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Friday, January 18, 2008

Indian Stock Market News, Recommendations & Broker Views


Indian Stock Market News, Recommendations & Broker Views

HOT STOCK : GODREJ INDUSTRIES

Posted: 17 Jan 2008 12:09 PM CST

GODREJ INDUSTRIES stands to gain immensely from the recent repeal of
Urban Land Ceiling Act of Maharashtra. It holds a large piece of land
in Vikhroli, a central suburb of Mumbai which it can now develop.
After development, the rental income alone could be over 100 crores
annually.

According to sources, the company is holding 82.88% stake of Godrej
Properties P. Ltd. which is holding 51% of Godrej Realty P. Ltd. and
100% of Godrej Waterside Properties P. Ltd. These companies are
developing an IT Park at Kolkatta and a Residential Project at Thane.

There is also a buzz in the market that Godrej Poperties will be
coming out with a public issue soon. This and the company's foray into
real estate in a big way will result in huge value unlocking for
Godrej Industries.

At the time of writing this, the stock was trading at the lows of
359.40. It can turn out to be a Multibagger investment for long term
investors.

JK LAKSHMI CEMENT LIMITED : Potential MULTIBAGGER

Posted: 17 Jan 2008 12:08 PM CST

JK LAKSHMI CEMENT LIMITED has been posting stellar results for the
last five quarters in a row. The nine months Cash EPS till December,
2007 stands at 43.21 as against 27.57 for the same period previous
year.

At current price of 171, this stock is trading at a PE of a mere
3.6!!! The fair value of this stock should be three times the current
market price at least. Long term investors can look forward to targets
of 500 plus in the next one year.

The company has also declared an interim dividend of 10% and record
date for that is 30th Jan, 2008. If ever there was an undervalued
share in the stock market, this is the one. Must Buy.

Parsvnath Dev eyes 120-140% bottomline growth - Pradeep Jain,Parsvnath Developers

Posted: 17 Jan 2008 10:13 AM CST

Pradeep Jain, Chairman, Parsvnath Developers, said DoT has wrongly rejected our application for telecom licence. "We may again approach DoT to reconsider our application."

 

Jain said the company would grow about 120-140 % over last year. "Last year, we had a bottomline of Rs 292 crore. This year, at under 120-140%, the bottomline comes to about Rs 600-700 crore."

 

Excerpts from CNBC-TV18's exclusive interview with Pradeep Jain:

 

Q: First off from the telecom bit, what next from your point of view, now that the licence has been rejected. Would you consider acquiring an additional smaller company who has acquired licence or would you consider re-bidding? What is the process like?

 

A: We are the first players to apply to DoT. They have wrongly rejected our application. DoT said telecom is not part of the Memorandum and Articles of Association. Although in the other object, communication is there. Our lawyers and other legal experts are trying to understand on what grounds they have reject our application. We may again approach DoT to reconsider our application.

 

In regards to acquiring a new or an overseas player, telecom is not our main business. We have already formed a telecom company in the last four-five months. We feel there is large synergy and will explore that possibility as well.

 

Q: You have your finger in several pies like hotel development, SEZs, and even airport development. Give us an idea of what kind of revenues you are seeing for the listed entity? You reported revenues of Rs 800 crore for the first half. Give us an idea for FY09 and FY10 or as long as you can see the visibility?

 

A: We are developing a lot of real-estate projects at this point of time. We own about more than 191 million sq ft area and are developing a number of the integrated townships, housings, standalone malls, and most Delhi Metro stations, among others. Commercial development is also on. We are currently doing projects in Kurla and Mahim and a number of SEZs.

 

We will grow about 120-140 % over last year. Last year, we had a bottomline of Rs 292 crore. This year, at under 120-140%, the bottomline comes to about Rs 600-Rs 700 crore.

 

We own 17 hotel properties across the country. We have started work on six properties and work on the other eleven properties will begin in the next 3-6 months. We have almost tied up with the operator. We will own the property and the operator will operate all those properties. We are talking with international and domestic operators and are close to signing up operating agreements with those operators.

 

We are in negotiations with both onshore as well as offshore hotel operators to acquire or operate.
 
