Court granted CBI to conduct polygraph test on 10 new suspect including Mr Mhaiskar of IRB Infrastructure Developers Ltd :IFIN

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Court granted CBI to conduct  polygraph test on 10 new suspect including Mr Mhaiskar of IRB Infrastructure Developers Ltd

The court of Additional Sessions Judge S M Shinde on Wednesday granted permission to the Central Bureau of Investigation (CBI) to conduct polygraph tests on 10 new suspects, including managing director of Ideal Road Builders (IRB) Infrastructure Developers, director of Sable-Waghire company and six personnel of Pune rural police, this week in the RTI activist Satish Shetty murder case.

The police official who will undergo the tests had investigated the case before it was handed over to the CBI. The CBI produced IRB managing director Virendra Dattatray Mhaiskar (40), director of Sable-Waghire Nitin Sable (49), Bhausaheb Andhalkar (55), then police inspector of the local crime branch, and seven other suspects, including an accused, before the court to seek permission for the test.

These names were mentioned by Sandeep Shetty, brother of deceased Satish Shetty, in his FIR. Additional Superintendent of Police (CBI) S P Singh had filed an application, through special public prosecutor Ayub Pathan, for the permission. The other names include Police Inspector Sunil Tonpe (46), Assistant Police Inspector Namdeo Kauthale, Head Constables Ramesh Gabaji Nale and Sahaji Ramchandra Athawale, Police Naik Rajendra Mirghe, retired constable Kailash Labade, all attached to Pune rural police, and arrested accused Shyam Dabhade.

In its application, the CBI stated that it is necessary to subject the 10 new suspects to polygraph tests to unearth larger conspiracy, involving influential persons, behind the January 13, 2010 murder. The judge granted the permission after each of the suspects and the lone accused showed willingness to take the test.

The State Anti-Corruption Bureau (ACB), Pune, on Wednesday filed a case of disproportionate assets (DA) against Andhalkar at Chatuhshrungi police station. According to the ACB, Andhalkar has assets of Rs 1.57 crore which is 95% more than his legal source of income. 

Outlook : We believe this is negative development against the company’s growth prospect since Mr. Virendra Mhaiskar is the key personnel in driving the business. We would keenly watch on the development of the case and its impact on the organization . Presently we had BUY rating on the stock.   We value IRB based on SOTP and maintain our FY12E TP of Rs216. We use DCF to derive NPV of each of the BOT assets

Thanks & Regards,

Daimler AG - conference call transcript-2-May-12 : Edelweiss, PDF link

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Dear Sir/Madam,

Please find enclosed the transcript of the conference call with Daimler AG held on 2nd May, 2012 to discussgrowth strategy of BharatBenz Business in India.

Daimler AG - conference call transcript-2-May-12

      
      
      
       

Engineering & Capital Goods - Growth still away; monthly update : Edelweiss, PDF link

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Monthly highlights: What’s inside?

·       Company interactions

·       Key highlights/ news for the companies/ sector

·       Key macro trends

Titan Industries Ltd Shifting Focus To Earnings Growth , Upgrade to BUY :Emkay

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¾ Titan Q4FY12 performance in line with expectations.
Revenues at Rs 22.8 bn, growth of 28% yoy and PAT at Rs
1.4bn, growth of 72% yoy
¾ As expected, jewellery volumes declined 7% yoy, but high
gold prices maintained revenue growth momentum at 30% to
Rs 18bn and SSG at 25% yoy in Tanishq
¾ Watches division beats expectation with 25% yoy revenue
growth to Rs 4.1 bn, led by 14% yoy volume growth. EBIT
margins remain under pressure at 12.9%
¾ Not loosing sight on the aggressive store expansion, multipoint
activation in jewellery and emergence of Fast Track
brand; Upgrade to BUY with price target of Rs 273/Share
Q4FY12 results in line with expectation…
Q4FY12 results were in line with our expectations. Revenues grew by 28% yoy to Rs
23.3bn driven by 30% yoy growth in jewellery division and 25% yoy growth watches
division. High gold prices led to continued slide in jewellery volumes to decline of 7%
yoy, but watches division volumes saw healthy growth of 14% yoy. EBIDTA grew 84%
yoy to Rs 2.1bn, with EBIDTA margins improving 270bps yoy to 9.1% largely due to
one-off impact of employee cost provision in comparable quarter. The results were
realigned for lease costs; being reported below Ebidta. Consequently, APAT growth was
72% yoy to Rs 1.4bn. For FY12, revenues grew by 36% yoy to Rs 88.4bn and APAT
grew 39% yoy to Rs6.0bn, while EBIDTA margins were maintained at 9.4%.
High gold prices hit jewellery volumes, but customer footfalls grew
¡ Jewellery division revenues grew 30% yoy, largely driven by high gold prices,
which increased 36% yoy.
¡ Volumes declined by 7% yoy mainly attributed by high and volatile gold prices;
stayed in line with estimates
¡ however, customer footfalls grew 4% yoy, remaining on firm ground
¡ At the store level, Tanishq posted 38% yoy growth, SSG at 25% yoy. Goldplus
grew 36% yoy and SSG at 23% yoy.
¡ Share of studded jewellery rose to 32% during the quarter.
¡ PBIT margin was 10.1% for Q4FY12. For FY12, PBIT margins improved 30 bps
yoy to 9.9%.
Watches post healthy growth, aggressive store expansion in place
¡ Revenues grew 25% yoy to Rs 4.1bn led by 14% volume growth. Growth was
aided by all store formats, with World of Titan growing 18% yoy and SSG of 14%
yoy, Fastrack growing 95% yoy and SSG at 16%, while LFS grew 34% and
posted SSG of 19% yoy.
¡ Despite 40bps qoq expansion in EBIT margins to 12.9%, it continues to remain
under pressure due to rupee depreciation and expansion of new stores.
¡ 27 stores/kiosks opened in Q4FY12, which includes 6 World of Titan stores, 17
Fast Track stores and 4 Helios stores.

