2007 | Dalal Street

India Infoline Rises on CLSA Pouching and results

May 28, 20071 min read

InfiaInfoline has posted good results.India Infoline’s net profit soared 56.68% to Rs 16.06 crore in the quarter ended March 2007, from Rs 10.25 crore in the quarter ended March 2006. Sales soared 1296.42% to Rs 238.09 crore in the year ending March 2007 (Rs 17.05 crore).

Net profit advanced 96.90% to Rs 52.12 crore in the year ended March 2007, from Rs 26.47 crore in FY 2006. Sales galloped 503.53% to Rs 269.78 crore (Rs 44.70 crore).

The India Infoline Stock is up 40% today on BSE.

Just over the weekend, India Infoline has puched 4 key personnel from CLSA Securities at a whopping Rs 16 crore sign-on bonus, thing never heard off in the Indian stock broking industry. Lets see how logn this mania continues 🙂

Economy, Markets and Macro Views

Unitech Recommends a Bonus Again

May 28, 20071 min read

FLASHNEWS: The board of Unitech Ltd has decided to issue bonus shares in the ratio of 1:1.

The board also decided to cancel the existing authorised preference share capital and decided to increase the authorised share capital from Rs 200 crore (after cancellation of preference shares) to Rs 500 crore.

Unitech had given a liberal Bonus and a stock split last year.

Breaking Corporate India Earnings News

Crompton Greaves to acquire Microsol Holdings

May 28, 20071 min read

Crompton Greaves has concluded with an arrangement to acquire Microsol Holdings together with other companies in Microsol group. Microsol Holdings is based in Ireland with operations in UK, USA and Ireland.

Microsol Holdings is engaged in the business of providing sub-station automation for MV and HV sub-stations. Appromixate enterprise value of this acquisition is Euro 10.50-million.

This acquisition will increase Crompton Greaves’ strengths in high-end engineering and sub-station automation capabilities.

Economy, Markets and Macro Views

Reliance Money Software Glitch Causes Huge Loss

May 28, 20071 min read

Reliance Money, the e-Trading arm of ADAG has too many bugs in their online trading software which has causes huge loss to investors.

A customer, said that he sold 10,000 shares of Reliance Natural Resources (RNRL) at a profit and still his ledger balance was showing a debit 🙁

Other Common Glitches Faced by Investors are as follows,

Limit based orders have disappeared.
Executed Order confirmation given on next Trading Day [They should be given the next second]
Franchisees admit to problems in software
Transferring amount from UTI Bank to Reliance Money takes 4 days. JeeZ!!!

It is not uncommon to see Billing and Software errors in Ambani controlled companies. In 2003-04, their were tons of Billing errors in Reliance Infocom which caused the company to suffer more than Rs 100 crore loss. Ambanis are who are traders and oil merchants don’t understand the IT business 🙂

HDFC Bank is another bank which doesn’t understand the Online Banking needs of the User.

Breaking Corporate India Earnings News

HDFC Preferential Issue

May 25, 20071 min read

The board of Housing Development Finance Corporation has decided to issue 18-million equity shares of Rs 10 each on preferential basis at a price of Rs 1730 per share. The board also decided to increase the authorised share capital from Rs 275 crore to Rs 325 crore.

The board has also decided to grant 50,60,000 stock options in Employees Stock Option Scheme and Employee Stock Purchase Scheme.

These were decided in the board meeting held on 25 May 2007 and are subject to shareholders’ approval.

Equity Research

BUY Finolex Industries – ICICI

May 25, 20072 min read

Finolex Industries is the largest PVC pipe and second largest PVC manufacturer in India.
Demand-supply mismatch for PVC
During 2001-2006, capacity addition grew at a miniscule CAGR of 2%, whereas demand continued to surge in double digits at a CAGR of 11%. This has resulted in firm PVC prices and high capacity utilisation rates for domestic manufacturers.

Robust demand for PVC pipes
Finolex is the leader in PVC pipes with a 20% market share in the domestic organised market. PVC pipes are used for irrigation as well as in sanitation and plumbing systems in the construction sector.

Timely capacity expansions, cost reduction initiatives
Finolex has doubled its PVC resin capacity from 130,000 to 260,000 tpa in 2006 by setting up a VCM (vinyl chloride monomer)-based new facility

ICICI expects the company to report net sales of Rs 1282.50 crore in FY08 and net profit of Rs 78 crore, translating into an EPS of Rs 6.29. At the current price of Rs 78, the stock trades at a P/E multiple of 13.8x its FY07 earnings of Rs 5.64 and 12.4x its FY08E EPS of 6.29. On an EV/EBIDTA basis, the stock is available at 6.7x FY08E earnings. ICICI believes that the stock is attractively valued and set a price target of Rs 93.6, for 3-6 months, an up-side potential of a 20%

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