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  • For IT, numbers say it all

    Posted: 17 Jan 2008 10:11 AM CST

    Early Results of IT companies for the December quarter may not be as exciting as they used to be few quarters ago. The sector has lost some of its appeal after the rupee-dollar debacle and global subprime crisis. However, going by the latest quarter numbers of Infosys, iGATE Global Solutions and Mastek, one can conclude that even though the picture may no more be rosy for the IT sector, it's not too gloomy either.

    Out of the three, Infosys and iGATE generate a major part of their revenues from IT services, while Mastek is in the solutions-led business. In that sense, Infosys and iGATE broadly represent the big and mid-sized IT services companies more than Mastek.

    The first two also generate a majority of their income from the US market. Thus, their numbers — especially that of Infosys, the second biggest IT exporter from India — provide a quick window to the trend in the US market. Mastek, on the other hand, has a larger presence in the UK.

    Both Infosys and iGATE have reported a moderate growth in sales and profits sequentially, following new client additions at higher billing rates. Infosys has added 47 new clients, four more than those in the same quarter of the previous year. iGATE also added three new clients during the quarter. This underlines the sustained demand traction in the IT outsourcing market, putting aside the concerns regarding global macroeconomic issues.

    On the profitability front, both companies have fared well. Infosys reported a 1.2% rise in operating margin at 32.6% over the previous quarter. This was mainly aided by lower selling and administrative costs. In iGATE's case, margins improved for the second consecutive quarter. Operating margin expanded from 15.8% a quarter ago to 17.5%. The company expects to increase this to over 20% by the end of FY09 by bringing down the average employee experience from 3-4 years to 1-3 years.

    Analysts are concerned over the signs of a slowdown in the US economy. It's widely believed that any such economic issue may eventually increase outsourcing by US companies to keep costs under control. But the market is more concerned about the quality of the revenue generated in terms of realisations. Even if business is generated, it is important to see the price at which it comes. The results of both iGATE and Infosys throw some light on this aspect of the business.

    During the December quarter, both companies were able to win contracts at higher billing rates. These are expected to remain buoyant. Infosys expects billing rates for new customers to go up by 3-4%, whereas repeat business is likely to attract 2-3% higher rates.

    Further, both iGATE and Infosys expect to see either flat or marginal uptrend in IT spends in '08. Infosys, for instance, has already seen some of its clients expanding their IT budgets by 6-7%.

    Though these results provide a precursor to what lies ahead, the picture will be clearer once results of other IT companies unfold over the next few days.

     

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  • Rosy Future - Stock Focus - Karuturi networks
  • Multi Bagger - XL Telecom & Energy
  • Revision in BSE Mid-Cap and BSE Small-Cap Indices
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  • Brokers bullish on Syndicate Bank, Omaxe, MnM
  • Multi Bagger: Alps Industries
  • Tata's 1-lakh a reality- Automobiles
  • ANALYSIS OF NOIDA TOLL Bridge
  • SPEL SEMICONDUCTOR LTD., CHENNAI
  • SUNDARAM CLAYTON LTD. (TVS GROUP)
  • ALPS INDUSTRIES - Recommended by tulsian
  • RAKESH JHUNJHUNWALA HAS ENTERED in ROCKET STOCK…. ...
  • Carol info - a look at wockhard company
  • gremach infrastructure : relook
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  • Stocks to pick: Reliance capital,Axis Bank, Moser Baer, Shree Cement

    Posted: 17 Jan 2008 10:08 AM CST

    Reliance Capital
    Research: Macquarie
    Rating: Outperform
    CMP: Rs 2,768

    Macquarie has initiated coverage on Reliance Capital with an
    'outperform' rating and a target price of Rs 3,392, with a 23%
    potential upside. The company looks set to make a serious breakthrough
    into multiple segments of retail financial services. Macquarie
    believes the domestic financial services sector is in a period of high
    structural growth. The retail side of this is being driven by chronic
    under-penetration, which is being unlocked by changing demographics
    and greater availability and reach of products. The wholesale segment
    is being driven by significant acceleration in investment activity in
    the economy. Reliance Capital is entering a critical phase in most of
    its businesses, where it will start to grow aggressively and give a
    massive push to break into the top three.

