Friday, April 28, 2006

Sebi to enquire into SEs’ Friday frenzy

Regulator’s clarification breathes life back into the market.
The Securities and Exchange Board of India (Sebi) on Friday said it would enquire into the sharp 500-point volatility in the benchmark 30-share BSE Sensex after the index tanked in early morning trade before recovering at day’s end.

When contacted, Sebi chairman M Damodaran told FE, “We will certainly enquire into it. This is the work of some operators.”

It was a scene of utter chaos and confusion on the equity bourses during the first few minutes of trading on Friday as the indices went into a free-fall mode reacting to the interim order passed by Sebi on the IPO allotment scam. A weak trend in the Asian markets only added to the investor woes. The regulator’s clarification giving a reprieve to Indiabulls, however, breathed life into the markets with Sensex ending the day 16.91 points higher at 11,851.93.

When asked if there was any political pressure on the regulator to rescind the order, Mr Damodaran said, “I am under no pressure, whatsoever.” According to him, the interim order allowed for post-decisional hearing within 15 days.

“Indiabulls officials came to the Sebi office in the morning. After hearing their defence, Sebi had two options, either to let its interim order run for some time, or keep it in abeyance till their claims of Indiabulls were verified and the final order passed,” he said.

The Sensex opened with a negative gap of nearly 140 points and, within minutes, fell further to touch the day’s low of 11,344.61, down almost 500 points from Thursday’s close of 11,835.02.

However, short-covering and buying at lower levels in select index heavyweights provided some support with the Sensex closing at 11,851.93, up a marginal 16.91 points.The S&P CNX Nifty of the National Stock Exchange (NSE) ended the day at 3,515.25, up 7.15 points.

Manish Sonthalia, vice president (equity strategy), Motilal Oswal Securities Ltd, said, “The 400-points fall during the morning session was a knee-jerk reaction on the Sebi order. When more clarity on the Sebi order poured in, some amount of investor confidence was restored.”

According to dealers, the order turned to be a blessing in disguise for day traders who placed sell orders in the pre-opening session. This created a panic situation. The late short covering from these players helped the market recoup its losses, they added.

Hot News

GlaxoSmithKline Pharma gets a boost from robust Q1
GlaxoSmithKline Pharmaceuticals gained 3.3% to Rs 1,426 on the back of robust Q1 March 2006 results.Only 2,468 shares changed hands in the counter on BSE.

GlaxoSmithKline Pharmaceuticals has reported 115.7% growth in Q1 March 2006 net profit to Rs 101.23 crore (Rs 46.91 crore). Net sales rose 54% to Rs 426.16 crore (Rs 276.24 crore). Most pharma companies have reported solid results for Jan-March 2006 quarter as their performance in Jan-March 2005 quarter was impacted due to VAT related issues. GlaxoSmithKline Pharmaceuticals was no exception.

Meanwhile, GlaxoSmithKline Pharmaceuticals has sold its veterinary business Agrivet Farmcare (AFC) to Virbac, a France-based company.

Stock Alert

GlaxoSmithKline Pharmaceuticals may gain on robust Q1 results
GlaxoSmithKline Pharmaceuticals may rally on the back of robust Q1 March 2006 results. The net profit jumped 115.7% to Rs 101.23 crore (Rs 46.91 crore). Net sales rose 54% to Rs 426.16 crore (Rs 276.24 crore).

Gufic BioSciences reported 78% fall in Jan-March 2006 quarter net profit to Rs 0.46 crore (Rs 2.07 crore). Net sales declined 13.5% to Rs 12.77 crore (Rs 14.77 crore).

PTC India reported 84.6% jump in Q4 March 2006 net profit to Rs 6.98 crore (Rs 3.78 crore). Net sales rose 121.9% to Rs 754.60 crore (Rs 340.04 crore).

Ind Swift reported 73% fall in Jan-March 2006 quarter net profit to Rs 1.27 crore (Rs 4.77 crore). Net sales declined 6% to Rs 59.82 crore (Rs 63.69 crore).

Areva T&D India reported 178% growth in Q1 March 2006 net profit to Rs 23.64 crore (Rs 8.49 crore). Gross sales rose 69% to Rs 406.79 crore (Rs 240.20 crore).

Timke India reported a 21.4% fall in Q1 March 2006 net profit to Rs 7.96 crore (Rs 10.13 crore). Net sales was flat at Rs 75.16 crore (Rs 75.15 crore).

Esab India has reported 19% growth in Q1 March 2006 net profit to Rs 8.91 crore (Rs 7.51 crore). Net sales rose 16.2% to Rs 62.91 crore (Rs 54.10 crore).

Punjab Chemicals & Crop Protection has convened board meeting on 4 May 2006 to consider various options to raise resources including issue of warrants/debt instruments/ private equity/structured debt/GDRs/FCCBs and such other instruments. The funds raised will be used to for opportunities of organic and inorganic growth, the company said in a statement.

Markets Open on Saturday, 29th April 2006

In order to further test and upgrade its backup site, the Exchange has decided to conduct one more live trading session on Saturday, April 29, 2006.

Market Timings for trading on Saturday, April 29, 2006 will be as follows: Normal Market Open - 10:30 hours
Normal Market Close - 13:30 hours
Closing Session start - 13:50 hours
Closing Session end - 14:00 hours

Trades done on Saturday, April 29, 2006 shall be settled on Wednessday, May 03, 2006, as a separate settlement. As a result, shares bought on April 28, 2006 shall not be allowed to be sold on April 29, 2006.

Slippery steps in an ascending escalator

The domestic growth story looks strong, but there are stress signals from the global economy.India’s corporate sector continues to impress. The first 150 results announced by companies over April show corporate earnings (net profits) during 2005-6 have surged by over 35%. Although their pace has slowed somewhat, profit growth numbers remain impressive. As one looks to the future, it appears the growth story is intact. But bad things usually happen during good times and even as one prepares to take advantage of the unfolding growth environment, it may be useful to get proactive on the risks lurking around the corner and take into account the costs of hedging that risk.

First, the good news. India’s growth story continues to look robust and GDP may advance by 7.5-8% in 2006-7. What is impressive is that economic momentum is spread across almost all segments of manufacturing and services, that account for 80% of GDP. There are three major differences between the high growth boom of the 1990s and the ongoing one. First, India’s services exports ($67 billion in 2005-6) have acquired critical mass and created a rapidly growing middle class that is driving consumption. Software and BPO exports of $23.5 bn in 2005-6 are creating a huge consumption multiplier. The IT industry alone would expand employment by nearly 300,000 people this fiscal and create huge new middle class consumption demand. Add to this the middle class jobs to be created in financial services, retailing, hospitality and tourism, entertainment, telecom, etc.

Second, and partly linked to the first, there is a momentum in all-round construction activity that was missing in the 1990s. With the rising spend on infrastructure, this has added a new dimension to the economy that is generating demand for both manufactured goods and services, and also creating job linkages with rural and semi-urban areas. Third, India’s manufacturing sector has become a lot more competitive over the past decade and segments of it are now making impressive inroads into the global market and are also less vulnerable to import competition. This makes capacity additions more sustainable and less risky, as industry has the option of selling both at home and abroad.

Agriculture remains a weak spot, but that is partly being compensated by strong performance of the non-farm rural economy. There is also evidence that the strong performance of services and manufacturing segments is now creating opportunities for rural youth. The increasing consumption of manufactured goods and services in rural areas indicates economic growth is now generating backward linkages. The other positive development for the rural economy is the surge in investor interest in food processing and the entire value chain that links the farmer to the consumer. The shrinking contribution of agriculture to GDP means that growth is getting less susceptible to monsoon failure.

The continuing bull-run in stock markets needs to be appraised against this backdrop. Strong inflows of domestic and foreign money are chasing high growth and good returns being provided by large and medium companies. It is being said the P/E of around 20 for Sensex stocks is too high and unsustainable. There is no hard rule about high and low P/Es. If Japan with 2% GDP growth has a P/E of 17, India with four times that GDP growth figure can surely sustain much higher P/Es, provided there is demand (liquidity) chasing Indian stocks.

At present, there seems no expectation of a slowing in liquidity inflows into the stock market, as the growth story remains strong. What should strengthen the sentiment are the huge cash reserves accumulated by Indian corporates, giving them the ability to incur large sums on capital expenditure without worrying too much about the rising trend in interest rates. That investment activity is gathering momentum is evident by a 32% jump in imports of capital goods and 16% increase in their domestic production.

While the domestic story looks strong, it cannot be ignored that rapid globalisation of the Indian economy has made it more susceptible to the confidence (or lack of it) that investors have in the global economy as a whole. There are stress signals here that need to be assessed and factored into investment and expansion strategies. The first and perhaps most dangerous signal is the ongoing tussle over Iran’s nuclear facilities and its implications for global oil prices, investor confidence and the global economic environment.

Any sign of a confrontation in the Persian Gulf will send oil prices soaring and rock the leading stock and commodity exchanges. Once the confidence is dented, it may be a while before it is restored. Each company must analyse the implications of a sudden spike in global oil prices for its production process or the demand for its products. What companies also need to do is to assess the impact of turbulence in stock markets and prices of commodities, define the likely risks and take measures to hedge against these. The need to do this would be greater for small and mid-cap companies that have just begun to find their place under the sun.

The second area that needs a close watch is global and local asset markets. At a time when asset price inflation is rising, corporates must clearly map their exposures in assets of all kinds, whether stocks, commodities, real estate, etc. Third, the health of the US economy and the dollar, and the implications for global growth, export demand, liquidity flows and currency markets must be monitored.

India is experiencing one of the most exciting episodes in its economic history and investors, foreign and local, must make the most of this. However, there is need to safeguard against some disquieting trends in the global economy.

Source:Financial Express
—The writer Vivek Bharati is an advisor to Ficci. These are his personal views.

SEBI defers order against Indiabulls

The Securities and Exchange Board of India has deferred its order banning Indiabulls Securities from participating in the capital market in the wake of its findings about the role of depository participants in the multi-crore IPO scam.The order would be kept in abeyance, pending verification of clients.

"Pursuant to the same and on the basis of oral and written submissions made by Sameer Gehlaut, Chairman, Indiabulls Securities, and having regard to the balance of convenience in the materiality of circumstances of the case, the order would be kept in abeyance subject to verification of clients and until further directions," SEBI said on Friday.

Indiabulls along with Karvy were among 24 operators who were barred from operating in the stock markets on Thursday in the SEBI's order on IPO scam.Earlier on Friday, Indiabulls had said it would contest the SEBI order, contending it was based on "factually incorrect data."

Markets Today

Sensex ends with small gain, huge intra-day rebound
Buying support at lower level from cash rich domestic mutual funds triggered a solid recovery on the bourses today. The recovery accentuated in the last half an hour of trading, soon after news hit the market that SEBI had kept in abeyance its interim order barring Indiabulls Securities from trading after a hearing with the brokerage.
It was a highly volatile trading session as the Sensex moved up and down in intra-day trade.

