14 January 2011

Macquarie Research: Weekly US oil data Not entirely bearish, though not strong

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Weekly US oil data
Not entirely bearish, though not strong
We think this morning‘s DoE weekly oil report erred on the bearish side, though
there were a few highlights. The biggest negative was obviously the turn in product
stocks, which had previously dropped for 15 consecutive weeks. Demand growth in
gasoline and diesel did not look particularly strong last week either. That said, it is
typical for nearly all stocks to build in January, so the number was not entirely
unexpected—it merely takes a gust of wind away from crude‘s fundamentals-driven
momentum higher. As for demand, the headline number remains constructive, with
annual growth continuing to come in north of 4%.

Bank of Baroda - structural rerating to continue; Buy:: Edelweiss,

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Bank of Baroda - structural rerating to continue; quality deserves premium; visit note; Buy


We recently met Mr. M.D. Mallya, Chairman & Managing Director, Bank of Baroda (BoB), and the bank’s top management team. Their body language was positive which reaffirmed our confidence in the bank’s fundamentals. Management reiterated that margin slide will be marginal given the focus on ALM and asset quality will continue to be superior. It sounded confident that pension liability will not lead to any disproportionate rise in employee cost or hit on earnings. We believe BoB is in a league of its own in terms of superior fundamentals amongst PSU banks and, hence, continue to perceive it as our top pick.

MSFL Research -Dishman Pharma:: Better times ahead

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Dishman Pharma:: Better times ahead



We met the CFO Mr. V.V.S Murthy of Dishman Pharma and believe that the turnaround in the business is very much round the corner. Following are the key takeaways of the meet.
CRAMS business reaching normalcy:
Last 6 quarters have been very bad for the company majorly due to i) Recession which had resulted in reduction in R&D costs from innovators as close to 65-70% of Carbogen Amcis (CA) sales comes from contract research. CA contributes 55.5% to its CRAMS sales and 40.2% to overall sales. ii) One of its major customers Solvay got acquired by Abbott which had contributed almost 18% to its overall topline.

India Pharma Sector 3QFY11 preview – Sustained momentum: Anand Rathi

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India Pharma Sector
3QFY11 preview – Sustained momentum
We expect pharma companies in our coverage to witness steady
revenue growth, ex CRAMS space, which has not picked up since
the slowdown in CY10. EBITDA margin would be slightly hit due
to higher staff costs. Adjusted net profit growth would remain
muted at 5% yoy, owing to lower margin and higher tax rate.

Rural Electrification, REC CMD on SEB finances: :Motilal oswal,

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THE CORNER OFFICE: REC CMD on SEB finances

-     Deterioration in the financial health of SEBs has gained wide attention and the Prime Minister's Office (PMO) has appointed a high level committee headed by Mr V K Shunglu to review the financials of SEBs. The Committee has been asked to submit its report by February 2011.

-     Increase in losses of SEBs has raised concerns relating to asset quality of power financing companies.

-     Stiff competition from banks and various government initiated schemes like RGGVY, R-APDRP is impacting business growth for REC in the T&D segment.

-     Higher competition and rising cost of funds is leading to spread compression. REC had reported spreads of 330bp for 1HFY11.

-     Dr J M Phatak is the Chairman & Managing Director of Rural Electrification Corporation (REC). Before joining REC, he was Additional Secretary, Ministry of Panchayati Raj, Government of India. Dr Phatak is an IAS officer of the 1978 batch from the Maharashtra cadre, with 32 years of service. He has extensive experience in city governance. He has served as Principal Secretary, Urban Development, Government of Maharashtra.

HERO HONDA MOTORS - Growth All Around!!! K R Choksey

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Hero Honda: Growth All Around!!! HOLD
Company:
Hero Honda Motors Ltd. is the world's largest manufacturer of two – wheelers,
based in India. The company is a joint venture between India's Hero Group and
Honda Motor Company, Japan that began in 1984. Hero Honda is a world leader
because of its excellent manpower, proven management, extensive dealer
network, efficient supply chain and world-class products with cutting edge
technology from Honda Motor Company, Japan. The teamwork and commitment
are manifested in the highest level of customer satisfaction, and this goes a long
way towards reinforcing its leadership status.

