2010 | Dalal Street

Equity Research

Educomp Solutions – Smart Class – Strong pipeline

March 23, 20102 min read

Educomp team is well placed to meet strong demand for Smart Class implementation. Educomp’s guidance of implementing Smart Class in 2500 (FY11) schools implies installing hardware in ~50 schools per week. As EduSmart outsource nearly 50% of low end installation work to local vendors and given its ability to manage hardware installation at multiple schools concurrently, we believe the current team of 70 technicians can manage installations in nearly 80 schools per week. See minimal risk to implementation in FY11e.

The initial response to Educomp & EduSmart Smart Class advertisement has been extremely strong with school signs up exceeding (more…)

Breaking Corporate India Earnings News

Impact of Additional 4 mtpa of LNG from Qatar

March 23, 20101 min read

Qatar oil ministry has agreed to supply additional 4 mtpa of LNG to India by 2013E. The supply is expected to be ramped up from 0.3 mtpa in CY2010E to 4 mtpa in CY2013E; this is in addition to the current supply of 7.5 mn tons of LNG to India. The petroleum
ministry has stated that a share of the additional LNG from Qatar will go to Petronet LNG and RGPPL’s yet-to-be-commissioned 5 mtpa LNG Dabhol terminal.

Linking of LNG price to crude oil may be negative for LNG importing companies given (1) speculation-driven volatility in crude oil prices (more…)

India IPO Reviews and Updates

How IPO Grey Market Works – Retail to Big Bull Brokers

March 20, 2010April 19, 20203 min read

The Indian Grey Market for IPOs which went for a toss after Anil Ambani’s Reliance Power Ltd royal rip off of small investors is thriving back. After the 2005 IPO scam, none want to take chances. This time the system is designed so well, it is out of reach of SEBI because the big fish is not on any official record. (more…)

Equity Research

Welspun Gujarat diversifies into EPC with MSK Projects

March 19, 2010March 19, 20102 min read

Welspun Gujarat, India’s leading pipe manufacturing company has announced the acquisition of MSK Projects (MSKP IN, not rated) – a construction company – for a consideration of INR8bn (75% stake). Synergies from this acquisition may include – diversification into the infrastructure sector, enhancing Welspun’s ability to provide its customers with end-to-end solutions to plate-pipe-pipeline laying; and MSK Projects through Welpsun’s balance sheet support likely to bid for large infrastructure projects specifically into the road sector. MSK’s current order book of INR5bn constitutes 40% road projects.

Here is the take from various brokerages on Welspun Gujarat’s Diversification move. Kotak analysts said there will be few orders where pipe (more…)

Breaking Corporate India Earnings News

Welspun Gujarat bags orders worth Rs. 600 Crores

March 19, 2010March 19, 20101 min read

Welspun Gujarat Stahl Rohren Ltd., the 2nd largest line pipe company in the World has recently won orders worth Rs. 600 Crore for Pipes from its prestigious global clients.

It may be noted that Welspun very recently announced another order of Plates and Pipes worth Rs. 600 Crore. With the addition of these orders, the current order book of the company stands at Rs. 7,800 Crore without excluding the orders being executed in the current quarter. (more…)

Economy, Markets and Macro Views

ENAM Downgrades Sugar to Underweight

March 17, 2010April 18, 20202 min read

The basic premise for the rally in sugar prices was led by the production deficit in India and Brazil, further supported by rising consumption from emerging markets, which depleted inventory levels to historical lows. However the prospects of higher Brazilian output, government intervention and lackluster follow up demand from key EMs has led to sugar prices cooling off by 30% globally and 20% domestically since Jan-10. With Brazilian output coming on stream by April-10, price recovery to previous high’s could be ruled out, unless there are extreme climatic conditions.

Brazilian sugar output for the 2010/11 season beginning April could increase by ~15%, driven by higher cane production and recovery (more…)

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