November, 2007 | Dalal Street

Maruti Oct ’07 sales volume up 15%

November 1, 20071 min read

Maruti Suzuki India (MSI) registered impressive growth of 15% to 69415 units in month of Oct ’07 backed by steady growth volumes in both domestic and exports sales. Its domestic sales for Oct ’07 increased by 15% to 64258 units compared to 55894 units in Oct ’06. Upside came largely from the higher sales volume registered by A2 segment that consists of models such as Alto, Wagon R, Zen and Swift. Its exports in Oct ’07 increased by 21% to 5157 units.

Segment wise, A2, A3 and multiutiliy vehicle (MUV) continued to report healthy growth while C segment (Omni & Versa) attained marginal growth and A1’s (M800) declined. A2 achieved healthy growth of 21% to 47077 units while A3 (Esteem, Baleno and SX4) grew by 55% to 4177 units. MUV consisting of Gypsy and Grand vitara surged by 184% to 417 units. On the other hand C segment grew marginally by 5% to 8110 units. A1 that consists of M800 crashed by 30% to 4477 units.

Breaking Corporate India Earnings News

Bharti Airtel slumps onTEC Report

November 1, 20071 min read

Bharti Airtel Ltd has trading in red despite very good quarterly results announced yesterday. TEC, the technical arm of the Department of Telecommunications (DoT), is planning to recommend a steep increase in spectrum usage charges for GSM mobile service providers that seek additional spectrum beyond 6.2 MHz.

Bharti Airtel is seeking more bandwidth to offer better mobile-phone services.

TEC has also recommended increasing the minimum number of subscribers required for operators to qualify for additional spectrum.

Equity Research

Grasim Industries – Strength from Cement and Fibers

November 1, 20072 min read

Grasim Industries Ltd is drawing strength from almost all its business verticals. Q2 consolidated PAT (Rs6.2bn) grew 50% YoY, driven by Ultratech’s strong performance. Grasim’s H1 FY08 consolidated PAT was Rs12.9bn (up 52% YoY); that is, an EPS of Rs140.70. This is 48% of FY08 consensus EPS estimate of Rs293.50, implying that estimate is reasonable, as H2 is traditionally stronger than H1 for cement and VSF businesses. Q2 was characterised by strong earnings growth in all divisions -VSF (EBITDA growth +82% YoY), cement (25%) and sponge iron (+418%).

Grasim’s total capex plan is Rs61.2bn for FY08 and Rs18.2bn for FY09. In addition to 95KTPA VSF capacity expansion in Kharach (Gujarat) and Harihar (Karnataka), Grasim is planning an 88KTPA greenfield VSF plant in Vilayat (Gujarat). For cement, the company expects Shambhupura (4.4mt) and Ultratech’s Tadipatri (4.9mt) be commissioned by end-FY08 and Kotputli (4.4mt) by Q1FY09.

Macquarie and UBS have upgraded Grasim’s earnings expectations. (more…)

Economy, Markets and Macro Views

Jai Hind Projects, Initiating Coverage

November 1, 20072 min read

SBI Cap Securities has initiated coverage on Jai Hind Projects Ltd [JPL]. JPL operates as an engineering, procurement and construction (EPC) company. The company is involved in the construction and laying of onshore and horizontal directional drilling (HDD) pipelines, urban infrastructure development projects like construction of water systems, gas distribution projects and other environmental projects, corrosion protection services and engineering & turnkey projects.

JPL has an order backlog worth Rs.2142.4 mn as on FY07, which is 179.4% higher than FY06. Average ticket size has improved to Rs.235 mn, from Rs.125 mn in FY06. In order to support big ticket size projects, JPL has planned capital expenditure of Rs.400 million in span of two years. JPL is planning to enter into global EPC contracts for which it has tied up with Thiess of Australia, Naftogaz of Ukraine.

Valuations and Target for JPL (more…)

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