Monday, July 31, 2006

Stock Alert

MphasiS BFL may drop on dismal Q1 results
MphasiS BFL said its quarterly profit more than halved on rising wages and sluggish growth in outsourcing. But MphasiS, 51.4% owned by US computer services firm Electronic Data Systems Corp. said it was positive about the outlook and expected to benefit from a proposed merger with EDS. The company said on late Monday its consolidated net profit for the fiscal first-quarter ended June fell to Rs 15.16 crore from Rs 33.70 crore a year ago, while revenue rose 18.6% to Rs 260 crore.

"This has been a challenging quarter for us with cost increases from salary hikes eroding our margins," Chief Executive Officer Jerry Rao said in a statement. "This was aggravated by slowdowns at the front-end due to the long process around the open offer (by EDS)." In April, MphasiS board had approved a $380 million bid by EDS for a majority stake in MphasiS. EDS will raise its stake in MphasiS to 61.8 percent after a merger of its wholly owned subsidiary, EDS India, with the Indian company.

MphasiS said revenue in the IT services business in April-June rose 23.6% to Rs 183 crore but this was offset by the backoffice services business where revenue grew a subdued 8.6% to Rs 77.91 crore. The company added 12 clients during the quarter, 10 in its software operations and two in its back-office services business.

Onward Technologies reported fall in net profit for Q1 June 2006 to Rs 0.12 crore (Rs 0.68 crore). Net sales declined to Rs 6.47 crore (Rs 7.04 crore).

The board of book publisher Navneet Publications India late on Monday approved to divide each share with a 10 rupee face value into five.

Jewellery maker Gitanjali Gems said late on Monday it had formed an equal joint-venture with diversified firm Modern India for jewellery retailing. No other details were immediately available.

Saregama India reported 50.5% growth in Q1 June 2006 net profit to Rs 2.77 crore (Rs 1.84 crore). Net sales rose 28.9% to Rs 33.77 crore (Rs 26.19 crore).

Tata Power Company plans to set up a 1,000-megawatt coal-fired power plant in Chola in the northern Indian state of Uttar Pradesh, the company said in a statement on Monday. Power from this proposed project will be supplied to Tata Power's distribution arm in New Delhi, it said

Britannia Industries reported 23% fall in Q1 June 2006 net profit to Rs 30.30 crore (Rs 39.10 crore). Net sales rose 19% to Rs 482.80 crore (Rs 405.40 crore).

How will the market be today??

Market may remain range bound
The market may edge slightly lower tracking fall in US stocks and rise in oil prices. The market staged a solid rebound from lower level in the past few days on the back of strong Q1 results, firm global markets and cooling off of oil prices from a record high of above $ 78 a barrel. The highlight of the recovery was strong market breadth indicating that the sentiment has turned for the better.

FIIs have mopped up stocks over the past few days. As per provisional data, FIIs bought shares worth a net Rs 185 crore on Monday 31 July, the day when Sensex had risen 64 points. Their net inflow in five trading sessions between 24 July to 28 July aggregated Rs 1092 crore.

The market has been moving in a 1,000-point range, between 9,800 and 10,900 since mid-June 2006. From a lifetime closing high of 12,612.38 of 10 May, the Sensex is down 14.8% at the current 10,743.88. The barometer index is up 14.3% in calendar 2006 so far, from 9,397.93 on 30 December 2005. In the past one year period, the barometer index has risen 40.7% from 7,635.42 on 29 July 2005.

The all-India weighted average rainfall for the current monsoon season till July 26 for the country was 14% below normal.

This week the Reserve Bank of Australia and European Central Bank (ECB) would meet on 2 August and 3 August respectively to consider rate hikes. It is widely expected that both would hike rates by quarter percentage point. The Bank of Japan (7 August) and the US Federal Reserve (8 August) will next week to take a decision on interest rates. A possible rate hike by Bank of Australia and ECB may further tighten the global liquidity situation.

Asian stocks were mixed on Tuesday (1 August). Key benchmark indices in Japan and Australia rose marginally. Markets in Singapore, South Korea and Taiwan were subdued. US stocks declined slightly on Monday as a handful of disappointing earnings dimmed the outlook for profits and inflationary concerns crept back into the picture. The Dow Jones industrial average was down 34.02 points, or 0.30% to end at 11,185.68. The Standard & Poor's 500 Index was down 1.89 points, or 0.15% to finish at 1,276.66. The Nasdaq Composite Index was down 2.67 points, or 0.13% to close at 2,091.47.

In the Middle East, Israel rejected pressure to end its war against Hizbollah and launched a new incursion into Lebanon. US crude oil for September delivery rose $1.16 to settle at $74.40 a barrel on the New York Mercantile Exchange on Monday boosted in part by supply concerns related to the Middle East conflict. That was a gain of 1.6% from Friday's NYMEX close.

Day 1: GMR IPO oversubscribed 1.3 times

Nowadays, when companies are wary of going ahead with their initial public offerings (IPOs) due to almost 3 to 4 per cent volatility in the market, GMR Infrastructure has gone ahead with its IPO of Rs 928 crore, which opened on Monday. The IPO was 1.3 times oversubscribed on the first day itself. The price band was fixed at Rs 210 to Rs 250 per share of Rs 10 each for its initial public offer of 3.81 crore equity shares under book building route.

JM Morgan Stanley, ENAM Financial Consultants, DSP Merrill Lynch and SSKI Corporate Finance are the book running lead managers and Karvy Computershare is the registrar to the issue.

According to Prithvi Haldea, managing director of Prime Database, at this time, when the primary market is closely linked to the secondary market and in the secondary market volumes are very low, only companies whose fundamentals are very strong and who need money urgently to fund their projects are going in for IPOs". However, GMR has matter pending before the Supreme Court.

It may be recalled that Consumer Education and Research Centre, CERC, Ahmedabad, in a representation to the Sebi Chairman, M Damodaran, had said that it received serious complaints about the company's IPO, involving the fact that if the matter pending before the Supreme Court goes against the company, the investment plan of about one-third amount to be raised from the IPO will fail.

According to the red herring prospectus, Rs 928 crore (Rs 9.28 billion) is to be raised from public under the IPO. Out of this fund, nearly one-third, i.e. Rs 93.2 crore (Rs 932 million) is planned to be invested in respect of the Delhi International Airport project, and Rs 289.3 crore (Rs 2.89 billion) in the acquisition of GVL Investments, which holds 9 per cent stake in the Delhi International Airport.

This shows that a substantial amount raised from the IPO proceeds is intended to be used for the Delhi International Airport project. If the company loses the case, the investment of lakhs of investors would be either lost or diminished, CERC said.

ADAG-led Reliance consortium had challenged the Union government's decision of awarding the modernisation contract of Delhi International Airport to GMR-led consortium in the Delhi High Court.

If the Supreme Court annuls the contract of the Delhi International Airport, a substantial part of the project for which the IPO is brought will be jeopardised. In such a situation, the viability of the activity, based on which the investors subscribe to the IPO, will be lost and the investment of lakh of investors will be either lost or diminished.

Says Haldea: "Let the investors take a call on whether they want to invest in an IPO whose case is pending with the Supreme court, but usually a court case does not act as a market mover in terms of sentiments".

Investment advisors on the other hand sound a note of caution. They say that prior to investment, the small investor should read the risk factor on the prospectus clearly and then take a decision accordingly.

GMR's Offer document clearly states: "Our operations, management and development of the Delhi Airport are subject to a number of risks". There are litigations in the Supreme Court and the outcome is not clear.

The offer document also mentions that if it does not turn out to be favourable, it may adversely affect the business plans of the company. According to investment advisors, small investors for whom risk factor is very important should read the offer document carefully before putting their money into it.

However, according to GMR spokesperson, the High Court had cleared it and the Supreme Court has not stayed the construction of Delhi Airport, which means positive signals for the company. According to the spokesman, the construction is going on at the Delhi airport and GMR has already taken control.