Plastene IPO from May 9, price band at Rs 81-84/ share

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Plastene India , a manufacturer of jumbo bags and BoPP woven sacks, is launching its initial public offer of 92,55,290 equity shares of face value of Rs 10 each on May 9, 2012, with a price band of Rs 81-84 a share. The issue comprises of employees' reservation of upto 55,290 equity shares. The company aims to raise around Rs 74.97-77.74 crore via public issue, by diluting 25.89% stake in the company. One can apply for minimum 75 equity shares and in multiples of 75 shares thereafter. Plastene intends to expand manufacturing facilities of jumbo bags and BoPP woven sacks at its existing units at Nani Chirai in the Kutch district of Gujarat and at Rajpur in the Mehsana district of Gujarat. The company also intends to venture into manufacturing of new product called as block bottom valve bags used for packaging of cement, pharma food grains etc. Equity shares are proposed to be listed on the BSE and National Stock Exchange. The issue will close on May 15, 2012. Motilal Oswal Investment Advisors Pvt Ltd is the book running lead manager to the issue.

High crude prices, weak rupee weighing on market: Nirmal Jain in ET

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In an interview with ET Now, Nirmal Jain, Chairman, IIFL, shares his views on stock markets, rupee depreciation and a range of stocks. Excerpts:

ET Now: There is market talk that some of your key employees who run your institutional business are on their way out.

Nirmal Jain : This is a rumour I have denied six times on your channel alone in the last three years, and I do not know how people do not get tired. There are some petty operators who are desperate for whatever reasons and they keep spreading these rumours. They are absolutely baseless and false and hardly deserve your channel's time because these rumours keep coming every month or every couple of months.

ET Now: But there is no smoke without fire. Why is the rumour not dying down?

Nirmal Jain : But it has been going on for three years now. So I do not know how long the fire and smoke story will sustain. We are seeing smoke for a long time and then there is no fire actually.

ET Now: So let me be specific here. Nemkumar and Aniruddha Dange, both key to the institutional business. Are you confirming to us that they are not going?

Nirmal Jain : Yes, both are there very much intact and hale and hearty, and doing their job on a normal course.

ET Now: You have shut down your Singapore operation business.

Nirmal Jain : That is right.

ET Now: Are you done with your cost cutting?

Nirmal Jain : The Singapore operations were completely different. In fact Prabodh, who was handling Singapore, will now move back to India and strengthen our team here. We have been running the Singapore operations for the last two years and we realise that it can take much longer to break even. So we have suspended them for the time being and we are done with the cost cutting in Singapore.

ET Now: Do you think this is nervousness ahead of the final notification on GAAR which is coming up on May 7 and, perhaps, that the market in anticipation of what may come is sort of easing out?

Nirmal Jain : Crude oil prices which have again started moving up are the biggest problem in the market. More importantly, the market's health will be more reflected in the currency because the rupee has already crossed 53 and our current account deficit is almost at an all time high. The problem is that there is a gap in import and export and our imports are by and large inelastic and that gap is met by invisibles and capital.

So that is not sustainable and that is what is making FIIs worry more because if you bring in dollars today and as the rupee depreciates, when you want to take it back, then your rupee returns are significantly reduced by the rupee's depreciation. So currency has to stabilise. That is one important factor which is impacting FII sentiment at this point in time but besides that of course there are GAAR and the global impact. There is a lot of uncertainty in the global markets. So if you look at the Asian or emerging markets, they have not been very stable.


