11 February 2011

CLSA: Buy M&M -Strong 3Q results; target Rs875

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Strong 3Q results
M&M reported a strong 46% YoY growth in net profits in 3Q driven by strong
volume growth and relatively stable margins. Cost pressures are rising but
with strong growth outlook for both UVs and tractors, multiple new launches
and minimal incremental competition, M&M is best-placed to defend margins
at 15%. We maintain our FY11-13 profit forecasts but cut EPS by 3%
factoring in dilution from the ESOP trust share allotment. Our target price
drops to Rs875 (34% upside) on account of the dilution. M&M remains our top
pick in India Autos. Maintain BUY.

Citi Research: Indian Real Estate Time to Add Some Exposure; Buy Prestige

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Indian Real Estate
Time to Add Some Exposure; Initiate Coverage of Prestige at Buy
 Negatives priced in; Initiate Prestige at Buy/Medium Risk — Asset prices
are at highs; stock prices are at cyclical lows – we believe likely price cuts are
largely factored in, presenting an opportunity to start adding exposure. We
initiate Prestige at Buy/Medium risk – a play on Bangalore (our preferred micro
market with modest price increases, IT Services recovery helping commercial
demand/purchasing power), with a proven track record of execution. We
continue to be selective: we prefer DLF (quality land bank, good rental annuity
support), Prestige & Phoenix Mills. IBREL remains a high-risk pick in the sector.

Indiabulls Real Estates -Attractive Valuations, But A High Risk Pick:: Citi research

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Indiabulls Real Estates (INRL.BO)
Attractive Valuations, But A High Risk Pick
 Execution picking up, real estate business is showing numbers — The
real estate business has started contributing to revenues starting Q1FY11.
The company has launched several projects, which have garnered a good
response. Execution of ongoing projects is proceeding well. The stock trades
at ~50% discount to base NAV, which is attractive in our view, but it remains
a high risk play in the sector. An improving risk appetite and macro
environment could result in meaningful upside in the stock, in our view.

Citi:: Unitech - Reasonable on Valuations after the Fall but Overhang Remains

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Unitech (UNTE.BO)
Reasonable on Valuations after the Fall but Overhang Remains
 New Base NAV of Rs 85 vs Rs 113— Our new NAV adjusts for the
following: a) roll forward to Dec-11; b) built-in 50% discount to the telecom
business (vs earlier valuation) on the back of concerns; c) further delays to a
few projects; d) updated current prices and cost of construction; e) increased
cost of capital to 17.3% versus 13% earlier - this assumes debt costs at 12%,
long-term DE of 0.5, risk-free rate of ~8%, a market premium of 8% and tax
rate of 30%.

Citi research: DLF - Commercial Pick-Up A Big Plus

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DLF (DLF.BO)
Commercial Pick-Up A Big Plus
 What we like in DLF — DLF has a diversified and a superior land bank with
good city-centre exposure. Also, the commercial market is doing well - DLF
will end FY11 leasing ~5-6msf, one of the best years in terms of leasing. D/E
at ~0.79x is high; however, we believe DLF is capable of servicing such debt
levels, as the strong rental annuity of ~Rs 16bn should support.

IIP - Base effect pulls down IIP growth to 20-month low: Edelweiss

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The Index of Industrial Production (IIP) grew a paltry 1.6% in December against 3.6% in the previous month. While the monthly data remains volatile, the broader moderation in industrial activity is well observed in the 3MMA Y-o-Y data. Nonetheless, high base effect for the month clearly exaggerated the weakness in production, as sequential growth (M-o-M 3MMA SA) at ~1% was stronger than the trend in recent months. Pick up in exports in Q3FY11 seems to have supported industrial activity. Among the components of IIP, weakness in consumer non-durables persists, with production declining for the second straight month Y-o-Y, possibly reflecting the impact of high and sticky inflation. The durables category, on the other hand, has grown strongly, though growth momentum has moderated in recent months. Production of capital goods remains volatile, but the broader trend (on moving average basis) continues to depict meaningful moderation, particularly in the past three months. Overall, we believe that soft patch in industrial activity will continue in the coming months, with March seeing significant high base effect. While pick-up in exports augurs well for industrial activity, tightness in liquidity, rising interest rates and wage pressures pose a challenge. 