Nifty 50 Quotes at End Of Day

Company Prev Close LTP %Change
NSE Sensex 3130.8 3143.2 0.4
ABB 2466.45 2425.95 -1.64
ACC 849.25 843.8 -0.64
BAJAJAUTO 2471.55 2462.2 -0.38
BHARTIARTL 385.65 383.05 -0.67
BHEL 1968.25 2045.2 3.91
BPCL 310.05 312.45 0.77
CIPLA 232.4 236 1.55
DABUR 133.95 131.85 -1.57
DRREDDY 1403.75 1397.95 -0.41
GAIL 246.3 241.8 -1.83
GLAXO 1000.05 999.6 -0.04
GRASIM 2114.85 2080.3 -1.63
GUJAMBCEM 105 104.5 -0.48
HCLTECH 528.6 519.85 -1.66
HDFC 1185.25 1177.4 -0.66
HDFCBANK 795.5 795 -0.06
HEROHONDA 698.3 705.9 1.09
HINDALC0 162.75 160.65 -1.29
HINDLEVER 242.7 232.7 -4.12
HINDPETRO 217.75 224.95 3.31
ICICIBANK 542.55 553.85 2.08
INFOSYSTCH 1630.2 1655.55 1.56
IPCL 245.85 247.45 0.65
ITC 164.55 167.4 1.73
JETAIRWAYS 512.85 507.3 -1.08
LT 2184.8 2209.55 1.13
M&M 576.15 590.1 2.42
MARUTI 768.85 787.85 2.47
MTNL 142.5 140.4 -1.47
NATIONALUM 198.1 201.8 1.87
ONGC 1182.45 1173.15 -0.79
ORIENTBANK 177.6 176.75 -0.48
PNB 369.5 380.25 2.91
RANBAXY 372.5 373.55 0.28
REL 447.75 452.75 1.12
RELIANCE 979.05 978.8 -0.03
SAIL 71.45 70.25 -1.68
SATYAMCOMP 741.55 754.35 1.73
SBIN 796.4 810.25 1.74
SIEMENS 876.45 886.1 1.1
SUNPHARMA 822.5 816.45 -0.74
SUZLON 1041.05 1083.55 4.08
TATAMOTORS 728.6 742.05 1.85
TATAPOWER 496.4 489.25 -1.44
TATASTEEL 497.7 496.2 -0.3
TATATEA 810.75 833 2.74
TCS 928.45 936.15 0.83
VSNL 365.3 354.45 -2.97
WIPRO 483.1 490.8 1.59
ZEETELE 257.55 263.15 2.17

Markets Today:Sensex collects 64 points

The benchmark index closed below the day's high, which was recorded at 10,853.91, as selling pressure emerged at the fag end of trading. Nevertheless, it ended with moderate gains.

At the closing bell, the BSE 30-shares Sensex ended with a gain of 63.65 points, or 0.60%, to 10,743.88.It had opened with a sharp spurt at 10,759.19, tracking firm global markets. It slipped to a low of 10,710.29 in the last minute of trade. The benchmark index moved in a band of 144 points for the day.The S&P CNX Nifty rose 12.40 points, or 0.40%, to 3,143.20.

The market-breadth on BSE was positive, thanks to the broad-based nature of today's rally. Vigorous buying was witnessed in small-caps and mid-caps. Against 1,490 shares that advanced on BSE, 945 declined. Only 64 scrips remained unchanged.The total turnover amounted to Rs 2,264 crore.

Among the Sensex pack, 17 advanced while 13 declined.FMCG major Hindustan Lever (HLL) slumped 5% to Rs 230.25 on 9.66 lakh shares after reporting 35% growth in Q2 June 2006 net profit to Rs 381 crore (Rs 282 crore). Net sales rose 9%, to Rs 3,083 crore. HLL's revenues from home and personal care -- which make up nearly two-thirds of sales -- rose 14% from a year earlier, and revenue from foods rose 4%. Its advertising and promotion costs, pushed higher by competition, rose by a fifth. HLL has also announced payment of interim dividend of Rs 3 per share for FY 2006 (year ending 31 December 2006).

Grasim Industries lost 2% to Rs 2,075 despite reporting 24% growth in Q1 June 2006 net profit to Rs 311.90 crore (Rs 250.95 crore), surpassing market expectations. Five brokerages forecast a net profit of between Rs 250.30 crore and Rs 278.30 crore. Sales rose 20.8% to Rs 1,876.99 crore (Rs 1,553.28 crore), as per expectations. Operating profit rose 37% to Rs 513.27 crore (Rs 374.37 crore). The core operating profit margin rose to 27.3% from 24.10.

ACC (down 1.13% to Rs 839), ONGC (down 0.92% to Rs 1170) and HDFC (down 0.83% to Rs 1173) were the other losers.

BHEL was the biggest gainer, up 4% to Rs 2,046 on 3.71 lakh shares. The company reported 85% surge in net profit to Rs 236.7 crore for Q1 June 2006 compared with Rs 127.9 crore in Q1 June 2005. Net sales rose 37% to Rs 2,656.3 crore (Rs 1,936.5 crore). BHEL has deferred its board meeting scheduled for 8 August 2006, to consider the bonus issue and stock-split proposals.

ICICI Bank rose 1.35% to Rs 550 on 4.30 lakh shares. The counter recovered from an early low of Rs 544.90 on bottom fishing.

Index heavyweight RIL sliped marginally by 0.07% to Rs 979.50 on 13.11 lakh shares. It moved in a range of Rs 997.50 and Rs 977.15.

RIL was the top-traded counter on BSE with a turnover of Rs 129.19 crore followed by SBI (Rs 93.29 crore) and Satyam Computers (Rs 87.55 crore).

There was a strong demand for IT shares. The BSE IT index rose 1.40%. Major gainers from the pack were Satyam (up 2.14% to Rs 753), Wipro (up 2% to Rs 492), TCS (up 0.45% to Rs 932) and Infosys Technologies (up 1.35% to Rs 1,651).

Auto stocks, Tata Motors (up 1.01% to Rs 735), Maruti Udyog (up 2.63% to Rs 788.60) and M&M (up 2.54% to Rs 590) advanced as global crude oil prices declined. The BSE Auto index rose 1.29%.

Among side-counters, Newspaper publisher Jagran Prakashan surged 20% to Rs 279 after its board recommended a bonus issue of one share for every five held. It reported a net profit surge to Rs 22.9 crore for the Q1 June 2006 as compared to Rs 4.29 crore Q1 June 2005. Net sales jumped to Rs 136.7 crore (Rs 114.1 crore).

Corporation Bank jumped 6.55% to Rs 249.10 after posting 16.7% growth in net profit for Q1 June 2006 to Rs 144.24 crore (Rs 123.52 crore), beating market expectations. Net interest income rose 15.6% to Rs 324.79 crore. Other income rose 10.5% to Rs 187.51 crore (Rs 169.58 crore).

Hinduja TMT rose 3.52%, to Rs 508 on registering 1,484% surge in net profit to Rs 167.05 crore for Q1 June 2006 as compared to Rs 10.54 crore in Q1 June 2005. Total income during the period increased to Rs 285.01 crore (Rs 41.14 crore). The company made an exceptional profit of Rs 204.83 crore from the sale of its stake in Hutchison Essar during the current quarter.

Welspun Gujarat jumped 11.59% to Rs 66.45 on registering 66.45% growth in net profit for Q1 June 2006 to Rs 26.30 crore for Q1 June 2006 compared to Rs 15.80 crore in Q1 June 2005. Total income during the period has increased from Rs 328.60 crore to Rs 536.30 crore.

SREI Infrastructure jumped 6.33%, to Rs 40.30 on a high volume of 16.76 lakh shares. It registered 37% growth in net profit for Q1 June 2006 to Rs 15.02 crore in Q1 June 2006 compared to Rs 10.94 crore in Q1 June 2005. Net sales during the period increased to Rs 85.63 crore from Rs 38.59 crore.

Sun TV spurted 4.88%, to Rs 1,160 on registering 52% growth in net profit for Q1 June 2006. Sun TV has registered a net profit growth of 52% to Rs 42.23 crore for Q1 June 2006 compared to Rs 27.79 crore in Q1 June 2005. Net sales during the period under consideration increased to Rs 99.04 crore from Rs 74.68 crore.

Madhucon Projects jumped 13.60%, to Rs 200 after reporting 163% growth in net profit for Q1 June 2006 to Rs 9.1 crore on a turnover of Rs 113.05 crore for the first quarter ended 30 June 2006, a growth of 163% over the net profit of Rs 3.46 crore and 85% in turnover of Rs 61.03 crore, respectively for the corresponding quarter of the previous fiscal.

VisualSoft Technologies plunged 10.20% to Rs 68.70 after it reported a sharp fall in net profit for Q1 June 2006. VisualSoft Technologies reported a sharp fall in Q1 June 2006 net profit to Rs 25 lakh (Rs 5.98 crore). Sales declined 69% to Rs 15.94 crore (Rs 51.75 crore).

Garden Silk jumped 6% to Rs 45.80 after it reported a net profit surge to Rs 7.70 crore in Q4 June 2006 compared to Rs 2.11 crore in Q4 June 2005. Net sales vaulted to Rs 288.2 crore (Rs 146.8 crore).

Century Textiles & Industries slipped 3.22%, to Rs 382.60 on registering 51% growth in Q1 June 2006 net profit to Rs 69.73 crore (Rs 46.10 crore). Total income during the period has increased from Rs 671.37 crore to Rs 734.32 crore.

Shopper’s Stop slipped 3.25% to Rs 456.10 after it reported a 68% growth in Q1 June 2006 consolidated net profit to Rs 5.39 crore (Rs 3.20 crore). Revenue has risen 34.9% to Rs 171.95 crore (Rs 127.38 crore).

Orchid Chemicals rose 0.65%, to Rs 177.10 on reports of acquiring 26% stake in the US-based Bexel Pharmaceuticals. As per reports, the company bought the remaining 26% stake in US-based Bexel Pharmaceuticals for $ 3 million. Orchid has previously acquired 74% of Bexel.

Punjab National Bank surged 2.51%, to Rs 378 on 2.61 lakh shares. It registered flat Q1 June 2006 results. Punjab National Bank (PNB) posted a net profit growth of 2.16% to Rs 367.52 crore for Q1 June 2006 compared to Rs 358.16 crore for Q1 June 2005. Total income has increased from Rs 2,542.79 crore to Rs 2,921.80 crore.

