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Friday, May 04, 2007

Weekly Close: Markets Looking for direction !


It was a holiday week with markets closed for 2 days in the middle. Markets started with a big negative with ICICI results declared being quite disappointing. Also the intention to raise huge money is what had the markets squirming. All banks saw some pressure on Monday. However Markets made a recovery helped by the cement, steel and Tech counters. The Rupee was weaker on Monday on expectations that the RBI was ready to intervene having increased the Monetary stabilisation funds availability. With holidays the participation was surprisingly not less. There was good level of activity. The two wheeler numbers were a disappointement. Hero Honda did well but Bajaj and TVS numbers were extremely disheartening. Tough to digest the view that the industry growth will slow to 5%. We were expecting benefits of the lower priced excise free bikes to spur growth. But that does not seem to be happening. Bajaj Auto rallied despite bad sales numbers for April on talks that the business split would be discussed in May. Cement stocks got a gift of sorts from the PM with the Dual excise regime shifted to an advalorem one. The impact of this is not too positive but it does away with the negative of the head on conflict between the Finance Ministry and the Cement industry. It is clear now that there will be no cement ban.

Sensex closed flat this week. Nifty however gained half a percent. The gainers were ACC + 4%; Bajaj Auto +4%, Gail 8%, HCL t +4%, Hero Honda +4%, Tata Power +4% Among the major losers was HLL which was down 6% this week. topnew.gif (1104 bytes)

Stocks delivered this week as well.

Castrol was a winner this week and that was over 25% gains on the wow call. Castrol benefits from an appreciating rupee and a weaker crude oil. Base oil prices are slipping and thats what brought in the interest. We expect this company will be compared to an FMCG plays as its Workshops come online. The Lube business however will see pressure from higher life and better quality engines which use even less Lube oil. There are talks that the parent may buy it out and get it delisted.

Aftek was another one giving in some smart gains this week.. though we closed the call with some gains. HPCL also gave gains and so did D-link. We closed RTS power with decent gains. The company did not report any good results.

The tyre companies are doing well. We had research put out for Apollo tyres. The companies performance has been good and with lower rubber prices life is quite easy here.

Technically Speaking: Markets are taking a breather. A close below 13828 would have the markets headed for 13500 levels. It would be a major negative because a lower top has been set up. So its important that 14390 is taken out on the upside. However the resistance at 14240 needs to be taken out ahead of that.

Fundamentally speaking : Results are coming in still and the Auto majors are the ones to report and also the biggie SBI. Almost all others have been fairly ok. There is nothing which these numbers will change. However inflationary pressures across the globe are increasing. The appreciating rupee offsets that to some extent.. but inflation in India continues to be high and this is despite the base effect. So really we are concerned. We believe that the upsides will be tempered by inflationary pressures.

Citigroup - Indian Real Estate Sector, Ansal Housing, Parsvanath Developers, Unitech


Indian Real Estate Sector

Ansal Properties & Infrastructure

Parsvanath Developers

Unitech

Indiainfoline - Andhra Bank, Balrampur Chini, Gayatri Projects, Great Offshore, Glaxo, Hindustan Lever, JSW Steel, Kesoram Industries, Voltamp


Andhra Bank

Balrampur Chini

Gayatri Projects

Great Offshore

Glaxo

Hindustan Lever

JSW Steel

Kesoram Industries

Voltamp Transformers

Edelweiss - hEDGE - The alternative insights monthly, May 2007


Edelweiss - hEDGE - The alternative insights monthly, May 2007

IISL - JSW Steel Q4FY07 Result Update (Reduce)


IISL - JSW Steel Q4FY07 Result Update (Reduce)

Indiainfoline - Weekly Stock Ideas


BUY Bharat Forge (340)
SL 333 T 352, 358


BUY Jet Airways (724)
SL 710 T 760, 765

BUY Escorts
(131)
SL 126 T 140, 143

BUY NALCO (249)
SL 242 T 262, 268

BUY Cipla (217)
SL 210 T 229, 234

Weekly Newsletter


FM modifies dual duty on cement

Finance Minister P. Chidambaram altered the dual excise duty structure on cement. There will now be an ad valorem excise duty of 12% on cement retailed above Rs190 per bag as against the Rs600 per ton levy proposed in the budget on Feb. 28. The ad valorem duty is expected to lower the excise duty burden on cement by Rs7 per bag, Chidambaram told the Lok Sabha during a discussion on the Finance Bill 2007. On cement retailed below Rs190 per bag, the excise duty will remain Rs350 per ton. Prior to the budget, the excise duty on cement was Rs400 per ton, irrespective of the retail price.

In what is good news not just for the local iron ore mining companies but also for the Chinese steel makers, the Finance Minister said that the export duty on iron ore fines with Fe content of 62% or lower will be Rs50 per ton instead of the flat Rs300 per ton levy proposed in the budget. Excise duty on texturised vegetable proteins (soya bari) has been reduced from 8% to Nil. Similarly, excise duty on ready to eat packaged food has been reduced from 8% to Nil. Chidambaram exempted biscuits whose sale price does not exceed Rs100 per kg from excise duty. Excise duty on zippers has also been halved to 8%.

The Finance Minister has also exempted from customs duty import of aircraft by flying clubs and institutes for training purposes and by non-scheduled point-to-point and non-scheduled charter operators under certain conditions. Chidambaram also said that the Government will cut customs duty on nickel to 2% from 5%. This is likely to benefit local stainless steel producers and may even lead to a reduction in stainless steel prices. The Finance Minister also removed the 10% customs duty on refrigerated vehicles and brought down the excise/countervailing duty on the same to 8%.

In a move that will boost the diamond industry cut and polished diamonds have been fully exempted from customs duty. The import duty on cut and polished diamonds was reduced from 5% to 3% in the budget. But, the much-dreaded FBT on ESOPs stays. Employers can heave a sigh of relief as they will now be able to pass on the tax cost to employees. Also, FBT will be levied on the value of ESOPs at the time of vesting and not when the shares are transferred. The tax will be leviable only when the ESOPs are transferred.

RIL told not to sell gas to 3rd party

Shares of Reliance Natural Resources Ltd. (RNRL) climbed on Friday after it secured a stay from the Bombay High Court, restraining Reliance Industries Ltd. (RIL) from supplying natural gas from the KG Basin to a third party. Reliance Energy Ltd. (REL), part of the Anil Dhirubhai Ambani Group (ADAG), also gained amid expectations that the Bombay High Court ruling may help the company build the world’s largest gas-fired power plant at Dadri in Uttar Pradesh. RIL shares declined. The Bombay High Court order prevents RIL from selling 40 million standard cubic metres per day of gas (MMSCMD) out of its estimated production of 80 MMSCMD. The interim order restrains the Mukesh Ambani controlled RIL from selling the gas to any third party or using it for captive consumption.

RNRL, also part of ADAG, was entitled to buy 28 MMSCMD of gas from RIL at US$2.34 per million British thermal units (MMBTU). It had a claim on an additional 12 MMSCMD of gas originally committed to NTPC, if the gas contract with the public sector major fell through. In July 2006, the Petroleum Ministry asked RIL to increase the price of the gas it plans to sell to RNRL. " Selling gas at prices lower than what other private oil companies charge in India will reduce the royalty that the Government will earn," the Petroleum Ministry said on July 26, 2006. In November last year, RNRL filed an application in the Bombay High Court, seeking the implementation of the demerger agreement between the two brothers at the time of splitting the country's largest private sector group.

RIL said yesterday that it plans to appeal against the interim order in a division bench. "The Hon’ble High Court of Mumbai has passed an ad-interim order in respect of a part of the quantity of gas expected to be produced from KGD-6 area. The Copy of the Judgment is awaited," RIL spokesperson said. "RIL has been advised to prefer an appeal to the Division Bench against this order and intends to do so," he added. RIL shares fell by Rs40 or 2.5% to Rs1582 after being as low as Rs1577. RNRL was up 2.5% at Rs26.95 after rising by the daily limit of 4% to Rs27.35. REL gained 0.6% at Rs515 after touching an intra-day high of Rs524.

Fourth weekly gain on D-Street

Spiderman, Spiderman,
Does whatever a spider can
Spins a web, any size,
Catches thieves just like flies
Look Out!
Here comes the Spiderman

Despite Friday's profit booking, the bulls are slowly but surely mounting a bid to scale a new peak sooner or later. Good corporate results, buoyant global markets and renewed risk appetite among global investors for equities have aided the bulls in recent weeks. However, concerns about rising rupee, high interest rates and inflation may still spring some negative surprises in the coming weeks. Plus, monsoon will also have some bearing on the outlook for the Indian economy.

The benchmark BSE Sensex added 26 points or 0.2% during the truncated week to close at 13934. The NSE Nifty rose by 34 points or 0.8% to shut shop at 4117. This was the fourth straight weekly gain for the key indices. Interestingly, the CNX Mid-cap index outperformed the key indices and notched up gains of 3%. Other prominent gainers for the week included Capital Goods, Pharma, Metal, Small-Cap and Cement stocks. Banking stocks fell sharply after last week's gains.

Mid-Cap stocks are seeing some more action as investors looking for gains outside the frontline counters. IFCI, Nagarjuna Fertilizers, Bata India, TTML and Colgate had a dream run this week. IFCI surged after the public sector term lender posted a net profit of Rs6.44bn in the fourth quarter as against a loss of Rs1.05bn in the same quarter a year earlier. The net profit for FY07 is Rs8.98bn versus a loss of Rs740mn last year. Separately, the Board of Directors of the company passed an enabling resolution to increase the FII / FDI holding limit up to 74% of the capital.

