / modernization etc.

ICIL’s user industries (cement, steel, sugar, mining, pharma etc.) are growing at brisk pace and have lined up huge investments to augment their capacities. Government is also focused on infrastructure development and has embarked on various infrastructure projects. All these developments augers well for ICIL and it expect the order momentum to sustain for next 3-4 years.

At CMP of Rs 363.65, the share (Rs 10/- paid up) is trading at 10.9 times estimated FY 2007 diluted EPS of Rs 33.4 and at 7.6 times estimated FY 2008 diluted EPS of Rs 47.7. We recommend a BUY on this niche boutique stock, which is benefiting from on-going boom in user segments.

Jindal Stainless (JSL)

JSL, India’s largest integrated manufacturer of stainless steel flat products, has reported robust performance for Q3 FY 2007.

Net Sale doubled to Rs. 1445.6 crore (Rs .707.4 crore) led by skyrocketing of export sales to Rs. 800.8 crore (Rs. 236 crore). Domestic sales grew @ 35.4% to Rs. 744.1 crore (Rs. 549.6 crore). OPM% enhanced to 15.6% (12.4%) because of improved product mix, cost savings led by optimized operations, efficient procurement and increased production of ferro-chrome at Orissa plant. It was despite spurt in raw material cost to 65.9% (60.7%) of sales due to volatile nickel prices. Riding on strong sales and improved profitability, PBT shot up to Rs. 173.34 crore (Rs. 33.86 crore), growth of 411.9% even after accounting for 83.2% higher depreciation of Rs. 58.53 crore owing to ongoing capacity expansion. PAT zoomed to Rs. 113.05 crore (Rs. 20.94 crore).

Going ahead, company is expected to sustain the growth momentum in view of

Ø Huge global pull – not much slowdown in demand from China, robust demand from India and Latin America will be driving future growth. In view of huge demand pull, prices are also expected to remain firm. Earlier company was facing capacity constraint. However, with commissioning of Orissa plant, company is well placed to meet growing demand.

Ø Nickel (main raw material) prices are expected to remain stable. This coupled with impetus on value added stainless steel to significantly boost profitability in future.

Ø Has planned massive capacity expansion

a. 1.6 million tonnes Greenfield project in phases at Orissa. Operations of 2x60 MVA Ferro-Chrome furnaces have already started. JSL expects to start 2x125 MW power plants by June 2007 followed up by setting up of other Ferro alloys units of Ferro-Manganese and Silico - Managanese.

b. Cold rolling capacity is being expanded from 150,000 tonnes to 275,000 tonnes,

c. Capacity of precision strip is being increased from 15000 tonnes to 30000 tonnes.

d. After successful operations of its subsidiary Jindal Stainless Steelway Limited (JV with Steelway, Italy) at Manesar, plans to set up 2nd plant at Mumbai (expected to be start operation by July 2007) followed up by one in Chennai and others in Gujarat & overseas.

Ø Maspion Stainless Indonesia (acquired in 2004) has added strength to JSL’s reach in South East Asian markets. It has also helped to build in synergies as Hot rolled coils manufactured at Indian plant is being cold rolled at Indonesia and used for servicing South East Asian & global market. This subsidiary has turned around in Q3 FY 2007. JSL will be doubling capacity to 150,000 tonnes considering importance of emerging South East Asian and other global markets.

Thus, company is set on course to become more competitive with backward integration into power intensive ferro chrome at competitive cost, simultaneously moving up the chain by enhancing capacity of cold rolling mills and precision strips.

At CMP of Rs. 230/-, share is trading at 8.1 times FY 2007 expected EPS of Rs. 28.39 and 6.23 times FY 2008 expected EPS of Rs. 36.90. In view of very optimistic future outlook, we recommend to BUY the share at CMP.

Kerala Chemcials & Proteins Ltd (KCPL)

Kerala Chemicals & Proteins has staged a turnaround and put up an excellent performance for Quarter ended December 2006. Net Sales grew @22.4% to Rs.31.96 crore. OPM% zoomed to 14.2% (2.2%) mainly due to decline in raw material cost to 47% of sales (58.2%). Higher net sales coupled with improved OPM% led to PBT (before extraordinary items) of Rs.2.63 crore as against loss of Rs.1.4 crore. After taking into account extraordinary income on account of interest on refund of excise duty which is pending final determination by assessing authorities, PBT (after extraordinary item) spurted to Rs.3.56 crore (Loss of Rs.1.40 crore). PAT stood at Rs.2.89 crore (Loss of Rs.1.42 crore).

