August, 2007 | Dalal Street

Purvankara Lowers IPO Price- Extends Closing Date

August 3, 20071 min read

Ravi Purvankara, promoter of Purvankara Projects who wanted to rip off Investors by pricing his Realty company stocks at absurd prices has suffered a severe setback as the issue was not even subscribed 0.38 times at 16:00 Hours on August 3rd, an hour before the IPO would close.

Loser, Ravi Purvankara is now saying fragile global market conditions as the reason for the debacle of his IPO. The issue will be now priced between Rs 400 and Rs 450, down from Rs 500 and Rs 525. The IPO will now close on August-8th. Losers!!!!

SEBI should investigate the matter of abnormal pricing of Real Estate IPOs. The days will be back when Value Investing will be the order of the day kicking out speculators and shell company promoters out of the market. Stay tuned for our IPO Analyst to evaluate the IPO of this Loser, Mr. Ravi Purvankara.

Breaking Corporate India Earnings News

Gitanjali Gems Shines on Good Results

August 3, 20071 min read

Net profit of Gitanjali Gems rose 55.59% to Rs 32.83 crore in Q1 June 2007 over Q1 June 2006. Sales jumped 31.26% to Rs 653.85 crore in Q1 June 2007 over Q1 June 2006.

Shares of the second largest diamond maker by sales in India had hit a high of Rs 280, which is also its all-time high. The current market price of Rs 275.05 discounts its Q1 June 2007 annualized EPS of Rs 21.69 by a PE multiple of 12.68

Equity Research

Sell HT Media – Citi

August 3, 20071 min read

Citigroup has downgraded the stock of HT Media to SELL from BUY after a disappointing first quarter of FY-2008 with a Target Price of Rs 212.

Earnings growth for HT Media is slowing, partly because of new investments, but also because fixed costs have continued to increase rapidly. In 1Q FY08 it reported the slowest growth of the last two years.

HT Media’s fixed cost base compares unfavorably to other Indian media companies. While it has made some new investments, the extent of increase in fixed costs is too high. Employee costs rose 400bps over the last three years, despite revenues doubling, which is surprising given high operating leverage inherent in media businesses.

1QFY08 results were below expectations. Even after adjusting the 500bps impact on margins due to new investments, EBITDA grew only 7.1% (33% adjusted for new business investments), the slowest over the last two years.

Citi reduced EPS estimates for FY08-09E by 10.3-12.2%. At 27xFY09E P/E, HT Media trades at an 80% premium to its regional print media peers, which is excessive. HT Media is likely to report an EPS of Rs 6.64 and Rs 8.49 for FY-2008 and FY-2009 respectively.

Breaking Corporate India Earnings News

Punj Lloyd gains on Pipavav Shipyard Deal

August 3, 20071 min read

Punj Lloyd has signed a memorandum of understanding (MOU) to invest Rs 403 crore for acquiring a 25.1% stake in Pipavav Shipyard. This will provide it an access to fabrication facilities for platforms, rigs and jackets to exploit the opportunities in this sector.

Orders to the Company:
On 2 August 2007 that Sembawang Engineers and Constructors (Sembawang), a subsidiary of Punj Lloyd (PLL), secured a contract worth over Singapore dollar 250 million for sub-structural works at the Sentosa Integrated Resort Development.

Punj Lloyd has signed a MOU with the Ramprastha Group for the development of multi-storied residential housing through a 50:50 joint venture of the company and the Ramprastha Group.

The MOU envisages development of residential apartments by the joint venture in Ghaziabad in approximately 29 acres in Vaishali in the first phase. In the second phase, substantial real estate development is proposed in Indrapuram and Gurgaon, where the Ramprastha Group holds a large land-bank. Punj Lloyd is expected to make an initial investment in the joint venture to the extent of Rs 180 crore and a similar initial investment is planned by the Ramprastha Group.

India IPO Reviews and Updates

Omaxe Allotment Status Available

August 3, 20071 min read

The Allotment Status Omaxe Construction Ltd IPO can be checked here. All individual retail applications for 320 shares have been firmly alloted 26 shares.

Intime Spectrum Registrar to the issue has told us that, As per information made available by ECS-Refund Banker(HDFC BANK LTD.)

Credit into respective account through ECS can be expected
In Mumbai by : 04/08/2007
Other than Mumbai by : 08/08/2007

Update on Purvankara Ltd IPO:
Our Analyst has an AVOID on Purvankara projects. The issue is very poorly subscribed at mere 0.28 times [just one more day to go] with absolutely no interest from Retailers. Stay away from the issue.

Equity Research

Citi retains BUY on Gokaldas Exports

August 2, 20071 min read

Gokaldas Exports Q1-FY08 revenues grew a healthy 18% YoY, but EBITDA and earnings declines of 7% and 22% yoy, respectively, were lower than estimates. EBITDA margin also declined 220bps YoY to 8% – adverse impact of 9% appreciation in rupee in the quarter.

Gokaldas has taken steps to counter the rupee appreciation 1) Negotiating higher prices for future orders, 2) increase usage of imported raw materials, benefit is expected to flow from 2Q, 3) focus on a richer product mix. Gokaldas management is focused on Building order book of Rs2.5bn for 2QFY08, contrary to sector’s decline and Enriching product mix with entry into suits, innerwear, workwear.

Gokaldas Exports offers the best exposure to the garment outsourcing theme. With Gokaldas’ large capacity, good relationships with global brands and healthy order-book position, we believe the company is well positioned for growth. Target price of Rs285 is based on 12x FY-08E P/E. EPS estimates are Rs 23.8 and Rs 27.5 for FY08 and FY09 respectively.

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