RIL was in the limelight. The stock lost some of its gains on Friday after the Bombay High Court restrained the company from selling gas from its KG Basin field to any company other than RNRL. The scrip managed to close the week with gains of 2.8% to Rs1583. RIL said it plans to appeal the ruling.

Cement stocks got some relief after the Finance Minister altered the dual excise duty structure. There will be an ad valorem excise of 12% on cement sold above Rs190 per bag as against the Rs600 per ton proposed in budget. ACC added over 4% to Rs859, Mangalam Cement advanced by over 2% to close at Rs152 and Grasim surged by over 1.5% to Rs2475.

The BSE Banking index declined led by a sharp fall in ICICI Bank. The scrip suffered its biggest fall in three years on concerns that the planned Rs200bn fund raising will hurt earnings. The stock lost over 8% during the week to Rs855. Others like HDFC Bank fell by 3% to Rs1008. However, SBI gained 2.7% to close at Rs1129.

Auto stocks were in action after the companies declared their monthly sales figures. Hero Honda advanced by over 4% to Rs698 after its April sales rose 4.86% to 262,544 units. Tata Motors lost 2% to Rs733. The company posted a 10.7% rise in its April sales. Maruti advanced by over 1.4% to Rs806. Maruti clocked a 16.75% rise in April vehicle sales at 50,352 units.

Firm metal prices boosted the metal stocks. Tata Steel recorded healthy gains of 2.8% to Rs553. The company unveiled refinancing of bridge loan to fund its acquisition of Corus Group Plc.

Bulls eye next big trigger

Though the bulls managed to eke out fourth weekly gains amid high volatility the trend for the next week looks uncertain. Having said that we don't see a major downfall from these levels either. The upside too will be capped unless FIIs continue to pump money into Indian shares like they did in April. The market is likely to remain in 'no-man's-land' for a while as key events such the monetary policy and quarterly earnings are behind us now. Key indices will witness alternative bouts of buying and selling as investors look for value following the last month's rally. A lot of portfolio churning is expected and action will be much more stock specific. Much will depend on liquidity and the trend across the global markets. Currency, metal and commodity markets will also have a role to play in driving sentiment. Investors may just decide to take it easy after a terrific run- up over the last few weeks. The market is surely running out of fuel and needs fresh catalyst(s) to lift the benchmark indexes past the previous all-time peaks. Monsoon will be the next big trigger. Till then, there's going to be lot of choppiness.


Market expected to stay firm


The market may stay firm, as buying interest is expected to continue following robust set of results posted by India Inc.

The major Q4 results scheduled next week are Union Bank of India, Dabur India, Hero Honda Motors.

Tech Mahindra, Texmaco, Kotak Mahindra Bank, Aztecsoft, Blue Star, Lupin, S Kumars Nationwide, Asian Paints, Lanco Infratech and Zuari Industries among others will also declare their results in the coming week.

Although the Reserve Bank of India (RBI) has kept rates steady in its recent credit policy, market men feel that the pause may just be a temporary measure, and further rate hikes are expected to curb inflation.

Also a lot will depend on how the global markets pan out. Over a past few months, local bourses have been tracking global cues in the similar direction. Any sharp correction will lead to a fall here as well.

Oil prices were steady at around $63 per barrel on Friday (4 May). Any sharp rise may affect the sentiment.

Sensex gains 26 points, Nifty adds 34 points


The market edged higher in a truncated trading week. Select side-counters were in demand, either due to their strong Q4 results or on expectations of good earnings.

The 30-share BSE Sensex rose 25.69 points to 13934.27 in the week ended 4 May. The S&P CNX Nifty advanced 33.85 points to 4117.35 in the week.

Small-cap and mid-cap stocks extended their recent gains. BSE Mid-Cap Index rose 129.63 points to 5863.16 in the week. BSE Small-Cap Index rose 90.09 points to 7031.57 in the week.

The two key indices Sensex and S&P CNX Nifty witnessed a divergent trend on Monday (30 April). While the Sensex shed 36.21 points to end on 13,872.37, Nifty rose 4.40 points and settled at 4,087.90. However, the highlight of the trading session was a tremendous intra-day rebound by both. The Sensex reverted from the lower level after having plunged as many as 214.99 points in mid-morning trade.

The market remained closed on Tuesday (1 May) and Wednesday (2 May) on account of public holidays.

Renewed buying in Reliance Industries (RIL) took Sensex up 206 points on Thursday (3 May). Rallying US markets and firm Asian markets aided rally on domestic bourses.

A fall in RIL, caused by an unfavourable interim order of the Bombay High Court, pulled the barometer BSE Sensex below the psychologically important 14,000 mark on Friday (4 May). IT pivotals also edged lower, hit by the rupee’s surge. The domestic bourses bucked a firm trend in Asian stocks. Sensex lost 143.94 points to finish at 13,934.27.

FIIs pressed sales to the tune of Rs 304.60 crore on Monday (30 April) but they resumed buying on Thursday (3 May) with an inflow of Rs 56.20 crore. Mutual funds were net buyers to the tune of Rs 71.30 crore on Monday and Rs 298 crore on Thursday.

Finance Minister P Chidambaram on Thursday announced changes in the Finance Bill 2007-08, following a discussion in Parliament. Chidambaram said the government will charge an ad valorem duty of 12% on cement priced above Rs 190 per 50 kg bag as against the budget proposal of Rs 600 per tonne. After this 12% duty, the effective reduction in tax burden on cement sold above Rs 190 per bag would be up to Rs 7, Chidambaram said during the debate on Finance Bill 2007-08 in the Lok Sabha.

The import duty on jems & jewellery has been completely abolished and duty on cut diamonds abolished. The export duty on low-grade iron ore export was slashed to Rs 50 per tonne from Rs 300 per tonne.

The Finance Minister also recast the tax on Employee Stock Options (ESOPs). Fringe Benefit Tax will now be applicable on date of vesting. Guidelines will be issued in due course on how to arrive at the value of ESOPs. The Lok Sabha on Thursday passed the Union Budget 2007-08 by a voice vote.

Cement shares rose ahead of excise duty relief announced by the government on Thursday. ACC said on Friday its shipments rose 4.8% in April 2007 from a year earlier, to 1.74 million tonnes. ACC said production rose 6.6% to 1.77 million tonnes, up from 1.66 million tonnes in April 2006.

ONGC came of lower level on renewed buying at declines. Analysts say rising rupee against the dollar, which makes import cheaper will help bring down under-recoveries of oil marketing firms, which, in turn, will reduce the subsidy burden on ONGC. The state-run oil explorer shares subsidy burden on this count with oil marketing firms

Bajaj Auto (BAL) surged 4% to Rs 2551.05 on Thursday boosted by a media report that its board meeting on 17 May 2007, is also likely to discuss a proposal for demerger. Meanwhile, Bajaj Auto continued its downward spiral in motorcycle sales for the third consecutive month this year, with its April numbers, including exports, declining by 13% compared to the same month last year. The company said its bike sales in April stood at 1,64,304 units against 1,88,518 units (inclusive of exports) in the same month last year, down 13%. Total two-wheeler sales also registered a dip of 13% at 1,65,692 units against 1,90,964 units last year, BAL said.

ICICI Bank lost 7.2% to Rs 865.90 on Monday after the private sector bank reported disappointing 4.45% net profit growth for Q4 March 2007. Concerns of equity dilution also weighed on the counter. Along with Q4 results, ICICI Bank’s board also approved raising additional equity capital by way of a public issue of shares and American Depositary Shares (ADSs). The exercise is expected to generate around Rs 20000 crore. The approval of shareholders will be sought by postal ballot, the private sector bank said.

Colgate-Palmolive India jumped 12.7% to Rs 396.45 in a single trading session on Friday after the toothpaste and grooming products maker proposed a reduction in capital, resulting in payment of deemed dividend of 9 rupees a share to shareholders and reducing face value of each share to 1 rupee from 10 rupees.

IFCI surged ahead of its Q4 March 2007 results. IFCI reported a net profit of Rs 644 crore for the quarter ended 31 March 2007 against a loss of Rs 105 crore in Q4 March 2006. For the year ended 31 March 2007, its net profit was Rs 874 crore. The results were announced after trading hours on Thursday.

Index complier MSCI rejigged its Standard Index Series following an annual review. With regard to India, three stocks have found place in the Standard Index Series viz. Aditya Birla Nuvo, Unitech, and Videocon Industries. Simultaneously, ten stocks have moved out viz. Arvind Mills, Bajaj Hindusthan, Bank of Baroda, Biocon, Britannia Industries, Colgate-Palmolive India, Jet Airways India, Matrix Laboratories, Moser Baer India and Nicholas Piramal.

The outcome of the ongoing seven-phased Uttar Pradesh assembly elections, is a key political event to watch out for. The assembly poll gets over early this month. The vote is seen as a barometer of national political trends. Some opinion polls show the opposition Bharatiya Janata Party (BJP) emerging second in the race, further adding to the woes of the ruling Congress, which is already battling rising prices.

