Economics/Road Infrastructure Development

Infrastructure spending critical in the current economic environment – In the current domestic growth environment, while the private business capex is likely to suffer, we believe that the government’s effort to push infrastructure spending will be critical. Within the infrastructure segments, we believe the roads spending is the most important considering its strong multiplier effect.

Of the total 33,097km planned, only 10,858km had been completed as of February 2009. About 50% of roads tenders have yet to be awarded.

The progress on road development is likely to be tardy until the end of 2009. The new cabinet, which should be in place by June 2009, will need to spearhead this spending and, if need be, take the financial risk on its own balance sheet.

Nano likely to affect sales of M800 model: Maruti Suzuki

Leading passenger car manufacturer Maruti Suzuki has admitted for the first time that the launch of Tata Motor’s Nano would marginally affect the sales of its flagship model M800.

Reports quoted that the company could be forced to stop producing the M800 model by next year after stricter emission norms come into effect.

The current M800 model is Bharat Stage III (BS III)-compliant and the company would have to invest heavily in the engine assembly to upgrade it to meet the BS IV norms.

Maruti’s chairman R C Bhargava stated that the company is neither having any plans of cutting the prices of the M800 model or the Alto model nor is it planning to enter the segment being created by Tata’s Nano.

Will the SENSEX Rally Hold ?

India’s strong 25%+ bounce from lows, +ve YTD performance, and recent peer market outperformance has been backed by – Near-trough valuations, Signs of growth revival and resilience in consumption demand, Rising monetary flexibility and rate reductions, Liquidity and stabilization of domestic credit market. FIIs have bought stocks more than Rs 3,000 cr in CASH in the current rally.

The summer will be the season of election and global risk pullback will have a more lingering effect. Will this Rally Sustain or was it just a spike ? (more…)

Tata Chemicals reinforces confidence

As per the company soda ash prices are stabilizing and demand in North America is stable despite slowdown as flat glass demand gets replaced by container glass. The company has also not scaled back price hikes it got in CY08 in UK and Netherlands.

Post channel checks and meeting with Tata Chemicals management we believe price correction in the stock is overdone given stabilizing prices in soda ash and strong expected free cash flow led by urea and iii) improving scenario in DAP.

Post de-bottlenecking, urea capacity is up 30% and is already functional. The company is in talks with Reliance Industries for gas supply and is likely to get ~US$6/mmbtu delivered cost. Moreover, we expect DAP and IMACID operations to become profitable in Q1 FY10 given strong correction in rock phosphate prices globally.

Sensex in 15 Year Bull Rally ? Elliot Wave

Breaking NewsElliott Wave International in a report released just a while ago said

Prices in India’s Sensex have just broken above a downtrend line, imitating a pattern from 2004 that led a strong rally

The Sensex rose in the past few days, on optimism U.S. plans to rid banks of toxic assets will help ease the credit crisis and revive global economic growth. This five-wave cycle will include three rallies, with each peak exceeding the previous one. The first wave started with gains between April 2003 and January 2008, (more…)

15 Stocks with Potential to double in 15 Months – Kotak

Kotak has identified stocks that show steep increases in earnings over the next two years and / or stocks that are trading at very low multiples. 15 stocks with the potential to yield 50-100% returns over the next 18 months and examine the drivers required for these returns. In most cases, these are a sharp rebound in earnings (select commodity stocks), a potential re-rating of multiples led by better than expected operating and financial performance (largely banking stocks) and potential positive catalysts (RIL). (more…)