KCPL is engaged in manufacture of Gelatin, Ossein (intermediate product in process of making gelatin from crushed bones) and Dicalcium Phosphate (a byproduct). Company’s products find application in photo, food and pharmaceutical industry both in domestic and international market. Exports constitute ~60% of Net Sales with company’s products being sold in USA and Europe.

Going forward, company is shifting its focus to high margin - pharmaceutical grade of gelatin on back of robust demand for this grade both in domestic as well as global markets. Moreover, Ossein exports to Nitta Gelatin Inc (holding 46.4% stake), which were earlier hit due to reduced demand for Gelatin, are picking up with recovery in international gelatin market.

At CMP of Rs.68.25, the share is trading at 8.5 times FY 2007 expected EPS of Rs.8 and 6.2 times FY2008 expected EPS of Rs.11. In view of good future prospects, we recommend to “BUY” the share at CMP.

Maharashtra Seamless Ltd. (MSL)

Maharashtra Seamless, one of leading steel pipe manufacturer in India, is engaged in manufacture of seamless & ERW pipes. It is a dominant player in seamless pipe segment with market share of ~ 37% and is the only producer in India to manufacture seamless pipes with outer diameter up to 14’’and ERW pipes with outer diameter up to 21’’.

MSL’s net sales grew by 26.5% to Rs 342.63 crore (Rs 270.77 crore) mainly driven by better product mix from 7-inch to 14-inch diameter seamless pipes and higher sales volume from increase in capacity. OPM% expanded to 25.2% (23.3%) due to greater contribution of higher margin seamless pipes (14’’ pipes). Operating profits increased by 36.5% which translated into higher PBT to Rs 89.29 crore (Rs 62.89 crore) – increase of 42% because of lower interest cost & depreciation. Consequently, PAT increased to Rs 60.02 crore (Rs 41.73 crore) – increase of 43.8% on YoY basis.

MSL is increasing its seamless pipes capacity in total (up to 7’’ and 7’’ -14’’ pipes) in a phased manner from 225,000 MTPA in 2006 to 500,000 MTPA in 2009 thru addition of ancillary equipments that would involve lower capex of Rs 85 crore over next two years. With commissioning of higher diameter seamless plant (7’’ to 14’’), company is well placed to garner significant orders with better margins. Also, capacity increase in a phased manner and order book position of Rs 700 crore will drive topline growth in future.

MSL has entered into 50:50 JV with US based Hydril company LP to manufacture premium connections / high end pipes. This JV would enable MSL to sell value added products in order to expand & diversify its revenue streams. Additionally, MSL has embarked on backward integration of its billet requirement for seamless pipes division at cost of Rs 250 crore funded by issue of FCCBs (US$ 75 million). However, this project at present is facing hurdles in terms of its rehabilitation issue but company is looking at resolving this issue thru alternative site for this project.

Considering immense potential arising from Oil & Gas sector and significant oil & gas finds in KG Basin and Rajasthan, pipeline companies are expected to do well in future since pipeline is cheapest way to transport fuel.

At CMP of Rs.520 (Rs 5/-paid-up), the share is trading at 16.1 times FY 2007 expected diluted (on conversion of FCCBs till date) EPS of Rs.32.2 and 13.5 times FY2008 expected diluted EPS of Rs.38.6. Considering brownfield expansion of its capacity in a phased manner and backward integration project as when it comes thru will provide significant upside to MSL’s earnings. Therefore, we recommend to “BUY” MSL at CMP.

Orient Ceramics and Industries Limited (OCIL)

OCIL, one of the leading ceramic tiles (wall and floor) manufacturers in India, has reported decent performance for Q3 FY 2007.

