28 June 2011

India IT Services: Strong 3QFY11 results from Accenture point to healthy demand environment for Indian IT:: JPMorgan

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


 Accenture (covered by our US IT analyst Tien-Tsin Huang) reported a robust
Q3 meaningfully ahead of consensus and J.P. Morgan (revenue) estimates,
pointing to continued healthy spending environment. The company reported
impressive  revenue  growth and bookings  for both consulting and  outsourcing
businesses.  Management  suggested  that  discretionary  spending  continues  to
grow  and  macro  economic  concerns  do  not  seem  to  have  impacted  clients’
willingness/ability to invest for future growth. Public sector revenues were light,
which is  understandable  given  difficult  fiscal  situation  (in the US  and  certain
European countries); however it is not likely to impact overall revenue growth
meaningfully.  Management  pointed  out  that  clients  continue  to  spend  to
position  themselves  for  global  opportunities,  to  be  compliant  with  new
regulations,  to  increase  efficiency  to  remain  competitive  and  to  build
capabilities in themes like cloud, analytics and mobility.
 Strong  revenue  growth  and  bookings  point  to  healthy  demand
environment. Accenture  reported  impressive  Q3  revenues  of  $6.7  bn,
significantly ahead of consensus estimate of $6.4 bn and upper end of guidance
($6.5  bn).  Consulting  revenues  were  particularly  robust (growing  17% y/y in
local currency and 23% y/y in USD) pointing to strong discretionary spending,
while Outsourcing business was healthy with 12% y/y revenue growth in local
currency (17% in USD). Bookings were strong (particularly for outsourcing) at
$7.1 bn, and positively, the company guided  for even stronger booking (about
$8 bn) next quarter (management is likely to have significant visibility for next
quarter  bookings  now). Notably,  BFSI growth  (which  had  some  concerns
regarding  sustainability  of  growth) was impressive  (19% in local currency) as
acquisition  integration  and  compliance  projects  continue  to  grow,  this  bodes
well for TCS & Cognizant, which derive over 40% of their revenues from BFSI.
This also helps assuage concerns that BFSI spending might be slowing down.
 Discretionary  spending  continues  to  grow. Management  suggested  that
system  integration  work  exhibited  strong  growth  driven  by  ERP  for  helping
global expansion and for data management and analytics. The driving factors for
consulting  growth  include intent to  target  new  opportunities,  revenue  growth
and rationalization of infrastructure utilizing virtualization and consolidation.
 Globalization, increased regulation, efficiency focus and themes are driving
spending  growth  despite  weak  macro  environment.  Weakening  consumer
spending (particularly in the US) and macroeconomic concerns do not seem to
have  impacted  enterprise  spending,  which  drives IT  industry  revenues.  Most
clients of IT services vendors are G2000 companies, which continue to invest in
new markets/geographies, need to be compliant with new regulations, invest for
operational  efficiency to  remain  competitive and  in  themes such  as  cloud,
mobility and analytics. Moreover, these companies have meaningful exposure to
emerging markets where growth has not meaningfully slowed down.
 Accenture  results  point  to  strong  growth  for  Indian  IT  companies. We
believe the  healthy  spending  environment  augurs  well  for revenue  growth for
Indian  IT. We  retain our  positive  bias  towards  the  sector with OW  on  TCS,
Wipro and HCL Technologies.