Sensex ended with a gain of 16.91 points (14%) to settle at 11,851.93. The S&P CNX Nifty ended flat at 3,508.35 compared to Thursday’s closing of 3,508.10.It may be recalled that Sensex had tanked as much as 490 points within minutes of commencement of trading, to a low of 11,344.61 as the sentiment was hit by a SEBI order banning 24 entities from the market, including Indiabulls with respect to an IPO scam.

`On the basis of oral and written submissions made by Sameer Gehlaut, Chairman, Indiabulls Securities and having regard to the balance of convenience in the materiality of circumstances of the case, the ex-parte ad interim order dated April 27, 2006 in the matter of Initial Public Offerings, in so far as it relates to Indiabulls Securities would be kept in abeyance subject to verification of clients and until further directions’, a SEBI released issued in late afternoon trade on Friday stated.

In an interim order passed late on Thursday, SEBI said 24 entities including Indiabulls and Karvy Stock Broking appeared to be key operators in various IPOs during 2003-2005, "tilting the allotment process in their favour". SEBI said certain firms had cornered IPO shares reserved for retail applicants with thousands of fictitious applications for small amounts that were then transferred to financiers, who sold them on the first day of listing for a profit.

BSE clocked a turnover of Rs 4426 crore today, lower than Thursday's Rs 5335 crore.
Data released after trading hours on Thursday (27 April) showed, domestic mutual funds bought shares worth a net Rs 327.67 crore on Wednesday (26 April) – the day when Sensex had jumped 292 points. On Tuesday (25 April), mutual funds had mopped up shares worth a net Rs 217.43 crore. On that day, the Sensex had tanked 268 points. Mutual funds are sitting on a large cash pile due to hefty collections from new equity schemes over the past 3-4 months. In the month of April 2006 so far, they bought shares worth a net Rs 2,324 crore (till 26 April).

FIIs made heavy purchases on 27 April. As per provisional data, FIIs bought shares worth a huge Rs 2,635 crore on 27 April – the day when it had plunged 104 points. The huge FII inflow was due to a major block deal whereby IOC had sold 2.7 crore shares of ONGC to a clutch of institutional investors.

Trading remains on tomorrow for three hours between 10:30 IST to 13:30 IST as BSE and NSE are testing their backup sites at Chennai.

Index heavyweight Reliance Industries rose 1.2% today to Rs 1,009. RIL has a huge weightage of 10.4% in the Sensex. RIL on Thursday reported better-than-expected Q4 results during trading hours on the back of strong refining margins. RIL said its refinery margins in Q4 March 2006 were its highest ever at $10.3 a barrel, compared to $9.1 a barrel in October-December 2005 quarter, and higher than benchmark Singapore refining margins.

Infosys ended flat at Rs 3,135. The stock recovered from a level of Rs 3,095 that it had hovered at about 14:30 IST. Infosys has a weightage of 10% in the Sensex.
Software major TCS rose 1.9% to Rs 1,990. At the time of announcing Q4 March 2006 results, TCS had announced that it was pursuing a 5-year $ 500 million outsourcing deal.

ICICI Bank gained 1.4% to Rs 575. ICICI Bank has a 6.9% weightage in the Sensex.
Two auto stocks surged. Hero Honda rose 3.2% to Rs 850 and car major Maruti Udyog gained 2.8% to Rs 924. Oil prices dipped further. Frontmonth US crude for June delivery was down 32 cents at $70.65 on Friday deepening the previous day's 96 cents (1.3%) slump, taking the week's losses so far to 6 %.

ACC rose 1.8% to Rs 951. Firm cement prices have triggered a solid rise in the scrip over the past few days.FMCG major Hindustan Lever (HLL) (up 1% to Rs 290.10) staged a solid intra-day rebound. Earlier, it had dropped as much as 4% in early afternoon trade. HLL has reported a net profit of Rs 442.86 crore as compared to Rs 250.25 crore in Q1 March 2006. Total income rose to Rs 2867.41 crore (Rs 2581.02 crore). The profit included a one-time gain of Rs 200 crore from the sale of its Nihar hair oil to Marico. "We will continue to judiciously use the levers of pricing, cost management and brand investment to sustain profitable growth," Chairman Harish Manwani said in a statement.

Bharti Tele-Ventures gained 0.3% to Rs 403.25. Bharti’s consolidated net profit jumped 48.5% to Rs 682 crore from Rs 459 crore in Q4 March 2005. The results hit the market in morning trade today.

Media major Zee Telefilms jumped 7% to Rs 264.60. The company on Thursday reported a drop in Q4 March 2006 net profit. Earlier this month, the company had announced a major restructuring of its operations.

Power generation major NTPC rose 4.6% to Rs 135.50.

Though Indiabulls (down 9% to Rs 282.50) ended sharply lower, the stock staged a solid intra-day rebound soon after the news hit the market that SEBI had kept in abeyance its interim order barring Indiabulls Securities. Just before the news hit the market, the stock had plunged 20% to Rs 248.80. A staggering 63 lakh shares changed hands in the counter on BSE.

Sterlite Industries jumped 9% to Rs 2,753. As many as 2.6 lakh shares changed hands in the counter on BSE. Earlier, the stock had lost as much as 5% to Rs 2,390 in mid-morning trade due to broad weakness in metal shares as China's surprise rate-hike raised concerns that the move would slow demand for metals. On Thursday, China said the one-year lending rate would be increased to 5.85 % from 5.58 % from Friday, in an effort to cool investment in factories and property.

Dabur India (up 11% to Rs 155) spurted. The stock rose on high volume of 14.1 lakh shares on BSE.

Ador Fontech surged 10% to Rs 138.75 on strong Q4 and FY06 results. The company’s net profit for the fourth quarter jumped 111.2% to Rs 2.07 crore as compared to Rs 0.98 crore for Q4 March 2005. The net sales for the same period rose 27.2% to Rs 22.22 crore from Rs 17.47 crore.

Tantia Construction settled at Rs 220, a huge premium of 340% over the IPO price of Rs 50. A staggering 1.05 crore shares changed hands in the counter on BSE. Tantia has a strong order-book. From Rs 650 crore on 31 March 2005, it swelled to Rs 810 crore. The current order-book is 7.8 times its FY 2005 full year net sales of Rs 103.16 crore. Most of these orders are scheduled for completion over the next 2-3 years.

Patni Computer declined for the second day in a row, on cue from a fall in its ADR. The scrip lost 6.5% to Rs 373.75. Disappointing Q1 March 2006 results announced on Wednesday sent Panti ADR plunging on Wednesday and Thursday, impacting the scrip price on BSE.

Cadila Healthcare jumped nearly 7% to Rs 708 after the company declared a liberal 1:1 bonus issue.Yes Bank rose 3% to Rs 99.70 after it reported a surge in Q4 March 2006 net profit. Yes Bank has reported a net profit jump of 1,529% to Rs 15.32 crore for Q4 March 2006 as compared to a net profit of Rs 94 lakh in Q4 March 2005. Total income has jumped 232% to Rs 59.07 crore from Rs 17.79 crore in Q4 March 2005.Atlas Copco gained 1.4% to Rs 2,020 after the company declared a liberal 1:1 bonus.

Quarterly Results

Mico Q1 net at Rs 114.91 crore
Total Income at Rs 929.29 crore.Motor Industries Company (MICO) has posted a net profit of Rs 114.91 crore for the quarter ended March 31, 2006 (Q1 FY 2006) as compared to Rs 91.74 crore for the quarter ended March 31, 2005 (Q1 FY 2005). Total Income has increased from Rs 662.08 crore in Q1 FY 2005 to Rs 929.29 crore for Q1 FY 2006.

Gail Q4 net at Rs 409.26 crore
Annual net profit at Rs 2310.07 crore.Gail India has posted a net profit of Rs 409.26 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 523.53 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 3663.14 crore in Q4 FY 04-05 to Rs 4292.22 crore for Q4 FY 05-06.The company has posted a net profit of Rs 2310.07 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 1953.91 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 13940.43 crore in FY 04-05 to Rs 16806.83 crore for FY 05-06.

Bank of India Q4 net at Rs 254.42 crore
Annual net profit at Rs 701.44 crore.Bank of India has posted a net profit of Rs 254.42 crore for the quarter ended 31 March 2006 (Q4 FY 05-06) as compared to Rs 52.79 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 1978.65 crore in Q4 FY 04-05 to Rs 2326.58 crore for Q4 FY 05-06.
The Bank has posted a net profit of Rs 701.44 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 340.05 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 7187.32 crore in FY 04-05 to Rs 8213.08 crore for FY 05-06.

GE Shipping Q4 net at Rs 223.06 crore
Annual net profit at Rs 939.14 crore.Great Eastern Shipping Company has posted a net profit of Rs 223.06 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 251.68 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 571.16 crore in Q4 FY 04-05 to Rs 660.56 crore for Q4 FY 05-06.The Company has posted a net profit of Rs 939.14 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 808.79 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 2119.23 crore in FY 04-05 to Rs 2690.73 crore for FY 05-06.The Group has posted a net profit of Rs 957.42 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 836.79 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 2202.32 crore in FY 04-05 to Rs 2846.54 crore for FY 05-06.

Hot News

Tantia Construction attracts 318% premium
Tantia Construction was trading at Rs 209, a huge premium of 318% over the IPO price of Rs 50.The stock opened at Rs 180. It struck a low of Rs 180 and a high of Rs 254. As many as 70.5 lakh shares changed hands in the counter on BSE.The current price of Rs 209, discounts its 9-month April-September 2005 annualised EPS of Rs 3.5, by a PE multiple of 59.7.Tantia Construction has strong presence in Eastern India.

Tantia has a strong order book. From Rs 650 crore on 31 March 2005, its order-book swelled to Rs 810 crore. The current order-book is 7.8 times its FY 2005 full year net sales of Rs 103.16 crore. Most of these orders are scheduled for completion over the next 2-3 years.

Tantia has a diversified project portfolio spanning railways, roads, ports, bridges, power and urban infrastructure. As its order-book is not dependent on a single segment of the construction industry, it is exposed to relatively low business risk.

For 9-months ended 31 December 2005, the company made a net profit of Rs 4.08 crore as compared to a net profit of Rs 1.87 crore in the full year FY 2005 (year ended 31 March 2006). The first 9-months revenue stood at Rs 96.54 crore versus Rs 103.16 crore in FY 2005.

Emkay Share and Stock Brokers attracts 11% premium
Emkay Share and Stock Brokers was trading at Rs 133.10 in afternoon trade, a small premium of 10.9% over IPO price of Rs 120.The stock opened at Rs 148. It hit a low of Rs 115 and a high of Rs 149. 34.9 lakh shares changed hands in the counter on BSE.The current price of Rs 133.10 discounts its six months year April-September 2005 EPS of Rs 5.77, by a PE multiple of 23.The post issue FII-holding in the company is 8.1%. Mutual funds’ holding is 3.7%. The equity capital is Rs 24.15 crore with large promoters’ holding of 72.46%

Emkay Share and Stock Brokers (ESSB)’s revenue predominantly comprises brokerage income from equities and derivatives on BSE and NSE. The primary focus of ESSB is on institutional broking, which generates almost 55% of its income.