Prestige Estates, Initiate at Buy; TP of Rs 170:; Citi research

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Prestige Estates Projects Ltd (PREG.BO)
Proxy Play on Bangalore & Commercial
 Initiate at Buy with a TP of Rs 170 — Our bullish view is based on a)
strong execution track record; b) attractiveness of Bangalore market –
pricing should hold given moderate increases in the recent past and volumes
should be helped by the boom in IT services; c) attractive ~35% disc to NAV
– stock has underperformed Sensex by ~21% over the past three months.

Citi: Phoenix Mills - Timely Execution of Market Cities: The Key to Re-Rating

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Phoenix Mills (PHOE.BO)
Timely Execution of Market Cities: The Key to Re-Rating
 HSP, a cash cow, provides strong valuation support — A high-yielding
asset - High Street Phoenix (HSP) Mall in Lower Parel, which is ~55% of
NAV, makes Phoenix Mills a differentiated and defensive play unlike its
peers, whose developmental portfolios largely dominate (60-85%) their NAVs
and thereby increase their risk profiles.

Credit Suisse:: Telecom- TRAI revised spectrum pricing proposals - more confusion?

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India Telecom Sector ------------------------------------------------------------------------------------------
TRAI revised spectrum pricing proposals - more confusion?


● TRAI released revised recommendations on spectrum pricing, as
a follow up to similar proposals released in May-10.
● The document aims to address the key issues of renewal charges
and price of spectrum beyond 6.2MHz.
● The impact from new proposals, if implemented, are not different
from the May-10 proposals for Bharti and Idea at 13% and 48% of
fair value respectively. For RCOM, the impact would reduce from
31% to 16% (due to differential pricing of smaller spectrum
allocations).
● Further, by setting a benchmark for spectrum upto 6.2MHz, TRAI
has ensured that the process of allocating additional spectrum to
new entrants who currently have 4.4MHz will be mired in
controversy.
● We believe that regulatory newsflow over the next few months will
remain volatile for the sector, in the run up to budget session and
state elections. However, post these events we expect regulatory
noises to mellow down. With a longer term view, we still like Bharti
and Idea with OP ratings.

Cognizant Technologies: Q4CY10 Update: Centrum

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Market share gain to slow in 2011
QoQ revenue growth of 7.7% capped a strong 2010 (40%
revenue growth vs. 25-30% for top tier Indian peers and 16-
18% for the industry). We believe Cognizant has benefited
disproportionately from the burst of pent-up demand that
occurred in the offshore space in 2010. We, therefore, do not
expect the large growth gap that existed in 2010 to sustain.
Considering the company’s large exposure to financial
services (~55% if one were to include healthcare payers), we
believe some of the one-off opportunities it addressed in 2010
might entail relatively lower growth, going forward. While we
still believe that Cognizant would outperform, the extent will
likely narrow significantly. Strong growth prospects and
superior ROIC (next only to Infosys) makes it one of our
preferred stocks. We, however, maintain our Hold rating as
current valuations leave little for investors.

Buy Allcargo Global Logistics: Q4 & CY10 results: Centrum

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Volume growth to drive valuations
Allcargo Global Logistics’ (Allcargo) Q4 results were
mixed compared to estimates. While volume growth
helped boost revenues, cost pressure and margin
contraction led to lower profitability. Container volumes
remained buoyant (up 17.7% YoY and 3.2% QoQ) at
123,443 TEUs. The CFS (container freight station)
segment recorded the highest-ever volume in Q4 at
63,729 containers on the back of robust port volumes
and timely capacity expansion.

Macquarie: Weekly US oil data - Seasonally weak fundamentals

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Weekly US oil data
Seasonally weak fundamentals
Normally, seasonally weak crude oil fundamentals push oil prices down in early
February. But of late that running theme in weekly US oil data is just one of the
factors driving prices. Today, for instance, a weaker dollar, more upbeat news on the
US recovery, and a string of supply issues as well as anxiety about instability in
North Africa and the Mideast are all pushing Brent oil futures back up above
US$100/b again, while WTI is struggling to end the day unchanged. While the
structure of Brent futures curves has deteriorated materially in the last five trading
days, Brent flat price is within 1% of where it was a week ago.