Suzlon Energy jumped 3% to Rs 1,067 after reporting a 222% surge in Q1 June 2006 net profit to Rs 193.6 crore (Rs 60.2 crore). Net sales jumped 204% to Rs 933.8 crore (Rs 307.6 crore).

Plastiblends India jumped 5.10%, to Rs 133 on undertaking major expansion plans. The company will expand capacity of its facility in Daman from 24,000 tonnes to 35,000 tonnes by March 2007. It is also setting up a new unit at Uttaranchal with an initial capacity of 5,000 tonnes, which will be operational by March 2007. Total cost of both the projects will be about Rs 20 crore.

The Nikkei average booked its highest close in three weeks on Monday, advancing 0.74% as Canon Inc., continued to gain after posting strong quarterly results. The Nikkei ended the day 113.94 points higher at 15,456.81, its highest finish since 11 July.

The Hong Kong’s Hang Seng index was up 31.19 points, or 0.18%, at 16,986.23 while the TOPIX index was up 0.81%, at 1,572.01.

Major US indices registered significant gains on Friday after reports of an economic slowdown raised hopes that the Fed may not hike interest rates during its August meeting. While the Dow Jones jumped 119 points, to 11,220, the Nasdaq Composite advanced 40 points to 2,094.

Crude oil prices eased with the Nymex light crude oil for September delivery falling $ 1.30 to $ 73.24 a barrel, while the London Brent crude slipped 86 cents to $ 74.15 per barrel.

As per provisional data, FIIs bought shares worth a net Rs 24 crore on Friday (28 July), the day when the Sensex lost 61 points. Their net inflow in four trading sessions between Monday (24 July) and Thursday (27 July) aggregated Rs 961 crore.

Mutual funds bought shares worth a net Rs 262.80 crore on Thursday (27 July), the day when the benchmark index rose 124 points.

Hot News

Suzlon Energy blazes away
Wind-turbine maker Suzlon Energy surged 4.5%, to Rs 1,083 after reporting 222% growth in net profit for Q1 June 2006.A total of 2.2 lakh shares changed hands in the counter on BSE.The stock spurted during late June 2006 to early July 2006 – to Rs 1,137.20 on 5 July from a low of Rs 814.65 on 26 June. But the rally soon fizzled out and the scrip slipped to a low of Rs 921.85 on 19 July from a high of Rs 1,137.20 on 5 July. It recovered once again to Rs 1,044.10 on 27 July. The scrip slipped 1,035.75 on 28 July. The results were announced on Saturday (29 July).

Suzlon Energy today reported a 222% increase in net profit at Rs 193.60 crore for the first quarter ended 30 June 2006 against Rs 60.14 crore in Q1 June 2005. Income from operations rose 203.5% to Rs 933.77 crore (Rs 307.59 crore).

Suzlon Energy is a leading manufacturer of wind-turbine generators (WTG). It claims to be a fully integrated WTG manufacturer post-acquisition, in March 2006, of the world's second largest windmill gearbox manufacturer, Hansen Transmission, for EV of $ 538 million.

Meanwhile, the recently established manufacturing facilities in the world's fastest growing markets, US and China, will help it increase its market share.

Recently, Suzlon Energy (Tianjin), the step-down subsidiary of the company, and P R China signed a contract with Datang International for 40 Mw comprising 32 units of 1.25 Mw wind turbine generators for installation at Zhuozi Wind Farm.

Recently, Suzlon Energy said that its shareholders have cleared a special resolution enabling the firm to raise up to Rs 5,000 crore through the issue of a combination of equity and debt-linked instruments.

Suzlon expects to expand its order-book by 40% in 2006-07 from Rs 3,303 crore as on April 1.

Hot News

HLL up on posting strong Q2 show
Hindustan Lever surged 1.96%, to Rs 247 on reporting 35% growth in Q2 June 2006 net profit.As many as 1 lakh shares were traded on the BSE.The stock had recovered after hitting a low of Rs 186.15 on 14 June amid bouts of volatility, to settle at Rs 242.25 on 28 July 2006. Q2 results were announced on Sunday (30 July).

Hindustan Lever (HLL) posted a net profit growth of 35.13% to Rs 380.90 crore for Q2 June 2006 compared to Rs 281.65 crore for Q2 June 2005. Total income during the same period increased to Rs 3,164.63 crore from Rs 2,915.68 crore.

HLL’s revenues from home and personal care -- which make up nearly two-thirds of sales -- rose 14% from a year earlier, and revenue from foods rose 4%. Its advertising and promotion costs, pushed higher by competition, rose 20% during the quarter under consideration. HLL has also announced payment of interim dividend of Rs 3 per share for FY 2006 (year ending 31 December 2006).

As per reports in July, HLL is planning Pureit, a phased-out extension of its much-touted water purification project. Pureit is now being test-marketed in Tamil Nadu and is likely to be launched soon in other states. Based on a direct-to-consumer distribution model, the product will be targeted at the mid-end and low-end of the urban and rural market, primarily the SEC, B, C and D segments of consumers.

As per reports, India's monsoon in the crucial sowing month of July are likely to be 90 - 100% of the long-term average. Rural demand holds key for FMCG companies, which derive about 40% of their revenue from rural areas. Over the past few months, strong rural demand has contributed to the growth in the FMCG sector.

While growth for the FMCG sector from both rural and urban sector remains strong, there has been a return of pricing power to industry players. In the backdrop of rising input costs, market leaders such as HLL now have the leeway to hike prices without sacrificing their market share.

Punjab National Bank has no regrets about flat results
Punjab National Bank surged 4.27%, to Rs 384.50 despite registering almost flat Q1 June 2006 results.As many as 2.03 lakh shares were traded on the BSE.The stock had hit the recovery trail recently. After tumbling from the high of Rs 486.45 on 10 May to a low of Rs 303.45 on 18 July, the scrip found support and rallied to settle at Rs 368.75 on 28 July 2006.

Punjab National Bank (PNB) posted a net profit growth of 2.16% to Rs 367.52 crore for Q1 June 2006 compared to Rs 358.16 crore for Q1 June 2005. Total income has increased from Rs 2,542.79 crore to Rs 2,921.80 crore.

Further, the bank has declared a final dividend at 60%, (Rs 6 per share) for the financial year 2005-06. This is in addition to the interim dividend at 30%, (Rs 3 per share) paid on 19 December 2005. With the declaration of final dividend, the total dividend for the FY 2005-06 is 90%.

FII-holding in the company as on 31 March 2006 stood at 20.06%, while that of other institutional investors was 12.54%. The public holding in the company is 7.09%.

Recently, PNB had renewed and extended its technical services agreement with Nepal-based Everest Bank (EBL) for another period of five years. Thus, the agreement will now be valid till 2011.

Earlier this month, PNB planned to make a capital infusion of about £25 million in its UK-based subsidiary in the UK after getting the necessary approvals.

In June, PNB tied up with Indian Airlines for online booking of air tickets. The bank has signed an agreement with INDIAN in this regard. According to the agreement, the customers of the bank would be able to book Indian Airlines tickets by making online payment on the Internet through their bank accounts. The service is available free of cost to the bank's customers.

PNB had raised fresh capital (tier-II) of Rs 885 crore to fund its expected business growth this fiscal in early June.PNB had recently opened its first agriculture development branch in Kashipur, Uttaranchal, in Kumaon region.

In April, PNB was permitted to set up a subsidiary of the bank in the form of a private limited company, Punjab National Bank International, in the UK on 13 April 2006. This is in line with its earlier plans to expand operation to foreign shores. After the Reserve Bank of India (RBI) had granted approval for overseas expansion, PNB hopped to open up subsidiaries in London (UK) and Vancouver (Canada) and two Foreign Overseas Business Units (FOBUs) at Singapore and Hong Kong.

In February, PNB had opened its 130th branch at Oachira in Kollam district, Kerala.

Sunday, July 30, 2006

IPO scam: Sebi lifts ban on 3 DPs

The Securities and Exchange Board of India (Sebi) on Friday lifted the ban on opening of fresh demat accounts by IL&FS, ING Vysya Bank and IDBI Bank in their capacity as depository participants.

These three entities, along with a host of others, were barred from opening fresh demat accounts by Sebi in April for their alleged involvement in the initial public offering (IPO) scam.

Sebi passed Friday’s order after taking into account the submissions made by the three institutions. The Sebi order also states that the probe against the three entities has not been closed.

“It is clarified that the present order gives only a prima facie finding as to the necessity of passing the above directions at this stage and accordingly, all issues and contentions are left open to be decided by the enquiry officer and to be decided in subsequent proceedings to his report,” the Sebi order in each case said.

The charge against the three entities was that they had failed in adhering to the know-your-client norms laid down by Sebi, thereby facilitating opening of demat accounts in fictitious names with an aim to corner the retail portion of shares in IPOs.

In its order in April, Sebi had banned 12 depository participants including HDFC Bank, Centurion Bank of Punjab, and Motilal Oswal Securities from opening new demat accounts until further directions from the regulator. In addition, Sebi had also barred 24 firms and individuals from any kind of dealings in the securities market, including IPOs, and also banned 85 financiers from securities market dealings.