Net Sales (excl. excise) grew @ 29.2% to Rs. 45.4 crore (Rs. 35.1 crore) led by 29% volume growth. Realisation came down by ~ 3% due to change in business composition (floor tiles and wall tiles) and more of trading. OPM% enhanced to 20.25% (18.76%), basically due to higher volume growth (as fixed costs are apportioned over larger base). Consequently, PBT more than doubled to Rs. 6 crore (Rs. 2.8 crore). However, tax provision of Rs. 2.9 crore restricted growth in PAT of Rs. 3.17 crore (Rs. 2.8 crore) to just 13.2%.

Going ahead, company is expected to sustain current growth rate in view of :-

Ø Huge investment taking place in housing, hospitality and commercial segments like super markets, malls, multiplexes, etc., would drive demand for ceramic glazed tiles.

Ø To take advantage of abundant opportunities, company has been enhancing capacities from 100,000 TPA in FY 2005 à 120,000 TPA in FY 2006 à 200,000 TPA in FY 2007. Expansion of capacities is going ahead of schedule and commercial production is likely to commence from March 2007. 15% of enhanced capacities would be used for manufacturing vitrified tiles, in which realization is almost doubled than ceramic tiles. Thus, it would boost profitability as well.

Considering buoyant growth prospects, company is expected to grow top-line @ 30% (+), while bottom-line would be growing at faster pace of ~ 50% (+). At CMP of Rs. 80/-, share is trading at 6.6 times FY 2007 expected EPS of Rs. 12 and 4.5 times FY 2008 expected EPS of Rs. 17.6 on fully diluted equity of Rs. 10.5 crore (post 5:4 bonus). In view of excellent future prospects, we recommend to “BUY” share at CMP.

Punj Lloyd Limited (PLL)

PLL, one of the largest engineering and construction companies of India providing integrated design, engineering, procurement, and construction and project management services for energy and infrastructure sector projects, has come out with decent numbers for Q3 FY 2007.

PLL has reported consolidated Income from Operations of Rs 1,433.32 crore. OPM% stood at 5.8%. It earned consolidated PAT of Rs 48.29 crore. Consolidated Income from Operations has significantly improved in 9 M FY 2007 to Rs 3,423 crore (Rs 1,684.65 crore in FY 2006) due to acquisition of Sembawang Engineers and Constructors, Singapore (Semb E & C) with its subsidiary Simon Carves, UK. However, bottom-line has not increased similarly due to costs incurred for transfer of assets to PLL.

Increased demand for oil & gas has resulted in need to increase exploration, production and distribution infrastructure in energy industry. PLL is well positioned to capitalize on global as well as domestic demand in energy and infrastructure industry. In addition to strong presence in India, PLL has diversified operations spread across regions of Middle East, Caspian, Africa, Asia Pacific and South Asia. This enables PLL not only to achieve operating efficiencies, focus on projects and regions where it can be competitive but also be insulated from economic downfall in any particular geography.

Benefits of acquisition of Semb E & C have started flowing in with PLL winning a prestigious Heera Redevelopment Project of Rs 1,288 crore from ONGC. This acquisition has helped PLL to meet stringent pre-qualification criteria to bid for large orders and has opened a whole new gamut of opportunities. Apart from this project, PLL has won several big projects like a large contract for construction of LDPE plant in Thailand, an EPC order of Rs 803 crore from Doha Urban Pipeline Relocations Projects (DUPRP) from Qatar Petroleum and contracts from IOC’s Refinery Project valued at Rs 1,342 crore in Q3 FY 2007.

Company has an strong order book of Rs 14,358 crore as on December 31, 2006 which will be executed over a period of 2 years providing good earnings visibility. Till now, Semb E & C was not contributing to profits but now as its orders have started executing; it also expected to contribute to profits positively in coming quarters.

PLL has entered into 49:51 Joint Venture with Swissport International, a world leader in ground handling services. India being one of the fastest growing markets in entire aviation sector, JV has a strong business potential. Also, PLL has set up Engineering Services Outsourcing (ESO) Company to cater PLL group’s engineering requirements initially and gradually will include specialized verticals with domain specialists to provide offshore engineering services across various sectors as well as outside the group. ESO offers tremendous growth potential due to robust growth prospects of engineering services sector in Europe, Asia and US.

At CMP of Rs 1,022.90, share is trading at 34.6 times FY 2007 expected diluted EPS of Rs 29.6 and 20.7 times FY 2008 expected diluted EPS of Rs 49.4. Considering strong growth prospects, we recommend “BUY” at CMP.