IISL - Gateway Distriparks Q4FY07 Result Update (Hold)


IISL - Gateway Distriparks Q4FY07 Result Update (Hold)

ISEC - Indraprastha Gas, Colgate Palmolive, Wockhardt


Indraprastha Gas

Colgate Palmolive

Wockhardt

Heavyweights, oil stocks drag down market


The market sentiment was high after the smart gains of over 200 points yesterday. The Sensex opened on a positive note with a gap of 52 points on the back of firm international markets and selective buying in cement, metal and banking stocks. The Finance Bill was passed by the Lok Sabha yesterday, with the finance minister modifying the dual excise duty structure on cement to bring in a 12% ad valorem duty in place of the specific duty of Rs600 per tonne. This generated significant buying interest in cement stocks in the early trades. As the market players started profit booking among the front-line stocks, the Sensex slipped in to the red. The market remained range-bound with a negative bias thereafter. The lower-than-expected inflation number at 5.77% for the week ended April 22 lifted the market sentiment in the afternoon, causing the Sensex to enter into positive territory again. However, the strong bout of selling in heavyweight, oil and capital goods stocks dragged the Sensex down to the day's low of 13913. The Sensex finally ended the session with a loss of 144 points at 13934. The Nifty ended the session at 4117, down 34 points.

The market breadth was weak. Of the 2,658 stocks traded on the BSE, 1,462 stocks declined, 1,101 stocks advanced and 95 stocks ended unchanged. Among the sectoral indices the BSE Oil & Gas index shed 1.26% at 7245, while the BSE CG index declined 1.26% at 8242. The BSE CD index was the major gainer and moved up 2.08% at 3801.

Select heavyweights declined on strong selling pressure. HDFC slipped 2.66% at Rs1,634, Reliance Industries dropped 2.50% at Rs1,583, L&T fell 2.50% at Rs1,698, Bharti Airtel shed 1.95% at Rs818, ICICI Bank lost 1.92% at Rs855, Satyam Computer declined 1.70% at Rs470, BHEL dipped 1.58% at Rs2,496 and TCS slumped by 1.23% at Rs1,274. Among the select gainers, Cipla advanced by 2.72% at Rs217, Hindalco added 1.54% at Rs148 while ACC, ONGC, Reliance Energy, Bajaj Auto, SBI, Dr Reddy's Lab and HDFC Bank gained marginally.

Select oil stocks came under selling pressure. BPCL slipped 3.43% at Rs335, IOC declined 1.43% at Rs442, Essar Oil lost 0.96% at Rs56, HPCL fell 0.73% at Rs278 and Reliance Petroleum was down 0.12% at Rs81. In the capital goods segment, Astra Micro, Areva, Jyoti Structures and Greaves Cotton were down over 2-3% each.

Select consumer goods stocks, however, attracted buying support. Videocon surged 6.03% at Rs447, LLyod Electric moved up by 2.12% at Rs154, Gitanjali Gems added 0.75% at Rs200 and Blue Star gained 0.62% at Rs227.

Over 3.94 crore IFCI shares changed hands on the BSE followed by Nagarjuna Fertilizers (1.35 crore shares), Himachal Futuristic (1.35 crore shares), Reliance Natural Resources (1.19 crore shares) and Tata Teleservices (1.10 crore shares).

Value-wise India Bulls registered a turnover of Rs377 crore on the BSE followed by Reliance Industries (Rs242 crore), IFCI (Rs185 crore), Tech Mahindra (Rs159 crore) and India Bulls Real Estate (Rs141 crore).

Citigroup - India Economics - Business confidence dips on inflation, rate concerns


Citigroup - India Economics - Business confidence dips on inflation, rate concerns

Sensex settles below 14000


A fall in index heavyweight Reliance Industries (RIL) caused by an interim order by Bombay High Court against the company, fall in IT stocks and select other blue chips pulled market lower today. Sensex lost 150.63 points, as per provisional data, to 13927.58, a day after it had surged 206 points on Thursday (3 May). Domestic bourses today bucked firm Asian markets.

The weakness stemmed in afternoon trade. The market was range bound in the first two hours of trade.

The market breadth was weak. 1450 shares declined on BSE as compared to 1116 stocks that rose. 101 shares were unchanged. Losers outpaced gainers by a ratio of 1.29:1.

BSE clocked a turnover of Rs 4246 crore.

Reliance Industries shed was down 2.4% to Rs 1583, hit by reports that the Anil Ambani controlled Reliance Natural Resources (RNRL) had secured an interim stay from the Bombay High Court, preventing RIL from selling 40 million standard cubic metres per day (MMSCMD) of gas out of its estimated potential of 80 MMSCMD. RIL plans to appeal against the interim order in a division bench.

Cellular services major Bharti Airtel dropped 2.2% to Rs 815, engineering & construction major L&T shed 2.3% to Rs 1700 and PSU power equipment major Bhel lost 1.6% to Rs 2493

IT pivotals edged lower as the rupee firmed up against the US dollar. Satyam Computer was down 1.8% to Rs 470, TCS shed 1.1% to Rs 1275, Wipro shed 0.4% to Rs 568 and Infosys shed 0.2% to Rs 2076. A stronger rupee directly impacts the revenue and profits of IT firms, which derive a lion’s share of revenue from exports. The rupee today gained more than half a percent to about 40.88 per dollar, within sight of last week's nine-year high at around 40.70.

The government on Thursday recast the tax on Employee Stock Options (ESOPs). The Fringe Benefit Tax (FBT) will now be applicable on the date of vesting. FBT would be imposed on the difference between the fair market value (FMV) on the date on which the option vests with the employees and the amount actually paid by the employee for the shares. The Lok Sabha on Thursday passed the Union Budget 2007-08 by a voice vote

State Bank of India ended in the green with a slight gain of 0.3% at Rs 1126. The stock pared gains after an intra-day 3.5% surge in the stock to Rs 1161.70.

ICICI Bank dropped 2% to Rs 853. Late last week, ICICI Bank had said it planned a Rs 20000 crore equity issue.

The wholesale price index rose 5.77% in the 12 months to 21 April 2007, lower than previous week's increase of 6.09%, data showed on Friday.

Hindalco gained 1.4% to Rs 148. Hindalco’s net profit rose 15% in Q4 March 2007 to Rs 721 crore from Rs 626.30 crore. The results hit the market in mid-afternoon trade.

Housing finance major HDFC dropped 2.3to Rs 1639. During trading hours on Thursday, HDFC had reported 28.96% growth in net profit in Q4 March 2007 quarter to Rs 550.05 crore as against Rs 426.52 crore during the previous quarter ended March 2006.

Cement stocks came off higher level from early rise. ACC rose 0.5% to Rs 857.05, off early high of Rs 880.20. Grasim shed 0.9% to Rs 2470, off early high of Rs 2565. Gujarat Ambuja Cements shed 1.3% to Rs 120; it was off an early high of Rs 125.40. The government on Thursday (3 May 2007) withdrew higher fixed duty on cement manufacturing proposed in the Union Budget, and instead levied 12% ad-valorem duty on 50 kg bags costing more than Rs 190 a piece.

Cipla gained 2.3% to Rs 216.65. The stock had plunged 14.2% to Rs 217.10 in a single trading session on 27 April 2007, hit by its dismal Q4 March 2007 results. The stock had retreated further to Rs 210.85 on 30 April 2007. It had also recovered a bit to Rs 211.70 on 3 May 2007.

Admitting that prices of essential commodities like pulses and edible oils have hardened since the last one year affecting the common man, the government today said measures already initiated will be further intensified to ease the situation. Finance Minister P Chidambaram said that a two-pronged strategy has been adopted to tackle inflation both in the short term and in the long term. On correcting the supply-demand mismatch of essential goods, he said supply can be augmented either by way of increased procurement within the domestic market or through imports. "I hope the agriculture minister will take a decision in this regard," he said in Lok Sabha while replying to questions on price rise.

Asian shares forged ahead on Friday, with Australia setting another record high, while the dollar clung to gains, nervously waiting on US payroll data due later for clues on Federal Reserve policy. Market sentiment was lifted by the bellwether Dow Jones industrial's push to yet another record close, helped by a surprisingly strong US service sector survey and a drop in labour costs. Japanese and Chinese financial markets remained shut for their respective Golden Week holidays.

US stocks edged higher on Thursday, after a series of indicators showed signs of strength in the economy and a moderate rise in wage inflation. The Dow industrials closed at a record for the third straight day, led by a 3.7% gain in Verizon Communications Inc. on news that it was taking video and Internet customers from rival Cablevision Systems. The Dow rose 29.50 points, or 0.22%, at 13,241.38. The Standard & Poor's 500 Index was up 6.47 points, or 0.43%, at 1,502.39. The Nasdaq Composite Index was up 7.62 points, or 0.30%, at 2,565.46.

The key data later in the day today is US job data for April. Median forecasts are for a payroll increase of 100,000 in April, with the jobless rate ticking up to 4.5% from 4.4% in March.