HSBC Research:: Reliance Communications- Upgrade to Neutral on valuation

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Reliance Communications
Upgrade to Neutral on valuation
 See limited impact on operations from the CAG reportrelated
actions, but expect sentiment to weigh on the stock
 Break-up value of assets to provide downside support
 Upgrade to N from UW (removing V flag); cut target price to
INR152 from INR170

Coal India: “Mining” the gains :Takeaways from site visits: Motilal Oswal

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Coal India: “Mining” the gains
Subtle improvement in business philosophy at ground level
The Indian power sector is reeling under tremendous pressure in terms of
domestic coal availability (38m tons of imports in FY10, ~9% of the fuel basket).
A recent report by the Planning Commission estimates possible imports of 100m
tons+ in FY12 for the power sector, ~20% of the total fuel basket. Global coal
prices have started moving up (RB index up 31% since April 2009), M&A
transactions are becoming expensive and coal availability is an issue worldwide.
In this backdrop, we met various business heads and senior management of Coal
India, and visited Jhanjra underground coal mines of Eastern Coalfields at Raniganj.

BofA ML:: Idea Cellular - M&A speculation revives

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Idea Cellular Ltd.
M&A speculation revives
􀂄 CEO resignation renews expectations of ownership change
Mr. Sanjeev Aga, Managing Director of Idea Cellular will be leaving office from
April 2011 but will continue as a director on the board. Mr. Himanshu Kapania is
the new MD-designate and is currently Director - Operations in charge of all the
company’s circles in South and West India. The stepping down of Mr Aga ahead
of his scheduled retirement, and at the cusp of regulatory and competitive
changes in the industry has renewed market expectations about possible
ownership changes at Idea, as previously widely speculated in the media. Idea is
tightly held; ~47% stake is with the Aditya Birla group, ~19% is with Axiata, and
Providence owns ~10%.

Infosys Technology: Result Update:: ICICI Securities

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Expectations need to be tempered…
Infosys reported its Q3FY11 numbers below heightened Street
expectations with 6% QoQ US dollar revenue growth. Though notable
positives include 26,000 campus offers, >5,000 lateral hires, application
development (5.9% QoQ growth), Europe (5.9%) and 1.6% reported
currency (up 0.5% in constant currency), pricing uptick, at 3.1% volume
growth, was tepid. Noticeably,  | 118.9 as FY11E EPS guidance leaves
significant delta relative to consensus EPS at about | 122 and implies a
lower FY11E exit rate. While FY12 earnings downgrades are unlikely,
upgrades could be restricted leaving limited upside in the near term.
Consequently, we maintain ADD but raise our price target to | 3350 (|
3195 earlier) and believe investors could get an attractive entry point at
lower levels.

HSBC Smart Idea :: Buy Alok Industries Ltd

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Alok Industries Ltd Buy
Alok Industries Ltd, one of the largest textile companies in India, is a
vertically integrated company having operations from spinning to
garmenting and home textiles stage to retailing stage. It operates in
cotton as well as polyester segment with a balanced revenue mix to
garner opportunities in the optimistic demand scenario of textile sector.
Reaping the benefits of the aggressive expansion undertaken in the last
six years, Alok Industries is in a sweet spot to benefit from global vendor
consolidation.Growth Drivers

BUY CITY UNION BANK :Impressive track record and superior asset quality: Centrum

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City Union Bank: Impressive track record and superior asset quality


Investment arguments
Impressive track record over a century: City Union Bank (CUB) is one of the
oldest and well managed old private sector banks and has had a consistent track
record, of profits and dividends during most of the years in its over 100 years of
operations. Over the last five years, CUB has grown its net profits by 30 per cent
(CAGR) while its business has grown by 27 per cent (CAGR). The bank also scores
above most of its peers on operational parameters, having an ROA of 1.98 per cent
and ROE of 27.31 per cent in Q2FY11. CUB has been aggressively growing its
branch network - currently, it has 229 branches and the management has plans to
grow its branch network to 500 branches over the next 3 years.