However, the following day, Sebi stated that it had kept its order in abeyance banning Indiabulls from any stock market operations. Then on May 26, Sebi allowed Karvy Stock Broking to continue with its existing depository participant business, but asked it not to open fresh demat accounts.

It also restricted the proprietary operations of Karvy Stock Broking. The same day, Sebi also withdrew its interim orders against Magnum Equity Services and Jhaveri Securities.

Then on June 16, Sebi withdrew its interim order against Anagram Securities, but said “order does not foreclose any further action against ASL (Anagram Securities) or any other person/entity, as deemed fit.”

DLF's IPO likely to have new quota

In A bid to end the impasse with minority shareholders, real estate major DLF may allocate a part of its proposed public issue for those who missed out on the debentures rights issue.

The delayed IPO, expected to hit the market in October, is yet to get the Sebi clearance and is now under the affairs ministry scanner following complaints by minority shareholders.

Sources told ET that among proposals to redress the misgivings of minority shareholders being discussed by the ministry, DLF and minority shareholders, one that seems most favourable is reserving a certain number of shares for the disgruntled shareholders in the forthcoming public offer.

“However, all this will be done only with due approval from the ministry and Sebi,” sources said. When contacted, senior DLF executives said talks are on with the ministry and a group of minority shareholders, and all outstanding issues are likely to be resolved over the next two-three weeks.

Earlier, the ministry had asked DLF to issue a clarification on complaints lodged by a few shareholders over the rights issue of debentures.

Sources in investment banking circles said that the real estate company, which was looking at raising around Rs 13,000 crore from the capital market in July, is now planning to time the issue around Diwali. A revised draft red herring prospectus is likely to be filed in early September.

The group is also likely to time this with announcements of new real estate projects and joint ventures in the hospitality sector. For DLF, the controversy with minority shareholders that stalled the Sebi clearance for the mega public issue coincided with a meltdown in the capital market.

Many investment bankers feel that the forthcoming issue of infrastructure company GMR will be a test case to check out the appetite of retail investors in IPOs.

Stock Alert

Grasim may gain on stronger-than-expected Q1 results
Grasim Industries has reported a 24% growth in Q1 June 2006 net profit to Rs 311.90 crore (Rs 250.95 crore). Net profit surpassed market expectations. Five brokerages had forecast a net profit of between Rs 250.30 crore to Rs 278.30 crore. Sales rose 20.8% to Rs 1876.99 crore (Rs 1553.28 crore). Sales growth was within market expectations.

FMCG major Hindustan Lever (HLL) has posted 35% growth in Q2 June 2006 net profit to Rs 381 crore (Rs 282 crore). Net sales rose 9% to Rs 3083 crore. HLL’s revenues from home and personal care -- which make up nearly two-thirds of sales -- rose 14% from a year earlier, and revenue from foods rose 4%. Its advertising and promotion costs, pushed higher by competition, rose by a fifth. HLL has also announced payment of interim dividend of Rs 3 per share for FY 2006 (year ending 31 December 2006).

Ashok Leyland reported a 7.4% growth in Q1 June 2006 net profit to Rs 69.18 crore (Rs 64.40 crore). Net sales rose 34% to Rs 1423.87 crore (Rs 1062.40 crore).

Bharat Forge has reported a 14.4% growth in Q June 2006 profit after tax (before exception items) to Rs 55.99 crore (Rs 48.91 crore). Net sales has risen 15.6% to Rs 420.57 crore (Rs 363.51 crore).

Asian Hotels has reported a 84% growth in Q1 June 2006 net profit to Rs 17.32 crore (Rs 9.41 crore). Revenue has risen 28% to Rs 85.20 crore (Rs 66.56 crore).

Shopper’s Stop has reported a 68% growth in Q1 June 2006 consolidated net profit to Rs 5.39 crore (Rs 3.20 crore). Revenue has risen 34.9% to Rs 171.95 crore (Rs 127.38 crore)

How will the market be today??

Domestic bourses may track firm global markets
The market may edge higher taking cue from firm global markets. Strong Q2 results from FMCG giant Hindustan Lever (HLL) announced on Sunday (30 July) may also support the market. The Q1 June 2006 results are almost over and the results have been largely strong.

Asian stocks rose on Monday and oil extended Friday's losses after weaker-than-expected US economic growth fuelled speculation for a pause in the Federal Reserve's two-year rate tightening campaign. The data cheered stock investors hoping the Fed would hold rates at its Aug. 8 meeting. The key benchmark indices in Hong Kong, Japan, South Korea, Singapore, Indonesia and Malaysia were up by between 0.4% to 1%.

Gross domestic product in the United States grew 2.5 percent in the second-quarter, below Wall Street analysts' forecasts for a 3 percent expansion. The slower growth may persuade the Fed to pause in its two-year campaign of interest rate increases, which, if continued, would have reduced the attractiveness of emerging markets including India.

Meanwhile, this week the Reserve Bank of Australia and European Central Bank (ECB) would meet on 2 August and 3 August respectively to consider rate hikes. It is widely expected that both would hike rates by quarter percentage point. The Bank of Japan (7 August) and the US Federal Reserve (8 August) will next week to take a decision on interest rates. A possible rate hike by Bank of Australia and ECB may further tighten the global liquidity situation.

As per provisional data, FIIs bought shares worth a net Rs 24 crore on Friday 28 July, the day when Sensex had lost 61 points. Their net inflow in four trading sessions between Monday 24 July to Thursday 27 July aggregated Rs 961 crore.

Mutual funds bought shares worth a net Rs 262.80 crore on Thursday 27 July, the day when Sensex had risen 124 points.

Thursday, July 27, 2006

Stock Alert

NIIT may gain on US acquisition
NIIT said on Thursday it had purchased US based Element K for $40 million to boost its growth in developed economies. NIIT and Element K together would have more than 3,000 employees, about $250 million in revenues and a presence in 32 countries to offer comprehensive learning solutions, a statement said. Element K has a $80-million learning solutions business and offers a suite of more than 3,500 courses, the statement added.

Kansai Nerolac Paints (erstwhile Goodlass Nerolac Paints) reported a 23% growth in Q1 June 2006 net profit to Rs 27.10 crore (Rs 22 crore). Net sales rose 18% to Rs 267.60 crore (Rs 226.74 crore).

Kanoria Chemicals & Industries a sharp fall in Q1 June 2006 net profit to Rs 1.82 crore (Rs 10.04 crore). Net sales surged to Rs 93.14 crore from Rs 74.42 crore.

Wartsila India reported a fall in Q2 June 2006 net profit to Rs 4.67 crore (Rs 4.71 crore). Net sales declined to Rs 61.41 crore (Rs 66.54 crore).

Fag Bearings India reported a surge in Q2 June 2006 net profit to Rs 15.16 crore (Rs 9.83 crore). Net sales surged to Rs 135.32 crore (Rs 95.05 crore).

Strides Arcolab’s consolidated Q2 June 2006 net profit declined to Rs 5.49 crore from Rs 13.57 crore. Consolidated sales surged to Rs 167.29 crore (Rs 124.35 crore).

Ramkrishna Forgings reported a surge in Q1 June 2006 net profit to Rs 2.39 crore (Rs 1.25 crore). Sales shot up to Rs 32.38 crore (Rs 21.03 crore).

Birla Power Solutions said on Thursday its board has approved the issue of 1.28 million shares at a price of Rs 43 per share. The shares will be issued on a preferential basis to media house Bennett, Coleman & Co., Ltd, it said in a statement.

Rajasthan Spinning and Weaving Mills said on Thursday it had raised the cost of a proposed expansion project by Rs 325 crore to Rs 900 crore. The company would expand yarn capacity and set up a denim plant and two power plants, it said in a statement.

"New expansions are being implemented to ensure visible growth momentum over the next five years," Joint Managing Director Riju Jhunjhunwala said. Yarn capacity would go up to 397,000 spindles from 242,000 spindles in three years. Also, a 27-million metres per year denim plant would be built in two stages and two 23 megawatt power plants set up, the textile firm added.

How will the market be today??

Market may remain steady to firm
The market may extend its recent solid surge on the back of gains in some of the key Asian markets. Inflow from FIIs and mutual funds may also support the market.

The major Q1 results of the day are Bhel, Sail, i-flex solutions, MTNL, VSNL and Hindalco. Other Q1 results of the day are EIH, Oriental Bank of Commerce, and Bank of Baroda.

Among Asian markets, Hong Kong’s Hang Seng was up 0.5% and Japan’s Nikkei 225 average was up 0.6%.Recovery in global markets and largely strong Q1 June 2006 results triggered a solid rebound on the domestic bourses in the past four days when Sensex jumped 656 points.One of the triggers for the recovery in global markets was cooling off crude oil price from a record high of above $ 78 a barrel.

Short covering in derivatives due to expiry of July 2006 derivatives contracts partly aided the rebound on the domestic bourses.