TIL Limited

TIL, strong player in the construction equipment and material handling business in eastern India, has reported superb performance for Q3 FY 2007.

Net Sales grew @ 29.3% to Rs. 149.06 crore (Rd. 115.25 crore) led by doubling of Material handling turnover to Rs. 51.25 crore (Rs. 24.78 crore). Construction equipment sales registered 16.6% increase in sales of Rs. 68.9 crore (Rs. 59.11 crore). OPM% enhanced to 9.2% (8.2%). Consequently, PBT (before extra ordinary items) shot up to Rs. 7.93 crore (Rs. 3.7 crore). Further aided by profit on sale of fixed assets of Rs. 1.12 crore and lower average tax rate of 36.4% lifted PAT up by 173% to Rs. 5.76 crore (Rs. 2.11 crore).

TIL operates in 3 businesses viz. construction equipment, material handling and power systems segment, catering to wide industries like construction, ports, mining, steel, cement etc.

In material handling business, company enjoys dominant 80% market share and is increasingly focusing on value added high tonnage offerings such as Reach Stackers (container handling mobile equipment) and Level Luffing (for Bulk Cargo). Company is focusing on rubber tyre gantry cranes, which are currently imported. For this purpose, it has entered into technical tie-up with Pasico, USA (has 30% market share world-wide in this type of port equipment). This business is expected to sustain the growth momentum in view of GDP growth of ~ 8%, thrust on infrastructure spending as well as huge capex lined up by corporates.

In construction equipment business, TIL has exclusive marketing right for Caterpillar, USA, who has decided to focus on India. They also provide service backbone and spare sales to Caterpillar who does not have pan India presence. On back of substantial infrastructure spending, this business is expected grow ~ 20-25% for next few years, enabling TIL to cash on this growth.

At CMP of Rs. 229, share (Rs. 10/- paid up) is trading at 12.4 times FY 2007 expected EPS of Rs. 18.5 and 9.5 times FY 2008 expected EPS of Rs. 24/-. In view of excellent business prospects, we recommend to “BUY” the share at CMP.

State Bank of India (SBI)

State Bank of India (SBI), India’s premier commercial bank, has come out with excellent numbers for Quarter ended December, 2006 (Q3 FY 2007).

Consolidated Net Interest Income (net of interest expenses) grew @ 33.3% (excluding one time items) to Rs. 5,684 crore (Rs. 4,263 crore) led by 27% rise in gross advances to Rs. 315,376 crore across segments as well as improvement in net interest margins (NIM). Less reliance on low yielding corporate bulk deposits resulted in deposits growth of only 11.17%.

Strong increase in Net Interest Income coupled with 79% spurt in other income (excluding one time items) to Rs. 3302 crore (Rs. 1,845 crore) led to 173.5% jump in PBT (before extra ordinary items) of Rs. 2506.11 crore (Rs. 916.28 crore). This growth was despite 62.7% higher provisions & contingencies (mainly NPA provisioning of Rs. 520 crore against write back of Rs.45 crore in Q3 FY 2006). SBI had extraordinary gains to the tune of Rs. 1,864 crore in Q3 FY 2006 (including, interalia, interest on IT refund – Rs. 954 crore, IMD maintenance value refund from RBI – Rs. 564 crore, forex gain on redemption of India Millennium Deposits – Rs. 532 crore, one-off adjustment in salaries of Rs. 313 crore). In absence of such one time gain, PBT (after extraordinary items) declined 10% to Rs. 2506 crore (Rs. 2780 crore). Consolidated PAT, however, increased 4.4% to Rs. 1575 crore (Rs. 1508 crore) due to lower average tax rate.

SBI, proxy for the India economy, with its substantial market share of 18%, is well positioned to take advantage of buoyant economic conditions supported by vast geographic spread (to every nook and corner of the country) and its bouquet of almost the entire gamut of financial services. SBI has adopted a very aggressive technology implementation policy; it has over 13,800 branches (group) on core banking platform and also has the largest number of ATMs which will help in competing against private sector banks.

