CP | Dalal Street

Stone India up on orders from Indian Railways

July 9, 20071 min read

Stone India announced during market hours today, that the company had received an initial development order from the Indian Railways for supply of five sets of 180 kilo volt-ampere (KVA) static converter for locomotive application. This is a high-value, solid-state product to be supplied under collaboration with SMA Technologies AG, Germany.

On 23 April 2007, Stone India entered into an exclusive understanding with ZRJC, China, to supply air-conditioning systems for trains. This product will be manufactured at its upcoming plant in Nalagarh, Himachal Pradesh, which enjoys tax benefits.

On 14 April 2007, Stone India had received an order for refurbishment and upgradation of 1,115 wagons from the Union Ministry of Defence. The order, valued at about Rs 14 crore, to be executed over the next eight months.

The scrip had hit a high of Rs 199.85 and a low of Rs 180 so far during the day. Its 52-week high was Rs 278.80 on 29 August 2006 and 52-week low Rs 104.30 on 30 April 2007.

The Stone India stock had risen 18.31% over the last one month to 6 July 2007 compared to the Sensex’s return of 5.48%. The scrip had outperformed the market over the past quarter, gaining 22.88% compared to the Sensex’s rise of 16.40%.

Breaking Corporate India Earnings News

Infosys Technologies Q1 Expectations

July 9, 20071 min read

Infosys Technologies is seen reporting a fall in net profit on a sequential basis in Q1 June 2007 due to the surge in the rupee and wage hike. The revenue is expected to grow only a bit on a sequential basis. Infosys unveils Q1 results on Wednesday, 11 July 2007.

Market men also expect Infosys to revise downwards its rupee EPS guidance for FY 2008 to factor in the impact of the rupee’s rise. But they expect Infosys to raise revenue guidance in dollar terms. This will help it maintain the EPS guidance in dollar terms. Infosys had guided a 20% to 22% growth in EPS in FY 2008 and a higher 25.7% to 27.7% growth in EPS in dollar terms at the time of announcing FY 2007 (year ended March 2007) results.

On a consolidated basis, Infosys reported a 16% rise in net profit to Rs 1,144 crore in Q4 March 2007, from Rs 983 crore in Q3 December 2006. Sales rose 3% to Rs 3,772 crore in Q4 March 2007, from Rs 3,655 crore in Q3 December 2006.

Equity Research

Saregama to Outperform – ICICI Sec

July 6, 20071 min read

ICICI Securities expects Saregama to once again dominate the Indian music industry and replicate its dominant performance which it showed for decades. Given the robust growth in the high margin business like publishing and home video coupled with effectively utilization of the music library ICICI expects Saregama to command improved valuations given its high earnings visibility. At the current price of Rs 302, the stock at a P/E of 21.15x FY08E EPS of Rs14.28 and 16.77x FY09E EPS of Rs 18.01. ICICI rates the stock as an OUTPERFORMER with a price target of Rs 405, 22.5x FY09E.

The company is expected to report an EPS of Rs 14.28 for FY08 and Rs 18.01 for FY09. You can download and read the entire report. [PDF]

Economy, Markets and Macro Views

BSE Sensex Hits 15,000 – New High

July 6, 20071 min read

The Bombay Stock Exchange Sensex hit a new all time high today – 15,000. Top gainers amongst Sensex stocks are – Satyam Computers, TCS Infosys Technologies, Bharti TeleVentures and Gujarata Ambuja Cements Ltd.

ICICI Bank and Tata Power are the major losers in SENSEX stocks.

Breaking Corporate India Earnings News

Pantaloon retail to launch Small Bazaar

July 6, 20071 min read

Kishore Biyani’s Pantaloon Retail India Limited is entering the neighborhood store format with – Small Bazaar outlets. This will compete directly with Reliance Fresh, Spinach, Subhiksha, Fresh @ and Bharti-Walmart stores.

Equity Research

BUY Container Corporation – Kotak Securities

July 5, 20072 min read

Kotak Sec research group has put a BUY on Container Corporation of India Limited [CONCOR] with a price target of Rs 3,000. Potential upside of 35% from current levels.

Container traffic expected to touch 20 mn TEUs by 2015:
In FY07, Indian ports handled 5.4 mn TEUs as against 4.6 mn TEUs in FY06, thereby recording strong YoY growth of 17.1%.

Headroom for raising traffic till rail freight corridor becomes operational:
Currently, Concor runs approximately 16 to 17 trains in a day. On an average, it runs two trains to Mundra port, one to Pipavav and the remaining between JNPT and Delhi ICD. It is expected to go up to 22 and ultimately to a maximum of 25 trains per day on the current network of Indian railways.

Foray into end-to-end logistics services:
Concor has successfully forayed into offering end-to-end logistics solutions to its customers for domestic cargo. The company has tied up with various service providers like road transporters and coastal shipping companies to offer the entire gamut of logistics services.

Cold chain project:
Concor has already commenced commercial operations of its cold chain project in a phased manner. The entire cold chain project is being carried out under a wholly owned subsidiary named Fresh and Healthy Enterprises Ltd, incorporated in February 2006.

Auto carrier project:
Concor is moving ahead with its auto transportation project. The company has developed a special design of wagons to carry cars across the country on the Indian Railway network, primarily to bring down the cost incurred on transportation.

Financials of Container Corporation of India Limited:
Kotak maintains earnings estimates for FY08 and expect Concor to report net sales of Rs.38.3 bn, EBIDTA margin of 30.3% and PAT of Rs.8.2 bn, thereby translating into an EPS of Rs.126.7 and CEPS of Rs.144.3.

In FY09, Kotak expects Concor to report net sales of Rs.45.3 bn, that is, sales growth of 18.3%, EBIDTA margins of 30.0% and PAT of Rs.9.7 bn, that is, YoY growth of 17.9%, thereby translating into an EPS of Rs.149.3 and CEPS of Rs.169.9.

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