Indiainfoline has initiated coverage on Graphite India Ltd [GIL] with a BUY rating. Graphite electrode is an indispensable material used in the electric arc furnace steel. The average consumption of graphite electrodes is 2.3 kgs per ton of steel. Contract prices for electrodes have increased by 20% (more…)
Author: CP
CLSA underweight on NTPC and Dr Reddys Labs
NTPC is now among the most expensive power utilities in the world. It is trading at 40- 60% premium to average valuations of its Asian, Chinese, US and European peers. CLSA believes the potential upsides from coal mining, merchant power capacity, sale of fly ash, carbon credits etc. are now already factored in the stock price. NTPC offers high earnings stability (more…)
BHEL gets government nod to acquire BHPV
Bharat Heavy Electricals (BHEL), the country’s largest manufacturer of power equipment, will initially invest Rs 275 crore for upgrading the manufacturing facilities of Vishakhapatanam-based loss making Bharat Heavy Plate & Vessels (BHPV).
According to the scheme, the central government will waive and write-off loans and interest amounting to Rs 414.95 crore of BHPV up to 31 March 2007 this year. Besides, the government will settle all outstanding liabilities of BHPV amounting to Rs 263.97 crore.
Post-acquisition, BHPV would become a subsidiary of Bhel. The restructuring scheme also envisages increasing the authorized capital of BHPV to Rs 70 crore. Bhel will subscribe Rs 34 crore as additional equity of BHPV.
GMR Infra Fully Valued SOTP Valuation – Neutral Rating
Merill lynch just a while ago initiated coverage on the stock of GMR Infrastructure with a neutral rating. GMR’s head-start in profitable airport development at India’s capital city (Delhi), fast growing cities such as Hyderabad and at Istanbul, Turkey. With India likely to auction 35 non-metro airports & many east-European airports coming-up for bidding, we see immense opportunity for growth ahead. Expansion into toll road development as India aims to quadruple road capex and also Power Generation. Entry into real-estate development led by access to prime land-bank (next to airports) and scale-up the business through SEZs.
GMR has a portfolio of extremely profitable assets such as airports
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GVK Power & Infra + Mundra Port Listing
GVK Power & Infrastructure told us that Mumbai International Airport, an associate company of the company on 27 November 2007 has awarded the duty free contract to DFS Ventures Singapore for a period of three years with an option to extend for another year.
Mundra Port and SEZ which had recently concluded its IPO had a big bang listing with 125% appreciation on day one to successful allottees. Our IPO Analyst had a Subscribe recommendation on the IPO.
BUY Colgate – Citi + Merill Lynch
Colgate’s business has demonstrated strong growth over the 8 quarters, with sales growing in excess of 15%. It has gained share in rural areas through its “Cibaca” brand. Colgate has recently increased its focus on other personal care products (hand wash, shower gels), which though currently coming off a small base, set the tone for the next growth opportunity.
With major capital expenditure behind it, and incremental tax and excise savings from its new plants, cash generation is likely to accelerate. (more…)