Sharekhan Highnoon dated May 04, 2007


Sharekhan Highnoon dated May 04, 2007

Citigroup - Infoedge - May 4 2007


Citigroup - Infoedge - May 4 2007

Prabhudas Lilladher - Reliance Communications


Prabhudas Lilladher - Reliance Communications

Anand Rathi - Info Edge


Anand Rathi - Info Edge

ENAM - Aditya Birla Nuvo, Canara Bank, Cement Sector, ING Vysya, Jubilant Organosys, Sterlite, Zodiac Clothing


Aditya Birla Nuvo

Canara Bank

Cement Sector

ING Vysya

Jubilant Organosys

Sterlite

Zodiac Clothing

Edelweiss - Patel Engineering - branching out; result update Q4FY07; maintain Reduce


Edelweiss - Patel Engineering - branching out; result update Q4FY07; maintain Reduce

Citigroup - Info Edge


Citigroup - Info Edge

Citigroup - India Investment Daily - May 4 2007


Citigroup - India Investment Daily - May 4 2007

Kotak - Daily Morning Brief - Mphasis BFL, Market Morning


Kotak - Market Morning - May 4 2007
Kotak - Daily Morning Brief - Mphasis BFL

Kotak - Reliance Petroloeum, Banks/Financial Institutions, HDFC, Sterlite, Aditya Birla Nuvo, Sintex Industries, M&M, Sesa Goa, Wockhardt


Reliance Petroloeum

Banks/Financial Institutions

HDFC

Sterlite

Aditya Birla Nuvo

Sintex Industries

M&M

Sesa Goa

Wockhardt

Morgan Stanley - India Strategy Chartbook - More Snakes than Arrows


Morgan Stanley - India Strategy Chartbook - More Snakes than Arrows

PowerYourTrade Trading Calls


Ashwani Gujral
Buy GMR Infrastructure with stop loss of Rs 400 for a target of Rs 540
Buy Alstom Power with stop loss of Rs 460 for a target of Rs 650.

Rajat K Bose
Buy Jindal Stainless with stop loss below Rs 146.25 for a target of Rs 158-165. This is a day-trading recommendation.

Sell Moser Baer with stop loss above Rs 378.25 for a target of Rs 355-351-345. This is a day-trading recommendation.

Deepak Mohoni
Buy Canara Bank below Rs 227.50 with stop loss of Rs 224. This is a day-trading recommendation.
Buy SAIL below Rs 135.50 with stop loss of Rs 133. This is a day-trading recommendation.

Friday Telefolio Plus - 3i Infotech


Friday Telefolio Plus - 3i Infotech

Anand Rathi - Daily Fundamental Snippets - May 4 2007


Ad valorem duty of 12 per cent of the retail selling price would be levied on cement sold at more than Rs 190 per 50 kg bag.



Wockhardt Ltd has acquired Negma Laboratories in an all-cash deal worth $ 265 million.



Pratibha Industries Ltd has secured a contract from GMS Construction Pvt. Ltd. for Rs 199 million.



Welspun-Gujarat Stahl Rohren Ltd has bagged prestigious pipeline orders worth Rs 700 Crores (USD 170 mn.) for the supply of line pipes overseas.



Phillips Carbon Black Ltd (PCBL) is to expand its capacity by 1,25,000 tonnes.



Housing Development Finance Corporation's (HDFC) fourth-quarter net profit rose 29 per cent.



Aditya Birla Nuvo has posted a 9.86 per cent increase in net profit at Rs 62.26 crore (Rs 56.67 crore) for the quarter ended March 31, 2007.



Century Textiles and Industries Ltd. has recorded a net profit at Rs 94.36 crore for the quarter ended March 31, 2007, against Rs 25.21 crore in the corresponding quarter previous year.


Info Edge (India) reported net profit of Rs 10.13 crore for the fourth quarter ended March 31.

Anand Rathi - Daily Fundamental Snippets - May 4 2007

Intra-day Stock Ideas


NIFTY (4150.85) SUP 4120 RES 4191

BUY BANKINDIA (199.80)
SL 195 T 208, 210

BUY HINDPETRO (279.95)
SL 275 T 289, 291

BUY GUJAMBCEM (121.80)
SL 117 T 130, 132

SELL STROPTICAL (186.50)
@ 188 SL 192 T 178, 176

SELL WIPRO (570.9)
@ 574 SL 579 T 563 ,560

Investsmart - Morning Call


Market Grape Wine :

In House :

Nifty at a support of 4122 & 4088 levels with resistance at 4178 & 4213 & 4245 levels .

Buy : Centextile above 617 target of 632 s/l of 609

Buy : NDTV above 343 target of 355 s/l of 336



Out House :

Markets at a support of 13919 & 13848 levels with resistance at 14164 & 14253 levels .

Buy : RIL

Buy : LUPN

Buy : FSL & IFCI

Buy : Praj & GlenMark

Buy : Maruti & HDFC

Buy : JSW & Sail

Buy : Titan & MphasisBFL

Dark Horse : Praj , JSW , Bata , IFCI , Sail , IDBI , LUPIN & GlenMark

TGIF : Thank God Its Friday : Markets on a BULL run ride the wave with strict stop loss .

STRATEGY INPUTS FOR THE DAY


FM, global markets in focus

The strongest principle of growth lies in human choice.

The bulls may choose to be upbeat at least for the day as there is more good news in the air than bad developments. Given the sheer momentum, good quarterly earnings, firm global markets and renewed buoyancy in portfolio investments we expect the bulls to end the truncated trading week on a strong note. Yesterday was a perfect example of the strong undercurrent in the market, with the key indices shooting up on higher volume and turnover. Market breadth was also quite positive, with even the mid-cap and small-cap shares participated in the rally.

What's more, after the market had downed the shutters, Finance Minister P. Chidambaram made some positive announcements in parliament which should cheer up the bulls today. To add to the feel-good vibes, stocks in the US, Europe, Latin America and Asia are all up while crude oil is steady at around $63.20 per barrel mark. Cues from the F&O segment are also looking good with the premium between Nifty May futures and the underlying index widening and open interest picking up.

A few more key companies are scheduled to announce their results today. If they manage to deliver the goods it would only add to the good tidings. But, one should watch out for the weekly inflation numbers. The WPI-based inflation is expected to fall below 6%. Any negative surprise in the data could dampen the sentiment just a little bit.

Stainless steel makers could gain after the Government slashed the import duty on nickel from 5% to 2%. Sesa Goa could advance following the steep cut in export duty on low-grade iron ore. Cement companies will definitely be in focus after the FM altered the dual excise duty structure. Gems & Jewellery firms might gain from the scrapping of customs duty on cut and polished diamonds. Ready-to-eat food manufacturers and biscuit makers may also rise after the FM lowered the import duties.

Global Vectra could attract some attention as Chidambaram has exempted the import of aircraft for non-scheduled charter operators from customs duty. Moreover, RIL and RNRL will hog the limelight after the latter secured an interim stay from the Bombay High Court, preventing the former from selling the gas from KG basin to a third party. RIL says it will appeal the decision. Watch out for Videocon as well as creditors of Daewoo Electronics are likely to approve a bid by a consortium led by the Indian company.

On Wall Street, US stocks rallied, with the S&P 500 index closing above 1,500 for the first time in more than six years and the Dow Jones Industrial Average ending at a record high for the sixth time in seven sessions.

Sentiment received a major boost following the release of better-than-expected reports on productivity gains and the US services industry.

The Dow added 29.50, or 0.2 percent, to 13,241.38. The S&P 500 increased 6.47, or 0.4 percent, to 1502.39. The Nasdaq Composite Index advanced 7.62, or 0.3 percent, to 2565.46.

Treasury prices slipped, lifting the yield on the 10-year note to about 4.67% from 4.64% late on Wednesday as investors bet that the strong economic news means that the Federal Reserve is unlikely to cut interest rates anytime soon.

In currency trading, the dollar gained against the euro and the yen. COMEX gold for June delivery rose $9.30 to settle at $684.40 an ounce.

US light crude oil for June delivery fell 49 cents to $63.19 a barrel on the New York Mercantile Exchange. The front-month contract was quoting 2 cents down at $63.21 a barrel in extended trading in Asia.

European shares ended higher in a volatile trading session. The pan-European Dow Jones Stoxx 600 index closed with a 0.3% rise at 389.73. All other indexes touched highs not seen for at least six and a half years in the session, with the French CAC-40 breaking though 6,000 level for the first time since December 2000 ahead of the weekend's elections. The CAC closed up 0.2% at 6,004.28, the German DAX Xetra 30 increased 0.3% at 7,479.40 and the U.K. FTSE 100 rose 0.8% at 6,537.80.

In Latin America, Brazilian blue-chip shares closed at a fresh record high. Mexican stocks were boosted by positive US economic reports. In Brazil, the benchmark Ibovespa stocks index closed up 747 points, or 1.5%, at 50,21.22. Mexico's IPC index rose 493 points, or 1.7%, to 29,752.95.

Most Asian markets are up this morning. Australian markets rose to a new high. South Korea's Kospi was flat at 1561 after earlier setting a fresh high of 1,566.03. In Singapore, the benchmark Straits Times Index rose 20 points to 3,471, after earlier marking an intra-day high of 3,484.97. The Hang Seng in Hong Kong gained 40 points at 20,721.

HOW MARKET FARED

Modified Finance Bill may cheer up bulls

The bulls made a solid come back and ended the day with firm gains. Strong regional markets, lower crude oil prices and impressive corporate performance lifted the benchmark Sensex above the 14k mark. The bulls were victorious as set of impressive monthly sales numbers from Auto Majors and steady gains for biggies like RIL aided the markets. Upward trend of market continued on Thursday as the Bulls looked refreshed after two holidays. Thankfully nothing untoward happened in the international markets in the interim. Others like Bajaj Auto, Gujarat Ambuja Cement, L&T and SBI were the major gainers among the 30 Sensex stocks. Finally the benchmark Sensex closed at 14078, up by 206 points and NSE Nifty closed at 63 points at 4151.

Earlier, indices opened with a huge upward gap taking cues from strong US market overnight. The Dow Jones Industrial Average hit another record high on Wednesday, clocking its longest winning streak in almost 52 years as investors welcomed strong earnings, lower oil prices, media deals and a strong reading on manufacturing.

