Dalal Street

Maruti Udyog’s net profit rose 35.1% to Rs 499.60 crore in Q1 June 2007 over Q1 June 2006. Net sales rose 25.7% to Rs 3930.82 crore in Q1 June 2007 over Q1 June 2006. Both top line and bottom line exceeded market expectations. Recall Analysts were skeptical and negative about the performance of Auto companies.

MRF’s net profit rose 420% to Rs 42.5 crore in Q3 June 2007 over Q3 June 2006. Sales moved up 13.93% to Rs 1,133.43 crore in Q3 June 2007 over Q3 June 2007. MRF has declared interim dividend at the rate of Rs 3 per share.

Punjab National Bank’s [PNB] profits are ahead of our 10% growth expectations, but qualitatively, it remains a modest quarter. Margins continue to face pressures, cost increases are also relatively high and overall profitability has been supported by provisioning write-backs.

Falling margins and high costs pressure overall profitability; excluding trading gains, profit expansion is likely to be lower still. PNB’s well above industry and 400bp+ margins were always likely to erode; however, the erosion appears to be coming in a rate environment that should have bolstered PNB’s margins, given its balance-sheet structure. PNB is expected to report an EPS of Rs 60.08 below Dalal Street Analysts consensus of Rs 64.49. Stock price target is Rs 615.

Canara Bank 1Q08 profits up 26% yoy, 9% higher than our expectations. Qualitatively though, they fall short, with a drop in NIIs the primary and a large disappointment. Margins dipped almost 50bp; well below industry levels, its own historical lows, and in a quarter that saw little growth. The asset book itself provides comfort; limited asset deterioration over quarter, continuing asset recoveries, increase in coverage levels, and loan growth moderation to sub 20% levels.

Canara Bank is expected to report an EPS of Rs 35.86 for FY2008 and the stock price target is Rs 300.

Ranbaxy Laboratories has reached an agreement with GlaxoSmithKline (GSK) to stipulate a dismissal of their US litigation with regard to Valtrex (Valacyclovir Hydrochloride tablets). The lawsuit in the US was related to GSK’s US Patent No 4,957,924, covering Valacyclovir Hydrochloride and its use in the treatment of herpes virus infections.

Under the agreement, the company will enter the US market in late 2009 whereby as the first generic, the company will enjoy a 180 days exclusivity. In early February 2007, the company received a final approval from the US FDA to market and manufacture Valacyclovir Hydrochloride tablets.

Company will continue to pursue a strategy to effectively leverage and monetize it’s pipeline of FTF opportunities. The company believes that it has a First-to File (FTF) status on approximately 20 Para IV ANDA filings representing a market size of – US $ 26 billion valued at innovator prices.