Dalal Street :: India Equity Research, Investment Analysis

Indian Markets Down Again

August 6, 20071 min read

The American Home crisis has gripped the Asian Markets this morning. Hang Seng Index is down 530 points while NIKKEI is down 190 points.

Dalal Street opened down 400 points and is currently down 362 points at 14,775. Major losers in the BSE-SENSEX are ACC, ICICI bank, Bajaj Auto, Hindalco and Reliance Energy. None of the SENSEX stocks are trading in positive category. The ratio of Put to Call Ratio is 1.3 in favour of the Puts.

Long Term Investors can pick in very small quantities of companies with sound management, business and cash flow [More Downside expected]. Do read our Research Section to see what Brokerage Houses have recommended and do not just blindly BUY. Convince yourself with EPS and the growth the company has to offer.

Breaking Corporate India Earnings News

Jindal Saw Conference Call – Notes

August 4, 20071 min read

Financial Highlights:
For the quarter ended Jun’07 Jindal Saw reported a 34% rise in Net sales revenue to Rs 1285.53 crore. The OPM (Operating Profit Margin) increased by 100 basis points to 12.5%. Operating profit for the quarter ended Jun’07 stood at Rs 160.59 crore, which was 45% higher as compared to corresponding previous quarter last year. The ensuing PAT for the quarter ended Jun07 was Rs 82.05 crore which was 99% higher when compared with corresponding previous quarter last year.

The order book is approx. US$ 1.225 billion (Indian book approx. US$ 725 million and app. US$ 500 million at USA branch). The orders are slated to be executed by June 2008.

Targets sales revenue to the tune of Rs 5000- 5200 crore for the year ending Sept’07. The sales target for the year ending Sept’08 and Sept’09 is around Rs 6000-6200 crore and Rs 7200 crore respectively.

Capacity utilisation of Kosikana plant, which is longitudinal plant, is 45-50%.
Capex to the tune of Rs 450 crore upto Sept’08. The total Interest cost for the year ended Sept’07 is expected to be around Rs 120 crore. The Depreciation for the FY 2007-08 would be around Rs 75-80 crore.

Breaking Corporate India Earnings News

Rajesh Exports India’s No 1 investor friendly company

August 3, 20071 min read

Rajesh Exports was rated as India’s No. 1 investor friendly company among India’s all listed companies. The rating was announced by the leading business magazine BUSINESS TODAY. The company achieved this significant milestone ahead of some of India’s highly rated service and manufacturing companies.

The rating was arrived as a result of a comprehensive exercise conducted among all the India’s listed companies including the SENSEX and NIFTY companies.

If you don’t agree, you may send your comments to “feedback @ DalalStreet.Biz”

Economy, Markets and Macro Views

Purvankara Lowers IPO Price- Extends Closing Date

August 3, 20071 min read

Ravi Purvankara, promoter of Purvankara Projects who wanted to rip off Investors by pricing his Realty company stocks at absurd prices has suffered a severe setback as the issue was not even subscribed 0.38 times at 16:00 Hours on August 3rd, an hour before the IPO would close.

Loser, Ravi Purvankara is now saying fragile global market conditions as the reason for the debacle of his IPO. The issue will be now priced between Rs 400 and Rs 450, down from Rs 500 and Rs 525. The IPO will now close on August-8th. Losers!!!!

SEBI should investigate the matter of abnormal pricing of Real Estate IPOs. The days will be back when Value Investing will be the order of the day kicking out speculators and shell company promoters out of the market. Stay tuned for our IPO Analyst to evaluate the IPO of this Loser, Mr. Ravi Purvankara.

Breaking Corporate India Earnings News

Gitanjali Gems Shines on Good Results

August 3, 20071 min read

Net profit of Gitanjali Gems rose 55.59% to Rs 32.83 crore in Q1 June 2007 over Q1 June 2006. Sales jumped 31.26% to Rs 653.85 crore in Q1 June 2007 over Q1 June 2006.

Shares of the second largest diamond maker by sales in India had hit a high of Rs 280, which is also its all-time high. The current market price of Rs 275.05 discounts its Q1 June 2007 annualized EPS of Rs 21.69 by a PE multiple of 12.68

Equity Research

Sell HT Media – Citi

August 3, 20071 min read

Citigroup has downgraded the stock of HT Media to SELL from BUY after a disappointing first quarter of FY-2008 with a Target Price of Rs 212.

Earnings growth for HT Media is slowing, partly because of new investments, but also because fixed costs have continued to increase rapidly. In 1Q FY08 it reported the slowest growth of the last two years.

HT Media’s fixed cost base compares unfavorably to other Indian media companies. While it has made some new investments, the extent of increase in fixed costs is too high. Employee costs rose 400bps over the last three years, despite revenues doubling, which is surprising given high operating leverage inherent in media businesses.

1QFY08 results were below expectations. Even after adjusting the 500bps impact on margins due to new investments, EBITDA grew only 7.1% (33% adjusted for new business investments), the slowest over the last two years.

Citi reduced EPS estimates for FY08-09E by 10.3-12.2%. At 27xFY09E P/E, HT Media trades at an 80% premium to its regional print media peers, which is excessive. HT Media is likely to report an EPS of Rs 6.64 and Rs 8.49 for FY-2008 and FY-2009 respectively.

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Sell HT Media – Citi