The Dow gained 75.74 points, or 0.6%, to a record 13,211.88 as a stronger-than-expected factory orders report lifted Honeywell International Inc. shares. The average recorded its 18th record close this year. The Nasdaq Composite climbed 26.31 points, or 1%, to 2557.84, the highest since February 2001.

US light crude oil for June delivery fell 72 cents to settle at $63.68 a barrel on the New York Mercantile Exchange, after the government said that supplies of gasoline fell and crude oil inventories climbed. The front-month contract was quoting 6 cents higher at $63.74 a barrel in extended trading in Asia.

Auto stocks were among the major gainers on back of strong monthly sales figures. Maruti surged by over 1% to Rs815, Bajaj Auto surged by over 4% to Rs2562. However, Bajaj Auto's sales last month declined by 10%.

Fresh buying was seen in sugar stocks. Renuka Sugar was up by 5% to Rs461, Sakhti Sugars has gained by 1.5% to Rs92.25, Triveni Engineering was up by over 8% to Rs52.2 and and Uttam Sugar was up by 2% to Rs107.

Market Volumes:
The turnover on NSE was up by 23% to Rs93.27bn. BSE Oil & Gas index was the major gainer and gained 2.84%. BSE Auto index (up 1.45%), BSE Mid Cap index (up 1.22%) and BSE Capital Good index (up 1.85%) were among the other major gainers.

Volume Toppers:
IFCI, TTML, Nagarjuna Fertilizers, IDBI, Arvind Mills, Dish TV, RNRL, SAIL, HLL, IDFC, Tata Steel, IDEA, Bank of India, RIL, Ashok Leyland, Bajaj Hind, Satyam and Cipla.

Upper Circuit:
Deccan Aviation, Mid-Day Multimedia, Silverline Tech, Mercator Lines, Ador Welding and Sanwaria Agro.

Results Today:
Ashok Leyland, EID Parry, GE Shipping, GSFC, Gujarat Alkalies, Hindalco and HT Media.

Delivery Delight:
Andhra Bank, Ashok Leyland, ACC, Bajaj Auto, BILT, Bank of India, BEML, Bharat Forge, BPCL, Corporation Bank, Crompton Greaves, HCL Technologies, M&M, Ranbaxy and Reliance Industries.

Abnormal Delivery:
J&K Bank, Rolta India, Tata Elxsi, UTI Bank, CEAT, Kesoram Industries, Gujarat State Fertilizers & Chemicals Ltd, EID Parry and Dabur India.

Stock Futures with Largest Increases in OI:
Chennai Petro, GE Ship, Federal Bank, Wockhardt, Triveni Eng, Shree Renuka Sugar, Tata Motors, Amtek Auto, Tata Steel and R Com.

Stock Futures with Largest Decreases in OI:
Crompton Greaves, Cummins, BILT, Vijaya Bank, VSNL, Bank of India, Sobha Developers, Ranbaxy and Balrampur Chini.

Results Corner:
Sterlite Q4 net income (down 13%) to Rs2.09bn and revenue (up 20%) to Rs30.73bn

Colgate Q4 net income (up 36.7%) to Rs505.9mn, revenue (up 14.9%) to Rs3.61bn and to pay Rs2 as special dividend

HDFC full year profit at Rs15.7bn (up 24.9%), revenue at Rs53.14bn (up 40%) and to pay Rs22 per share as dividend.

Brokers Recommendations:
HLL – Buy from CLSA with target of Rs240

ICICI Bank – Outperform from Macquarie with target of Rs1085.

Long Term investment:
JSW Steel

Major News Headlines:

FM alters dual excise duty on cement

Ad valorem excise of 12% on cement sold above Rs190 per bag

Govt will keep tax rates 'stable and moderate': FM

Wockhardt buys Negma Labs for $265mn in cash

PSL-led JV secures 156 Acres from Mississippi

Honda plans to make small car in India from 2009

JSW Steel output rises 18% in April after the company raised capacity

Jet Airways raises fuel surcharge by Rs150

Tata Sons raises stake in Tata Tea to 22.78% from 19.1%.

Market may extend gains


The market may extend Thursday (3 May)’s gains tracking firm global markets. Stocks from cement, IT and steel sector may edge higher after finance minister Finance Minister P Chidambaram on Thursday announced changes in the Financial Bill 2007-08 following a discussion in the parliament on the bill.

Chidambaram said the government will charge an ad valorem duty of 12% on cement priced above Rs 190 per 50 kg bag as against the budget proposal of Rs 600 per tonne. After this 12% duty, the effective reduction in tax burden on cement sold above Rs 190 per bag would be up to Rs 7, Chidambaram said during the debate on Finance Bill 2007-08 in Lok Sabha.

The import duty on jems & jewellery has been completely abolished and duty on cut diamonds abolished. The export duty on low-grade iron ore export was slashed to Rs 50 per tonne from Rs 300 per tonne.

The Finance Minister also recast the tax on Employee Stock Options (Esops). Fringe Benefit Tax will now be applicable on date of vesting. Guidelines will be issued in due course on how to arrive at the value of Esops. The Lok Sabha on Thursday passed the Union Budget 2007-08 by a voice vote.

The key data due today is the weekly inflation data. The wholesale price inflation rate is forecast at 5.87 percent for the 12 months to April 21, lower than an annual 6.09 percent a week before. The data will be released around noon. The annual rate hit 6.69 percent on Jan. 27, its highest in more than two years, but has moderated after RBI tightened policy and the government cut duties on a range of items to rein in prices.

RBI kept its short-term lending rate steady at its monetary policy review last week, as expected, but left the door open for further rate increases if needed to combat price pressures and inflationary expectations.

FIIs turned sellers at the fag end of April 2007 after their heavy inflow in the second half of that month. FIIs were net sellers to the tune of Rs 304.60 crore on Monday 30 April 2007. They were net sellers to the tune of Rs 194.80 crore on Friday 27 April.

As per provisional data, FIIs were net buyers to the tune of Rs 69.70 crore on Thursday (3 May). Domestic institutional investors were net buyers to the tune of Rs 186.40 crore on Thursday.

Asian shares forged ahead in quiet trade on Friday, with Australia setting another record high, while the dollar clung to gains, nervously waiting on US payroll data due later for clues on Federal Reserve policy. Market sentiment was lifted by the bellwether Dow Jones industrial's push to yet another record close, helped by a surprisingly strong U.S. service sector survey and a drop in labour costs. Japanese and Chinese financial markets remained shut for their respective Golden Week holidays.

US stocks edged higher on Thursday after a series of indicators showed signs of strength in the economy and a moderate rise in wage inflation. The Dow industrials closed at a record for the third straight day, led by a 3.7 percent gain in Verizon Communications Inc. on news that it is taking video and Internet customers from rival Cablevision Systems. The Dow rose 29.50 points, or 0.22 percent, at 13,241.38. The Standard & Poor's 500 Index was up 6.47 points, or 0.43 percent, at 1,502.39. The Nasdaq Composite Index was up 7.62 points, or 0.30 percent, at 2,565.46.

The key data later in the day today is April US job data. Median forecasts are for a payrolls increase of 100,000 in April, with the jobless rate ticking up to 4.5 percent from 4.4 percent in March

Emkay - Morning Notes, Praj Industries


Emkay - Morning Notes, Praj Industries

Firm trend may continue


Upturn in the market is likely to continue further following the overnight gains in the US markets and firm Asian indices in morning trades. The presence of strong bullish sentiment after yesterday's smart gains of 206 points may also help the market to open in the green. Among the local indices, the Nifty could test 4180 and 4220 on the upside and may slip to 4040 on the downside. The Sensex has a likely support at 13700 and may face resistance at 14300. On the earnings front Ashok Layland, EID Parry, Great Eastern Shipping, Gujrat Alkalies, GSFC, Hindalco are expected to announce their quarterly numbers.

Indian floats ended largely with gains on the US bourses. ICICI Bank was the leading gainer and rose 1.43% while Infosys, Satyam, MTNL, HDFC Bank and VSNL gained around 1% each. However, Patni Computers, Dr Reddy's, Tata Motors and Rediff were down around 1% each.

While the Nymex light crude oil for June delivery moved up by 49 cents at $63.19 a barrel. In the commodity space, the Comex gold for June series jumped by $9.30 to settle at $684.40 a troy ounce.

Anand Rathi - Daily Technical Note & Daily Strategist


Nifty and Sensex have exhibited a bullish candlestick.

Technically, one may use the level of 4080 (Nifty) and 13975 (Sensex) as the stop loss level.

Nifty faces resistance at 4185 and Sensex at 14225.

BSE Smallcap and BSE Midcap exhibited a bullish candlestick.

CNX IT has gained ground.

In the Punter's zone we have a BUY in ARVIND MILLS , SRF & TATA STEEL.

In the Technical call section, we have a BUY in 3I INFOTECH , HIND CONSTRUCTION & INDIA GLYCOL.



The NIFTY futures saw a increase in OI 0.2 % with prices closing up indicating that lot of shorts positions were covered in the initial stage and at the higher end huge profit booking happened. The FIIs were buyers in futures to the tune of 654 crores of which they bought nifty futures alone to the tune of 534 crs and options worth 83 crs , while they bought stock futures to the tune of 31 crores . The PCR is in a range of 1.20 indicating the trend in the market. The volatility has remained in the range of 23.90 levels indicating the feel in the market.

Among the Big guns, ONGC saw a loss of 2.28 OI with prices going up 0.60% indicating that fresh shorts being covered in the counter while RELIANCE lost OI by 1.83% and the price coming up by 4.17% indicating huge fresh buying taking at the historical high in the counter.

