The Government of India is selling its peoples wealth – PSU companies to Foreign Investors [upto 60% of the IPO] without even first offering the Pie to Indians on whose wealth these companies have been built. After critics and objections from us, the Government has now come out with a proposition to offer shares of all PSUs taking the IPO route at 5% discount to retail Individual investors. The idea is to get more Indians to invest in these Government Bluchips. (more…)
Author: CP
TCS -Strong Quarter + Domestic Focus
TCS reported volume growth of ~5% and margin expansion of ~150bps qoq. Revenues at $1,538m (CIRA: $1,508m) and margins at 28.7% (CIRA: 27.2%) were significantly better. Net profit at Rs16.2b increased ~7% sequentially. BFSI, Retail and Utilities did well while Telecom, Manufacturing and Hi-tech seem to be bottoming out, according to the management. (more…)
Sarda Energy and Mineral – Structural Changes Make Money
Sarda Energy and Minerals Ltd. (SEML), promoted by Kamal Sarda, is a steel producer located in Chattisgarh with backward integration in iron ore mining, coal mining, pelletisation and captive power and a sizeable exposure to ferro alloys. The business model is on the cusp of a major structural change (more…)
Muhurat Trading Picks – HSBC
HSBC Investments has released the pics for this Muhurat Trading. Most of the stocks picked by HSBC are quoting at P/Es of 10 for FY2011 earnings. The 10 stocks that made it to the list of this FII are as follows.
BEML Ltd – P/E of 11.1x on FY2011 expected earnings
Brigade Enterprises – P/E of 17.5x on FY2011 expected earnings [We are not comfortable with this stock] (more…)
Bajaj Auto Sales Grow – Analysts Upgrade
Bajaj Auto reported PAT of Rs4 bn, slightly lower than estimate of Rs4.1 bn. The miss was bigger at the EBITDA level at Rs400 mn. The entire EBITDA miss was driven by 1.5% lower than expected realizations. A bigger proportion of 100cc bikes, especially in September, led by strong demand for Discover 100cc bike, seem to have led the slight underperformance. Export realizations were flat on a sequential basis while domestic realizations were down 2%.
Bajaj Auto reported EBITDA margins of 22.8% in the quarter, a 260 bps improvement sequentially and 880 bps improvement on a yoy basis. Volumes were up 25% sequentially. (more…)
Jindal SAW – Long-term visibility missing
Jindal Saw Q3 net sales declined 7.6% YoY to Rs13,729mn (vs our estimate of Rs14,316mn). PAT surged 46.3% to Rs1,464mn as interest outgo fell 33.2% to Rs366mn. Margin expanded 520bp at 18.3% due to the 21% increase in blended price realization and 16.8% decline in raw material costs.
During Q3, the company bagged orders for DI pipes worth $105mn, increasing its total order book to US$700mn to be executed by March 2010. However, it failed to bag new orders for seamless pipes as the demand outlook for crude still remains poor. So though there is medium-term visibility, long-term earnings visibility is
missing.