Citi research: Moser Baer India (MOSR.BO) Alert: Fund Raising in Private Entity

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Moser Baer India (MOSR.BO)
Alert: Fund Raising in Private Entity
 What's New — Press reports suggest that Moser Baer Projects Private Ltd
(MBPPL, a non-listed entity), promoted by the founders of Moser Baer India Ltd
(MBIL, the listed entity), has announced a fund raising of Rs5.8b from Macquarie
SBI Infrastructure Fund. The investors have taken a 'significant minority stake' in
MBPPL's 2,520MW thermal power project at Anuppur in Madhya Pradesh. The
first phase of this project with capacity of 1,200 MW will cost Rs62.4b and is fully
funded, according to press reports (e.g., in livemint.com and Reuters).

Indraprastha Gas- Better‐than‐expected performance:: Prabhudas Lilladher

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Indraprastha Gas- Better‐than‐expected performance:: Prabhudas Lilladher



Indraprastha Gas’ (IGL’s) Q3FY11 result was below our expectation on the top‐line
front, while it was above expectation on the bottom‐line front. Top‐line registered a
growth of 59.7% YoY to Rs4,571m (Rs2,863m) as against our expectation of
Rs4,694m. The lower‐than‐expected top‐line was largely on account of lower‐thananticipated
volumes during the quarter. However, EBITDA/scm was higher than our
estimates on account of lower‐than‐anticipated gas cost during the quarter. Raw
material cost was at Rs10.4/scm as against our expectation of Rs10.7/scm. Bottomline
during the quarter stood at Rs672m (Rs589m), registering an increase of 14.0%
YoY v/s our expectation of Rs647m during the quarter. We recommend a ‘BUY’
rating on the stock.

Buy Infosys Technologies Ltd: Target Rs 3,750

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Infosys reported USD revenue growth of 5.9%QoQ led by
volume growth of 3.1%QoQ. It was tad disappointing
because of lower volume growth (guidance for Q3 was 3.5-
4.5%QoQ, which was purely volume led) and hence lower
EPS, and also due to muted outlook for Q4. We expect a
strong revenue growth in FY12E, which is echoed by the
management’s broad outlook of 18-20%YoY USD revenue
growth for FY12 at this point of time.

CLSA recommends Sun Pharma to Out Perform as Sector Leader

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Sun Pharma
Rs482.75 - OUTPERFORM


Sector leader
Niche US opportunities, margin upsides from restructuring at Taro
Pharma and steady domestic business will drive strong earnings growth
in Sun Pharma. We see reasonable upsides to our estimates as niche
launches in the US like Taxotere, Stalevo and Eloxatin pan out over the
next two years. Including those, we see 29% net profit cagr over FY11-
13CL and see premium valuations sustaining. We raise our target price to
Rs532/ share based on 22x FY13CL EPS. O-PF.

CLSA: Buy Voltas-Strong growth from FY12 onwards

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Voltas
Rs209.55 - BUY


Strong growth from FY12 onwards
FY11 is likely to be a mixed bag for earnings, with sharp growth in engineering
products and unitary cooling businesses offsetting disappointing performance in
electro-mechanical products division. However, we expect 43% growth in new
orders which sets the tone for coming years. Voltas will benefit from a surge in
infrastructure spending in India and Middle East and its JV with Olayan allows it to
participate in Saudi Arabia market, the largest spender in the GCC. In India, Voltas
is already seeing strong traction in new water and power businesses. We forecast
26% Cagr in orders and a 21% in profits over FY11-14; maintain BUY.