In the TECH front, INFOSYS & TCS we saw short covering, SATYAM we saw fresh buying & WIPRO saw decrease in prices in the form of profit booking showing weakness in the stock. Overall we saw an impact of a weakening RUPEE making tech stocks more attractive.

On the other hand the BANKING counters we saw open interest gaining or loosing with gain in value. Also we saw the genuine buying coming in P.S.U banks like S.B.I & P.N.B and across the board prices gaining value in the sector. The rest like ICICI BANK & HDFC BANK saw short coverings and prices remaining positive. The new flavor was institutional stocks IFCI , IDFC & IDBI gaining huge values.

In the METALS there across the board buying be it TATA STEEL , STERLITE or SAIL after the sector had a massive negative movement. The only stock that saw selling or profit booking was HINDALCO.

Considering the market data, it suggests the most awaited expected trend has been curtailed by profit booking today at the higher end and we need to wait and watch how the market behaves as we should also remember any negative movement here could BOOMERANG the so formed RALLY and we suggest only caution with a positive bias here.

Anand Rathi - Daily Technical Note & Daily Strategist - May 4 2007

IISL Result Reports - IFlex, Mphasis, Allcargo, OBC, UTV Software, Reliance Communiations


IISL - I-Flex Solutions Q4FY07 Result Update (REDUCE)

IISL - Mphasis BFL Q4FY07 Result Update (REDUCE)

IISL - Allcargo Global Logistics Q4FY07 Result Update (Accumulate)

IISL - OBC Q4FY07 Result Update (Accumulate)

IISL - UTV Software Q4FY07 Result Update (Accumulate)

IISL - Reliance Communications Q4FY07 Result Update (Buy)

Citigroup - India Cement Sector, ACC, Grasim, Gujarat Ambuja, Ultratech Cement


India Cement Sector

ACC

Grasim

Gujarat Ambuja

Ultratech Cement

Anagram - Daily Call - May 4 2007


Anagram - Daily Call - May 4 2007

Religare - Daily Market Outlook, Futures, Technicals & Monthly Picks


Daily Market Outlook

Futures

Technicals

Monthly Picks

Wednesday Telefolio Plus - Firstsource Solutions


First choice in BPO space
While organic growth prospects itself will be impressive, benefits of inorganic growth will be icing on the cake

Firstsource Solutions, formerly known as ICICI OneSource, is a leading provider of offshore business process outsourcing (BPO) services to clients primarily in the banking, financial services and insurance (BFSI) ( 51.8% of total revenues), telecommunications and media (33.9%), and healthcare industries (9.2%).
The third largest standalone Indian BPO vendor, Firstsource's key strengths are domain expertise (e.g. ICICI Bank parentage gives an edge in financial services), integrated offshore-onshore delivery and ability to complement organic growth through acquisitions/alliances, with a history of retaining acquired clients/people.
Excellent sequential performance
On the back of approximately 16% growth on organic business and balance on acquisition of BPM, Firstsource reported 28% sequential growth in consolidated operating revenues to Rs 274.70 crore. The operating margins improved by 30bps to 20.1% eventhough it was impacted by recruitment of 3672 employees in the quarter leading to 650bps increase in personnel costs partially compensated by higher operational efficiencies.
The resultant operating profits grew by 30% Rs 55.21 crore. Other Income for the quarter dipped 75% to Rs 2.09 crore. Depreciation charge increased by 28% to Rs 19.99 crore on account of amortization of issue expenses, the resultant PBT increased by 8% to Rs 35.68 crore. Tax for the quarter dipped by 74% to Rs 0.84 crore on account of year-end adjustments and transfer pricing issues. PAT grew by 16% to Rs 34.84 crore. The Net Profit after minority interest grew by 16% to Rs 34.92 crore.
Superb Y-o-Y performance
For the quarter ended March 31, 2007 , Firstsource reported 71% y-o-y growth in operating revenues to Rs 274.70 crore. The operating margins dipped by 260bps to 20.1% on the back of increase in personnel cost by 660bps as a % of operating revenues on account of higher headcount. The resultant operating profits surged by 51% to Rs 55.21 crore. Other Income for the quarter grew by 254% to Rs 2.09 crore on account of higher interest on deposits. The resultant PBIDT grew by 54% to Rs 57.30 crore.
Interest cost for the quarter dipped by 38% to Rs 1.63 crore, Depreciation for the quarter grew by 72% to Rs 19.99 crore on account of higher capex. The PBT improved by 56% to Rs 35.68 crore. Tax provision for the quarter decreased by 36% to Rs 84 lakh on the back of transfer pricing issues. The resultant PAT before minority interest grew by 61% to Rs 34.84 crore. Minority Interest for the quarter stood at Rs 1 crore. The net profit for the quarter after minority interest surged by 61% to Rs 34.92 crore.
Yearly performance sees 51% rise in revenues and 294% jump in PAT
For the year ended March 2007, Firstsource recorded 51% rise in consolidated revenues to Rs 829.76 crore on the back of 105% growth in Telecom & Media vertical and 132% growth in Healthcare. OPM improved by 520bps at 19.8%. Thus driven by robust revenue growth operating profits were up by 106% to Rs 164.38 crore. Other Income zoomed to Rs 10.17 crore. On the back of building and expansion of new facilities during the year, depreciation charge was higher by 42% to Rs 64.15 crore, the resultant PBT grew by 281% to Rs 102.63 crore. Provision for taxation was higher by 123% to Rs 96.62 crore, thus PAT was up by 298% to Rs 96.62 crore. Net profit after Minority interest grew by 294% to Rs 97.25 crore.
Operates in high growth industry
IDC estimates that, globally, BPO service revenues will grow at a 10.9% CAGR to FY09, which is faster than all other markets viz. IT services, software products and hardware. BPO involves transfer of in-house business functions to an external service provider. In India this is also referred to as IT enabled services, i.e. business processes that can be enabled by IT. Therefore, this includes outsourcing of processes such as payroll, finance and accounting ( e.g. receivables management), insurance claims administration, credit card processing and market research analysis.
The Indian offshore BPO market is growing faster than the global market, at a ~43% CAGR over FY04-FY06E. India has continued to increase its market share of offshore BPO from 39% in 2001 to 46% in 2005. As per a McKinsey report entitled, 'NASSCOM-McKinsey Report 2005 – Extending India's leadership of the Global IT and BPO industries', Indian BPO revenues are expected to grow at a 37% CAGR to FY10.
Impressive margin expansion; trend likely to continue
During March 2007, Firstsource registered 30 basis points improvement in OPM in spite of large addition of employees, which were yet to be fully utilised. For the FY 2007, its OPM expanded by a solid 520 basis points to 19.8%.
The company can be expected to continue to improve its margin expansion on improving mix (e.g. acquisition of BPM Inc. to grow health claim adjudication skills), better seat utilization, also helped by increase in transaction processing revenues and SG&A leverage.
Management foresees all round growth in FY 2008
Commenting on the performance, Ananda Mukerji, MD & CEO said, "It's been a year of all-round achievement. We continued to grow both revenues and profits. Considerable progress was made in expanding our global delivery footprint with new centers being set up in USA, UK and Argentina . We also deepened our capabilities in the healthcare vertical and entered the domestic market with a significant contract. And last but not the least was Firstsource's listing on the Indian stock exchanges and the beginning of our relationship with global and Indian investors. We see a continued strong demand with clients looking for financially strong vendors with a sustained track record of delivery.''
Rajesh Subramaniam, CFO said, "Growth in profits and margin expansion this financial year has been on the back of high revenue growth benefits from economies of scale and operational efficiency. Going forward we see growth coming from strong demand in all our three verticals. In the BFSI sector for both collections and the joint Metavante-Firstsource service proposition, as also from healthcare services and the telecom business."
Aggressively expanding globular delivery centers
As of March 31, 2007 Firstsource had 24 centers with operations across India, US, UK & Argentina. During the year, Firstsource added 13 delivery centers; 8 overseas and 5 in India. The overseas centers are in Northern Ireland , Buenos Aires , Argentina and in the US. Firstsource's 5 centers in India are in Kolkata, Chennai, Vijaywada, Trichy & Kochi.
Firstsource's Philippines centre is expected to commence operations in Q1 fiscal 2008. This centre will initially have 150 seats
Newly struck alliances and strategic acquisition to benefit going forward
In April 2006 Firstsource entered into a strategic partnership with Metavante Corp. Metavante holds 20.18% stake in the company as of March 31, 2007. Metavante is the third largest provider of technology products and services to the financial services industry in the United States.
Firstsource is Metavante's exclusive offshore and preferred onshore BPO partner and has access to Metavante's banking domain consultants and preferred rights to the use of its widely-accepted technology platforms for providing outsourcing services to Metavante's over 1,000 clients which include, along with 91 of top 100 US banks, superregional, regional and local banks and financial institutions.
In January 2007 Firstsource acquired BPM Inc., a Delaware-based healthcare claims outsourcing company in the United States. The acquisition helped Firstsource deepen its proposition in the Healthcare vertical with enhanced capabilities in complex claims adjudication
Entering fast growing Domestic BPO market in a big way
Firstsource is entering the fast growing domestic market in a big way. It set up four new centers in Vijaywada, Kochi, Hubli & Trichy to provide BPO services to Hutch, a leading provider of telecom services in India. Its centers will have approx 2,000 seats. Firstsource views the domestic market as a very large opportunity where high quality BPO companies with international experience can bring significant value. NASSCOM-IDC estimates the domestic ITES-BPO market to be in the region of Rs 6608 crore with BFSI-Telecom verticals accounting for over 70% of the demand
Impressive client and employee addition
Firstsource added 22 clients in FY 2006-07.
Total number of clients as of March 31, 2007: 76 including 3 of the 5 largest US banks, 5 of 10 largest credit card companies in the US, 2 of the world's Top 10 telecom companies and 3 "Fortune 100" healthcare companies.
Top 5 clients contributed 51.4% of revenue in FY07 and 5 clients had revenues over Rs 50 crore.
Revenues from existing clients contributed nearly 94.2% to revenues
The company added 6,046 employees added for the full year with 3,679 added in the last quarter. It has 14,396 employees as on March 31, 2007. It has 2,182 employees in overseas.
Reasonable valuation
In FY 2008, we expect the company to register sales and net profit of Rs 1247.96 crore and Rs 178.27 crore without considering any inorganic growth. On fully diluted equity of Rs 461.00 crore and face value of Rs 10 per share, EPS works out to Rs 3.9. The share price trades at Rs 82. P/E works out to 21.2.

