Dalal Street

Are promoters of Ranbaxy Labs launching a hostile takeover bid for orchid Chemicals and Pharmaceuticals ? Solrex, a Ranbaxy group company has increased its stake to 11.4% from 8.06% in Oafter market purchases in the first week of April.

Orchid scrip has shot up by 10% and is currently traded at Rs 225 on heavy volumes. As of now Ranbaxy promoters are silent on the issue, but takeover is inevitable.

The district court of Netherlands ruled that Tata Communications must give Flag Telecom, now part of Reliance Communication, access to its landing station in Mumbai, which is owned by Tata Communications, erstwhile VSNL. Tata Communications will be ordered to pay the cost of the proceedings, said the court order.

The dispute between the two companies goes back a few years when Flag accused VSNL of denying it free access to its cable landing station and of therefore having a monopolistic hold on bandwidth prices.

Flag wanted access for enhancing the capacity of its cable system. However, VSNL said that it was not under obligation to grant access under the construction and maintenance agreement between the two parties.

Sales were up 27% YoY driven by 25% Y/Y increase in truck sales. Bus sales were also robust (+30% YoY). Domestic sales saw a strong pick-up (+20% Y/Y) primarily attributed to low base effect, some element of channel stuffing and deferment of last month sales into March. Exports growth was also quite strong (+128% Y/Y). Company achieved sales of 83,300 units (below management’s target of 86,000) in FY08.

Domestic MHCV sales were up 23% YoY (YTD -11%). We reckon Ashok Leyland gained market share from Tata Motors (March domestic MHCV sales up 17% YoY). Management guided to ~8-10% growth in truck sales for the industry (in line with our forecasts) and ~15% growth for Ashok Leyland in FY09E.

Pyramid Saimira Theatre has informed us that it will be producing a total of 52 films this year. The company has already completed 6 films in various languages and more than 7 films are under production in various languages. Apart from the film production, the company also is engaged in producing content for television and other modes. It has currently more than three hours of TV content production per day. Towards this, the company announced the production of the first ten Tamil films this fiscal year, thereby becoming the first production house in the world to commence the production of ten movies on one day. The company will invest around Rs 35 – 40 crore towards the production of these ten films.