The company also undertakes distribution of third-party products, portfolio management service (PMS) and demat services. However, their contribution to income is very small. The company now plans to become a full service brokerage outfit providing comprehensive advisory services to its clients.

The company is expanding its operations and branch network (both in India and overseas), from current 41 to 100, in the next two years. ESSB will upgrade its technology to support its increasing business volumes and scale up the online trading business.For 6-months April-September 2005, ESSB reported a net profit of Rs 6.96 crore on income from operations of Rs 19.49 crore.

Yes Bank strengthens on brilliant results
Yes Bank rose 2.48% to Rs 99 on brilliant Q4 results.As many as 1.95 lakh shares were traded on the BSE.The stock has been on a roll since late October 2005. From Rs 63.40 on 28 October 2005, the scrip, amid lots of fluctuation en-route, rallied to close at the high of Rs 102.20 on 3 April 2006. From there, the scrip slipped, rose and again slipped to close at Rs 96.60 on 27 April 2006.Yes Bank has reported a net profit jump of 1,529% to Rs 15.32 crore for Q4 March 2006 as compared to a net profit of Rs 94 lakh in Q4 March 2005. Total income has jumped 232% to Rs 59.07 crore from Rs 17.79 crore in Q4 March 2005.On 10 April, YES Bank had offered debt financing of $ 4.45 million to Take Solutions, a technology-enabled business solutions company.

On 21 March, Yes Bank had entered into an agreement with IMaCS (ICRA Management Consulting Services Limited), a wholly owned subsidiary of ICRA, to construct Basel II compliant credit risk rating models along with a workflow oriented software which will lay the foundation for Yes Bank to enhance its internal risk rating processes. This will enable Yes Bank to compute capital as per Basel II requirements, calculate risk-based pricing and generate the necessary MIS and portfolio reports for credit risk management.

Yes Bank came out with its maiden IPO of 7 crore equity shares in June 2005 for the purpose of raising its paid-up capital base, meet its long-term capital requirement for growth and diversify the equity-holding structure.

Yes Bank has 6 operational branches in Mumbai and Delhi, the financial hubs of the country. It plans to open another 24 branches by the end of FY 2006 in major cities, which would lay the foundation for business expansion and brand building.

Thursday, April 27, 2006

Quarterly Results

Moser Baer India Q4 net at Rs 34.9 lakh
Annual net profit at Rs 5.32 crore.Moser Baer India has posted a net profit after tax of Rs 34.9 lakh for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 24.52 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of duties) has increased from Rs 411.82 crore in (Q4 FY 04-05) to Rs 521.88 crore for (Q4 FY 05-06).The Company has posted a net profit of Rs 5.32 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 58.37 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of duties) has increased from Rs 1,343.02 crore in FY 04-05 to Rs 1,725.13 crore for FY 05-06.

P&G Q3 net at Rs 26.54 crore
Total income falls to Rs 1.24 billion.Procter & Gamble Hygiene and Health Care posted a net profit of Rs 26.54 crore for the January-March quarter, up 81 % over a year ago, the company said on Friday.The soap and personal care products maker had a net profit of Rs 14.66 crore in the comparable period a year ago.The company said its total income for the third quarter was Rs 1.24 billion versus Rs 1.75 billion a year ago.The figures were not strictly comparable because it had exited its detergent business, the company said.

Hot News

Rebound after initial 490-point fall
The Sensex plunged as much as 490 points before recovering sharply from the lower level in opening trade.The plunge came on the back of a SEBI order banning 24 entities from the market in regards to an IPO scam.

At 9:59 IST, the Sensex was down 136 points, on 11,698 off sharply from a low of 11,344.61 hit in opening trade. From the day’s low, the barometer index had recovered 353 points.After opening with a downward gap of 136 points, at 11,698.68, the Sensex lost further ground and plummeted as much as 490 points, to a low of 11,344.61 within minutes of commencement of trading.

Besides the SEBI order, weakness in Asian markets impacted the domestic bourses.BSE clocked a turnover of Rs 295 crore.Some major losers were Cipla (down 5% to Rs 246), HDFC Bank (down 3.4% to Rs 795), Wipro (down 2.7% to Rs 529), Hindalco (down 2.9% to Rs 211), HDFC (down 3% to Rs 1,260), Grasim (down 2.5% to Rs 2,305), and VSNL (down 3% to Rs 409).

The market breadth was extremely weak. While 1,136 stocks declined on BSE, 218 rose. Only 8 scrips were unchanged. Losers outpaced gainers by a ratio of 5.21:1.

The Securities and Exchange Board of India (SEBI) has barred 24 entities from the securities market after investigating an alleged manipulation of initial public offerings. In an interim order passed late on Thursday, SEBI said these entities appeared to be key operators in various IPOs during 2003-2005, "tilting the allotment process to their favour". However, the ban on dealing for these entities, including Indiabulls and Karvy, is with respect to dealing in proprietary account by these entities and the brokerages can execute trades on behalf of their clients.

SEBI said certain firms had cornered IPO shares reserved for retail applicants with thousands of fictitious applications for small amounts that were then transferred to financiers who sold them on the first day of listing for a profit.

SEBI has also instructed 12 other depositary participants including HDFC Bank, Centurion Bank of Punjab, Motilal Oswal Securities, ING Vysya Bank, Infrastructure Leasing & Financial Services, Khandwala Int. Fin. Services not to open fresh paperless share accounts. SEBI said these depositary participants had failed to meet "Know Your Client" norms and it also ordered an investigation into 13 others.

Meanwhile, China's surprise interest rate hike spooked Asian markets and pushed them lower on Friday, offsetting US Federal Reserve chief's hints of a possible end of US rate increases.

Indiabulls plunges on SEBI ban
Indiabulls Financial Services Ltd. touched 248.80 rupees, down 20 percent, the maximum daily limit, after it was barred by the market regulator Securities and Exchange Board of India on Thursday on alleged manipulation of an initial public
offering. The stock has recovered but is at 271.05 rupees, down 12.8 percent.

Stock Alert

Dalmia Cement may build on robust Q4 results
Dalmia Cements reported 342% growth in Q4 March 2006 net profit to Rs 53.53 crore (Rs 12.11 crore). Net sales rose 33.2% to Rs 183.47 crore (Rs 137.70 crore).

Jet Airways will levy a fuel surcharge of Rs 300 ($6.70) per seat on all its domestic flights from May 1, the company said on Thursday. The fuel surcharge will be applicable on all tickets for all domestic routes in India, the company said in a statement. Ahead of the news, shares in Jet ended down 1.2% at Rs 935.70 in a weak market.

Media Video reported 103% growth in Q3 March 2006 net profit to Rs 2.48 crore (Rs 1.22 crore). Net sales rose 77.5% to Rs 47.45 crore (Rs 26.72 crore).Sanghi Industries reported a 454% surge in net profit for Q4 March 2006 to Rs 39.11 crore (Rs 7.05 crore). Net sales rose 70.6% to Rs 194.96 crore (Rs 114.22 crore). Meanwhile, the company’s board has approved raising up to Rs 1500 crore ($333 million). The issue could be through issue of shares, overseas depositary receipts or convertible bonds, the company said.

Nagarjuna Fertilisers reported a 5.2% growth in Q4 March 2006 net profit to Rs 16.80 crore (Rs 15.96 crore). Net sales rose 6.8% to Rs 349.33 crore (Rs 326.84 crore).
Polaris Software reported a 9.4% fall in Q4 March 2006 net profit to Rs 2.12 crore (Rs 2.34 crore). Revenue rose 1.2% to Rs 198.85 crore (Rs 196.43 crore). The board recommended a dividend of Rs 2.50 per share.

Emkay Share and Stock Brokers lists on BSE and NSE today. The company had priced its IPO at Rs 120 per share.Blue Dart Express reported 89.5% growth in Q1 March 2006 net profit to Rs 18.20 crore (Rs 9.60 crore). Net sales rose 25% to Rs 152 crore (Rs 121.40 crore).

Banswara Syntex has got a $2.87 million fabric export order, the company said on Thursday. Ahead of the announcement shares in the company closed 2.5% down at Rs 86.35 in a weak market

Mahindra & Mahindra Financial Services has registered 31.7% growth in FY 2006 (twelve months ended 31 March 2006) net profit to Rs 108 crore (Rs 82 crore). Income from operations rose 46.5% to Rs 582 crore (Rs 397 crore). It also approved raising the foreign portfolio investment limit to 35% from 24%.

How will the market be today?

Market to lose further ground
The market is likely to lose ground with SEBI banning 24 entities from capital market for their role in IPO scam. The SEBI move dragged down ADRs of Infosys Technologies, ICICI Bank, HDFC Bank and Tata Motors, between 3-7% on Thursday. Weakness in Asian market will add to the fall on the bourses today. Mutual funds may support the market at declines as they are sitting on large cash pile

The Securities and Exchange Board of India (SEBI) has barred 24 entities from the securities market after investigating alleged manipulation of initial public offerings. In an interim order passed late on Thursday, SEBI said these entities appeared to be key operators in various IPOs during 2003-2005, "tilting the allotment process to their favour". However, the fall in market due to SEBI order may be limited since the ban on pertain to their proprietary trades and the banned brokerages can execute trade on behalf of their clients.

China's surprise interest rate hike spooked Asian markets and pushed them lower on Friday, offsetting US Federal Reserve chief's hints of a possible end of US rate increases.Meanwhile, the latest data showed FIIs bought shares worth a huge Rs 2635 crore on Thursday (27 April) – the day when Sensex had plunged 104 points.

Mutual Funds bought shares worth a net Rs 327.67 crore on Wednesday (26 April). Sensex had jumped 292 points on that day. On Wall Street, the Dow Jones industrial average rose 0.25 percent on Thursday after Federal Reserve Chairman Ben Bernanke said the Fed might pause in its 22-month cycle of raising borrowing costs. The Nasdaq Composite Index gained 0.49 percent.

Frontmonth US crude for June delivery was down 32 cents at $70.65 on Friday deepening the previous day's 96 cent or 1.3 percent slump and taking the week's losses so far to 6 percent.

Sebi ban: Customers may not be able to trade

As market regulator Sebi bars heavyweights like Indiabulls, Karvy from stock market, there customers may not be able to trade on Friday.The only way out for these investors will be to transfer their shares into another demat account with another depository participant and then sell in the market. This, however, could take a few days.

This holds true for customers of Karvy and Anagram Securities as well. However, market sources say that investors holding positions in the derivatives segment will have the option to call up the exchange directly and square off their positions.

When contacted, Gagan Banga, CEO of Indiabulls, said they were still trying to ascertain from Sebi whether their customers could trade in the market.