Institutional buying aided the recovery. As per provisional data, FIIs bought shares worth a net Rs 270 crore on Thursday 27 July, the day when Sensex had risen 124 points. Their net inflow in three trading sessions between 24 July to 26 July totaled Rs 499.30 crore.

Domestic mutual funds bought shares worth a net Rs 276 crore on Wednesday 26 July, the day when Sensex had jumped 202 points. Their net inflow in four trading sessions between 21 July to 26 July totaled Rs 604.21 crore.

The Q1 results have been largely strong. But the market sentiment remains edgy under a reckoning that foreign institutional investors (FIIs) may not return with the force seen in 2005, when they invested a net $10.7 billion. The cumulative FII inflow in calendar year 2006 so far has reached $ 2.67 billion, much lower than the inflow of $ 6.3 billion recorded in the same period last year.

Hot News

SBI trips following weak results
SBI slipped 1.65%, to Rs 741 after reporting a fall in net profit for Q1 June 2006.
The counter clocked a high volume of 15.32 lakh shares on BSE.The stock witnessed a pre-results' rally from Rs 689.50 on 19 July 2006, to Rs 753.85 on 26 July 2006, anticipating strong results from India's biggest moneylender.

SBI reported 34.69% fall in net profit of Rs 798.57 crore for the quarter ended 30 June 2006 compared to Rs 1,222.83 crore for the quarter ended 30 June 2005. Total income decreased 1.34% to Rs 10,598.75 crore (Rs 10,742.85 crore). These results were below street expectations.

On consolidated basis, the group posted a net profit after minority interest of Rs 963.01 crore for the quarter ended 30 June 2006 as compared to Rs 1,322.67 crore for the quarter ended 30 June 2005. Total income increased to Rs 15,290.27 crore (Rs 14,483.50 crore).

As per reports, the State Bank of India (SBI) has sought permission from the ministry of finance (MoF) to float a rights issue to meet its future capital requirement. The issue will allow the bank to raise tier-I capital without diluting the government's shareholding, which now stands at 59.73%.

State Bank of India (SBI) has made three acquisitions in the past couple of years. It picked up 76% stake in an Indonesian bank, PT Bank IndoMonex, 51% in Indian Ocean International Bank, Mauritius, for $ 8million and 76% in Giro Commercial Bank (of Kenya) for $ 7 million.

SBI is the largest commercial bank in the country. The total foreign holding in the bank is 19.78% while the Indian citizens hold 6.65% stake.

MICO rallies on smashing Q2 results
MICO jumped 8.30%, to Rs 2,756 after its net profit more than doubled for the Q2 June 2006.The stock surged to hit the 20% circuit filter at Rs 3,066.05 immediately after the company came out with results.The counter clocked an astonishingly high volume of 30,630 shares as compared to a two-week average volume of 641 shares on BSE.The stock witnessed selling pressure ahead of the results. From Rs 2,784.95 on 10 July 2006, the stock slipped to Rs 2,555.05 on 26 July 2006, under selling pressure.

MICO reported 137.30% surge in net profit to Rs 242.78 crore for the quarter ended 30 June 2006 compared to Rs 102.31 crore for the quarter ended 30 June 2005. Total income increased to Rs 930.99 crore (Rs 765.59 crore). Net profits for the quarter ended 30 June 2006 includes other items (exceptional) of profit/(loss) on sale / diminution of investments - Rs 5.83 crore (Rs 6.61 crore) and profit on sale of property - Rs 1.1 crore (Rs 0.0 crore).

On 9 March, MICO announced that it planned to invest Rs 800 crore this year, while its parent company, Robert Bosch, will invest Rs 500 crore to expand operations in the country.

Last year, MICO had entered into a 50:50 venture with Mann Hummel GmbH in a Euro 6 million project to develop and produce fuel filter systems as well as oil, fuel, air and cabin filters for the Indian market, and for export demand. The joint venture plans to start production of filters, by mid-2006 with some 350 associates.

MICO is a preferred supplier to a majority of original equipment manufacturers (OEMs) and enjoys around 65% market share in spark-plugs and more than 80% in diesel fuel injection pumps.

Robert Bosch GmbH controls a 60.55% stake in MICO as of 31 March 2006. The total paid-up equity share capital of the company is Rs 32.05 crore.

Hot News

Sun Pharma glitters on strong Q1 show
Sun Pharma surged 4.15% to Rs 831 on strong Q1 June 2006 result.A thin volume of 23,015 shares was traded on the BSE.The stock, after finding support at Rs 680.55 on 8 June, had appreciated to Rs 790.75 by 30 June as the market recovered from the bearish phase. Here, it slipped and rose under bouts of buying and selling in a volatile market to Rs 797.90 on 26 July 2006.

Sun Pharma reported a 29.8% growth in consolidated Q1 June 2006 net profit to Rs 176.73 crore compared to Rs 136.06 crore in Q1 June 2005. Consolidated net sales rose 31% to Rs 511.64 crore from Rs 390.16 crore.

As per recent reports, Sun Pharma along with Ranbaxy had joined the consortium of other pharma companies in buyer-seller meets organised in Poland and Hungary to tap these markets, which offer huge subsidies of around 30 - 100% to their healthcare system. Thus, this countries are looking towards Indian drug makers to cut down costs of these subsidies. Poland, Hungary and Slovakia are keen to source medicines and key ingredients from Indian companies, besides striking joint ventures and contract manufacturing deals. India now exports medicines worth $18 million to the $2 billion market in Hungary and drugs worth $20 million to the $5 billion market in Poland.

Last month, Sun Pharmaceutical had received a tentative US Food and Drug Administration approval for the tablet forms of Ondansetron, which is used to treat vomiting caused by chemotherapy, general anaesthesia and radiation therapy.

In February 2006, Sun Pharma had approved the demerger of its innovative research and development and new drug delivery systems to a new company. The company has been incurring heavy costs on the R&D expenses, which currently account for 11-12% of the turnover. The de-merger will have an immediate impact of lowering R&D costs and setting free Sun Pharma’s core generic business. Despite the company’s progress in the bulk drug business through impressive exports, the margin has been overshadowed by heavy R&D expenditure.

Sun Pharma is focusing on its core generics business, which is growing very fast. The focus will be mainly on the regulated market. In the non-regulated market, the company will continue to operate in the generic branded market.

Sun Pharmaceuticals is dominant in fast-growing therapeutic segments such as cardiovascular diseases, diabetes, and gynaecology. The company is raising its presence in the international generic drugs market and plans to earn half its revenue from there, up from 15% now.

In December 2005, Sun Pharma acquired US-based Able Laboratories, a developer and manufacturer of generic pharmaceutical products in tablet, capsule, liquid and suppository dosage forms.

MUL gains on strong Q1 results
Maruti Udyog surged 3.16%, to Rs 788.50 on registering a 63% growth in net profit for Q1 June 2006.A huge 5.63 lakh shares were traded in the BSE.The stock has been rallying for the last three trading sessions from Rs 711.15 on 21 July to Rs 764.35 on 26 July on expectation of solid Q1 numbers.The stock, after a sharp setback from early-May till mid-June 2006, due to a broad market fall, turned volatile by late June 2006. The scrip, after finding support at Rs 684.10 on 14 June, rallied to Rs 814.05 on 13 July 2006, as buying resumed amid volatility. Here, the stock slipped to Rs 711.15 on 21 July 2006.

Maruti Udyog posted a net profit growth of 63.19% to Rs 369.57 crore for Q1 June 2006 as compared to Rs 226.46 crore for Q1 June 2005. Total income during the period has increased from Rs 2,723.67 crore to Rs 3,268.77 crore.As per reports, Maruti Udyog sold 44,626 vehicles in the domestic market in June 2006, which is 17.50% higher compared to 37,995 vehicles sold in the domestic market in June 2005. In all, the company sold 48,425 vehicles in June 2006, up 17% from 41,390 sold in June 2006. This includes 3,799 units of exports.

Recently, there were reports about Maruti Udyog (MUL) making an upward revision of 1 lakh cars for Japanese auto-giant Nissan motors at its upcoming facility at Manesar, Haryana. This means Maruti will hike the manufacturing capacity at the Manesar unit from the planned 1 lakh units per annum.

It may be recalled that earlier this month, the two Japanese auto majors - Nissan and Suzuki - announced a global production alliance, which will see Nissan supply mini vans to Suzuki on an OEM (original equipment manufacturer) basis starting from 2006-end. The deal also included Suzuki’s commitment to supplying a mini vehicle to Nissan on an OEM basis.

As per MUL’s original expansion plan, the company will set up a new assembly line with a capacity of 1 lakh units per annum, including a diesel engine unit with a capacity of 1 lakh units for Rs 2,900 crore. This will mark Maurti's entry into the diesel car market.

Maruti Udyog on 16 June said that it will take a decision in about a week on raising prices of its vehicles on account of rising costs of raw materials.

Recently, Maruti Udyog said it will set up a new joint venture company to make components for Suzuki motorcycles and cars in India. The joint venture, which also involves a Japanese firm and an Indian manufacturer, will make sheet metal, chassis, as well as other components for Maruti's cars and Suzuki Motorcycles in India. The venture will involve Japan's Bellsonica Corp., and Maruti will own 30% in the venture, which would have an initial capital outlay of Rs 12 crore. Maruti has deals with several component makers and owns a minor equity stake in some. These include Jay Bharat Maruti, Sona Koyo Steering Systems, Asahi India Safety Glass, Krishna Maruti and Caparo Maruti.

