Indian Equity Research and Investment Strategy
Inflation based the wholesale price index rose 7% in 12 months to 22 March 2008, accelerating from the previous week’s rise of 6.68%, government data showed today. The rate is the highest reading since 4 December 2004 when it was 7.07%. The annual inflation rate was 6.54% during the corresponding week of the previous year.
As soon as the figures were out, Banking stocks came under selling pressure and the BSE Bankex was down 3.50% at 7,547.04. (more…)
The Steel Ministry called a meeting yesterday with the large domestic steel majors in an effort to convince them to reduce steel prices due to concerns about high inflation. However, according to insiders, the steel industry indicated that they were not in a position to cut prices of hot rolled coils (HRC) due to the surge in raw material
costs.
Tata Steel and RINL currently sell their TMT bars at a premium to the other producers. They have agreed to cut TMT prices by Rs2,000/t in order to bring prices in line with the market. TMT bars are mainly used for construction.
The steel industry agreed to cut prices of galvanized sheets used for roofing in low cost housing by Rs500-1000/t. Sales of this product by the steel majors are limited as they are increasingly focusing on high-end galvanized products.
On Feb-21st, our chief research analyst wrote that the Zenith is behind us which was hard to digest then, a reality now.
Over the last 3-4 years BHEL’s PAT growth was largely aided by operating leverage and slower than expected sales growth could be made up by EBIT margin improvements. We had expected EBIT margins to peak in FY08 – EBIT margins might have peaked in FY07.
BHEL’s FY08P reported PAT at Rs28.1bn up 17% YoY was 14% below CIR estimates on the back of slower order backlog execution in 4QFY08P. 4QFY08P derived Gross Sales was up a measly 6.5% YoY and PAT was down 7% YoY. At this point of time we do not know if 4QFY08P had any exceptional items.
BHEL booked orders to the tune of Rs503bn up 41% YoY ending FY08 with a stupendous order backlog of Rs855bn up 56% YoY. However, it is pertinent to note that only 9,800MW of orders are remaining to be ordered in the XIth plan and as consequence inflows should slow down in FY09E/FY10E.
Looks like every Retail Research Analyst has started chasing Vishal Retail. We will cover notes from two HSBC and ICICI Analyst who have reiterated OUTPERFORM rating on the stock.
The expansion plan of Vishal Retail is very aggressive. It increased its retail space from 88,700 sq.ft. in FY03 to 1.3 mn sq.ft. in FY07, CAGR of 94%. We expect the retail space to increase to 5.1 mn sq. ft. by FY10, at a CAGR of 59% over FY07-FY10E. The company targets Tier-2 and Tier-3 cities where there is little or no presence of organised retail players. (more…)
Bartronics India Ltd – BIL offers tailor-made AIDC [automatic identification and data collection] and RFID(radio frequency Identification)-based systems. The company also provides business and technology strategy, systems design and architecture, applications implementation, network and systems integration in this field. The US subsidiary of the company has recently got a US Patent for – non-reusable RF based temper proof Wrist Band; which can be used as Identity proof as well as for cashless payment. This product will have wide ranging applications. The market for RFID tags is growing fast and will grow from $1.5 bn in 2005 to $6.1 bn in 2010. The AIDC or smart cards will also grow to around 150 million units soon, growing at a CAGR of around 45%. (more…)
Ranbaxy Laboratories has announced the launch of BONISTA- Teriparatide injection (recombinant human parathyroid hormone) for the treatment of Osteoporosis, in collaboration with Virchow Biotech, Hyderabad, India. Ranbaxy is the first company to launch this bio generic product in the world.
The product has been indigenously researched at Virchow Biotech and developed with and from the Department of Science and Technology, Government of India. Virchow Biotech, part of the Hyderabad based Rs 600 crore Virchow Group, engages in research, development, manufacture and marketing of a wide range of unique classical biologicals and high value recombinant bio-generie products for serious life-threatening diseases at affordable prices.