Thursday's order has also named several high-profile depository participants like HDFC Bank, IL&FS, Motilal Oswal Securities, IDBI Bank, ING Vysya Bank and Centurion Bank, which have been barred from opening new depository accounts.

Investigation by the regulator has also found that DPs like Kotak Securities, Kotak Mahindra Bank, Citibank, ICICI Bank, Standard Chartered Bank, UTI Bank and BNP Paribas had more than 500 demat account-holders sharing common addresses.

Sebi has directed NSDL to inspect the books of all these DPs and ascertain whether all the addresses are genuine and whether the rules were adhered to while opening these demat accounts.

A number of leading banks could also find themselves in deep trouble after Sebi exposure. In the wake of the IPO demat scam, in which several banks were found to have played a major role in financing IPOs, Sebi has made references to the banking regulator RBI for appropriate action against these banks.

Investigations have found that between 2003-2005, as many as 21 IPOs - including TCS, NTPC, Suzlon and Jet Airways - were manipulated by these players. It all started with the Maruti Udyog divestment in June 2003.

Over these two years, these unscrupulous market players, now indicted by Sebi, cheated retail investors. They took advantage of the fact that the chance of getting allotments in the retail segment of an IPO was far more than other segments, like high networth clients and institutional segments.

So they opened a large number of bogus or benami bank and demat accounts, and applied for IPO allotments with money borrowed from financiers.

Once they got allotment in the IPOs, they sold these shares in the market, mostly at a premium. And, several lakhs of genuine small investors were deprived from participating in these IPOs.

SEBI bars Indiabulls, Karvy and 22 others

In a move that could likely impact the ongoing bull run in the Indian equities mrket and also casts some doubt on the various planned initial public offers (IPO), capital market regulator, Securities and Exchange Board of India (Sebi) has barred key depository participants and leading banks from carrying out capital market operations.

In a move that could likely impact the ongoing bull run in the Indian equities market and also casts some doubt on the various planned initial public offers (IPO), capital market regulator, Securities and Exchange Board of India (Sebi) has barred key depository participants and leading banks from carrying out capital market operations.

In an ex-parte order issued late Thursday evening, Sebi barred Karvy and Pratik from carrying out depository participant (DP) and any other stock market activities, including broking. Karvy is India’s leading DP. The market regulator also directed major banks such as HDFC Bank, Centurion Bank of Punjab, IDBI Bank, ING Vysya Bank, Infrastructure Leasing & Financial Services, Motilal Oswal Securities and others, not to open fresh demat accounts. Indiabulls Securities, a major stock broker, has also been barred from the securities market. Karvy Stockbroker has also been banned.

The order issued by Sebi whole-time member G Anantharaman, has barred 24 “key operators” not to buy, sell or deal in the securities market, including in IPOs, directly or indirectly, till further directions. “We don’t comment on our own orders. Others have that privilege,” Sebi chairman M Damodaran told ET.

In its April 9 edition, ET had mentioned that Sebi had found more operators involved in the IPO irregularities. The move may cause uncertainty for many investors, including retail and high net worth individuals, who have broking accounts with Karvy Stockbroking and Indiabulls, both of whom are major brokers.

However, retail investors will be allowed to transfer their DP accounts to other Sebi registered DPs, according to the portion of the Sebi order dealing with Karvy. It is possible that broking accounts may also be allowed to be transferred.

The order which came late in the evening, had an immediate impact on the fortunes of Indian companies in the overseas markets. NYSE-listed software major Infosys Technologies traded weakly on news of the Sebi crackdown.

The operators mentioned by Sebi, include Roopalben Nareshbhai Panchal, Sugandh Estates and Investments, but the prominent retail brokerage Indiabulls Securities and Karvy Stockbroker are the only two real big names among the brokerages.

Sebi has also directed NSDL and CDSL to ensure that the demat accounts which were used by these “key operators” are not used for manipulation of IPO allotment in the future.Sebi has also barred about 84 entities, who financed the above mentioned key operators, from trading in the securities market and in IPOs. The financiers also include Karvy Stock Broking and prominent chartered accountant Dushyant Natwarlal Dalal.

Coming down heavily on the DP activities of major banks, Sebi said that the banks have “grossly failed in adhering to the know-your-client norms and thereby facilitated opening of demat accounts in fictitious names and cornering the retail portion of IPO shares.”

The Sebi investigation was initiated after reports of irregularities surfaced in the IPOs of Yes Bank and IDFC. There were complaints on alleged manipulation in the allotment of shares in the two IPOs, where some investors allegedly opened large number of demat accounts — as many as 14,000 in some cases — to corner large number of shares of the company.

The order has been particularly harsh on the various arms of the Hyderabad-based Karvy. “Since the business groups of Karvy have appeared to have acted in concert in the gamut of the IPO manipulations, Karvy Stock Broking, Karvy Computershare, Karvy Investor Services and Karvy Consultants have been banned from taking on fresh business as registrar to issues and share transfer agents.

Penny Stocks perk up in journey from 11k to 12k

The Sensex journey from 11,000 to 12,000 has seen the prices of penny stocks perk up once again without any change in the fundamentals. The list of such penny stocks includes those earlier pulled up by Sebi.

In September 2005, Sebi had come down heavily on six stocks: IFSL, Prime Property, Konkan Tyres, Minal Engineering, Consortex Karl Doelitzch, Ind-Tra Deco and Shree Mahaganga Sugar Mills Ltd (formerly Eltrol Ltd). Between March 27 and April 20, when the Sensex gained 1,000 points, all the stocks but one (Minal Engineering) gained in the range of 25% to 144%.

Take IFSL. The stock moved from Rs 1.48 to Rs 3.61 - a gain of 143.92% in less than a month. On the other hand, Konkan Tyres gained 83.08% moving from Rs 2.01 to Rs 3.68 in the same period. Similarly, Prime Property (up 44.02%), Consortex (up 71.43%), Ind Tra Deco (up 48%) and Shree Mahaganga (up 25%) also gained in the recent bull run.

Interestingly, these stocks did not move up when the Sensex moved from 10,000 to 11,000 or from 9,000 to 10,000. They had previously posted massive gains only when the index moved from 7,000 to 8,000.



Markets Today

Erosion of 104 points on derivatives expiry, weak European bourses
The market ended in the red today as weakness in European markets and unwinding of positions by traders, due to expiry of April 2006 derivative-contracts, pulled it down in the second half of the trading session. The market did a total reversal of the firm early trend in the second half of trading.

Reliance Industries edged higher after the company reported a better- -than-expected Q4 March 2006 results on the back of record refining margins. Auto stocks succumbed to profit-taking. Oil exploration major ONGC plunged and ACC dipped on profit-taking after a recent sharp surge in its price. IT bellwether Infosys lost ground. FMCG stocks were in demand.

The 30-share BSE Sensex lost 103.51 points (0.8%) to settle at 11,835.02. The S&P CNX Nifty lost 47.65 points (1.3%) to settle at 3,508.10.

Earlier, the market had surged by mid-morning trade, tracking firm Asian markets, a further fall in oil prices and a firm trend in ADRs on Wednesday. The Sensex had risen as much as 148.38 points to a high of 12,086.91.

The barometer index moved 283.42 for the day, between a low of 12,086.91 and a high of 11,803.49.As per provisional data, Nifty May 2006 futures ended at 3,517, a premium of 8.90 points over spot Nifty closing of 3,508.10. April derivative-contracts expired today. NSE’s futures segment clocked a record turnover of Rs 60,433 crore.

London’s FTSE 100 index was down nearly 1% after ECB Governing Council member, Nicholas Garganas, reminded markets that more interest rate rises are on the way and that inflation risks have surged. Asian stocks were mixed with most markets paring gain during the course of trading. Key indices in Hong Kong and Japan rose by between 0.34-0.4%. Stocks in Singapore and South Korea were marginally firmer. Stocks in Taiwan, Indonesia, Australia and Malaysia lost between 0.18-0.48%.

Turnover on BSE surged today to Rs 5,299 crore. It had dropped in the past two days. The turnover in the past two days was between Rs 4,588-4704 crore.Small cap and mid-cap stocks outperformed the market today. BSE small-cap index rose 60.54 points (0.8%) to settle at 7,254.80. The BSE mid-cap index gained 31.94 points (0.56%) to settle at 5,716.86. The last few days have seen small-cap and mid-cap stocks shining on the bourses. In a bull market like the current one, investors switch from one sector to another and from one segment of the market (from large cap to small-caps/mid-caps) in rotation.

Volatility on the bourses has risen sharply in the past few days following a solid surge over the past few months that has taken the market to record high level. On Wednesday (26 April), the Sensex jumped 292 points, a day after it had plunged 268 points on Tuesday (25 April).

An intermittent surge in volatility is also being witnessed in intra-day trade since the past few days. On 13 April, the Sensex swung a huge 1,000 points in intra-day trade.Over the past 4 years or so, the market has been on a bull-run on the back of strong corporate earnings, a boom in India’s economy and an increase in the risk appetite of global investors.

Reliance Industries rose 2% today to Rs 998.25. But the stock cooled off after it had jumped 3.5% to a high of Rs 1,013, soon after its results hit the market. A whopping 38 lakh shares changed hands in the counter on BSE. Reliance Industries reported a net profit of Rs 2502 crore for Q4 March 2006, a growth of 9.1% compared to a net profit of Rs 2292 crore for Q4 March 2005. Total income (net of excise) has risen 34.4% to Rs 24629 crore (Rs 18315 crore). The net profit has beat market expectation. Market men were expecting a fall in net profit of RIL mainly due to a fall in refining margins.

ONGC plunged 5.7% to Rs 1,307. IOC today sold 2.7 crore shares of ONGC at Rs 1,345 shares, in favour of a clutch of institutional investors.Infosys lost 2.6% to Rs 3,142. Infosys has 10% weightage in the Sensex.

Car maker Maruti Udyog lost 2.5% to Rs 899.80. The stock had spurted on Wednesday after the car major reported strong Q4 results during trading hours.

Among other auto shares, Tata Motors lost 2.7% to Rs 932, and Hero Honda lost 2% to Rs 830 and Bajaj Auto shed 0.8% to Rs 2,927. HDFC Bank (down 3% to Rs 811) was a major loser.

Cement major ACC lost 2.6% to Rs 942. The stock had risen sharply over the past few weeks on the back of firm cement product prices.

Zee Telefilms gained 1.6% to Rs 245.50. Zee reported 27% fall in Q4 March 2006 net profit to Rs 67.55 crore (Rs 92.57 crore). Total income rose 10% to Rs 396.64 crore (Rs 360.02 crore).

Petronet LNG jumped 11% to Rs 59 after it reported a solid surge in Q4 March 2006 net profit. The net profit surged to Rs 66.14 crore from Rs 7.61 crore in Q4 March 2005. Net sales rose 79.9% to Rs 941.74 crore (Rs 523.26 crore).

Investment & Precision Castings jumped 20% to Rs 1,217.25 as the scrip rose for the second day in a row after the company declared a liberal 3:1 bonus.