News This Week Economics &Corporate ::BofA Merrill Lynch,

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


News This Week
Economics
„ A 1983 double taxation avoidance treaty, which states companies originating
in Mauritius won't face capital gains tax in India, is being renegotiated by the
Indian government to plug a loophole exploited by businesses without roots
in Mauritius. – Media
„ Cumulative rainfall was excess/normal in 26 and deficient/ scanty in 10 out of
36 meteorological sub-divisions with overall rainfall in country above 11% of
Long Period Average- Media
„ Fuel EGoM meet is expected to review diesel and LPG prices on Friday in a
bid to cut down the rising losses of oil marketing companies. - Media
Corporate
„ SpiceJet has sought the RBI of India's nod to raise $270mn from Canada's
export finance agency EDC for financing fleet expansion. – Media
„ Accenture Plc reported earnings that beat Wall Street estimates and it raised
its annual earnings forecast. –Media
„ Perdaman Ind has dragged Lanco Infra to court in Australia seeking a A$
3.5bn compensation for not complying with coal supply. -Media
„ No. of passengers carried by domestic carriers in Jan-May rose 17.6% to
24.5mn, with Jet Airways continuing to hold the largest market share. - Media
„ L&T had inked Rs26bn concession agreement with the NHAI for widening of
Beawar-Pindwara highway in Rajasthan. . -Media
„ RIL has made a natural gas discovery in the very first well drilled on its D9
block in the Krishna Godavari basin off the east coast of India. – Media
„ Tata Steel received Rs5.8bn as part of an arbitration settlement between its
subsidiary & certain 3
rd
 parties relating to the Teesside business. –Media
„ Lupin has received the USFDA nod to market generic levofloxacin tablets,
used for the treatment of bacterial infections, in the American market. - Media
„ Religare plans to buy two brokerages in Nigeria and South Africa to increase
access to foreign institutional investors. – Media
„ To kick-start power capex and support SEB financials by offering cheap
captive coal based power, Minister for Environment made an exception by
approving ADE's 15mtpa Parsa East and Kante Basan coal mine which was
in 'no go' zone for 18 months.. – Media
„ Lanco Infra has signed a $80mn deal to build a power plant in Iraq as part of
the war-torn country’s plans to cut its energy deficit.  – Media
„ Wind-based power producer Caparo Energy (India) Ltd (Ceil) has raised
$78.5 million (Rs 353.25 crore) to increase capacity.
Source: Collated from Bloomberg and following news papers - Economic Times, Live Mint,
Business Standard & Financial Express dated June 19 – 24, 2011.

FII DERIVATIVES STATISTICS FOR 28-Jun-2011

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


FII DERIVATIVES STATISTICS FOR 28-Jun-2011 
 BUYSELLOPEN INTEREST AT THE END OF THE DAY 
 No. of contractsAmt in CroresNo. of contractsAmt in CroresNo. of contractsAmt in Crores 
INDEX FUTURES2068685728.661911395276.4059245816406.36452.26
INDEX OPTIONS2879997922.872527666946.62187677352035.88976.24
STOCK FUTURES2830006896.962782027385.27125385332567.60-488.31
STOCK OPTIONS7187185.876932182.5227425679.543.34
      Total943.54


-- 

Implications of Accenture and Oracle results for India IT ::Morgan Stanley

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��



Implications of Accenture and 
Oracle results for India IT 
Quick Comment: Overall trends in outsourcing for
Accenture (revenue +8% QoQ, Bookings +7% QoQ)
and Oracle’s license revenue (+19% YoY) were
encouraging and indicate a healthy demand
environment for the India IT vendors, in our view.
What's new: Accenture reported 3Q11 revenue of
US$6.7bn ahead of its guidance (US$6.3-6.5bn) and
raised its full year revenue growth outlook to 14-15% in
local currency (vs 11-14% earlier). Oracle guided for
15% YoY F1Q12 revenue and EPS ahead of consensus
estimates.
Accenture clients continue to invest despite macro
concerns: Accenture management indicated that
despite macro challenges in US and Europe, its global
clients continue to focus on enhancements to reduce
cost of legacy systems and development for new
technologies. We believe Infosys, TCS and Wipro are
also benefitting from continued IT spending from clients
in an otherwise tumultuous macro environment.
Stable pricing environment should support
margins: We note that across large vendors the pricing
commentary is similar and indicates stable to upward
bias. Accenture management also expects pricing to
remain stable with upward bias in parts of their business.
We believe margins for India IT vendors in 2011 are
unlikely to take a step down in a stable pricing regime.
Strong growth in enterprise applications could
continue: Oracle reported F4Q11 and FY11 results.
New license software revenue grew 19% YoY in F4Q
and 23% YoY in FY11. Trends from Accenture and
Oracle results indicate that system integration and
enterprise applications revenue could continue to show
strong growth for India IT companies, in our view.
Maintain In-Line industry view: Infosys (OW) remains
our preferred stock to play the upside in India IT in 2H


Broad-based revenue growth provides comfort in demand
environment: Accenture revenue growth was broad based
across geographies and industries. In local currency terms, US
grew 14% YoY, EMEA 13% YoY, Asia Pacific 25% YoY.
Financial services grew 19% YoY, communication and hi tech
grew 16% YoY. For India IT vendors, we expect revenue
growth to be driven by Financial Services, Manufacturing and
Retail verticals with Telecom lagging the industry growth rates
in F2012.


UBS-- Power Utilities :: No linkage coal for merchant projects?

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


UBS Investment Research
India Power Utilities
No linkage coal for merchant projects?