FII & DII trading activity on NSE and BSE as on 11-Feb-2011

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FII trading activity on NSE and BSE on Capital Market Segment
The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 11-Feb-2011.
FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
FII11-Feb-20113206.613744.32-537.71
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 11-Feb-2011.
DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
DII11-Feb-20111343.41823.74519.67
-- 

FII DERIVATIVES STATISTICS FOR 11-Feb-2011

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FII DERIVATIVES STATISTICS FOR 11-Feb-2011 
 BUYSELLOPEN INTEREST AT THE END OF THE DAY 
 No. of contractsAmt in CroresNo. of contractsAmt in CroresNo. of contractsAmt in Crores 
INDEX FUTURES1394383657.45924532426.9956655415050.761230.46
INDEX OPTIONS3726469785.983628729531.35199191852883.02254.63
STOCK FUTURES1034132505.09983072423.73121449728919.7381.37
STOCK OPTIONS24087653.5123360632.4923065596.9821.02
      Total1587.48

 
 

BSE, Bulk deals, 11/2/2011

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Scrip Code
Company
Client Name
Deal Type *
Quantity
Price **
524448
Ahlcon Par
RAJIV KUMAR RELAN
B
187920
40.65
524448
Ahlcon Par
ABHISHEK FINANCE CO.LTD.
S
189300
40.67
532875
Allied Digit
JMP SECURITIES PVT LTD
B
325502
78.34
532875
Allied Digit
JMP SECURITIES PVT LTD
S
307254
78.25
532875
Allied Digit
T ROWE PRICE INTERNATIONAL A/C NEW ASIA FUND
S
359306
78.35
524760
Arvind Intl
RAJESH NAVLANI
B
55350
10.85

NSE, Bulk deals, 11-Feb-2011

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Symbol
Security Name
Client Name
Buy / Sell
Quantity Traded
Wght. Avg. 
Price
ADSL
Allied Digital Services L
T ROWE PRICE INTERNATIONAL A/C NEW ASIA FUND
SELL
2,92,002
78.25
BEDMUTHA
Bedmutha Indust Ltd
RAJ FINVEST
BUY
1,65,581
89.40
BEDMUTHA
Bedmutha Indust Ltd
RAJ FINVEST
SELL
95,634
88.58
GITANJALI
Gitanjali Gems Limited
MODY RAJU ANOPCHAND
BUY
4,50,000
224.10

Change in the Constituents of Index - Nifty & IT Index

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Members are requested to refer to the press release issued by IISL dated February 10,
2011 in respect of the change in the constituents of S&P CNX Nifty Index and CNX IT
Index w.e.f. March 25, 2011. The details of the changes are as follows:
1. S&P CNX Nifty Index
The following company is being excluded:
Sr. No. Company Name Symbol
1 Suzlon Energy Ltd. SUZLON
The following company is being included:
Sr. No. Company Name Symbol
1 Grasim Industries Ltd. GRASIM


2. CNX IT Index
The following companies are being excluded:
Sr. No. Company Name Symbol
1 Firstsource Solutions Ltd. FSL
2 Moser Baer India Ltd. MOSERBAER


The following companies are being included:
Sr. No. Company Name Symbol
1 3i Infotech Ltd. 3IINFOTECH
2 OnMobile Global Ltd. ONMOBILE


For and on behalf of
National Stock Exchange of India Limited
Suprabhat Lala
Vice President


Clients, NRI, Proprietary trading activity 2/11/2011

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(Rs. crore)
Clients
Trade Date
Buy
Sales
Net
11/2/2011
2,257.03
2,274.02
-16.99
10/2/2011
2,354.34
2,368.32
-13.98
9/2/2011
2,510.38
2,512.00
-1.62
Feb , 11
19,972.84
20,550.03
-577.19
Since 1/1/11
66,254.81
66,699.95
-445.13
(Rs. crore)
NRI
Trade Date
Buy
Sales
Net
11/2/2011
1.38
0.32
1.06
10/2/2011
1.10
0.40
0.7
40788
1.10
0.48
0.62
Feb , 11
10.93
5.02
5.91
Since 1/1/11
36.70
31.90
4.81
(Rs. crore)
Proprietary
Trade Date
Buy
Sales
Net
11/2/2011
738.68
728.82
9.86
10/2/2011
821.99
837.17
-15.18
40788
828.41
852.12
-23.72
Feb , 11
6,241.83
6,354.65
-112.82
Since 1/1/11
19,734.62
20,030.36
-295.74