Meanwhile, Suzuki Motor Corporation is increasingly banking on its Indian operations for feeding the export market.

Maruti Udyog's runaway success with its premium hatchback model, the Swift, set a new record by clocking over 61,000 units in the first year of its launch.

Maruti is set to launch five new models in the next five years, including a new diesel-engine vehicle later this year that could help boost its sales volume in this growing segment, where it has no presence now. Diesel cars today account for 20% of overall volume.

Maruti approved the merger of its subsidiary, Maruti Suzuki Automobile India (MSAIL), with itself. Maruti already held 70% in MSAIL, with Suzuki Motor holding the remainder. According to an agreement in September 2004, MSAIL was set up as a subsidiary to operate a new car plant in Manesar, Haryana, which will initially have a capacity of 1,00,000 cars per year. Capacity will be scaled up to 2,50,000 cars per annum by 2008/09. The plant will begin production by the end of 2006 and is being set up at an investment of Rs 1,524.20 crore.

Wednesday, July 26, 2006

Stock Alert

Sun Pharma, Tata Chemicals may gain on Q1 results
Sun Pharma reported a 29.8% growth in consolidated Q1 June 2006 net profit to Rs 176.73 crore (Rs 136.06 crore). Consolidated net sales rose 31% to Rs 511.64 crore (Rs 390.16 crore).

Tata Chemicals reported a 16% growth in Q1 June 2006 net profit to Rs 75.35 crore (Rs 64.94 crore). Net sales jumped 48.5% to Rs 757.46 crore (Rs 509.98 crore).

Tata Tea reported a 7.3% fall in Q1 June 2006 consolidated net profit to Rs 80.07 crore. The fall was because Q June 2005’s base was inflated by extra-ordinary income of Rs 23.88 crore. The consolidated income from operations rose 11.4% to Rs 798.92 crore (Rs 716.69 crore).

Colgate reported a 28.8% growth in Q1 June 2006 net profit to Rs 36.06 crore (Rs 27.98 crore). The net profit was below market expectations of a net profit of between Rs 38 crore to Rs 48 crore for the quarter. Sales rose 19.8% to Rs 309.58 crore (Rs 258.30 crore). Sales surpassed market expectations.

KSB Pumps reported a 42.9% growth in Q2 June 2006 net profit to Rs 17 crore (Rs 11.90 crore). Net sales rose 14% to Rs 111.30 crore (Rs 97.60 crore).

How will the market be today??

Domestic bourses may track firm Asian markets
The market may extend last three day’s solid gains on the back of firm Asian markets and steady oil prices. The market sentiment may also be lifted by news that the US House of Representatives has approved the landmark civilian Indo-US nuclear cooperation accord.

Volatility may remain high ahead of today’s expiry of July 2006 derivatives contracts.

The major Q1 results of the day are car major Maruti Udyog (MUL), State Bank of India (SBI), National Aluminium Company and Dr Reddy’s Lab. Among other Q1 results of the day are Indian Hotels, Arvind Mills, Wockhardt, Glaxosmithkline Consumer Healthcare, LIC Housing Finance, Orchid Chemicals, Alstom Projects, NTPC, Cummins India and Madras Cement.

Asian stocks edged higher for the second day in a row today. Key benchmark indices in Hong Kong, Japan, South Korea, Taiwan and Singapore were up by between 0.5% to 1.4%.

As per provisional data, FIIs bought shares worth a net Rs 61 crore on Wednesday 26 July, the day when Sensex had jumped 202 points. They were net buyers to the tune of Rs 230 crore on Tuesday 25 July, the day when Sensex had surged 200 points. Mutual funds bought shares worth a net Rs 235 crore on 25 July.

Sasken buys out Finnish firm for $45

Sasken Communication Technologies Ltd, a leading software services and products firm, Wednesday announced the acquisition of Botnia Highteh Oy, a Finland-based leading provider of wireless services, for $45 mn (Euro 35.5 mn) in an all cash deal.

Headquartered at Kaustinen in Finland, the 17-year-old, privately held Botnia supplies hardware, software, mechanical design and testing services to leading mobile handset vendors, with additional operations in Denmark and Germany. It employs about 230 people.

For the fiscal year 2005-06 ending April, the Finnish company reported revenue of $22 mn with a net profit of $3.7 mn.

As Sasken's first overseas acquisition, Botnia will provide the Bangalore-based firm a window of opportunity to offer its slew of services and products to European vendors, including tier-one customers in the wireless communications space, especially in RF (radio frequency) technology, design and testing services.

"The acquisition will not only give us a presence in Finland, but also add value to our global development centres in Mexico and China. Botnia's services can be applied in R&D projects, sub-projects, tester design and in cost reduction," Sasken chairman and CEO Rajiv Mody told reporters from Finland through a video-conference.

The deal, to be completed by August, will be funded through the $50-mn equity issue Sasken plans to raise soon and partly through debt financing. Post-acquisition, Botnia will become a wholly owned subsidiary with its revenues consolidated in the parent company.

With 11 big-ticket customers in Europe, including major OEMs such as Alcatel, Nokia, Ericsson and Siemens, Botnia is a household name in Finland. The buyout will enable Sasken to offer a compelling portfolio of value added solutions to its global customers by leveraging the domain expertise of Botnia.

"Our strong presence in Europe, which leads in wireless technology development, and Sasken's global reach with development centres in multi-locations, will give both the partners scale and capabilities to expand the business exponentially," Botnia chairman Matti Paasila said in a statement.

"Post-acquisition, we will set up a global centre of excellence for hardware and mechanical design in Finland to address a growing market in handsets, networking equipment and semiconductors, which is set to be about $200 mn in size," Sasken chief operating officer Kumar Prabhas said.

The Rs.3.1-billion Sasken provides software services and products to fulfil embedded or R&D outsourcing needs of its customers worldwide in communications space. Its offerings cater to large network equipment manufacturers in wireless and wireline, semiconductor manufacturers, terminal product vendors and test and measurement equipment providers, worldwide.

24 outbound acquisitions in May-June 06

Indian entreprenuers continued their overseas shopping spree with homegrown firms concluding 24 outbound acquisitions out of a total of 58 during May-June period, industry chamber Assocham said.

The mergers and acquisitions were mostly in engineering, IT-ITES, pharmaceuticals and energy sectors. There were three outbound deals in each of these areas in the two-month period, the chamber said quoting its Eco Pulse study.

Corporates like Wipro, Tata Motors, Nicholas Piramal, Larsen & Tubro, Raymond's and Lupin Laboratories led the acquisition race overseas, it said.

In recent acquisitions, NIIT Technologies Ltd (NTL) took over UK-based insurance solutions provider ROOM Solutions Ltd for about 25 million dollar in an all-cash deal, Godrej Beverages and Foods acquired Nutrine Confectionery company for about Rs 250 crore and Lupin Ltd purchased 51 per cent stake in Belgium's Artifex Finance CVA, the report said.

On the domestic front, cement, IT&ITES, telecom, pharmaceutical and retail sector witnessed maximum number of deals.Energy sector accounted for eight deals, followed by engineering and technology (IT & ITES) sector with six deals each.

Pharmaceuticals sector struck out five deals during this period and Telecom and FMCG sector witnessed four deals each, it said.

R Systems to acquire WebConverse

Software products development company, R Systems International Ltd, said on Wednesday that it will acquire WebConverse Inc for over $10.7 mn.

The acquisition is scheduled to be completed within the next three weeks, the company informed the Bombay Stock Exchange.The company signed a definitive agreement today to acquire WebConverse, a technical support company with US operations and serving the technology sector with focus on growing mobile applications market, it added.

"This acquisition places us in a select group of service providers having onshore & offshore support capabilities," R Systems CEO Rekhi Singh said.Given the growth potential of the existing WebConverse client base, we see a near term and long term strategic benefit for all our stakeholders, he added.

WebConverse achieved revenues of 5.1 million dollars in calendar year 2005.The shares of the company closed at Rs 136.35, up 14.48 per cent at the BSE.

