CP | Dalal Street

Tata Steel Consolidated Results in Line

August 28, 20091 min read

Tata Steel posted consolidated revenue of Rs232.9bn and EBITDA of -Rs299mn compared to MS estimates of Rs260bn and Rs521mn, respectively, and F4Q09 numbers of Rs264bn and Rs328mn, respectively. We note that reported Teeside EBIT loss of Rs2.44bn was higher than our expectation of Rs1bn. Adjusted for the loss, results were ahead of expectation.

Ex-India business losses at the net level were down sequentially from Rs54bn to Rs30bn this quarter. At the EBITDA level as well the loss slipped just 8% QoQ to -Rs17.1bn. We find this a credible performance due to adverse steel price trends that Corus faced in the quarter, just a 57% capacity utilization in Europe and high raw materials costs due to the impact of old inventories.

This should be driven by full reflection of improving steel prices, higher capacity utilization, and full impact of lower raw material costs.

Equity Research

Analysts Bullish on PSU Banks

August 28, 20091 min read

Resumption of capital flows has reduced stress on asset quality. Moreover, core revenue momentum should pick up strongly in F2H10. Given valuations, analysts believe that SOE banks are the best way to play this theme and are likely to outperform their private sector peers. We continue to like wholesale funded institutions as well.

Bond yields are moving up and there are expectations of tightening. SOE banks are now relatively immune from MTM losses, unless yields spike up more than 200 bps. Moreover, the 5 year trend of contracting spread on bond portfolios is behind us – (more…)

Equity Research

Infosys downgraded to Underweight – Morgan Stanley

August 27, 20091 min read

Since the Ground realities in the IT sector warrant caution, Morgan Stanley has downgraded Infosys Technologies from Equal-weight to Underweight.

Valuations for Infosys appear rich and near-term risk reward is turning unfavorable. Lack of visibility on ramp-ups from existing clients remains the single biggest headache for managements across IT companies. (more…)

Economy, Markets and Macro Views

UBS – March 2011 Sensex Target 20,000

August 27, 20091 min read

The days of putting targets on BSE SENSEX are back. Despite the 100% rally from the bottom in Indian markets, fundamentals and liquidity are likely to support higher valuations. Indian stocks are likely to re-rate further over the medium term as positive data points relating.

The earnings estimates for the Sensex indicates 4% growth in FY10, 22% growth in FY11 and 21% growth in FY12. It is estimated that, strong earnings growth for pharma, (more…)

India IPO Reviews and Updates

NHPC – Allotment + Application Status

August 25, 20091 min read

In a fax message just received from our analyst in Mumbai, NHPC has finalized the allotment for retail individual Indian investors.

All applications for 2625 shares have been allotted 713 on a firm basis. Anybody bidding for more than 700 shares have secured firm allotment in the MiniRatna. Here is the complete basis of allotment chart the to be published (more…)

Economy, Markets and Macro Views

Changing Estimates of SENSEX Earnings – Trust Research

August 25, 20092 min read

Since the beginning of the Year, BSE Sensex companies earnings [hence forth will be referred to as earnings] estimates has undergone a dramatic change with the SENSEX rising as well.

At the beginning, the consensus was earnings would take a dip in FY 2010. However, the tone of Analysts at various Brokerages and Research house started changing and we shall have a look at it and where it stands currently.

All Numbers below are INR Earnings for BSE 30 SENSEX Companies: (more…)

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