Indiabulls jumped 14% to Rs 317 after its joint venture with a subsidiary of DLF Universal had the winning bid in an auction for a 35.8-acre residential land in south Delhi.

FMCG stocks were in demand. Nestle jumped 8% to Rs 1,330, ahead of its Q1 March 2006 results which are due later in the day. Colgate rose 6% to Rs 430, Dabur rose 5.6% to Rs 140, Marico gained 1.6% to Rs 545, P&G rose 1.1% to Rs 975, Glaxosmithkline Consumer Healthcare gained 1.4% to Rs 618 and ITC rose 0.8% to Rs 213. FMCG major Hindustan Lever (Rs 288.95) ended flat.

Hot News

United Breweries trotting on stock split proposal
United Breweries jumped 10% to Rs 1,442.40 on its decision to split existing stock.
Only 903 shares were traded on the BSE. There are pending buy orders for 1,972 share at the maximum price.The stock has been south-bound since the beginning of this month. From Rs 1,698.40 on 4 April 2006, the stock depreciated to Rs 1,311.30 on 26 April 2006. Earlier, the stock was on a roll from Rs 727.85 on 18 January to Rs 1,698.40 on 4 April 2006.United Breweries has approved the sub-division of 2,16,00,125 equity shares of Rs 10 each, into equity shares of Re 1 each.On 14 April, United Breweries' Kingfisher took the lead as the largest selling brand in strong beer, which accounts for 65% share of the overall domestic consumption.In March, UB had decided not to merge Millennium Alcobev (MABL) with itself, as it does not want to takeover a company ridden with huge debts and negative worth.In March, UB and the UK brewer Scottish & Newcastle (S&N) had jointly acquired Ravi Jain's 20% stake in Millennium Alcobev (MABL) for about Rs 18 crore.In February, United Breweries and the UK brewer Scottish & New castle had lined up fresh investments of Rs 400 crore towards doubling sales capacity in the next 3-4 years to keep pace with the buoyant beer market.The net profit for Q3 December 2005 jumped 550% to Rs 9.24 crore from Rs 1.42 crore for Q3 December 3004. The net sales for the same period rose 23.5% to Rs 120.87 crore from Rs 97.85 crore.

RIL gains on Q4 results
Reliance Industries rose 2% to Rs 998.05 but the stock came off the higher level after it had surged as much as 3.5% to a high of Rs 1,013, soon after the results hit the market.Reliance Industries posted a net profit of Rs 2502 crore for Q4 March 2006, a growth of 9.1% compared to a net profit of Rs 2292 crore for Q4 March 2005. Total income (net of excise) has risen 34.4% to Rs 24629 crore (Rs 18315 crore). The net profit has beat market expectation. Market men were expecting a fall in net profit of RIL mainly due to a fall in refining margins.For the full year FY 2006, the company has registered a net profit of Rs 9069 crore (Rs 7572 crore). Total income (net of excise) has risen 21.3% to Rs 81894 crore (Rs 67501 crore).The company’s board has declared a liberal dividend of Rs 10 per share for FY 2006.

Indian Overseas Bank rallies on wonderful Q4 show
Indian Overseas Bank surged 4.26% to Rs 99.10 on strong Q4 and FY06 results.As many as 3.9 lakh shares were traded on the BSE.Indian Overseas Bank (IOB) has declared its Q4 FY06 results for the period ended 31 March 2006.The IOB net profit surged 30% to Rs 204.44 crore for the fourth quarter ended 31 March 2006 compared to Rs 157.21 crore for Q4 March 2005. Total income for the same period has increased 17.91% to Rs 1,374 crore from Rs 1,165.20 crore.The net profit rose 20.26% to Rs 783.34 crore for the year ended 31 March 2006 as compared to Rs 651.35 crore for FY05. Total income has increased 8% to Rs 5134.48 crore from Rs 4750.60 crore.The board has proposed a dividend of 26%, ie, Re 2.60 per equity share of Rs 10 each for the financial year 2005-06.On 13 April, IOB announced that it had made a cash recovery of Rs 350 crore during the financial year 2005-06, against Rs 258 crore during the previous year. It also upgraded bad loans worth Rs 110 crore.In April, the bank had raised interest rates on FCNR deposits across maturities. The bank had raised the rate payable for deposits for periods over one year and less than two years to 5.15%, for 2-3 years to 5.131%, for 3-4 years to 5.11%, for 4-5 years to 5.107% and for five years to 5.109%. The bank has foreign currency deposits of $ 310 million.On 30 March, Darashaw, a Mumbai-based securities firm, had invested Rs 200 crore in Indian Overseas Bank (IOB), picking up the entire offering of perpetual bonds that were issued by the bank.On 5 March, the bank had hiked interest rates on NRE term deposits by 20 basis points from 1 March 2006. The revised rate is 5.9% on deposits from one year to less than five years. IOB's NRE deposits are now about Rs 5,500 crore.In February, IOB’s board planned the buyout of Bharat Overseas Bank at around Rs 171 crore.

Quarterly Results

IOB Q4 net at Rs 204.44 crore
Annual net profit at Rs 783.34 crore.Indian Overseas Bank (IOB) has posted a net profit of Rs 204.44 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 157.21 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 1,165.20 crore in Q4 FY 04-05 to Rs 1,374.00 crore for Q4 FY 05-06.The Bank has posted a net profit of Rs 783.34 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 651.35 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 4,750.60 crore in FY 04-05 to Rs 5,134.48 crore for FY 05-06.

Arvind Mills Q4 net at Rs 21.47 crore
Annual net profit at Rs 127.16 crore.Arvind Mills has posted a net profit of Rs 21.47 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 53.00 crore the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has decreased from Rs 440.70 crore in Q4 FY 04-05 to Rs 363.75 crore for Q4 FY 05-06.The company has posted a net profit of Rs 127.16 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 127.35 crore for the year ended March 31, 2005 (FY 04-05). Total Income has decreased from Rs 1659.90 crore in FY 04-05 to Rs 1614.52 crore for FY 05-06.The Group has posted a net profit after minority interest of Rs 85.82 crore for the year ended March 31, 2006 (FY 05-06) whereas the same was at Rs 117.38 crore for the year ended March 31, 2005 (FY 04-05). Total Income is Rs 2163.54 crore for FY 05-06 whereas the same was at Rs 1969.95 crore in FY 04-05.

Grasim Q4 net at Rs 346.76 crore
Annual net profit at Rs 1,038.60 crore.Grasim has posted a net profit after minority's share of Rs 346.76 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 249.28 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 2563.52 crore in Q4 FY 04-05 to Rs 2968.23 crore for Q4 FY 05-06.The Group has posted a net profit after minority's share of Rs 1038.60 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 880.43 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 9536.88 crore in FY 04-05 to Rs 10416.91 crore for FY 05-06.

RIL Q4 net at Rs 2502 crore
Annual net profit at Rs 9069 crore.Reliance Industries has posted a net profit of Rs 2502 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 2292 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has increased from Rs 18315 crore in Q4 FY 04-05 to Rs 24629 crore for Q4 FY 05-06.The Company has posted a net profit of Rs 9069 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 7572 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 67501 crore in FY 04-05 to Rs 81894 crore for FY 05-06.The Group has posted a net profit (after adjustments for Minority Interest) of Rs 9398 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 7628 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 68128 crore in FY 04-05 to Rs 84130 crore for FY 05-06.

Dena Bank Q4 net profit at Rs 130.47 crore
Annual net profit at Rs 72.99 crore.Dena Bank has posted a net profit of Rs 130.47 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to a net loss of Rs 39.20 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 493.07 crore in Q4 FY 04-05 to Rs 584.89 crore for Q4 FY 05-06.
The Bank has posted a net profit of Rs 72.99 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 61 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 2036.36 crore in FY 04-05 to Rs 2219.12 crore for FY 05-06.

Zee Telefilms Q4 net at Rs 67.55 crore
Annual net profit at Rs 221.39 crore.Zee Telefilms has posted a net profit after tax of Rs 67.55 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 92.57 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 379.62 crore in Q4 FY 04-05 to Rs 409.18 crore for Q4 FY 05-06.
The Group has posted a net profit after tax of Rs 221.39 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 317.37 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 1330.98 crore in FY 04-05 to Rs 1487.47 crore for FY 05-06.

Wednesday, April 26, 2006

Stock Alert

Merck may get a boost from robust Q1 results
Merck has reported robust Q1 March 2006 results. The net profit jumped 98% to Rs 18.54 crore (Rs 9.35 crore). Net sales has risen 38.3% to Rs 101.45 crore (Rs 73.31 crore). The surge in top line was due to low base effect of Q1 March 2005. Sales in that quarter were affected due to apprehension of dealers on account of the implementation of "Value Added Tax" which came into effect from April 01, 2005.

United Breweries said on Thursday its board had approved a 10-for-1 stock split of 21.6 million equity shares. The board's decision is subject to approval at its shareholders meeting on May 24.

Hinduja TMT said on Wednesday its board approved spinning off its business process outsourcing division into a separate company and merging its media subsidiary with itself. The demerger would be effective from April 1 and Hinduja TMT would soon decide the proportion in which its shareholders would be given shares in the two firms, it said in a statement on Wednesday. Chairman Ashok P. Hinduja said the restructuring would unlock shareholder value for each of the businesses. It would also aid in the induction of strategic and financial partners, he added. He also said the media business under InNetwork Entertainment was in talks with other players for content and distribution collaboration.

Hindustan Oil Exploration Company (HOEC) said on Wednesday its board will meet on May 3 to consider a rights issue. HOEC shares ended 0.4% down at Rs 175.95 in a firm market on Wednesday.

Kalindee Rail Nirman Engineers has received a high value contract from Rail Vikas Nigam Ltd (RVNL), New Delhi, a Govt. of India undertaking under Ministry of Railways, valued Rs 182.22 crore for Gauge Conversion of Meter Gauge Railway Line to Broad Gauge Line of Vellupuram-Maylldurai Section of Southern Railway. This work order is awarded to a consortium comprising the company, Tata Projects and Unity Infrapojects Pvt Ltd, Mumbai. The entire work order is to be commissioned within a period of 21 months. It is an ADB funded project.

Building materials maker Hyderabad Industries reported a net profit of Rs 6.73 crore for Q4 March 2006 as against a net loss of Rs 5.73 crore in Q4 March 2005. Net sales declined 1.6% to Rs 112.82 crore (Rs 114.72 crore). The company had decided to set up two plants to manufacture Fibre Cement Sheets and Accessories at an estimated cost of Rs 30 crore each and to set up a plant to manufacture Autoclaved Aerated Concrete Blocks at an estimated cost of Rs 40 crore.

Software firm Megasoft said on Wednesday net profit for the first quarter to March rose 100% to Rs 7.46 crore. Revenue for the quarter rose 37% to Rs 36 crore.

Bata India reported a surge in Q1 March 2006 net profit to Rs 4.41 crore (Rs 0.50 crore). Net sales declined 1.4% to Rs 165.13 crore (Rs 167.49 crore).