There is improved visibility of SBI’s life insurance venture that has begun gaining traction. Total first year premiums for its life insurance subsidiary grew by +200% during first 8 months of FY 2007. Insurance venture will also be divested at opportune time. This has not been factored in earnings.

Huge value unlocking is expected from stake divestment in its subsidiaries if amendment to SBI (Subsidiary Banks) Act takes place.

However, steadily rising deposit costs, expected interest rate hike by RBI and impact of implementation of Basel II norms on CAR continue to be key concerns going forward.

At CMP of Rs. 1,173/-, share (Rs. 10/- paid up) is trading at 10.2 times FY 2007 consolidated expected EPS of Rs. 115/- and 8.5 times FY 2008 expected consolidated EPS of Rs. 138/-. At CMP, it is available at 1.9 (x) adjusted book value. In view of excellent business prospects, we recommend to “BUY” the share at CMP.

Sukhjit Starch & Chemicals Ltd.(SSCL)

Sukhjit Starch & Chemicals, manufacturer of maize-based starch and sweeteners has put up stellar performance for Quarter ended December 2006. Net Sales grew @49.7% to Rs.43.73 crore. OPM% zoomed to 20.3% (10.8%) mainly due to decline in raw material cost to 59.3% of sales (63.6%). There was decline in other heads of expenses too. Higher net sales coupled with improved OPM% led to spurt in operating profit to Rs.9.03 crore (Rs.3.34 crore). PBT spiraled to Rs.7.51 crore (Rs.1.95 crore) while PAT was up to Rs.6.26 crore (Rs.1.65 crore).

SSCL’s products find application across wide range of industries – food processing, paper, pharma, textiles etc. All these industries are adding capacities to meet growth in demand for their product which in turn will increase demand or company’s products. Also demand for starch derivatives is rising in India, people have become quality conscious as it is used in food and pharma industry and are demanding better quality products. Maize based starch and its derivatives industry is a multi-billion dollar industry in US, while in India it is estimated to be only at Rs.15 billion and hence has tremendous potential to grow.

With a view to take advantage of emerging opportunities in Starch industry, SSCL has embarked on new expansion project in Himachal Pradesh entailing a capital cost of Rs.30 crore which is likely to commence production from April 2007. Company is also now looking at exploiting the vast export market.

Company’s performance largely depends on availability and cost of raw material (mainly maize) which is subject to natural vagaries. This year the maize stock has been lower and hence prices of maize are higher but industry is in position to pass on increased raw material costs. Moreover, Government has allowed duty-free import of maize to make up for lower domestic output.

At CMP of Rs.156.75 , the share is trading at 5.2 times FY 2007 expected EPS of Rs.30 and 4.4 times FY2008 expected EPS of Rs.36. Going ahead, company has a good growth potential in view of its strong track record, rising demand from user industries and capacity expansion. We recommend to “BUY” the share at CMP.

TamilNadu Newsprint and Papers (TNPL)

TNPL, one of the largest producers of Bagasse-based paper in India, has reported brilliant performance or Q3 FY 2007.

Net sales were up by 7.9% to Rs. 214.45 crore (Rs. 198.74 crore). OPM% improved significantly to 20.4% (18.6%) mainly due to sharp reduction in other expenses to 11.9% (14.05%) of sales. Further aided by 74% higher other income fo Rs. 7.59 crore and 37.3% lower interest cost of Rs. 4.11 crore (Rs. 6.55 crore), PBT jumped up to Rs. 31 crore (Rs. 19 crore), growth of 63.4%. after accounting for average tax rate of 27.8%, PAT soared up by 52.2% to Rs. 22.30 crore (Rs. 14.05 crore).

Demand for paper is rising steadily in wake of booming economy as consumer spending on consumer spending on education, newspapers and packaged consumer product increases. India has per capita paper consumption of just 6 kg as against Asian pears of 50 kg and increase in per capita consumption by 1 kg means increase in demand by 1 million tonnes. No major investments have been made in capacities in the paper industry for a while now leading to demand-supply imbalance ensuring firm price trend.

In view of robust demand, TNPL had embarked upon massive expansion plan spread over next 4 years taking up total capacity to 365000 MTs p.a from 230,000 MT at present. During this phase its power capacity will also increase to 81.12 MW (61.12 MW). After completion of project, it will be selling surplus power. Company will also enhance captive pulp capacity from 520 TPD to 800 TPD, which would add to both topline as well as bottomline.