Nifty 50 Quotes at End Of Day

Company Prev Close LTP %Change
NSE Sensex 3040.5 3110.15 2.29
ABB 2366.5 2451.9 3.61
ACC 820.5 829.4 1.08
BAJAJAUTO 2495.15 2498.45 0.13
BHARTIARTL 369.45 382.6 3.56
BHEL 1829.65 1858.9 1.6
BPCL 317.9 319.4 0.47
CIPLA 223.7 227.6 1.74
DABUR 133.2 137 2.85
DRREDDY 1296.5 1323.85 2.11
GAIL 248.15 267.05 7.62
GLAXO 1023.2 1017 -0.61
GRASIM 1990.3 2029.75 1.98
GUJAMBCEM 103.65 105.3 1.59
HCLTECH 531.9 543.15 2.12
HDFC 1097.15 1135.15 3.46
HDFCBANK 766 781.1 1.97
HEROHONDA 712.7 704 -1.22
HINDALC0 157.85 162.7 3.07
HINDLEVER 234.35 240.8 2.75
HINDPETRO 215.1 220.95 2.72
ICICIBANK 542.4 540.5 -0.35
INFOSYSTCH 1610.7 1646.4 2.22
IPCL 245.55 250.3 1.93
ITC 164.1 168 2.38
JETAIRWAYS 518.75 517.85 -0.17
LT 2114.6 2157.85 2.05
M&M 528.75 563.1 6.5
MARUTI 743.05 764.05 2.83
MTNL 139.85 145.6 4.11
NATIONALUM 209.85 213.05 1.52
ONGC 1093.25 1138 4.09
ORIENTBANK 170.2 174.15 2.32
PNB 345.55 347.85 0.67
RANBAXY 356.15 371.7 4.37
REL 448.35 451.25 0.65
RELIANCE 987.8 999.9 1.22
SAIL 68.3 68.9 0.88
SATYAMCOMP 731 739.1 1.11
SBIN 748.35 754.25 0.79
SIEMENS 838.7 840.1 0.17
SUNPHARMA 769.65 799.4 3.87
SUZLON 992.2 1034 4.21
TATAMOTORS 701.75 728.8 3.85
TATAPOWER 481.8 497.2 3.2
TATASTEEL 495.6 496.45 0.17
TATATEA 734.65 753.55 2.57
TCS 1847.3 1888.8 2.25
VSNL 363.65 369.5 1.61
WIPRO 469.8 476.35 1.39
ZEETELE 246.8 263.8 6.89

Markets Today: Market strikes a purple patch

The market collected gains for the third straight day as buying momentum was sustained. Most of the surge came in the second half of the day’s trading session after ONGC, M&M and Bharti Airtel, each one beat the street comprehensively.

The BSE 30-shares Sensex vaulted 201.66 points (1.94%), to 10,617.27.Earlier, it had opened lower at 10,391.93 and tanked to a low of 10,362.61, as selling erupted. It had surged to a high of 10,648.77, in the fag hours of trade as buying intensified.

With today’s surge, the Sensex has added 531 points (5.26%) since from the close of 10,085.91 on 21 July 2006.The S&P CNX Nifty rose 69.65 points (2.29%), to 3,110.15.

The market witnessed extreme volatility in the opening session of trade, which can be attributed to the impending expiry of July futures contracts on Thursday (27 July). The past two days have seen some short covering, which has propped up the barometer index.

The total turnover on BSE amounted to Rs 2,446 crore. The total turnover on Tuesday was Rs 2,612 crore.The market-breadth was positive; close to 2.30 gainers for every single loser. Against 1,651 shares that advanced, just 723 declined. A total of 81 shares remained unchanged. The BSE Small-Cap index rose 114 points to 4,968.19 while the BSE Mid-Cap index advanced 86 points to 4,181.54.Among the Sensex pack, 28 advanced while only 2 declined.

Ranbaxy was the biggest gainer, up 4.70% to Rs 373 on a volume of 13.97 lakh shares. A block deal of 5.50 lakh shares was struck in the counter at Rs 363 per share at 11:09 hrs IST.HDFC jumped 3.80% to Rs 1,139 on 34,060 shares.

ONGC surged 3.60% to Rs 1,133 on a volume of 12.44 lakh shares after reporting 24% growth in Q1 June 2006 net profit to Rs 4,118.99 crore (Rs 3,318.88 crore). Total income (net of excise) has gone up to Rs 15,022.72 crore from Rs 11,168.31 crore. Surprisingly, the company’s board also approved an issue of bonus shares in the ratio of one for every two held.

Cellular services major Bharti Airtel rose 3.51% to Rs 382.25 after it reported 48% growth in Q1 June 2006 net profit as per US GAAP to Rs 755 crore (Rs 510 crore). The net profit has surpassed market expectations. Revenue, as per US GAAP, has risen 53% to Rs 3,856 crore (Rs 2,517 crore). Revenue, too, outstripped market expectations.

Tata Motors rose 3.33% to Rs 725 on 13.08 lakh shares. The company agreed to enter into a joint venture with Italy's Fiat to build cars, engines and transmission systems. Tata Motors reported 40% growth in Q1 June 2006 net profit to Rs 381.85 crore compared to Rs 272.67 crore for the quarter ended 30 June 2005. The net profit was within market expectations. Net sales rose 49% to Rs 5,783.41 crore (Rs 3,878.09 crore), as per market expectations.

Reliance Communication (up 3.04% to Rs 255.80 on 14.03 lakh shares) and Hindalco (up 2.40% to Rs 161.50 on 8.73 lakh shares) were the other gainers.

Maruti Udyog advanced 3% to Rs 762 on 3.89 lakh shares. Media reports indicate that the company will announce a price hike.

Index heavyweight RIL rose 0.87% to Rs 995.90 on 14.86 lakh shares.Hero Honda (down 1.60% to Rs 700.15) and Tata Steel (down 0.30% to Rs 493.60) were the losers.

RIL was the top-traded counter on BSE with a turnover of Rs 144.20 crore followed by ONGC (Rs 139.42 crore) and Tata Motors (Rs 94.11 crore).All the BSE sectoral indices ended in the green. FMCG, Auto and PSU stocks led the rally.The BSE FMCG index rose 2.67% and was the biggest gainer. Shares of Nestle (up 5.10% to Rs 1098), McDowell (up 5% to Rs 512.05), Colgate (up 4.45% to Rs 394), HLL (up 2.45% to Rs 240.10) and Tata Tea (up 2.85% to Rs 753) were the gainers.

Mphasis BFL jumped 15.70%, to Rs 155.50 on 26.97 lakh shares after the boards of Mphasis and EDS India approved the merger of the latter into the former. EDS India is a wholly-owned subsidiary of Electronic Data Systems Corporation (EDS). A few months back, EDS secured control over Mphasis. EDS operates in the business process outsourcing (BPO) segment. EDS India reported a revenue of approximately $78 million for the year ended 31 March 2006. The combined entity will have an employee strength of over 15,000.

Tractor & utility vehicles maker Mahindra & Mahindra jumped 7.4%, to Rs 567.50 after reporting 40.5% growth in net profit for Q1 June 2006. Mahindra & Mahindra (M&M) has registered 40.5% growth in Q1 June 2006 net profit to Rs 204.17 crore (Rs 145.26 crore). Sales rose 23.4% to Rs 2,236.24 crore (Rs 1,811.86 crore).

Deccan Chronicle jumped 15.68% to Rs 410.20 after the publisher's net profit jumped 62.5% for Q1 June 2006. The Deccan Chronicle has registered a net profit growth of 62.5% to Rs 23.25 crore for Q1 June 2006 compared to Rs 14.31 crore in Q1 June 2005. Net sales during the period increased to Rs 109.63 crore from Rs 63.64 crore.

Bank of India surged 3.30%, to Rs 102 on registering a growth of 21% in net profit of Q1 June 2006. Bank of India (BoI) has registered a net profit growth of 21.53% to Rs 208.73 crore for Q1 June 2006 compared to Rs 171.74 crore for Q1 30 June 2005. Total income has increased from Rs 1,858.90 crore to Rs 2,331.70 crore.

Kirloskar Brothers jumped 7.10% to Rs 369 after the company said it would sell 51% stake in Kirloskar-Copeland, its joint venture to US partner Copeland Corp., for $40 million.

Pidilite Industries rose 3.72%, to Rs 90.70 on registering 24% rise in net profit for Q1 June 2006. Pidilite Industries has registered a net profit growth of 24.31% to Rs 37.94 crore for Q1 June 2006 compared with Rs 30.52 crore for Q1 June 2005. Total income during the period has increased from Rs 237.09 crore to Rs 294.23 crore.

Glaxosmithkline Pharma slipped 0.40%, to Rs 1,013.50 after the company reported 12% fall in Q2 June 2006 net profit. Glaxosmithkline Pharma has reported 12% fall in Q2 June 2006 net profit to Rs 91.06 crore (Rs 103.46 crore). The net profit was well in line market expectations. Net sales declined 12.3% to Rs 407.34 crore (Rs 464.98 crore), below forecasts. The fall in sales and net profit in Q1 June 2006 was because of higher base of Q1 June 2005. Resolution of VAT related issue had resulted in exceptionally strong sales in Q1 June 2005.

Sasken Communication Technologies rose 2%, to Rs 266 on acquiring Finland-based Botnia Hightech for € 35.5 million in an all cash deal. Sasken Communication Technologies has acquired Botnia Hightech Oy (Botnia), a leading provider of wireless R&D and testing services for € 35.5 million in an all-cash deal.

Esab India surged 12% to Rs 325 after the company said it will get a commission of Rs 1 crore out of an order secured by its parent, Sweden's Esab AB. The parent, which holds 37% stake in the Indian arm, bagged an order worth Rs 19.69 crore from the Indian Space Research Organisation (ISRO) to supply equipment used in manufacturing rocket fuel tanks.