Citigroup- Canara Bank, Colgate, United Phosphorous, Wockhardt


Canara Bank

Colgate

United Phosphorous

Wockhardt

Motilal Oswal - Derivatives, Daily Margin, Corporate News, Market Diary, Market Action - May 4


Derivatives

Daily Margin

Corporate News

Market Diary

Market Action

Prabhudas Lilladher - Ahmednagar Forgings, Amtek India, Gateway Distripaks, JSW Steel, Sesa Goa


Ahmednagar Forgings

Amtek India

Gateway Distripaks

JSW Steel

Sesa Goa

SSKI - Jain Irrigation & TV18


Jain Irrigation

TV18

Sharekhan Investor's Eye dated May 03, 2007


ICICI Bank
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,173
Current market price: Rs866

Price target revised to Rs1,173

Result highlights

  • ICICI Bank’s fourth quarter results have been below expectations. Its profit after tax (PAT) has grown by 4% year on year (yoy) and declined by 9% quarter on quarter (qoq) to Rs825 crore compared with our estimate of Rs1,004 crore. The lower numbers are mainly on account of a lower than expected non-interest income.
  • We had expected a much higher non-interest income due to the National Stock Exchange (NSE) stake sale that was likely to fetch around Rs500 crore and a sustained robust fee income growth witnessed during the previous quarters. However, despite the NSE stake sale the total treasury income stood at Rs446 crore adjusted for the marked-to-market loss on the corporate bond portfolio, which implies an insignificant contribution from any other treasury income source. The core fee income was also lower with a sequential growth of only 6% compared with 18% and 15% sequential growth witnessed in the previous two quarters.
  • The core operations were in line with expectations. The net interest income was up by 30% yoy and 5% qoq to Rs1,789.7 crore compared with our estimate of Rs1,763 crore. The reported net interest margin (NIM) for Q4FY2007 stood at 2.66% compared with 2.6% in Q3FY2007 and 2.79% in Q4FY2006. However, excluding the one-time cash reserve ratio (CRR) interest of around Rs85 crore we feel there would be a sequential decline of five basis points in the NIM.
  • The bank plans to come out with a follow-on public offer (FPO) in the domestic and international markets by June 2007 to raise Rs20,000 crore. We have factored in a dilution of 23.5 crore equity shares at an offer price of Rs850 which will help the bank to raise the desired amount. The huge FPO of Rs20,000 crore would loom large over the bank’s return on equity (RoE) for the next couple of years as the RoE is expected to decline from over 13% to 11% in FY2008. The same has affected our sum-of-the-parts (SOTP) valuations for the bank and hence we have reduced our price target for the stock by 4.4% to Rs1,173.
  • After the bank announced its results the stock price declined by 7%, factoring in the lower than expected profit numbers and the unexpected announcement of an Rs20,000-crore FPO. We feel the correction in the stock price already captures these negatives and the downside risk is limited. However the upside potential based on the current market price of Rs866 remains at 35%. We continue to remain bullish on ICICI Bank due to the following facts. First, on the operational side, the Sangli Bank merger would add 195 branches, help to increase the low cost deposit base and improve the NIM going forward. Second, the possible listing of the insurance and asset management holding company would help to unlock significant value in the bank's subsidiaries.
  • We have upgraded our FY2008E PAT and FY2009E PAT by 1.6% and 1.5% to Rs4,016 crore and Rs5,120 crore respectively. At the current market price of Rs866, the stock is quoting at 19.2x its FY2009E earnings per share (EPS), 8.5x its pre-provision profit (PPP) and 2x FY2009E book value (BV). We maintain our Buy recommendation on the stock with the revised price target of Rs1,173.

Ahmednagar Forgings
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs380
Current market price: Rs250

On track

Result highlights

  • Ahmednagar Forgings reported a strong performance for Q3FY2007. Its net sales grew by 69% to Rs175.2 crore during the quarter.
  • The company has increased its capacity to 110,000 tonne per annum (tpa) and is currently operating at utilisation levels of about 64%. We expect the capacity ramp-up to strengthen the top line further in the coming quarters.
  • The margins saw a slight improvement, as the same expanded to 21% led by better operating efficiencies. The operating profit rose by 72.6% to Rs36.8 crore. The company has been able to maintain good margins despite a steep rise in steel prices in the past two years (its raw material cost has risen from 63.5% to 67.9% as a percentage of sales).
  • The interest cost was a bit higher due to the capital expenditure (capex) incurred by the company during the quarter. Stable depreciation and lower taxes aided the company to report an 86% improvement in its net profit to Rs20.5 crore.
  • At the current levels, the stock is discounting its FY2008E earnings by 6.8x and quoting at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 4.7x. We maintain our Buy recommendation on the stock with a price target of Rs380.

Subros
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs340
Current market price: Rs222

Price target revised to Rs340

Result highlights

  • Subros' Q4FY2007 results are slightly below expectations both on the top line front and the profit margin front. The net sales for the quarter grew by 8.7% to Rs183.3 crore.
  • Adjusting for the one time VRS expenditure, the operating margins of the company has increased slightly to 13% against 12.6% last year as higher raw material costs restricted margin growth. Consequently the operating profits for the year grew by 11.8% to Rs23.75 crore.
  • Higher interest and depreciation costs due to the commissioning of its new plant at Gurgaon affected the profitability further. Consequently, the company reported a 4% growth in its adjusted net profits to Rs10.1 crore.
  • Rising interest rates would have a negative impact on the whole automobile sector, which would also affect the volumes of companies like Subros. We are therefore downgrading our volume estimate for Subros and consequently cutting our earnings estimate for FY2008 by 23.5% to Rs32.8. We are introducing our FY2009 estimates for Subros and expect earnings of Rs40.1.
  • We maintain our positive outlook on Subros. At the current levels, the stock is available at attractive valuations of 5.5x FY2009E earnings and an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 2.2x. We maintain our Buy recommendation on the stock with a revised target of Rs340.

Bank of India
Cluster: Apple Green
Recommendation: Buy
Price target: Rs219
Current market price: Rs200

Price target revised to Rs219

Result highlights

  • Bank of India's (BOI) Q4FY2007 profit after tax (PAT) was way above expectations. It grew by 76% year on year (yoy) to Rs447 crore compared with our estimate of Rs288.9 crore, mainly due to an unexpected 78.0% year-on-year (y-o-y) jump in the non-interest income.
  • The net interest income (NII) grew by 28.8% yoy and 7.7% quarter on quarter (qoq) to Rs991 crore against our estimate of Rs973 crore. The NII figures are adjusted for one-off items to the tune of Rs40 crore and Rs107 crore in Q4FY2007 and Q4FY2006 respectively. Higher yields and controlled costs with a stable low cost deposit base have helped the bank to show an improvement in the margin sequentially.
  • The non-interest income was a surprise as it grew by 78% yoy and 79% qoq to Rs576 crore. The 40.4% y-o-y and 38.5% q-o-q growth in the fee income is very promising and looks to be sustainable, as it was driven by a growth in the core fee income generating businesses like remittances, cash management, bank guarantees etc.
  • The operating expenses grew by 22% yoy, in line with the business growth. The operating profit was up by 63.6% yoy and 49.5% qoq to Rs918.3 crore.
  • Provisions increased by 4.5% yoy and 27.5% qoq to Rs369.5 crore mainly on account of higher other provisions influenced by standard assets provision, as the non-performing asset (NPA) provisions reported a decline on y-o-y and q-o-q bases.
  • The bank's asset quality has showed consistent improvement with the net NPA and gross NPA both showing a decline in percentage and absolute terms. The net NPAs stood at 0.74% as on March 2007 compared with 0.95% reported in December 2006 while the gross NPAs showed a decline to Rs2,100 crore from Rs2,186 crore in the previous quarter.
  • We feel BOI has so far proved to be the best performing public sector bank (PSB) in FY2007 based on all parameters and its management has shown proper intent to maintain the improved performance. We have revised our FY2008E PAT by 15% to Rs1,352 crore, based on the improved earnings visibility for the bank. At the current market price of Rs200, the stock is quoting at 7.2x its FY2008E earnings per share (EPS), 3.1x pre-provisioning profit (PPP) and 1.5x FY2008E book value (BV). We maintain our Buy recommendation on the stock with a revised price target of Rs219.