„ Event: govt may not provide domestic linkage coal for merchant plants
According to media reports, for the next 12th Five Year Plan (FY13-17), the
government is considering a change in coal linkage policy for power projects. It
may propose to provide linkage coal (from Coal India) to only those projects that
sell power either through regulated return-based power purchase agreements (PPA)
or competitive bid-based capacities. Currently, the coal linkage policy only looks
at the projects’ progress and does not differentiate on the basis of power sale
arrangements.
„ Impact: more projects would be based on long-term PPAs
If implemented, we believe this would be negative for India’s merchant power
capacity growth. Merchant tariffs declined significantly over past two years (50%
decline in FY11 from FY09) and if a cheaper source of fuel (linkage coal is 50-
70% cheaper than imported coal and other sources) is also taken away, the
incentive for a developer to set up highly risky merchant capacity would diminish
further. We think this is good for the sector as return expectations would become
more realistic and only serious long-term developers would remain in the space.
„ Action: we prefer companies with low fuel supply risk
In a scenario of negative developments on domestic coal availability for utilities,
investors may look for companies that have fuel cost pass-through (NTPC,
Reliance Infrastructure) or utilities with access to domestic captive fuel (Reliance
Power).
„ Our top pick: Power Grid, rated Buy
We prefer Power Grid and Lanco Infratech. We also have a Buy rating on NTPC,
Tata Power and Reliance Infrastructure

28-Jun-2011; NSE, Bulk deals,

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


DateSymbolSecurity NameClient NameBuy / SellQuantity TradedTrade Price /
Wght. Avg.
Price
Remarks
28-Jun-2011AANJANEYAAanjaneya Lifecare LtdBMD EXPORTS PRIVATE LIMITEDBUY61,198379.39-
28-Jun-2011AANJANEYAAanjaneya Lifecare LtdBMD EXPORTS PRIVATE LIMITEDSELL79,193383.58-
28-Jun-2011AANJANEYAAanjaneya Lifecare LtdCROSSEAS CAPITAL SERVICES PVT. LTD.BUY1,03,087382.94-
28-Jun-2011AANJANEYAAanjaneya Lifecare LtdCROSSEAS CAPITAL SERVICES PVT. LTD.SELL1,03,087384.03-
28-Jun-2011ABGSHIPABG Shipyard LimitedJAROLI VINCOM PVT LTDBUY2,50,000362.04-
28-Jun-2011ABGSHIPABG Shipyard LimitedJAROLI VINCOM PVT LTDSELL3,25,000358.27-
28-Jun-2011ABGSHIPABG Shipyard LimitedMERLION INDIA III LIMITEDSELL4,49,267355.34-
28-Jun-2011ABGSHIPABG Shipyard LimitedPARWATI CAPITAL MARKET PRIVATE LIMITEDBUY3,28,564360.05-
28-Jun-2011ABGSHIPABG Shipyard LimitedPARWATI CAPITAL MARKET PRIVATE LIMITEDSELL2,91,564362.64-
28-Jun-2011ACROPETALAcropetal Tech LtdINDIA MAX INVESTMENT FUND LTDSELL2,50,00018.50-

Impact Analysis - ONGC - Fuel price hike, duty cuts:: Angel Broking,

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Government hikes fuel prices, cuts duties: O n June 24, 2011, the Empowered
Group of Ministers (EGoM) announced to raise retail fuel prices. As expected,
the government not only took price hikes but also surprisingly re-jigged the duty
structure. The government hiked diesel price by `3/litre. Prices of cooking fuels,
LPG and Kerosene, were also hiked by `50/cylinder and `2/litre, respectively.
The resultant price hikes will help reduce under recoveries of OMCs by around
`21,000cr. The duty cuts will cost the exchequer a whopping `49,000cr.
Under recoveries to fall, but still remain high: With these measures, we now
estimate under recoveries to remain at `97,551cr in FY2012 and `73,853cr in
FY2013. We estimate the Indian crude oil basket to remain in the range of
US$95–105 in FY2012 and FY2013.
No clarity on subsidy-sharing mechanism yet: Although the government has
pegged subsidy-sharing burden of 33.0% of under recoveries for 1QFY2012,
there is still no clarity on the policy of the subsidy-sharing mechanism. Given that
crude price is at around US$100/bbl, we continue to peg FY2012 and FY2013
subsidy sharing for downstream companies at 38.7% of under recoveries.
Outlook and valuation: We anticipate ONGC’s incremental production from
marginal fields to more than offset any decline in production from the ageing
fields. OVL is also expected to report increased volumes by 2013 at ~12mn
tonnes on account of incremental productions from Myanmar, Sakhalin-1 and
Venezuela coming on stream. Deregulation of diesel and resolution of the royalty
issue with Cairn could be significantly earnings accretive for ONGC. Higher gas
price from extant fields and mark-to-market prices from incremental production
could accrete earnings further. Significant discoveries in the high-potential
Cambay, KG basin and Mahanadi fields (still under appraisal) could further boost
valuations. Although there is an FPO overhang on the stock in the near term,
we believe increased volumes and net realisation should offset these concerns.
We maintain a Buy on the stock with an SOTP-based target price of `336.