ET Now: So what is the worst case scenario that we could stare at because some analysts are also talking about levels of 55 with the dollar in the near term considering the RBI has pretty much run out of tools to control liquidity as well as the currency situation?

Nirmal Jain : Yes, 55 is quite in sight. In fact, 55 seems not too far but if you look at one year, even 58 or 60 is a level which is not impossible to think of. There is a huge structural problem in terms of our balance of payments. You may have a burst of flows from NRIs the way it happened 2-3 months ago when deposit rates or interest rates were increased, but those capital or NRI inflows cannot address our trade or current account deficit.

The government needs to really take some significant measures here and curb imports on the one hand and boost exports on the other. So from this perspective, the market is worried but the positive aspect is that export-oriented companies or companies that earn in dollars will tend to benefit from this.

ET Now: But what is the worst case scenario that the market could stare at after a breach of 5,100 today?

Nirmal Jain : The market can look at 4,950 in Nifty... that scenario cannot be ruled out.

ET Now: There is an old maxim in the market which is good news and good bargains do not come together for investors who are sitting on the sidelines, who have not participated in this calendar year. Should they use every decline to their advantage to load stocks?

Nirmal Jain : I have been talking to you in my earlier interviews that in a market like this, good news and good bargains do not come together and if you look at FMCG and pharma stocks, they look expensive. They do not look good bargains on PE multiples. In fact, they have been safer investments and safer portfolio choices and they also give us superior returns. One may build a portfolio in the IT sector and in very select companies. In a market like this, this is a safer thing to do.

ET Now: I remember this conversation we had on the same forum exactly a year ago and that time you had recommended our viewers to buy two stocks -- ITC and Bajaj Auto. My compliments, both stocks have done reasonably well. What are your top ideas for FY13 now?

Nirmal Jain : I would say may be you can continue with ITC but you can add Wipro instead of Bajaj Auto because the auto sector will not be as good as we have seen in the last couple of years. So one can shift from auto to IT and pharma. Stocks like Lupin or ITC continue to be good and we can look at Wipro or HCL.

ET Now: Why Wipro and not TCS? If I look at the guidance from Wipro, the management commentary was not all that colourful, but TCS has indicated and acknowledged that it is business as usual for them and they are likely to grow at a 10% plus rate which is above the NASSCOM guidance?

Nirmal Jain : In terms of valuations, Wipro is a little more attractive as compared to TCS. TCS is, if I am not mistaken, already a $45-$50 billion company. So TCS is a good portfolio stock, there is no doubt about it. But relative valuations at this point, what I heard from discussing with our analyst, Wipro is more attractive at this point of time. So I do not know the precise terms of PE multiples and the guidance, but that is what our researchers have been recommending.


ET Now: What about banks, considering we have until now seen a decent amount of runup but clearly NPA concern still looms large. And given the rate scenario, the RBI does not have enough headroom for a further easing.

Nirmal Jain : One should be cautious on banks, particularly public sector banks, because as you said although there has been a 50 bps cut we are not out of the woods in terms of inflation and in terms of other macro headwinds.

So I would say that if you have a large portfolio and have to have some exposure to banks, then stick to private sector banks. For public sector banks, one has to be very cautious and very choosy because NPA concerns still loom large. In fact one has to wait for the March quarter results as well as the next one or two quarters before you take a plunge in the sector. Let inflation, interest rates and rupee stabilise before we get into this.

ET Now: This may sound like a rather simple personal finance question. If you have to advise the retail viewer who has capital of about Rs 5 lakh and wants to decide between an asset class and if the options are 10% fixed maturity products versus 15% in equities which are not risk free, what would you advise for the next year?

Nirmal Jain : I would say that split your portfolio 50-50 at this point in time. Put 50% in FMP or fixed income instruments and another 50% in equity through a good mutual fund if your portfolio is just about Rs 5 lakh.

ET Now: Before we wrap the discussion, I am archiving a statement that there is no churn at the top when it comes to your institutional business?

Nirmal Jain : Yes, absolutely and you should highlight that the chairman of the company has categorically denied and said these rumours are rubbish and motivated.

RBI reaches out to NRIs to lift rupee; raises interest rates on deposits in foreign currencies by up to 3%: ET

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Buffetted by a sliding Indian rupee and surging dollar demand for imports, the Reserve Bank of India on Friday eased some curbs to attract dollars from NRIs and scrapped the interest rate ceiling on exporters' foreign currency credit. But the measures, aimed at taking the steam off the currency, may only provide temporary relief, analysts say.

The central bank raised the cap on interest rates offered by banks on non-resident Indians' deposits to make it attractive for those who earn less than 2% in most parts of the Western world.