India Infoline reported 93.55% growth in Q4 March 2006 net profit to Rs 16.53 crore (Rs 8.54 crore). Net sales rose 186.7% to Rs 84.13 crore (Rs 29.34 crore).

Provogue India said on Wednesday its subsidiary Prozone Enterprises Pvt. Ltd. plans to develop malls in northern India. The company said Prozone had also signed a preliminary agreement with Delhi-based real estate company Omaxe Construction Ltd. Ahead of the announcement, Provogue shares were up 5% to Rs 428.40 on Wednesday.

State-run refiner Indian Oil Corp will sell 20% of its 9.2% stake in Oil and Natural Gas Corp. (ONGC) on Thursday to raise $780 million. Indian Oil had offered a price range of 1,330-1,399 rupees each for the 27.4 million ONGC shares, as per reports.

The board of Strides Arcolab has approved raising up to $100 million for setting up new units and making acquisitions. Strides also said it obtained board approval to get out of specialty chemicals business, by selling off its subsidiary Research & Specialty Chemicals Ltd. (SRSCL) to the latter's management team. "The decision... is based on the lack of synergy between the companies," the company said in a statement. SRSCL accounted for 6% of Strides Arcolab's consolidated sales, it said.

The company said it would raise funds through the issue of convertible bonds or overseas depositary receipts to set up production units in India and abroad, besides acquiring other firms.

Essel Propack has reported a 4.59% fall in Q1 March 2006 consolidated net profit to Rs 18.70 crore (Rs 19.60 crore). Consolidated total income has risen 11.3% to Rs 212.20 crore (Rs 190.50 crore). The results were impacted by a seasonal and cyclical swing in volumes & revenue.

The company said its loss making operations in Europe are expected to turn around in the second half of 2006. This should help in the improvement of the margins, it said. To sustain a double-digit growth, the company has rolled out a multi-pronged approach. Mini-tubes will spearhead the company's penetration into pharmaceutical sector. At the same time, the company is broadening its customer base for laminated tubes by targeting toiletries, haircare and food sectors. Plastic tube is another focus area for the company aimed at cosmetics industry. Other than the Indian and European markets, the company has unveiled plans for foray into US market with plastic tubes by setting up a new facility. On the long term perspectives of the company, Vice Chairman & Managing Director Ashok Goel said, "Our earnings guidance remains unaltered for the year 2006. The revenues are expected to grow at 15-18% over 2005 and profit after tax is expected to grow along similar lines."

Quarterly Results

Godrej Consumer Products Q4 net at Rs 30.16 crore
Annual net profit surges to Rs 121.20 crore.Godrej Consumer Products has posted a net profit of Rs 30.16 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 28.82 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has increased from Rs 143.96 crore in Q4 FY 04-05 to Rs 164.78 crore for Q4 FY 05-06.
The Company has posted a net profit of Rs 121.20 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 89.59 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 569.08 crore in FY 04-05 to Rs 665.98 crore for FY 05-06.The group has posted a net profit of Rs 30.59 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 121.30 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has decreased from Rs 708.49 crore in Q4 FY 04-05 to Rs 192.18 crore for Q4 FY 05-06.

CESC Q4 net at Rs 44 crore
Annual net profit at Rs 179 crore.CESC has posted a profit after tax of Rs 44 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 39 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 582 crore in Q4 FY 04-05 to Rs 605 crore for Q4 FY 05-06.The Company has posted a profit after tax of Rs 179 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 147 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 2,387 crore in FY 04-05 to Rs 2579 crore for FY 05-06.

MUL Q4 net rises to Rs 360.92 crore
Annual net rises to Rs 1,189.05 crore.Maruti Udyog has posted a net profit after tax but before minority interest of Rs 360.92 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 259.45 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 3,139.73 crore in Q4 FY 04-05 to Rs 3,392.27 crore for Q4 FY 05-06.The company has posted a net profit after tax but before minority interest of Rs 1,189.05 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 853.63 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 11,346.57 crore in FY 04-05 to Rs 12,481.43 crore for FY 05-06.

Colgate Q4 net at Rs 37.01 crore
Annual net profit at Rs 137.60 crore.Colgate Palmolive India has posted a profit after tax of Rs 37.01 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 32.34 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 252.61 crore in Q4 FY 04-05 to Rs 307.04 crore for Q4 FY 05-06.The Company has posted a profit after tax of Rs 137.60 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 113.29 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 998.45 crore in FY 04-05 to Rs 1,149.80 crore for FY 05-06.The Group has posted a profit after tax of Rs 140.04 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 112.43 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 999.39 crore in FY 04-05 to Rs 1,153.18 crore for FY 05-06.

How will the market be today?

Market may extend gain
Upmove in Asian markets and a further fall in oil price should help the market extend Wednesday’s 292-point surge. But volatility may remain high ahead of expiry of April 2006 derivatives contracts today. Mutual funds may support the market at declines as they are sitting on large cash pile.

Given that the results season is in full swing, stock specific activity may remain robust. Institutional investors may churn their portfolios based on Q4 results and business outlook by company managements. The key Q4 result today is that of Reliance Industries (RIL). RIL is expected to report fall in Q4 March 2006 net profit mainly due to weak refining margins.

As per provisional data, FII sold shares worth a net Rs 246 crore on Wednesday (26 April), the day when the Sensex had jumped 292 points. In the futures & options segment, FIIs were net buyers to the tune of Rs 227.64 crore.

Domestic mutual funds bought shares worth a net Rs 117.43 crore on Tuesday 25 April – the day when the Sensex had lost 268 points. The inflow of mutual funds in April 2006 so far has reached Rs 1996 crore.

Strong earnings prospects boosted Asian stocks on Thursday, pushing some to new peaks after US blue chips hit a six-year high. South Korean shares rose to a record on earnings optimism but the index later erased its gains. Taiwan shares rose to a fresh 5-1/2-year high. Stocks in Latin American Emerging markets Brazil and Mexico surged on Wednesday.

US stocks ended higher on Wednesday, with the Dow industrials hitting a six-year high, buoyed by stronger-than-expected earnings from companies such as No. 1 brewer Anheuser-Busch Cos. and as a key broker dropped its "sell" rating on General Motors Corp. The Dow Jones industrial average ended up 71.24 points, or 0.63 percent, at 11,354.49, its highest close since Jan. 19, 2000. The Standard & Poor's 500 Index closed up 3.67 points, or 0.28 percent, at 1,305.41. The Nasdaq Composite Index finished up 3.33 points, or 0.14 percent, at 2,333.63.

US crude oil for June delivery was trading 4 cents lower at $71.89 a barrel in ACCESS electronic trading on Thursday. On Wednesday it settled down 95 cents, bringing prices nearly 5 percent below a record $75.35 struck late last week.

Markets Today

Sensex adds 2.5% on Asian rally, oil price fall
The market staged a solid rebound today as Tuesday’s huge 268 point fall gave way to a 292 points surge today. Strong Q4 results by car major Maruti, a recovery in Asian markets and fall in oil price after a recent record high, boosted the market. It was the biggest rise in the Sensex since 17 April 2006. On that day, Sensex had risen 302 points following strong guidance for FY 2007 by IT bellwether Infosys Technologies, heartwarming Q3 March 2006 results by Gujarat Ambuja Cements (GACL) and strong Q4 numbers of HDFC Bank. That was also the day when the market had staged a rebound after a sharp fall.

Auto, cement, metal, IT and FMCG stocks led the rally. Shares of firms sitting on large real estate and real estate developers extended their recent surge. Select side-counters surged with some stock boosted by strong news flow which in some cases included strong Q4 results.

Side-counters Bombay Rayon, Investment & Precision Castings, Thomas Cook, Tricom India, Amruntajan, RCF, Vibra Auto, Finolex Industries, Bata India, DCW, Subros, Pratibha Industries, Shyam Telecom, Indiabulls, Mahindra Gesco Developers, Spanco Telesystems, TRF, Elder Pharma, Opto Circuit, Kirloskar Oil Engines, Madras Aluminium, Orient Paper, Ashapura, and Gangotri Textiles rose between 10-20% for the day.

The 30-share BSE Sensex jumped 292.75 points (2.5%) to settle at 11,938.53. The S&P CNX Nifty gained 93.10 points (2.69%) to 3,555.75.

Key indices in Asian markets like Hong Kong, Japan, South Korea, Australia, Singapore and Taiwan were up between 0.5-1.5%.

BSE clocked a turnover of Rs 4,519 crore compared to Tuesday’s Rs 4,588 crore.

Heavy FII sales, increase in margins by stock exchanges, and high oil prices had caused a huge 383.52 points fall in the Sensex, in the past two trading sessions between 24-25 April. Stock exchanges have raised margins in both cash and the futures segment and the higher margins come into force from 28 April. `Strong domestic liquidity has triggered a solid rebound even as concerns about high oil prices, rising interest rates, uncertainty about the monsoon, and slowing FII inflows persist,' says Ajit Sanghvi, director, MSS Securities. The latest data showed that mutual funds bought shares worth a net Rs 217.43 crore on Tuesday 25 April – the day when the Sensex had tumbled 268 points. The cumulative inflow of mutual funds in equities in April 2006 has reached Rs 1,996 crore.

Over the past 4 years or so, the market has been on a bull run on the back of strong corporate earnings, a boom in India’s economy and an increase in the risk appetite of global investors.

The Q4 earnings season so far has been good with companies like ACC, Gujarat Ambuja Cement, Satyam Computer, TCS, Wipro, Infosys, HDFC Bank, Cipla and now Maruti Udyog reporting strong performance. What was also inspiring was a strong guidance of between 26-28% earnings growth for FY 2007 by Infosys.

Car major Maruti Udyog jumped 6.6% today to Rs 924.90 on stronger than expected Q4 results. A huge 12.5 lakh shares changed hands in the counter on BSE. Maruti Udyog has reported 39.1% growth in Q4 March 2006 net profit to Rs 360.92 crore (Rs 259.45 crore). If one takes into consideration a one-time expenditure, the net profit growth has exceeded market expectations. Net sales has risen 7.6% to Rs 3,277.01 crore (Rs 3,045.18 crore). Net sales growth has been in line with market expectations.

Maruti’s results boosted rival car maker Tata Motors (up 3.6% to Rs 950.75). Two-wheeler major Bajaj Auto rose 4% to Rs 2,950 and Hero Honda gained nearly 3% to Rs 850. Frontmonth US crude for June delivery was trading 14 cents (0.19 percent) lower, at $72.74 a barrel in Access electronic trading. On Tuesday in New York, it fell 45 cents. Crude oil prices fell after US president George Bush suspended deliveries to the US emergency reserve, to boost supply and counter near-record prices.

