October, 2007 | Dalal Street

Bharati Shipyard secures order

October 11, 20071 min read

Bharati Shipyard has announced that the Shipping Corporation of India board has accorded approval for acquisition of four numbers anchor handling tugs cum supply vessels from Bharati Shipyard. The total price of each vessel is US $ 22.32 million totaling to US $ 89.28 million. The contract signing ceremony will be held on 15 October 2007.

These vessels are the first of its kind being built by shipping corporation of India in India using such advance design. These vessels will be constructed by using havyard design which will be used for the first time for such vessels built in India. The design allows for achieving high bollard pull and fuel efficiency as against equivalent designs. Further, the design allows higher DWT and higher cargo carrying capacity compared to other 80 tons AHTSVs with similar dimensions.

Equity Research

Lupin-Kyowa Pharma Acquisition – BUY

October 11, 20071 min read

Lupin is on an acquisition spree. Earlier it acquired Rubamin and now its Kyowa Pharma in Japan. Lupin has acquired 80% stake in Kyowa Pharma, Japan (will increase to 100% soon) at an enterprise value of US$110 mn (1.7x sales and 11.3x EV/EBITDA). Current sales will significantly scale up from US$65 mn to US$100 mn and profits from US$3-4 mn to US$10-12 mn over the next 2-3 years. This would mainly be led by the increased number of product launches from Lupin, higher genricisation of the market and operational and sourcing efficiencies.

Taking this into consideration, the acquisition is a good opportunity for Lupin from a strategic point of view. The stock is trading at 15.9x FY08E and 13.1x FY09E earnings. ASK Securities reiterates a Buy rating on the stock with a target price of Rs 807.

Tags: Dalal Street, India Pharma, India Invest, India

Breaking Corporate India Earnings News

Infosys Q2 Results

October 11, 20071 min read

We have obtained a copy of Infosys Technologies results and here is an insight. The company which used to report QoQ growth has stopped reporting so because of its poor performance and its inability to transition itself. Now they are reporting YoY like any other commodity company.

Net profit of Rs 1,100 crore[Q2 – Sept-30] Vs 1,079 crore [Q1-June-30]
Infosys Full Year Guidance: EPS EXPECTED AT RS.79.5 to 79.88

As said by Lehman Brothers, Indian IT Companies fail to innovate and have lost their competitive edge with the falling Greenback. So Book Profits in Infosys at Higher Levels.

Update: It is seriously high time guys that all the research analysts get bold like Lehman Brothers and downgrade IT stocks.

Breaking Corporate India Earnings News

Indian Rupee Vs – USD + Euro

October 11, 20071 min read

Here is some data from HSBC on Indian Rupee Versus USD and Euro

INR /USD, end-year 45.61 43.46 45.05 44.26 39.00 37.50[2008E] 36.00[2009E]
INR /EUR, end-year 55.25 59.11 53.14 58.36 56.55 50.63[2008E] 46.80[2009E]

Economy, Markets and Macro Views

IDFC Upgraded by Morgan Stanley

October 11, 20072 min read

India’s premier infrastructure lending company – IDFC was upgraded by Morgan Stanley research. They have set a new price target of Rs 200 on the stock. Here is Citi’s exclusive coverage on IDFC.

IDFC is entering a phase where all parts of revenue are doing well – loan growth is strong, spreads are improving and fees are very strong. For F2005-F2007, IDFC has delivered the best core earnings progression among Indian private banks and financial institutions at a 55% CAGR. This trend will continue, resulting in outperformance.

IDFC has launched the first tranche of its proposed US$2 bn project equity fund along with Citi. This will result in a doubling of assets under management in 1-2 months. Moreover, its investments in NSE is performing strongly. SSKI is two-third owned by IDFC is also performing well.

Based on earnings adjusted for recent capital issuance and new fund raising in project equity, consensus is expecting 4% YoY earnings growth in the rest of F2008. The actual numbers are likely to be higher and hence raise F2008 earnings estimates by 5%.

The stock is trading at 24.8x F2009E earnings – in line with private banks. However, private equity (PE) and proprietary investments are not contributing significantly to earnings but provide almost 30% of value. Hence, core valuations are lower at 19x (cheaper than private banks, with better earnings profile) and could rise, given strong earnings growth expectations.

In a separate development, Reliance Capital has launched an exclusive Consumer Finance Loan subsidiary.

Mutual Funds Review

Reliance to launch Gold ETF

October 10, 20071 min read

Reliance Gold Exchange Traded Fund is an open ended Gold Exchange Traded Fund which will track the performance of Gold Bullion. The units issued under the scheme will represent the value of gold held in the scheme. It is designed to provide returns that, before expenses, closely correspond to the returns provided by domestic price of Gold.

You will hold Gold in DEMAT form
Do not worry about the security as their is a Custodian like for your shares [ NSDL ]
Transparency – High
Denomination – 1 Gram and in multiples of 1 Gram
Retail investors can trade on NSE
Best advantage is you don’t pay any wealth tax on the Gold units you hold [Physical Gold is liable for Wealth Tax]
Capital Gains – Applicable [No Security Transaction Tax]

NFO Opens: 15thOct,07
NFO Closes: 1stNov, 07

Investors looking to purchase Gold can invest in this fund. Questions and comments on Mutual Funds maybe sent to feedback @ dalalstreet. biz

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