Year: 2007

L G Balakrishnan & Bros reportedly plans to spin off its forging division into a separate company so that the division can focus more in its core business and can seek independent joint ventures in future. Reports suggest that the company would list the forging unit on the bourses and the company has already set up a panel to fix the share swap ratio for demerger.

At the current price of Rs 26, the scrip trades at a PE multiple of 11.50, based on Q1 June 2007 annualised EPS of Rs 2.26. Face Value of Rs 1.

Jai Corp is a major promoter in developing the 5,250-acre Navi Mumbai Special Economic Zone, apart from Mukesh Ambani led Reliance Industries (RIL). Jai Corp is focusing on developing one of the largest special economic zones in India. Jai Corp is led by Mukesh Ambani’s friend, Anand Jain who has been with Mukesh Ambani for over 20 years now in Reliance Group.

JAI CORP Ltd has informed BSE that the promoters on October 15, 2007 have sold 2,19,00,000 (two crores & nineteen lakhs) equity shares of the Company through the floor of the exchange.

Jai Corp has invested in two multi product special economic zones near Mumbai – Navi Mumbai SEZ (NMSEZ) and Mumbai SEZ (MSEZ). Both the SEZs are being conceived and developed as a futuristic business hub and gateway for trade, commerce, industry, service and tourism. The NMSEZ will be set up as a joint venture with the City and Industrial Development Corporation (CIDCO) of Maharashtra holding 26%, and RIL holding the rest with Jai Corp.

As per recent reports, Jai Corp is planning to raise a venture capital corpus of Rs 40000 crore through its wholly owned subsidiary, Urban Infrastructure Venture Capital. Reports suggest that Jai Corp has already committed a capital of Rs 22,000 crore in 12 cities in India. The major investments would be in multiuse projects and townships (22% each), residential (15%) commercial (14%), industrial township (12%) and hospitality (6%).

HDFC Bank reported net profit of Rs3.68 bn, which was up 44% yoy and 5% higher than our estimate. However, the company exceeded our target largely due to treasury gains.

Core operating performance was 7% below our estimate as the bank reported lower other income and higher expenses. Strong NII growth and moderate growth in fee income drove most of the growth in income. We have tweaked our earnings estimates marginally, so too our target price—to Rs1,300 from Rs1,250. The stock trades at 23X PER and 3.7X PBR FY2009.

IDFC’s reported standalone net profit for 2QFY08 of Rs1.79 bn, up 27% yoy but 8% below estimates. IDFC’s net operating income was up 43% yoy, mainly supported by strong loan growth, likely stable spreads but higher NIMs—on the back of recent capital issuance. Standalone fees, a lumpy income stream, have grown considerably but below estimates. The company has booked lower-than-expected capital gains during the quarter. While provisions have been higher, reported operating expenses were lower as IDFC adjusted share issue expenses with share premium account.

Container Corporation of India [CONCOR] reported revenues of Rs8,188 mn (up 6.4% yoy) and PAT of Rs1,742 mn (down 8% yoy). Operating margins reduced significantly – by 690 bps on a yoy basis to 25.9%. Exim volume growth at 12.6% was lower than our expectation of 14%. This was despite the discounts given on FEUs in an effort to take traffic away from roads. However, domestic volume growth at 38.4% was a positive surprised (we expected 15%). The steep margin decline is attributable to discounts, higher number of empties (due to imbalance in exim trade and repositioning of containers in the domestic segment) and additional charges by Indian Railways. 5 competitors have commenced operations. Volumes and margins of Concor are likely to be affected as competitors scale up. Fresh and Healthy, Concor’s cold chain subsidiary is likely to start sales from January next year. Kotak has a revised Target Price of Rs 2200 on CONCOR.

Himatsingka Seide has announced that the opening of the second international store for ‘Atmosphere’, in Singapore, on 12 October 2007. The first overseas store of ‘Atmosphere’ opened in Dubai in May 2007. The Dubai store has met with very encouraging response from interior designers and retail customers from all over GCC. The Dubai unit has already executed orders for palaces, high end hotels and local HNI’s.

The Singapore store is located very close to the premium Orchard Road area and is in close proximity to stores of the world’s leading luxury brands. This location is very suitable for retail sales.

Store locations are also being finalized in other cities of South East Asia and North Asia. Atmosphere’s third store in Mumbai and its 12th store in India will open in October 2007. The retail subsidiary is also in the process of finalizing other stores in India.