Dalal Street :: India Equity Research, Investment Analysis

Punj Lloyd offloading stake in realty JV

May 20, 20091 min read

Engineering and turnkey construction major Punj Lloyd has decided to offload its stake in the realty joint venture with the Delhi-based Ramprastha group. The latter will pick up Punj Lloyd’s 50% in the venture set up to develop a 29-acre project in Ghaziabad.

Company chairman Atul Punj stated that while the company will continue servicing construction contracts, it will not be a developer. The company’s order book includes a clutch of state-promoted housing projects in the Middle East.

The scrip price has witnessed upswings of 30.94% since last week and 49.27% since last month. Punj Lloyd is currently trading at Rs 168, up by 6.70 points or 4.15% from its previous closing of Rs 161.30 on the BSE.

Equity Research

OnMobile Global – Global contracts to drive growth

May 20, 20091 min read

Vodafone Group has announced that they have chosen OnMobile Global to provide its ring-back tone (RBT) service in emerging markets ex-India. This deal highlights OnMobile’s ability to convince international telecom operators to shift to a revenue share model for Mobile Value-added Services (MVAS), which is different from the one-time licensing model prevalent in international markets. We believe that this deal could be a precursor to more global contract wins for OnMobile. (more…)

Economy, Markets and Macro Views

Rising Tide Lifts All Boats / Stocks – Go Selective

May 19, 20092 min read

We had anticipated a strong market rally, in our view the 20-25% higher closing prices of several index heavyweights reflects the strong pull from the futures market rather than genuine price discovery in the cash market. The substantially higher activity in futures and options (US$560m) supports anecdotal evidence that futures were the preferred choice of participants for gaining exposure to the expected market rally on the basis of cost and effectiveness.

The extent of the rally in some names is not that surprising if viewed against the (more…)

Economy, Markets and Macro Views

Golden Monday – Markets trigger final upper limit

May 18, 20091 min read

Equities triggered final upper limit on Monday in response to Congress-led United Progressive Alliance’s (UPA) unparalleled victory at the general elections.

When the market halted for the day, the Sensex was at 14, 272.63, up 2099.21 points or 17.24%. Similarly, the Nifty gained 636.4 points or 17.33% to 4308.05 at that time. The base for calculating the percentage rise was SENSEX and NIFTY closing figures of March-31st. I don’t know who did this rule, but this is the rule.

According to the new rules, if there is 10% movement of either Sensex or the Nifty, trading is halted for an hour market, if this happens before 1 pm. Post 1 pm but before 2.30 pm, there is halt for half-an-hour, while after 2.30 pm, trading does not halt at the 10% movement. (more…)

Breaking Corporate India Earnings News

Overnight Change in Outlook

May 18, 20091 min read

With a stable Government in place, Analysts believe business confidence will look up and the prospects of fiscal consolidation will improve. The street is Overweight the investment cycle and adding to our positive stance on Financials.

Upgraded Industrial from Underweight to Overweight
Utilities from neutral to Overweight
Financials from Underweight to Overweight
Healthcare and Consumer Staples from Neutral to Underweight
Materials – Underweight
Downgrading IT Services, from an Overweight to Neutral
Upgrading Telecoms from Underweight to Neutral

However, the big question is will earnings match the new ratings for FY10 or will they start selling the FY11 story ? Tezi Mein Tezi seems to be the buzzword 🙂

Equity Research

Morgan Upgrades Financial Services

May 18, 20092 min read

With strong election results for UPA, in our opinion, reduces the tail risk of sharply higher NPLs. Morgan’s economist has upgraded his GDP forecast for India. In an improving economy, banks are less likely to underperform. Morgan has raised its industry view to In-Line.

The negative view on Indian banks has been premised on a weak outlook for revenues and a likely increase in non-performing loans (NPLs). This view still holds. However, with the general elections sending the strongest government since the early 1990s, the outlook for reform has increased – implying potential pickup in capital flows. (more…)

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