Nicholas Piramal India
Cluster: Apple Green
Recommendation: Buy
Price target: Rs393
Current market price: Rs243

Q4 results above our expectations

Result highlights

  • Nicholas Piramal’s consolidated sales for the quarter were 52% higher at Rs645.2 crore on the back of a 13% increase in the domestic sales and a whopping 146% surge in the global revenues. The consolidation of businesses acquired from Avecia Pharmaceuticals and Pfizer's former Morpeth facility, UK has scaled up the global revenues.
  • It has reported a 480-basis-point expansion in the OPM to 13.2% in Q4FY2007, but the same was much lesser than the expectation of an OPM of 15.6% due to one-time charge of Rs20 crore. Otherwise, if we discount the one-time charge, the OPM expanded by 790 basis points to 16.3%.
  • It has reported an impressive growth of 260% year on year (yoy) in its consolidated net profit to Rs54.9 crore for Q4Y2007. The same is above our expectation of Rs50.5 crore.
  • In full year FY2007, the company's consolidated sales grew by 55.0% to Rs2,470 crore, while its operating profit increased by 83.0% to Rs380 crore. The net profit for the year was up 80.7% to Rs220 crore.
  • For FY2008, the company has guided for about a 100% growth in the contract manufacturing business and a 25% growth in the overall revenue. It expects to maintain the margin at 15.5%.
  • We revised FY2008 estimates and introduce FY2009 numbers as per which the company’s net earnings stand at Rs297.0 crore (a 30.1% growth) and at Rs355.3 crore (a 20% growth) for FY2008 and FY2009 respectively. At the current market price of Rs256, Nicholas Piramal discounts its FY2009 estimated earnings by 15.1x. We maintain a Buy call with a price target of Rs393.

Wockhardt
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs552
Current market price: Rs431

Results in line with expectations

Result highlights

  • Wockhardt's net sales increased by 48.7% to Rs522.8 crore in Q1CY2007. The growth came on the back of a 35% growth in the domestic business and a 57% growth in the international business. The sales growth was ahead of our estimates.
  • The sales in the European market grew by 93%, largely driven by the consolidation of the Pinewood acquisition. The sales in the US market grew by 15%.
  • Wockhardt's operating profit margin (OPM) expanded by 260 basis points to 22.2% in Q1CY2007. However, the margin picture remains clouded due to the capitalisation of research and development (R&D) cost. Adjusting for the capitalised cost of Rs18.5 crore, the OPM actually showed a decline of 100 basis points. The company reported an operating profit (OP) of Rs115.9 crore, a growth of 68.2% year on year (yoy). The decline in the margin was also attributed to the acquisition of the lower-margin Dumex and Pinewood businesses.
  • Wockhardt's pre-exceptional net profit rose by 17% to Rs66.3 crore. The growth was despite higher interest cost, depreciation charge and tax outgo. The profit was in line with our estimates.
  • Wockhardt has announced the acquisition of France-based Negma Laboratories (Negma), with sales of $150 million and earnings before interest, tax, depreciation and amortisation (EBITDA) margin of around 18%, in an all-cash deal worth $265 million. This acquisition is in line with the company's aim to achieve a turnover of $1 billion by 2009. With its successful track record of creating value post-integration, we believe the acquisition of Negma too will be value accretive for Wockhardt. We await details of the acquisition, after which we will review our numbers to incorporate the same into our estimates.
  • At the current market price of Rs431, the stock is available at 14.2x its CY2007E and 12.4x its CY2008E earnings, on a fully diluted basis. The valuations seem very attractive at these levels and should be viewed as a strong buying opportunity. We maintain our Buy recommendation on the stock with a price target of Rs552.

Selan Exploration Technology
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs101
Current market price: Rs84

Price target revised to Rs101

Result highlights

  • Selan Exploration Technology (Selan) has announced a growth of 93.2% in its net sales for Q4FY2007 to Rs8.5 crore. The growth was higher than expectations due to a surge in the volumes during the last quarter. The average realisation of $55 per barrel was lower than the average of $58 per barrel realised for the full year.
  • The operating profit margin (OPM) improved considerably to 61.6%, up from 43.7% in Q4FY2006. Consequently, the operating profit grew by 171.9% to Rs5.2 crore.
  • The adjusted net profit grew by 134.7% to Rs3.4 crore, up from Rs1.4 crore in Q4FY2006 (adjusted for the one-time income of Rs1.9 crore).
  • On a full year basis, the net sales grew by 39.8% to Rs26.2 crore, driven by a 39% increase in the volumes. The company crossed the mark of one lakh barrels of oil sold during FY2007. The margins were largely flat and the adjusted net profit grew by 60% to Rs10.6 crore.
  • Encouraged by the positive results of the first phase of the development of its oil fields, the company intends to drill six to eight new wells during the current fiscal. The incremental volumes from the commercialisation of new wells (two wells in Bakrol during Q4) and the expected addition from the phase II of development in the current fiscal are expected to boost the overall production volume by 40-50% in the current year.
  • At the current market price the scrip trades at 7.5x FY2008 and 5.8x FY2009 estimated earnings. We maintain Buy call on the stock with a revised price target of Rs101 (7x FY2009 estimated earnings and 1.2x enterprise value [EV]/oil reserves [proven and probable]).

Canara Bank
Cluster: Apple Green
Recommendation: Buy
Price target: Rs268
Current market price: Rs226

Q4FY2007—first-cut analysis

Result highlights

  • Canara Bank's results have been much above our and market's expectations with the profit after tax reporting a growth of 2.3% to Rs505 crore compared with our estimate of a 10% year-on-year decline to Rs444 crore. The profit growth is higher mainly due to a very high growth witnessed in the non-interest income category.
  • The net interest income (NII) is up by 7.7% to Rs1,059 crore compared to our estimate of Rs1,083 crore.
  • The non-interest income has zoomed by 51% year on year (yoy) and 109% quarter on quarter (qoq) to Rs626.2 crore. However a detailed break-up of the same is still awaited.
  • The operating expenses grew by a marginal 1% yoy to Rs633 crore. The operating profit was up by 36.4% yoy and 50% qoq to Rs1,052 crore. The growth was primarily driven by a higher non-interest income.
  • Provisions increased by 66.1% yoy and 89% qoq to Rs497 crore mainly on account of higher depreciation on investments provided on the marked-to-market investment book. Higher standard assets provisioning requirement also kept the provisions elevated as the non-performing asset (NPA) provisions declined by 67% yoy to Rs102 crore from Rs306 crore in Q4FY2006.
  • Higher cash recoveries during the year to the tune of Rs1,025 crore as against Rs972 crore during the previous financial year helped the bank to bring down its gross NPAs. In absolute terms, the gross NPAs have reported a sequential decline of Rs380 crore while the net NPA ratio has declined sequentially from 0.96% to 0.94%.
  • Canara Bank's global business grew by 23% yoy to Rs240,887 crore as in March 2007. Aggregate deposits grew by 22% to Rs142,381 crore and advances were up 24% yoy to Rs98,506 crore.
  • The higher non-interest component in this quarter has caused the bank's PAT to grow by 2.3% yoy to Rs505 crore compared to our estimate of Rs444 crore. We would provide our detailed result update later. At the current market price of Rs226, the stock is quoting at 6x its FY2008E earnings per share, 3x pre-provisioning profit and 1x FY2008E book value. We maintain our Buy recommendation on the stock with the price target of Rs268.

Bharat Electronics
Cluster: Apple Green
Recommendation: Buy
Price target: Rs2,020
Current market price: Rsx1,740

Price target revised to Rs2,020

Result highlights

  • For Q4FY2007, Bharat Electronics Ltd (BEL) has announced a growth of 10.1% in its net sales to Rs1,734.2 crore, which is lightly lower than our expectations.
  • The operating profit margin (OPM) has improved smarty by 150 basis points to 28%, primarily due to the saving of 460 basis points in the raw material cost as a percentage of the sales. On the other hand, the higher staff cost and the other expenses had an adverse impact of 210 basis points on the margin.
  • In addition to the margin expansion, the 62.8% growth in the other income resulted in a robust growth of 27.1% in the earnings to Rs357.1 crore, which is ahead of our expectations of around Rs330 crore.
  • On a full year basis, the net sales have grown by 9.4% to Rs3,894.3 crore. The OPM has improved by 50 basis points to 24.2%, largely due to the savings in the raw material cost as a percentage of sales. Moreover, the jump of 69.1% in the other income component aided the growth in the earnings, which grew at a relatively higher rate of 22.4% to Rs713.9 crore.
  • The highlight of the performance was the much higher than expected jump in the order backlog to Rs9,000 crore. This coupled with the recent alliances/tie-ups with global defence companies has vastly improved the growth visibility in the revenues.
  • To factor in the same, we have revised upwards the earnings estimate of FY2008 by 10.9% and have also introduced our FY2009 estimate in the note. At the current price, the stock trades at 12.5x FY2008 and 9.9x FY2009 estimated earnings (price has been adjusted for cash on the books). We maintain the Buy call on the stock with a revised price target of Rs2,020 (rolling over the target price on FY2009 estimates; 12.5x FY2009 earnings plus the estimated free cash on the books).

SECTOR UPDATE

Automobiles

Interest rate blues
The downfall in the two-wheeler segment continued in the month of April, with only the market leader Hero Honda Motors recording positive growth numbers. The slow-down can also be seen in the commercial vehicle (CV) segment, particularly in the medium and heavy commercial vehicle (M&HCV) segment. The same is evident from the 14.2% drop in the M&HCV sales of Tata Motors for the month. Led by strong performance of its new launches, Maruti Udyog continued to report strong numbers in April.

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Sharekhan Investor's Eye dated May 03, 2007