At CMP of Rs. 95/-, share is trading at 7.6 times FY 2007 expected EPS of Rs. 12.5 and 5.7 times FY 2008 expected EPS of Rs. 16.6. Considering steadily rising demand for papers, focus on high value business and expansion of power generation capacity, company is poised for excellent future. Hence, we recommend to “BUY” the share at CMP.

Television Eighteen India Limited (TEIL)

TV 18, India's No.1 news & information network, reported good performance for Q3 FY 2007.

Q3 FY 2007 performance is strictly not comparable with Q3 FY2006 as revenues/cost of CNBC-Awaaz are being included from last quarter onwards. TV-18’s Consolidated revenues include income from CNBC-TV18, CNBC-Awaaz and various internet portals acquired by company’s subsidiaries during the year. Hence we are giving Q-o-Q comparison.

Q-o-Q Consolidated revenues from operations were up by 22.2% to Rs.64.8 crore. OPM% improved to 45.4% (44.3%). Topline growth coupled with improved margins led to 22.1% rise in PBT to Rs.20.3 crore (Rs.16.6 crore). Consolidated PAT (after minority interest & ESOP charge out) rose by 20.7% to Rs. 16.4 crore (Rs.13.6 crore).

Recently company has restructured its operations and post-restructuring company operates two channels in business news genres - CNBC-TV 18 and CNBC – Awaaz. These are both pay channels. It also owns portals such as,, & through its 85% subsidiary Web-18.

Company has a strong presence in business news space as CNBC-TV18 has been flag bearer of financial information market while CNBC-Awaaz (too has expanded its business audience phenomally. This will enable company to garner higher advertising revenues. In addition to advertising revenues, contribution from subscription revenues will also scale up with implementation of CAS and emerging distribution platforms of DTH (both aimed at lowering under reporting of subscribers) & IPTV (Internet Protocol Television).

Company has become very aggressive on its internet initiatives (which accounts for ~ 10% of revenues) with internet revenues having almost doubled over the last year to Rs.6.73 crore (Rs.3.06 crore) and company will continue to focus on this space as it is a big business initiative. Since several of internet properties are between 2-6 months old, substantial momentum is expected within 18-24 months.

Going forward, as a media company, TV-18 would continue to focus on internet and mobile space. With several exciting forays in news broadcasting and internet portals, company looks forward to period of sustained growth.

At CMP of Rs. 647.95 (Face value -Rs.5/-), share is trading 57.3 times FY 2007 expected consolidated EPS of Rs.11.3 and 38.6 times FY 2008 expected consolidated earnings of Rs.16.8. Considering above mentioned factors, company is poised for bright future. Hence, we recommend to “BUY” the share at CMP.

Z F Steering Gear Ltd

Z F Steering manufacturer and supplier of Power and Mechanical Steering Gears to Commercial Vehicles and tractor segment, has reported excellent performance for Q3 FY2007. Net Sales increased by 35.2% to Rs.57.21 crore (Rs.42.31 crore) on back of improved sales of commercial vehicles. OPM% improved to 21.1% (18.9%) as operational efficiencies more than offset raw material cost increase. Consequently, PBT improved significantly by 66.2% to Rs.11.43 crore. After providing tax @38.8%, PAT perked by 68.9% to Rs.6.99 crore.

Buoyant economy, higher industrial growth and increased investment in infrastructure will increase demand for commercial vehicles (CV) and utility vehicles. This in turn will trigger demand for high margin Power Steering Systems as use of Power Steering is made compulsory in passenger buses and will soon be made compulsory in CVs too. Moreover there is shift towards high-end CVs which use Power Steering Systems. In order to cater to rising demand company has expanded its capacity of Power Steering gears from 1,20,000 to 1,50,000 p.a. in FY2006.

Tractor industry is also on an upswing which will boost demand for mechanical Steering gears.

At CMP of Rs.210.05/-, share is trading at 7.05 times FY 2007 expected EPS of Rs.29.8 and 5.9 times FY 2008 expected EPS of Rs.35.7 We recommend to “BUY” the share at CMP in view of excellent business prospects.