Indian Equity Research and Investment Strategy
We have obtained the results of Infosys Technologies for FY2007-08.
WPI inflation continued to accelerate to 7.41% yoy in the week ending March 29, from 7% yoy in the previous week. Inflation is now at its highest level since November 2004, and significantly above the Reserve Bank of India’s (RBI) comfort ceiling of 5%.Minerals prices hastened by 42%, while basic metals rose 20% respectively yoy, reflecting a one-time upward adjustment to WPI prices which have been running up for several months.
Goldman Sachs expects RBI to increase the repo rate by 50 bp in its April policy meeting to primarily arrest inflationary expectations and second round effects. The central bank will encourage further INR appreciation. (more…)
Struggling American FII, Lehman Brothers Equity Research has upgraded Asia’s best housing finance company HDFC to Overweight from Equal weight. Lehman in the note said, Because of its highly stable business model, HDFC has historically been a good opportunity in times of heightened risk perception. This will continue to be the case this time as well. However, in the past two weeks, the stock has corrected by 13%, which we believe provides an attractive entry opportunity. (more…)
Punj Lloyd Ltd has informed us that the Company and its subsidiary Punj Lloyd Pte Ltd., Singapore have been awarded projects worth Rs 18640 million.
Sembawang Infrastructure (India) Pvt Ltd (a subsidiary of Sembawang Engineers and Constructors Pte Ltd, Singapore) has been awarded projects worth Rs 970 million.
With the award of above projects, the order backlog for Punj Lloyd Group is Rs 214,092 million. This is the total value of unexecuted orders as on January 01, 2008 and new orders received till date.
Sasken Communication Technologies has informed the us that the Board of Directors of the company (scheduled to meet on April 18, 2008) will also consider a proposal for buyback of equity shares. This could be a near-term trigger for the stock after a huge under performance of ~50% (against BSE IT index) in the last three months, but our fundamental concerns remain intact.
Citigroup Analyst in a report said,
Sasken’s services business has been significantly impacted by rupee and client-specific challenges, while its products business has gone through challenging times (with no respite in sight). The stock trades close to our target price, and any
move up would provide a more attractive opportunity to sell the stock.
They have a target price of Rs 138 with a SELL High Risk rating on the stock.
The Indian inflation touched a record 40 month high to 7.41% mostly by the centralization and rise in prices of Iron and Steel. The annual inflation rate was 5.94% during the corresponding week of the previous year. The Government of India has banned primary exports of Iron and Steel and Cement with immediate effect fearing the collapse of coalition Government.
However, their is a reason to cheer as well, the Indian Industrial Output for the month ended Feb-08 has risen back to 8.5% from 5.3% in Jan-08.