Government hikes fuel prices, cuts duties to tame mounting
under recoveries
In a meeting held on June 24, 2011, the EGoM took bold steps on the country's
retail fuel pricing after a long wait of one year. As expected, the government not
only took price hikes but also surprisingly re-jigged the duty structure. On the price
hike front, on an immediate basis, the government increased diesel price by
`3/litre; whereas the price of cooking fuels, LPG and Kerosene, were increased by
`50/cylinder and `2/litre, respectively. The resultant price hikes will help reduce
under recoveries of OMCs by around `21,000cr.
Further, to reduce the burden of under recoveries on OMCs, the government
lowered the customs duty and excise duty on crude oil and petroleum products.
Customs duty on crude oil has been reduced to nil from 5%; whereas on the petrol
and diesel front, the revised customs duty will stand at 2.5% from 7.5% earlier.
This will result in a loss of `26,000cr to the exchequer. Excise duty on diesel has
also been reduced by `2.6/litre to `2/litre, resulting into a loss of `23,000cr to the
exchequer. Thus, the duty cuts will cost the exchequer a whopping `49,000cr.


Outlook and valuation
We anticipate ONGC’s incremental production from marginal fields to more than
offset any decline in production from the ageing fields. OVL is also expected to
report increased volumes by 2013 at ~12mn tonnes on account of incremental
productions from Myanmar, Sakhalin-1 and Venezuela coming on stream.
Deregulation of diesel and resolution of the royalty issue with Cairn could be
significantly earnings accretive for ONGC. Higher gas price from extant fields and
mark-to-market prices from incremental production could accrete earnings further.
Significant discoveries in the high-potential Cambay, KG basin and Mahanadi
fields (still under appraisal) could further boost valuations.
Although there is an FPO overhang on the stock in the near term, we believe
the increase in volumes and net realisation should offset these concerns.
We maintain a Buy on the stock with an SOTP target price of `336.


28/6/11; FII & DII Turnover (BSE + NSE)

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��



FII & DII Turnover (BSE + NSE)
(Rs. crore)
FIIDII
Trade DateBuySalesNetBuySalesNet
28/6/112,774.221,954.81819.41999.421,574.48-575.06
27/6/113,754.002,306.581,447.42933.651,700.03-766.38
24/6/113,682.652,792.21890.441,064.621,551.47-486.85
Jun , 1145,012.2244,610.18402.0418,704.2417,789.94914.30
Since 1/1/11   *317,770.22329,000.24-11,230.02145,221.20129,696.0215,525.18

BSE, Bulk deals, 28-Jun-2011

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��



Deal DateScrip CodeCompanyClient NameDeal Type *QuantityPrice **
28/6/2011533412AANJANEYACROSSEAS CAPITAL SERVICES PRIVATE LIMITEDB103429383.74
28/6/2011533412AANJANEYAA K G SECURITIES AND CONSULTANCY LTDB67075382.77
28/6/2011533412AANJANEYABMD EXPORTS PRIVATE LIMITEDB87199378.43
28/6/2011533412AANJANEYABMD EXPORTS PRIVATE LIMITEDS87199378.41
28/6/2011533412AANJANEYAA K G SECURITIES AND CONSULTANCY LTDS67075382.79
28/6/2011533412AANJANEYACROSSEAS CAPITAL SERVICES PRIVATE LIMITEDS103429383.03
28/6/2011532682ABG ShipyardKBS TRADING PVT LTDB2000000355.25
28/6/2011532682ABG ShipyardSTANDARD CHARTERED PVT EQ MAURITIUS LTDS2754950355.34

Categories Turnover (Rs. crore) Clients NRI Proprietary Trades

Please Share:: Bookmark and Share India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��



Categories Turnover
(Rs. crore)
ClientsNRIProprietary
Trade DateBuySalesNetBuySalesNetBuySalesNet
28/6/111,915.211,863.6151.600.230.40-0.17555.55527.9027.65
27/6/111,702.501,781.26-78.760.560.60-0.04582.23553.2528.98
24/6/111,824.611,920.88-96.260.550.500.06686.12608.0278.10
Jun , 1134,849.8434,905.86-56.0225.8324.361.4711,178.4711,045.59132.89
Since 1/1/11266,781.81271,377.98-4,596.16147.02124.3622.6676,210.6275,733.47477.16