Aiming to attract long-term money, the cap on three- to five-year deposits has been raised to 3 percentage points above international benchmark rates from 1.25 percentage points. For less than three years, it will be 2 percentage points, raised from 1.25 percentage points. These are for the so-called FCNR (B) deposits, where the bank bears the currency risk since it will repay the depositors in US dollars.

With the benchmark London Inter-Bank Offered Rates, or Libor, at 1.05% for 12 months, NRIs could earn 3.05% in US dollars on their deposits up to three years. For longer maturities, it could go up to 4.05%. Libor is the rate at which banks in London intend to lend to each other, and is used to price bonds and loans worth trillions of dollars.

But these higher returns may still not lure NRIs in droves since transaction costs, convenience and tax rates play a role.

"It will help improve the sentiment at least in the near term," said Parthasarthy Mukherjee, president, treasury and international business operations, Axis Bank. "And banks will be able to lend more freely now."

The Reserve Bank of India has been intervening to arrest the fall of the rupee, which has been the worst performer among top countries in Asia, losing 6.14% after the Union Budget on March 16 upset foreign institutional investors. The avalanche of demand for dollars from international investors, who are pulling out due to tax issues and importers' needs, has limited the impact of the central bank's intervention.


The rupee has declined 1.7% this week to 53.4750 per dollar, Bloomberg data shows. It touched 53.9225 on Friday, the lowest level since December 15, when the currency plunged to a record low of 54.305, prompting the RBI to impose strong curbs on speculation.

Bank of India Target Price (INR) 455 Other income and low opex drives profitability: Avendus,

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Rise in other income, sequential NIM expansion and decline in
operating expenses led to c93% y‐o‐y growth in the net profit in the
Mar12 quarter. Other income was driven by recovery from written‐off
accounts. Domestic NIM expanded 43‐bp sequentially to 3.29%. Gross
NPL and net NPL ratios declined for the second consecutive quarter up
to 40‐bp sequentially. Restructured loans increased c31% q‐o‐q to
INR179bn, 7.1% of the total loans. We raise our FY13f PAT forecast by
up to 27% to factor in lower NPL provisions and operating expenses.
We rollover the TP to Mar13 and raise it by 8% to INR455. The TP
values BOI at 1.1x the one‐year forward adjusted book value. We
upgrade the rating to Buy. Higher‐than‐estimated incremental NPL and
NPL provisions are the key risks.
Other income and decline in operating expenses drive net profit
Other income growth of c17.5% y‐o‐y was largely driven by strong recovery in
the written‐off accounts, amounting to INR1.9bn (107% y‐o‐y). Furthermore,
operating expenses fell c24.5% to drive the c93% growth in the net profit. The
43‐bp q‐o‐q rise in domestic NIM to 3.29% was led by a 33‐bp rise in yield on
domestic loans. Savings deposits growth continued to moderate at 13% y‐o‐y.
However, CASA ratio (domestic) improved 60‐bp sequentially, mainly due to
the moderation in term deposits growth. Domestic loan growth (7% y‐o‐y)
continued to decelerate due to a slowdown in the corporate segment and rose
7.4% y‐o‐y, while retail (15% y‐o‐y) and agri (33% y‐o‐y) grew faster.
Strong recovery coupled with low slippage drives fall in NPL ratios
Gross NPL and net NPL ratios dropped sequentially by 40‐bp and 31‐bp to
2.34% and 1.47%, respectively. Slippages declined c27% q‐o‐q to INR3.8bn
(0.6% of annualized loans). However, outstanding restructured loans increased
sequentially by c31% to INR179bn. Restructured loans, as a percentage of gross
loans, were 7.1% at the end of Mar12. We lower our assumption for
incremental NPL up to 20‐bp and reduce the NPL provisions forecast for FY13f–
FY14f. However, NPL ratios are forecast to rise in FY13f.
Raise net profit forecast up to 27% for FY13f–FY14f
We raise our FY13f–FY14f net profit forecast up to 27%, driven by lower NPL
provisions and operating expenses. We have reduced our assumption for
growth in the average pay per employee by up to 5% for the period. While we
lower our assumption for incremental NPL by up to 20‐bp to 60‐bp, it remains
above that in FY12. The NPL provision‐to‐asset is estimated at 49‐bp during
FY13f–FY15f (above the last two years’ average at 45‐bp).
TP values BOI at 1.1x one‐year forward P/B
Large improvement in the asset quality during the Mar12 quarter is likely to
drive the near‐term outperformance. We rollover the TP to Mar13 and raise it
to INR455. The TP values BOI at 1.1x the one‐year forward book value. We
upgrade the rating to Buy. Higher‐than‐estimated incremental NPL due to large
restructured loans and NPL provisions are key risks.