MTNL gained nearly 7% to Rs 216.40 after the company said it has decided to form a new entity to manage its real estate assets in a bid to give a fillip to its sagging bottomline. The stock rose on heavy volume of 45.3 lakh shares on BSE. MTNL reported a 56.6% fall in Q4 March 2006 net profit to Rs 140.27 crore (Rs 323.26 crore). Total income fell 3.8% to Rs 1,594.51 crore (Rs 1657.61 crore). MTNL expects 1,300 employees to retire as part of a third round of voluntary staff cuts.

Cipla jumped nearly 6% to Rs 262.20. As many as 14.2 lakh shares changed hands in the counter on BSE. IT reported 80.6% jump in Q4 March 2006 net profit from Rs 105.58 crore to Rs 190.77 crore. Net sales rose 62.7% to Rs 870.59 crore (Rs 534.98 crore). The company also received insurance claim of Rs 19.70 crore relating to losses on account of floods which is included in other income.

Cement shares staged a comeback after Tuesday’s correction. UltraTech Cement jumped 10% to Rs 863.15, ACC rose 4.8% to Rs 967, Grasim gained 3.4% to Rs 2,379 and Gujarat Ambuja Cements advanced 1.6% to Rs 119.

Steel shares surged on firm global prices. Tata Steel jumped 4.7% to Rs 6,520.50 and Sail rose 3% to Rs 84.45. Steel firms had raised prices in April on the back of firm global prices.

Basic metal makers rose tracking firm global copper and zinc prices which hovered at all-time highs. Sterlite Industries jumped 7% to Rs 2,445, Hindustan Zinc (HZL) rose 5.6% to Rs 948 and Hindalco advanced 3.5% to Rs 213. HZL got boost from reports that the company had raised zinc prices by a steep Rs 10,200 per tonne.

Oil exploration major ONGC (up 4.5% to Rs 1,383) firmed up. Index heavyweight Reliance Industries rose 2.5% to Rs 977 even as the company denied rumours that it may consider a bonus and stock split.

IT stocks rose on bargain hunting after a recent fall. Wipro jumped 4.5% to Rs 550, Infosys rose 2.4% to Rs 3,222 and Satyam Computer advanced 1.6% to Rs 775.

R Systems International settled at Rs 249.75, below the IPO price of Rs 250. A massive 60.1 lakh shares changed hands in the counter on BSE.

Companies sitting on large real estate like RCF (up 20% to Rs 48.10), Bata India (up 16% to Rs 279), Bombay Dyeing (up 8% to Rs 761), surged. Companies involved in real estate development Mahindra Gesco Developers (up 12% to Rs 774) and Morarjee Realities (up 5% to Rs 920), too, surged.

Siemens gained 3.8% to Rs 5,782 on the back of surge in Q2 March 2006 net profit. Siemens’ Q2 March 2006 net profit has risen 48.4% to Rs 117.82 crore (Rs 79.37 crore). Net sales/operating income has jumped 57.6% to Rs 1,133.43 crore (Rs 719.05 crore). Investment & Precision Castings jumped 20% to Rs 1,014.40 after the company’s board declared a liberal 3:1 bonus.

Hot News

Maruti Udyog in top gear as Q4 beats street guess
Car major Maruti Udyog jumped 5% to Rs 911.25 on the back of strong Q4 March 2006 results.A strong 7.70 lakh shares changed hands in the counter on BSE.

Maruti Udyog has reported 39.1% growth in Q4 March 2006 net profit to Rs 360.92 crore (Rs 259.45 crore). If one factors into a one-time expenditure, the net profit growth has exceeded market expectations. Net sales has risen 7.6% to Rs 3,277.01 crore (Rs 3,045.18 crore). Net sales growth has been in line with market expectations.

The company said it took a one-time expense of Rs 34.92 crore during the quarter to support its dealers following a tax cut on small cars in February 2006.Maruti’s total vehicle sales rose 5% in Q4 March 2006 to 1,54,400 units.The government had cut taxes on small cars in February to 16% from 24%, prompting Maruti to cut prices of five models by as much as Rs 25,000.

Steel shares shine
Tata Steel surged 4% to Rs 648 and Sail rose 3.6% to Rs 84.85 on renewed buying.As many as 24.8 lakh shares changed hands in Sail and 13 lakh shares got traded in Tata Steel.

Today’s rebound in steel stocks came after Tuesday’s sharp fall. On Tuesday, Tata Steel had plunged 4.6% and Sail had lost 5.3%. Tuesday’s sharp fall in steel scrips stemmed after China’s Wuhan Iron and Steel Co. reported a plunge in its first-quarter Q1 March 2006 earnings.

Last few days saw a spirited rally in Tata Steel whereas Sail had turned range-bound after a solid surge in late March 2006. From a low of Rs 462 on 17 March, Tata Steel spurted 41.6% in a short while to a high of Rs 654.55 on 21 April. Sail moved between a low of Rs 77 and high of Rs 88 since 28 March 2006 after it had spurted nearly 30% in a short while to Rs 84.40 on 27 March 2006, from Rs 65 on 17 March.

Global steel prices hold firm. On the back of firm global prices, domestic steel firms had raised prices in the past two months. Steel prices saw a cumulative price increase of around Rs 4,500 per tonne from March 1 to April 1. While the first price hike in the range of Rs 1,000-1,500 per tonne was effected on March 1, some of the players like JSW and Ispat Industries hiked prices on March 16 for the retail segment by Rs 1,000 per tonne. Steel makers hiked prices by Rs 2000 per tonne in early April 2006, taking the basic hot rolled coil prices to around Rs 25,000 per tonne.

One reason for the rise in domestic prices was a surge in freight rates by 30% recently, following a Supreme Court ruling on overloading of trucks.

Tuesday, April 25, 2006

Quarterly Results

Dabur India Q4 net at Rs 49.96 crore
Annual net profit at Rs 214.18 crore.Dabur India Group has posted a net profit after minority interest of Rs 49.96 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 43.71 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has increased from Rs 398.12 crore in Q4 FY 04-05 to Rs 482.12 crore for Q4 FY 05-06.The audited results for the year ended March 31, 2006 are :

The Group has posted a net profit after minority interest of Rs 214.18 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 155.80 crore for the year ended March 31, 2005 (FY 04-05). Total Income has increased from Rs 1546.16 crore in FY 04-05 to Rs 1912.94 crore for FY 05-06.

Cipla Q4 net at Rs 190.77 crore
Annual net profit at Rs 600.08 crore.Cipla has posted a net profit after tax of Rs 190.77 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 105.58 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has increased from Rs 550.43 crore in Q4 FY 04-05 to Rs 917.35 crore for Q4 FY 05-06.

The Company has posted a net profit after tax of Rs 600.08 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 409.61 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 2336.48 crore in FY 04-05 to Rs 3116.82 crore for FY 05-06.

Hot News

R Systems International attracts modest premium on debut
R Systems International debuted at Rs 301 on BSE, attracting a 20.4% premium over the IPO price of Rs 250.The current price of Rs 301, discounts the FY 2005 (year ended 31 December 2005) EPS of Rs 9.20, by a PE multiple of 32.7.The FII-holding in the company is 10.7% and mutual funds’ holding is 3.9%. The equity capital base is a small Rs 13.53 crore with promoters holding of 41.5%.

R Systems International is a New Delhi-based software product development company. It helps companies bring products and services into the market quickly by using its different products and services comprising the pSuite framework, which is an execution framework for PLM (product lifecycle management) services. Other services include building and supporting software products in diverse areas like Internet security, Internet music delivery, Internet IP TV, banking applications, supply chain management, ERP solutions, and knowledge management. These software products and services find application across industry verticals such as banking and finance, government, health-care, high-technology and independent software vendors.

R Systems’s marquee clientele includes a variety of Fortune 1000, government and mid-sized organizations like GE, Intel, and ABN Amro. Around 34% of the company’s revenue comes from its top 5 clients.It also has a significant presence in the ASEAN area with its local headquarters in Singapore and seven regional offices.For the year ended 31 December 2005, R Systems reported a net profit of Rs 12.40 crore on sales of Rs 157.80 crore.

Stock Alert

Cipla may gain on robust Q4 results
Cipla may edge higher after the company reported 80.6% jump in Q4 March 2006 net profit to Rs 190.77 crore from Rs 105.58 crore. Net sales rose 62.7% to Rs 870.59 crore (Rs 534.98 crore). The company also received insurance claim of Rs 19.70 crore relating to losses on account of floods which is included in other income.

MTNL reported 56.6% fall in Q4 March 2006 net profit to Rs 140.27 crore (Rs 323.26 crore). Total income fell 3.8% to Rs 1594.51 crore (Rs 1657.61 crore). MTNL expects 1,300 employees to retire as part of a planned third round of voluntary staff cuts. Meanwhile, MTNL has decided to form new entity to manage its real estate assets in a bid to give a fillip to its sagging bottomline.

Dabur India has reported 22% growth in Q4 March 2006 net profit to Rs 50.22 crore (Rs 41.23 crore). Total income has risen 5.5% to Rs 334.84 crore (Rs 317.33 crore).

Ballarpur Industries reported 19% growth in Q3 March 2006 net profit to Rs 52.52 crore (Rs 44.21 crore). Total income has risen 5.8% to Rs 478.41 crore (Rs 451.87 crore).

Aban Loyd reported 11% growth in Q4 March 2006 net profit to Rs 21.95 crore (Rs 19.87 crore). Net sales rose 17% to Rs 120.23 crore (Rs 102.67 crore).

Foseco India reported 6.2% growth in Q1 March 2006 net profit to Rs 3.93 crore (Rs 3.70 crore). Net sales was flat at Rs 29.25 crore (Rs 29.21 crore).

Mahindra Gesco Developers reported 43.5% growth in Q4 March 2006 net profit to Rs 3.86 crore (Rs 2.69 crore). Net sales rose 74% to Rs 42.44 crore (Rs 24.37 crore).

Orient Paper reported a net profit of Rs 10.07 crore for Q4 March 2006 as against a net loss of Rs 1.54 crore in Q4 March 2006. Net sales rose 26% to Rs 278.41 crore (Rs 220.64 crore).

The Reserve Bank of India on Tuesday barred foreign funds from buying further shares of Andhra Bank. The decision was taken as the holdings of foreign funds had reached the limit of 18 percent, the RBI said in a statement.

An Austrian panel has ruled in favour of Ranbaxy in a patent litigation against Pfizer involving choloesterol-lowering drug `Lipitor’ in that country.

The Centre has appointed advisors to manage a sale of shares of state-run National Mineral Development Corp. (NMDC). The government plans to sell a 15 percent stake through a public offer of shares in the iron ore company, which would be worth about $1.3 billion at its current share price. Thinly traded NMDC, in which the government now holds 98.38 percent, closed unchanged at Rs 2,950 on Tuesday in a weak market.

Tata Consultancy Services Ltd. (TCS) said on Tuesday it had signed a 12-year, 486-million-pound ($868.6 million) deal to take over claims processing from British firm Pearl Group Ltd. The deal was first announced in October. The top Indian software exporter's British subsidiary Diligenta will provide back office administration services to the British insurance and pensions firm, TCS said in a statement. When TCS announced the deal in October 2005, Pearl had 2.5 million policyholders and 4 million policies on its books worth 27 billion pounds, out of a total UK life and pensions market with 150-200 million policies.