FII DERIVATIVES STATISTICS FOR 14-Jan-2011

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FII DERIVATIVES STATISTICS FOR 14-Jan-2011 
 BUYSELLOPEN INTEREST AT THE END OF THE DAY 
 No. of contractsAmt in CroresNo. of contractsAmt in CroresNo. of contractsAmt in Crores 
INDEX FUTURES1023762923.85954612716.0142943412038.59207.84
INDEX OPTIONS51235714624.2047724713674.01178746750357.37950.20
STOCK FUTURES935162573.52855082366.61130518433472.67206.90
STOCK OPTIONS20840627.0822066655.7921637614.75-28.71
      Total1336.23

 

FII & DII trading activity on NSE and BSE as on 14-Jan-2011

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FII & DII trading activity on NSE and BSE as on 14-Jan-2011


The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 14-Jan-2011.
FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
FII14-Jan-20112020.722769.32-748.6
Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment
The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 14-Jan-2011.
DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
DII14-Jan-20111381.91091.79290.11
 

Sell JSW Energy: Downgrade earnings:: CLSA research

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Sell JSW Energy: Downgrade earnings:: CLSA research 



We are cutting FY11-13 earnings for JSW Energy by 17-40% to factor in
higher thermal coal prices and delayed commissioning of Ratnagiri and
Barmer power projects. With limited control on its coal supplies and large
amount of power capacity which is outside PPAs, JSW Energy is
vulnerable in the current scenario of rising coal prices and falling short
term tariffs. There could be some respite with the company supplying
some power to Ispat Industries and entering into PPAs for its untied
capacity. We maintain our SELL rating with a reduced target price of
Rs88/sh.

Sintex Industries – 3QFY2011 Result Update- Angel Broking

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Sintex Industries – 3QFY2011 Result Update

Angel Broking maintains a Buy on Sintex Industries with a Target Price of Rs229.
For 3QFY2011, Sintex reported above expectation results. Strong revenue and
profit growth of 39.9% yoy and 55.7% yoy, respectively, was mainly led by the
monolithic segment and international subsidiaries. The recent acquisition of DCPL
has strengthened Sintex’s geographical footprint and the monolithic segment’s
product portfolio. Management has reiterated its strong outlook for the domestic
plastic segment and has clarified that future investment of `100cr–140cr by
FY2013 in the power segment is purely for captive consumption, which will
improve margins over the long term. We maintain Buy on Sintex.

headline inflation rises in line with expectations -~8.4% Y-o-Y for December: Edelweiss

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NSE, Bulk deals, 14-Jan-2011

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Symbol
Security Name
Client Name
Buy / Sell
Quantity Traded
Wght. Avg. 
Price
AMTEKAUTO
AmtekAuto-Roll Sett
AXIS BANK LIMITED
BUY
12,00,000
123.49
AMTEKAUTO
AmtekAuto-Roll Sett
AXIS BANK LTD
SELL
11,15,000
123.45
AMTEKAUTO
AmtekAuto-Roll Sett
UBS SECURITIES ASIA LTD. A/C SWISS FIN. CORP. (MAU
SELL
15,69,246
120.20
CANFINHOME
Can Fin Homes Ltd
RAJEN CHANDRAKANT SHARE A/C
BUY
1,09,888
122.16
CANFINHOME
Can Fin Homes Ltd
RAJEN CHANDRAKANT SHARE A/C
SELL
81,755
122.16
HARRMALAYA
Harrisons Malayalam Ltd
AJAY
BUY
1,40,148
90.69

BSE, Bulk deals, 14/1/2011

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Scrip Code
Company
Client Name
Deal Type *
Quantity
Price **
532114
Alchemist Rlty
VARINDER PAL SINGH
B
400000
11.75
532114
Alchemist Rlty
AMANDEEP
S
400000
11.75
590033
APW President
RAJASTHAN GLOBAL SECURITIES LTD
B
33594
182.45
512535
Asahi Infra
NARESH CHAND JAIN
B
184683
11.57

FII & DII Turnover (BSE + NSE) 14/1/11

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FII & DII Turnover (BSE + NSE)
(Rs. crore)
FIIDII
Trade DateBuySalesNetBuySalesNet
14/1/112,020.722,769.32-748.601,381.901,091.79290.11
13/1/113,370.213,619.98-249.771,405.471,163.05242.42
12/1/113,366.803,738.30-371.501,495.931,136.72359.21
Jan , 1127,934.1432,213.28-4,279.1415,155.6412,120.713,034.93
Since 1/1/11   *27,934.1432,213.28-4,279.1415,155.6412,120.713,034.93