CP | Dalal Street

Sterlite – Asarco Deal – Analysis and Ratings

March 9, 20092 min read

Sterlite announced that it has signed a revised agreement to acquire the operating assets of Asarco for US$1.7bn in cash, with US$1.1bn payable on conclusion of the transaction which the company expects in the next 4-5 months, and the balance US$600mn payable in installments over nine years. Sterlite had net cash of only Rs 44 bn (US$900 mn) at the standalone level at 3Q09 end.

The assets include three open-pit copper mines, a copper smelter and down stream units. In 2008, Asarco sold 237kt of refined copper and reported revenue of US$1.9 bn, and PBT of US$393mn. (more…)

Breaking Corporate India Earnings News

KEC International touches upper circuit with three new orders

March 6, 20091 min read

KEC International, a global leader in power transmission EPC business, has bagged two orders worth Rs 340 crore from Power Grid Corporation of India (PGCIL) and one order worth Rs 25 crore from Central Organization for Railway Electrification (CORE), Allahabad.

The first order worth Rs 185 crore from PGCIL is for the supply & construction of 400 kV D/C (Twin) Kameng Balipara & 400 kV d/C (Quad) Balipara – Bongaigaon Line (Part-I) associated with North East – Northern / Western Interconnector-I, while the second order is for the supply & construction of 400 kV D/C Gandhar – Navasari Line, LILO of 220 kV D/C Kawas – Navasari & 400 kV D/c Navasari-Navi Mumbai Line (Part-I) associated with ATS Mundra Regional System for WR.

The company has bagged its third order worth Rs 25 crore from CORE, Allahabad for design, supply, erection, testing & commissioning of 25 kV A.C. Single Phase, 50 Hz. traction overhead equipments, switching stations, booster transformer stations and LT. supply transformer stations including foundations, structures and all ancillary equipments for Pathankot (Excl.) -Jammutawi (Incl.) station of Ferozepur Division of Northern Railway under RE Project, Ambala.

Equity Research

Bharat Forge – Obstacles Remain

March 6, 20091 min read

Adverse macro environment affects domestic and international operations – Parent revenues affected by slowdown in CV sales (~40-45% of parent revenues). We expect muted recovery, spurred by pre-buying in 3/4Q FY10. Overall revenues and profit estimates at the parent level benefit from a weaker rupee and incremental non auto exports. In the subsidiaries, we now forecast losses at the EBITDA level over FY10 – given the expected c40% slump in European truck sales.

Non Auto Business: There is no visibility of revenues in the non-auto business. (more…)

Economy, Markets and Macro Views

Jai Corp Scam – II Anand Jains Office + Residence – Raided

March 6, 20091 min read

The Indian Income Tax Authorities have simultaneously raided the offices of Jai Corp Ltd and its Chairman – Anand Jain’s residence as well. Various press reports indicate that the raid was conducted due to Large amounts of Land Dealings which are shady [Ofcourse Real Estate in India is nothing but a parallel black money economy] (more…)

Economy, Markets and Macro Views

Impact of RBI Repo Rate Cut

March 5, 20092 min read

RBI has reduced the Repo and Reverse repo rate under LAF window by 50 bps each to 5.0% and 3.5%, respectively with immediate effect.

The cut in policy rates by 50 bps each is likely to signal the banks to reduce their lending rates. The reverse repo rate 3.5% would make it less attractive for banks to park money with the RBI.

Now question arises – Can we expect rates to come down dramatically?
(more…)

Equity Research

Sell ONGC – Reiterates Goldman

March 5, 20091 min read

Goldman Sachs in a report reiterates a SELL on ONGC primarily due to 5 main reasons – overseas growth strategy has not been very effective, unexciting execution track record in domestic business, limited focus on cost control, corporate governance issues with cash withdrawals by promoter [Government], and ONGC being structurally unattractive with downside from lower oil price but limited upside from price rebound. (more…)

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