TIL jumped 9.11%, to Rs 184.40 on the back of a 77% growth in Q1 June 2006 net profit. TIL registered 77% growth in Q1 June 2006 net profit to Rs 2.16 crore (Rs 1.22 crore). Net sales rose 27.7% to Rs 108.34 crore (Rs 84.85 crore).

Siemens rose 0.01% to Rs 836 after reporting a 42.9% growth in Q3 June 2006 net profit to Rs 56.51 crore compared to Rs 39.54 crore in Q3 June 2006. The net profit was below market expectation of a net profit of between Rs 60 crore and Rs 70 crore. Net sales rose 76% to Rs 1,052.26 crore from Rs 597.44 crore. Sales growth has exceeded market expectations.

The Nikkei average pared opening gains and fell 0.81% on Wednesday as caution crept in and trade narrowed ahead of earnings reports of major companies, including that of Matsushita Electric Industrial Co. The Nikkei fell 121.17 points, to end on 14,884.07.

US crude oil futures traded below $74 a barrel in Asian trading on Wednesday after tumbling the day before on expectations that Arab leaders and some European nations will call for an immediate end to fighting between Israel and Hizbollah at a meeting in Rome on Wednesday.

As per provisional data, FIIs were net buyers to the tune of Rs 93 crore on Tuesday (25 July), the day when the Sensex jumped 200 points. They were net buyers to the tune of Rs 31.50 crore on 24 July, the day when the benchmark index rallied 129 points. Mutual funds bought shares worth a net Rs 88.62 crore on 24 July.

Hot News

ONGC packs a punch with 1:2 bonus issue
Oil exploration major ONGC jumped 3.3%, to Rs 1,130.50 after it declared a 1:2 bonus issue.As many as 8.7 lakh shares changed hands in the counter on BSE.The stock had been marred by volatility over the past few days due to alternate bouts of buying and selling amid rising global crude oil prices. After an initial fall, the stock bounced back from the lower level later. From Rs 1,129.95 on 10 July, the counter slipped to a low of Rs 1,028.35 by 17 July. It recovered to Rs 1,093.65 by 25 July.

ONGC today surprised the market by declared a 1:2 bonus issue along with its Q1 June 2006 results. The company had last announced a bonus issue way back in 1995 that too a liberal 3:1.

ONGC today reported 24% growth in Q1 June 2006 net profit to Rs 4,118.99 crore (Rs 3318.88 crore). Total income (net of excise) has gone up to Rs 15,022.72 crore from Rs 11,168.31 crore.

Although a rise in global oil price augurs well, it will not benefit ONGC in full as it will have to bear the subsidy burden to compensate for losses made by oil marketing companies.

M&M in top gear on strong Q1
Tractor & utility vehicles major Mahindra & Mahindra jumped 7.4% to Rs 567.50 after it reported 40.5% growth in net profit for Q1 June 2006.4.4 lakh shares changed hands in the counter on BSE.The stock had come off higher level since early this month. From a high of Rs 627.60 on 4 July, the stock had tumbled to a low of Rs 511 on 19 July. It had recovered to Rs 528.10 by 25 July.

Mahindra & Mahindra (M&M) has registered a 40.5% growth in Q1 June 2006 net profit to Rs 204.17 crore (Rs 145.26 crore). Sales has risen 23.4% to Rs 2236.24 crore (Rs 1811.86 crore).

In March 2006, M&M launched new version of its sports utility vehicle Scorpio.

Recently, the company launched `Champion Alfa', a 0.5-tonne three-wheeler cargo vehicle in Tamil Nadu. This is a smaller load variant of M&M's 0.75-tonne Champion. Alfa was launched in six States last year.

M&M is the market leader in the utility vehicles segment and it has in place a roadmap for continued dominance in this segment. It is also a dominant player in the tractor segment in India.

M&M is planning to launch a new family van/multi-purpose vehicle on a whole new platform. The project, currently called Ingenio, could enable the company to take on the Toyota Innova and the Chevrolet Tavera in both the individual buyer and taxi segments.

M&M has a well-defined plan for strong debuts in product segments in which it has no presence currently. For this purpose, M&M has entered into joint ventures with global giants such as Renault for passenger cars and with International Truck and Engine Corporation for the manufacture of light and medium commercial vehicles and buses. In addition, M&M has set up new marketing joint ventures in South Africa (where its Scorpio pick-up has had a promising start) and in Western Europe.

Hot News

Siemens comes to terms with Q3 numbers
Siemens rose 0.4%, to Rs 840 after recovering from an initial fall of 2.8% to Rs 812.
A total of 61,977 shares was traded on the BSE.The stock had recovered after hitting a low of Rs 762.15 on 14 June. It rose to Rs 920.35 on 21 June only to sink to Rs 835.95 by 25 July 2006 as the market turned volatile.

Siemens has reported 42.9% growth in Q3 June 2006 net profit to Rs 56.51 crore compared to Rs 39.54 crore in Q3 June 2006. The net profit was below market expectation of net profit between Rs 60 crore and Rs 70 crore. Net sales rose 76% to Rs 1,052.26 crore from Rs 597.44 crore. Sales growth exceeded market expectations.

Siemens is an infrastructure and industrial solutions major. The company is sitting on a large order-book. Its unexecuted order-book as on 31 March 2006 was Rs 7,621.7 crore.Infrastructure-led growth for Siemens is expected to continue with power sector reforms and industrial demand for automation and machinery. The power-generation, power-transmission & distribution, automation and drives are expected to be principle drivers for Siemens in the near term, analysts reckon.

Bharti Airtel tunes gain as results beat forecast
Cellular services major Bharti Airtel rose 1.5%, to Rs 375 after reporting 48% growth in Q1 June 2006 net profit.As many as 4.7 lakh shares changed hands in the counter on BSE.The stock had risen 3.2% in the past two days in a firm market to Rs 369.30 on 25 July from Rs 357.60 on 21 July. Earlier, the stock pared gain following a rebound in the scrip from mid-June 2006.

Bharti Airtel registered 48% growth in Q1 June 2006 net profit as US GAAP to Rs 755 crore (Rs 510 crore), surpassing market expectations. Revenue, as per US GAAP, has risen 53% to Rs 3,856 crore (Rs 2517 crore), also beating market expectations. The results hit the market just a few minutes back.

Bharti had over 2.45 crore customers till 30 June 2006, an increase in the total customer base of 86%, over the corresponding period last year and maintained its leadership position through an improved market share of all India mobile subscribers at 22.5% as on 30 June 2006.

Bharti added 36.51 lakh customers in a single quarter ended 30 June 2006.

Recently, Bharti Airtel launched a fixed wireless phone (FWP) service, which offers local calls to a mobile subscriber at fixed line telephone charges of 40 paise a minute. The move is aimed at countering the Reliance Communication and Tata Teleservices whose CDMA-based fixed wireless telephones have become quite popular with nearly 1 million subscribers across the country. Bharti Airtel will use the GSM technology to offer FWP.

Jet, Deccan to shake hands

After edging out Indian to occupy the No.2 slot in the country, low-cost carrier Air Deccan is getting ready to tango with market leader Jet Airways.

The two top airlines are in talks for an interline agreement that would enable Jet to bundle Air Deccan tickets to its international passengers through its own distribution network.

So, someone in London would be able to book a ticket to Dehra Dun, whereby he will be given two flight coupons - one from London to Delhi on Jet, while Air Deccan will fly the other leg, connecting Delhi and Dehra Dun.It is a win-win situation for both, giving each carrier more penetration, and power to bundle tickets, offering more value to consumers.

Capt GR Gopinath, managing director, Air Deccan, told ET, that both the carriers are currently working on building an interface between their distribution systems with a payment gateway in place. The arrangement is expected to be in place over the next one month, Mr Gopinath added.

Jet Airways is on global distribution system while Air Deccan’s distribution is totally internet-based. A key difference between payment systems followed by Jet and Air Deccan is that full-service carriers use travel agents to book bulk of their tickets who operate on credit, while low-cost carriers usually have an instant-payment mechanism.

When contacted, Jet’s chief executive officer Wolfgang Prock-Schauer said as per the current arrangement, Jet and Air Deccan have entered into a seat swapping deal - valid for all flights across the country - for putting passengers stranded due to cancellation of flights on either carriers. “This is also applicable to maintenance and repairs,” he added.

He, however, did not wish to comment on whether the two carriers were entering into an interline arrangement, specifically for international markets. Industry analysts note that Air Deccan has been pushing for an interline arrangement between the two carriers for some time, but Jet’s response so far has been lukewarm.

“With Air Deccan now occupying the No.2 spot in the domestic market, and a domestic reach wider than that of Jet, especially connecting many secondary cities, an interline arrangement would look viable,” said a Mumbai-based airline industry analyst. As of June ‘06, Jet Airways continues to lead the market with around 32% market share, followed by 21.2% of Air Deccan and Indian (20.8%).

Competition from start-ups like Kingfisher, and new players such as IndiGo is set to keep existing players on their toes in the coming months. With Air Sahara management mulling over the low-cost option, competitive heat is set to intensify.

Many industry players feel that with growing competition in the domestic segments, Jet would increasingly focus its attention on international routes. For airlines, passenger yield per seat is better in international routes than in the domestic segments.
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