Sintex Industries has reported 63% growth in Q4 March 2006 net profit to Rs 40.83 crore (Rs 25.03 crore). Net sales has risen 31.4% to Rs 318.04 crore (Rs 241.86 crore).

Prism Cement reported 114.8% growth in Q3 March 2006 net profit to Rs 24.39 crore (Rs 11.35 crore). Net sales rose 62.9% to Rs 167.10 crore (Rs 102.57 crore).

Car major Maruti Udyog (MUL) unveils Q4 March 2006 results today. As per information available with capitalmarket.com, 9 brokerages have forecast a between 26.4% to 40% rise in MUL’s Q4 March 2006 net profit to between Rs 327.90 crore to Rs 363.16 crore. These 9 brokerages have forecast a between 5.4% to 13.5% growth in net sales at between Rs 3,209.07 crore to Rs 3,457.60 crore.

How will the market be today?

Recovery expected
Recovery in Asian market and fall in oil price may trigger recovery on the bourses today. But volatility may remain high ahead of expiry of April 2006 derivatives contracts on Thursday 27 April. The outstanding positions in the derivatives segment are large. Mutual funds may support the market at declines as they are sitting on large cash pile.

Given that the results season is in full swing, stock specific activity may remain robust. Institutional investors may churn their portfolios based on Q4 results and business outlook by company managements. The key Q4 result today is of car major Maruti Udyog.

Asian stocks gained on Wednesday, helped by lower oil prices and a modest rebound in the dollar against the yen on upbeat US consumer confidence data. Stocks in Japan, South Korea, Taiwan, Singapore, Hong Kong and Australia were up by between 0.07% to 0.9%.

Frontmonth US crude for June delivery was trading 14 cents lower, or 0.19 percent, at $72.74 a barrel in ACCESS electronic trading. On Tuesday in New York, it fell 45 cents. Crude oil prices fell after US president George Bush suspended deliveries to the US emergency reserve to boost supply and counter near-record prices.

As per provisional figures, FII sold shares worth a net Rs 529 crore on Tuesday 25 April – the day when the Sensex had lost 268 points. In the previous three trading sessions between 20 April to 24 April, they were net buyers to the tune of Rs 571.20 crore. In the futures & options segment, FIIs were net seller to the tune of Rs 350 crore on 25 April.

Domestic mutual funds bought shares worth a net Rs 77.34 crore on Monday 24 April – the day when the Sensex had lost 115 points.

US stocks fell on Tuesday, buffeted by fears of rising interest rates, a sell-off in the energy sector, including Exxon Mobil Corp., and a drop in the shares of heavy equipment maker Caterpillar Inc. Investors worried that stronger-than-expected data on housing and consumer confidence would give the Federal Reserve more ammunition to keep raising interest rates. The Dow Jones industrial average fell 53.07 points, or 0.47 percent, to end at 11,283.25. The Standard & Poor's 500 Index slipped 6.37 points, or 0.49 percent, to finish at 1,301.74. The Nasdaq Composite Index dipped 3.08 points, or 0.13 percent, to close at 2,330.30.

Markets Today

Sensex dips 268 points on increase in margins, high oil prices
A sell-off gripped the bourses today as traders unwound positions after stock exchanges raised margins for the second time this month. The revised margins become applicable from 28 April. Subdued trend in most Asian markets were also responsible for weakness back home. High oil prices also weighed on the market sentiment for the second day in a row.

The recent surge in oil price has raised concerns about costs for companies although India, which buys two-thirds of its oil, has not raised domestic fuel prices so far this year. Oil held firm above $73 on Tuesday as strong demand from China and renewed worries over Iran's nuclear ambitions halted profit-taking from last week's record highs.

The 30-share BSE Sensex plunged 268.46 points (2.2%) to settle at 11,646.78. This was its biggest fall since 12 April. On that day, the Sensex had plunged 307 points.

The S&P CNX Nifty lost 86.25 points (2.4%) to settle at 3,462.65.The BSE clocked a turnover of Rs 4,443 crore compared to Monday’s Rs 5,190 crore.

Stock exchanges have raised margins in both cash and the futures segment. In respect of the index-based contracts, the applicable exposure margin will be 6% from the current 4.5%. In respect of individual stock futures contracts, the applicable exposure margin will be higher of 10% or 1.5 times the standard deviation of daily logarithmic returns of the stock price in the last six months, from the current 7.5% or 1.5 times the standard deviation of daily logarithmic returns of the stock price in the last six months.

Metal shares, auto stocks, IT scrips, FMCG scrips, power and cement shares all succumbed to profit-taking.The market breadth weakened during the course of trading. While 1,432 stocks declined on BSE, 1,073 rose. Only 59 stocks were unchanged. Losers outpaced gainers by a ratio of 1.33:1.

Investors dumped steel stocks after China’s Wuhan Iron and Steel Co. reported a plunge in its first-quarter Q1 March 2006 earnings. Essar Steel plunged 7% to Rs 52.55, Tata Steel lost 4.9% to Rs 621, and Sail lost 4.8% to Rs 82.35. Wuhan Steel reported an 84% slump in quarterly profits and said its first-half earning could fall at least 50%. China's third largest steel mill blamed higher iron ore prices.

Copper and aluminium major Hindalco lost 2.6% to Rs 206 but zinc major Hindustan Zinc jumped 12% to Rs 898.80.High oil prices weighed on auto stocks for the second day in a row. Tata Motors shed nearly 5% to Rs 911.80, car major Maruti Udyog lost 3.3% to Rs 868.50, and Bajaj Auto lost 2.7% to Rs 2,849.

Power generation/utility scrips Reliance Energy (down 4% to Rs 608), Tata Power (down 4.4% to Rs 546) and NTPC (down 4% to Rs 128.65) were among the major losers.

Cement shares, too, succumbed to profit-taking. ACC lost 3.8% to Rs 920, Grasim lost 3.9% to Rs 2,283 and Gujarat Ambuja Cements shed 1.7% to Rs 117.45.

Index heavyweight Reliance Industries lost 2.5% to Rs 951.50. RIL unveils its Q4 results on 27 April.

Quarterly Results

ABB Q1 net at Rs 51.30 crore
Total income at Rs 820.86 crore.ABB has posted a net profit of Rs 51.30 crore for the quarter ended March 31, 2006 (Q1 FY 2006) as compared to Rs 27.50 crore for the quarter ended March 31, 2005 (Q1 FY 2005). Total Income has increased from Rs 619.60 crore in Q1 FY 2005 to Rs 820.86 crore for the quarter ended Q1 FY 2006.

Wockhardt Q1 net loss at Rs 3.70 crore
Total Income at Rs 354.30 crore.Wockhardt has posted a profit after tax of Rs 4.9 crore for the quarter ended March 31, 2006 (Q1 FY 2006) as compared to Rs 38 crore for the quarter ended March 31, 2005 (Q1 FY 2005). Total Income has increased from Rs 212.10 crore in Q1 FY 2005 to Rs 264.70 crore for Q1 FY 2006.The Group has posted a Loss after Tax of Rs 3.7 crore for the quarter ended March 31, 2006 (Q1 FY 2006) as compared to profit after tax of Rs 41.7 crore for the quarter ended March 31, 2005 (Q1 FY 2005). Total Income has increased from Rs 318.7 crore in Q1 FY 2005 to Rs 354.30 crore for Q1 FY 2006.

Nicholas Piramal Q4 net at Rs 15.17 crore
Annual net profit falls to Rs 120.65 crore.Nicholas Piramal Group has posted a consolidated profit after prior period items of Rs 15.17 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to the consolidated loss after prior period items of Rs 13.43 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has increased from Rs 249.59 crore in Q4 FY 04-05 to Rs 432.26 crore in Q4 FY 05-06.The Group has posted a consolidated profit after prior period items of Rs 120.65 crore for the year ended March 31, 2006 (FY 05-06) to a consolidated profit after prior period items of Rs 164.05 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 1,341.65 crore in FY 04-05 to Rs 1,621.72 crore for FY 05-06.

Ballarpur Q3 net profit at Rs 56.13 crore
Total Income at Rs 514.33 crore.Ballarpur Industries has posted a net profit after taxation of Rs 52.52 crore for the quarter ended March 31, 2006 (Q3 FY 05-06) as compared to Rs 44.21 crore for the quarter ended March 31, 2005 (Q3 FY 04-05). Total Income has increased from Rs 451.87 crore in Q3 FY 04-05 to Rs 478.41 crore for the quarter ended Q3 FY 05-06.The Company has posted a net profit after taxation, minority interest & share in associates of Rs 56.13 crore for the quarter ended March 31, 2006 (Q3 FY 05-06) as compared to Rs 44.43 crore for the quarter ended March 31, 2005 (Q3 FY 04-05). Total Income has increased from Rs 451.90 crore in Q3 FY 04-05 to Rs 514.33 crore for the quarter ended Q3 FY 05-06.

MTNL Q4 net falls to Rs 323.26 crore
Net profit for FY-06 at Rs 578.67 crore.Mahanagar Telephone Nigam has posted a net profit of Rs 140.27 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 323.26 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income has decreased from Rs 1657.61 crore in Q4 FY 04-05 to Rs 1594.51 crore for Q4 FY 05-06.The Company has posted a net profit of Rs 578.67 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 938.97 crore for the year ended March 31, 2005 (FY 04-05). Total Income has decreased from Rs 6084.10 crore in FY 04-05 to Rs 5785.57 crore for FY 05-06.

Cipla Q4 net at Rs 190.77 crore
Annual net profit at Rs 600.08 crore.Cipla has posted a net profit after tax of Rs 190.77 crore for the quarter ended March 31, 2006 (Q4 FY 05-06) as compared to Rs 105.58 crore for the quarter ended March 31, 2005 (Q4 FY 04-05). Total Income (net of excise) has increased from Rs 550.43 crore in Q4 FY 04-05 to Rs 917.35 crore for Q4 FY 05-06.The Company has posted a net profit after tax of Rs 600.08 crore for the year ended March 31, 2006 (FY 05-06) as compared to Rs 409.61 crore for the year ended March 31, 2005 (FY 04-05). Total Income (net of excise) has increased from Rs 2336.48 crore in FY 04-05 to Rs 3116.82 crore for FY 05-06.

Dabur India FY06 standalone net up at Rs 188cr
Dabur India has announced its FY06 standalone results. The company's FY06 standalone net profit is up at Rs 188 crore (Rs 1.88 billion) from Rs 148 crore (Rs 1.48 billion).Its FY06 standalone sales are up at Rs 1,369 crore (Rs 13.69 billion) from Rs 1,268 crore (Rs 12.68 billion).Its Q4 standalone net profit is up at Rs 48 crore (Rs 480 million) from Rs 41 crore (Rs 410 million.
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