2006 | Dalal Street

Equity Research

Parsvnath and Lanco Ratings by ET

November 6, 20061 min read

Economic Times Investor guide has “3*” rating on both Parsvnath Builders Limited and Lanco Infratech. They recommend investors with a 3 year horizon to BUY Parsvnath Builders and Long Term for Lanco Infratech.

Arun Kejriwal, director, Kejriwal Research and Investment Services, “The stock looks fairly priced, but considering the revenue prospects and potential value of Parsvnath’s assets, the stock promises to be a good investment option. We think investors should subscribe to the issue“

“The valuations are justified if we look at future earnings potential. We recommend the stock(Parsvnath) as a good long term bet,” says Surya Narayan Nayak, analyst, Networth Stock Broking

“Given its presence in high growth sectors like power, construction and property, we are optimistic about the business model and revenue visibility. One can invest in Lanco from a long-term perspective and gain substantial returns” adds Jigar Valia, analyst at Parag Parikh Securities

India IPO Reviews and Updates

Parsvnath Developers Limited – IPO Review

November 5, 20062 min read

Company: Parsvnath Developers Limited (PDL)
IPO Dates: Nov-06-2006 t oNov-10-2006.
Issue Price: 100% Book Building. Range Rs250 to Rs300.
Issue Size : 33,238,000 Shares Plus Green Shoe Option of 3,087,800 shares.
Total Issue Size= 36,325,800 shares * Rs250 = Rs908 crores
Or 36,325,800 shares * Rs300 = Rs1089.7 crores
Retail Investors have 30% reservation.

Company Background: The company is currently engaged in a variety of projects, 20 integrated townships, 25 residential projects, 27 commercial complexes, including shopping malls, multiplexes, office space and a complete metro station. Further, the company has obtained in-principle government approvals for the development of nine SEZ projects. It is the first company to receive a rating of DR 2-ICRA-NAREDCO from ICRA, which is given for a “strong project development capacity”. It has also receives ISO 9001:2000, ISO 14001:2004, and OHSAS 18001:19999 certifications from RINA. It has diversified business model spanning 14 states and 41 cities. Parsavanath has reputed client list of Biz Bazaar, Raymonds, Spencers, Pizza Hut, McDonalds etc.

It may face risks like any other real estate stock in India due to the overhetaing. No I don’t think commodity prices like Iron and Cement will affect its bottomline as commodities have turned bearish now. (Courtesy: Shankar Sharma and Mark Mobius)

Parsvnath SEZ Plans: Parsvnath is developing 1,500 Hectares together in 9 SEZs.

Parsvnath Company Financials: YoY Growth in Income and PAT is as follows. Figures in crores.
FY2002. Income=27.295 PAT=3.29
FY2003. Income=69.38 (+154%) PAT=11.46 (+248%)
FY2004. Income=112.945 (+62.8%) PAT=18.4 (+60%)
FY2005. Income=306.846 (+171%) PAT=65.6 (+256%)
FY2006. Income=653.67 (+130%) PAT=106.9 (+63%)

Q1FY2007. Income=249 and PAT=36.5. Lets be conservative and annualise the same earnings, we get PAT for FY2007 at 146.

Parsvnath Post-Equity: Post Equity considering the Green shoe option is exercised, 184.696
Expected EPS = Rs7.90

At the issue price of Rs250 or Rs300, the forward PE Multiple on EPS of Rs7.9 is 31.6 or 37.97.

DalalStreet.Biz expects that investors will have some gains on listing. By Tuesday, after talking to our sources in Mumbai, we will come with a clear recommendation.

Tags:IPO India , Parsvnath Developers , India Real Estate, Real Estate Stocks

Equity Research

Reddy Labs to Hit Wal-Mart Shelves ?

November 5, 20061 min read

An informer in the US has tipped me that Dr. Reddy’s Laboratoties Ltd generic drugs will be stocked by American retailing giant, Wal-Mart under its $4 prescription plan. My source is reliable and here is the list of drugs [PDF] that will be stocked by wal-mart. Let me know if Dr Reddy’s is really in it or not.

Tags: Invest India, DalalStreet, Pharma Stocks

India IPO Reviews and Updates

Info Edge India IPO subscribed by 55 Times

November 3, 20061 min read

The Naukri.Com IPO is finally over.
Total Issue Size : 5323851
Total Bids Received at Cut-off Price: 16110180
No. of times issue is subscribed: 54.77

Retail Individual Investors portion subscribed by 12.2133

Employyes of Info Edge India don’t have confidence in their own company and issue was UNDERSCRIBED in employee portion. Just 0.1141%

Tags: IPO India , Invest India , Dalal Street , Naukri

Equity Research

ILFS Puts a REDUCE Recommendation on Patni Computers

November 1, 20061 min read

IL&FS has initiated coverage on Patni Computer System Ltd with a REDUCE recommendation. It is another way to SELL and Exit. ILFS in its research reported stated,
Therefore we maintain our ÂReduceÂ rating on the stock and recommend a shift from Patni to other large players like Infosys and Satyam. Also note that the management guidance for the next quarter is 0.2% growth in revenues for QoQ and 8% sequential FALL in net profits. Patni’s problems are evident from this blog posting where one of the professors on the board of Patni is not so bullish on India. These are Patnspecificic problems only.

However, DalalStreet.Biz is not very bullish on Satyam with a one year target price of Rs495 which leaves limited upsidpotentialal on your investments and DalalStreet.Biz recommends a BUY on HCL-Technologies with a price target of Rs750 in a year.

The entire report by ILFS on Patni can be accessed here.[PDF]

Economy, Markets and Macro Views

Reliance Money brokerages are Lowest in India

November 1, 20062 min read

A fortnight ago, we first broke the news of Reliance Capital Ltd entering brokerage services through their arm Reliance Money and not RTrade or Reliance Trade as reported by section of the press.

Reliance Capital Limited promoted Reliance Money’s brokerage structures are available with us. Reliance Money is offering a brokerage charge of 7.4 paise on every Rs 100 worth of delivery based trades, and 2 paise on non-delivery trades (a.k.a Intra Day) which rival brokers admit is the lowest in the industry so far.

Reliance Money will offer a common platform for investors to invest in all equity products, commodities, forex, IPOs, insurance and other financial products.

Retail brokerage houses fear that Reliance Money may rewrite the rules of the broking business, distorting business dynamics in the short term. This move will have a direct impact on the bottomline of speculative company like Indiabulls Financial Services Limited and India Infoline Limited.

Reliance Money is offering prepaid cards of value Rs 500, Rs 1,350 and Rs 2,500. An insider has tipped that a Kolkatta based brokerage house is coming with flat fee unlimited trades package. I will get you the details soon. Reliance has also launched a Credit Card in association with CitiBank.

For Details Contact: Jaya @ 98675- 70030. Tell her you were referred by DalalStreet.Biz WEBSITE to get an attractive offer.

Tags: Dalal Street, Invest India, IPO India, Reliance Capital

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