    It has already established its credentials by surging to the top spot
    in the mutual fund league tables, and is now starting to make an
    impact in insurance and broking/wealth management as well. Its core
    strengths remain its strong brand name, aggression in the market, deep
    pockets and execution capabilities. The stock looks expensive at >11x
    P/BV, even on a consolidated basis, but its holding-company-like
    structure makes it difficult to view it on traditional valuation
    parameters. Also, the market is factoring in its large unrealised
    gains on the equity portfolio, some of which include strategic
    holdings in other group companies.

    Moser Baer
    Research: JP Morgan
    Rating: Underweight
    CMP: Rs 289

    JP Morgan retains its negative view on Moser Baer with a
    sum-of-the-parts based June '08 price target of Rs 250. Risks to the
    target price include a sharp price increase in optical media. Monthly
    sales of Taiwanese optical media manufactures fell 15% month-on-month.
    December monthly sales also fell 36% year-on-year (YoY), indicating
    continued original equipment manufacturer (OEM) pricing pressure.
    Optical media sales fell 14% quarter-on-quarter (QoQ) and 30% YoY
    during the second quarter. JP Morgan expects subdued pricing to
    continue, especially in DVD-R, leading to weak margins. On January 4,
    '08, Warner Brothers (WB) announced that it will exclusively support
    the Blu-ray format. This is a major positive for the Blu-ray format as
    WB has the largest market share (18-20%) in the US and earlier
    supported both formats. As greater clarity emerges on the
    next-generation DVD format, JP Morgan believes that adoption will
    accelerate, but expects significant volumes only in late '09. The
    photo voltaic business may face significant margin pressure going
    forward, led by higher poly-silicon prices in the near term and rising
    competition in the long term once the supply tightness eases.

    Axis Bank
    Research: CLSA
    Rating: Buy
    CMP: Rs 1,167

    Axis Bank can trade up to 25x 12-month forward P/E based on its strong
    growth trajectory, and reiterates 'buy' rating on the stock with a
    price target of Rs 1,300. Axis Bank's Q3 FY08 profit grew 66% YoY to
    Rs 310 crore, ahead of estimates, led by strong growth in core
    operations and higher treasury gains. Despite moderation in sector
    loan growth, Axis Bank's loan book grew 50% YoY led by corporate and
    agricultural credit. Retail loans as a percentage of total loans fell
    to 25% (29% in December '06). Despite strong loan growth, asset
    quality improved, gross non-performing loans (NPLs) fell 5% YoY, while
    net NPLs declined 12% YoY. Gross NPLs are now at 0.8% of advances and
    coverage has improved to 50%. Net interest margins (NIMs) expanded 90
    bps to 3.9%, of which, 30 bps was due to the bank's recent
    capital-raising.

    Rakesh Jhunjhunwala's latest Portfolio

    Posted: 14 Jan 2008 10:53 PM CST

    Rakesh Jhunjhunwala's latest Portfolio

     

     

     

     

     

     

     

     

     

     

     

     

    COMPANY

     

    30-Jun07

    30-Sep07

    PRICE 

    VALUE

    WEIGHT

    PE

    Market

     

     

     

    NO. OF SHARES

    4Jan08

    Rs crore

     (%)

     

    Cap

     

     

     

     

     

     

     

     

     

     

    TITAN INDUSTRIES

     

    4092756

    4082756

    1568

    640.18

    16.71

    56

    6961

    APTECH

     

     

    11434178

    11434178

    377

    431.07

    11.25

    -

    1648

    NAGARJUNA CONSTRUCTION

    12750000

    12750000

    325

    414.38

    10.82

    46

    7439

    PRAJ INDUSTRIES

     

    15026624

    1426624

    228

    342.61

    8.94

    38

    4163

    PUNJ LOYD

     

    5040000

    5040000

    528

    266.11

    6.95

    162

    15373

    BILCARE

     

     

    1650000

    2025000

    1405

    231.83

    6.05

    35

    2250

    CRISIL

     

     

    550000

    550000

    3508

    192.94

    5.04

    51

    2535

    PANTALOON RETAIL

    2330895

    2330895

    821

    191.37

    5.00

    111

    12378

    GEOJIT FINANCE

     

    18000000

    18000000

    104

    187.20

    4.89

    68

    2197

    .

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