Category: Breaking Corporate India Earnings News

Just a while ago, we received communication from Bharat Earth Movers Ltd. They stated that they have secured an order from Delhi Metro Rail Corporation (DMRC) for manufacture and supply of 156 numbers state-of-the-art standard gauge stainless steal metro cars towards second phase of operation worth Rs 1144 crore. This order is the single largest historic contract BEML has bagged. BEML is also looking forward for an additional order of 36 metro cars from DMRC.

BEML’s Rail & Metro Business Group has tied up with IL&FS for working as a consortium to bag metro projects in the country and BEML will supply rolling stock, spares and after sales service for metro projects. BEML & ILFS combine is also exploring the possibility to work on the city centre to international airport segment of Metro project at both Hyderabad and Bangalore Metro.

Karaikal Port, a wholly owned subsidiary of Marg Construction has entered into a MoU with Pembinaan Redzai Sdn Bhd (PRSB), a leading Malaysian company engaged in management and operation of forest plantations, logging, saw milling, chipping and other downstream manufacturing and related activities. PRSB also undertakes civil engineering and construction works and project management services in Malaysia.

Meanwhile, New Chennai Township, its another wholly owned subsidiary has got regulatory nod for setting up a special economic zone for light engineering sector.

The current price of Rs 223.50 discounts Q1 June 2007 annualized EPS of Rs 17.86 by a P/E multiple of 12.51.

Reliance Capital’s net profit rose 20.41% to Rs 201.28 crore on 75.58% rise in total income to Rs 391.27 crore in Q2 September 2007 over Q2 September 2006.

Compare this with HDFC Bank, which reported a 40% growth in Net Profit. As an investor we are more confident in HDFC / HDFC Bank than Reliance Capital though we recommend adding those stocks only on market corrections.

The current price of Rs 1,822.40 discounts Q1 June 2007 annualised EPS of Rs 49.14 by a PE multiple of 37.08. Reliance Capital recently launched consumer loans for various purposes.

TVS Motor Company’s net profit declined 52% to Rs 11.92 crore on 23.6% decline in sales to Rs 823.42 crore in Q2 September 2007 over Q2 September 2006. The current price of Rs 56 discounts Q2 September 2007 annualised EPS of Rs 2.01 by a PE multiple of 27.86.

Gujarat Gas Company’s net profit rose 82.8% to Rs 33.92 crore on 35% rise in sales to Rs 275.68 crore in Q3 September 2007 over Q3 September 2006.The current price of Rs 313.25 discounts Q3 September 2007 annualised EPS of Rs 21.12 by a PE multiple of 14.63.

Areva T&D India’s net profit rose 39.5% to Rs 48 crore on 20.5% growth in net sales to Rs 432.60 crore in Q3 September 2007 over Q3 September 2006. The current price of Rs 2,087 discounts Q3 September 2007 annualised EPS of Rs 40.15 by a PE multiple of 52.19.

Arvind Mills which revamped its Flying Machine jeans brand is now joining hands with global retailers. Arvind Mills Ltd has informed us that Cherokee Inc., a leading global licensor and brand management Company that it has signed an exclusive international license agreement for its Cherokee brand with Arvind Mills. India’s largest integrated textile company and retailer. This multi year agreement covers a wide range of categories including men’s, women’s and children’s clothing, footwear, accessories, home and other categories.

Arvind Mills and Celebrity fashions also have contracts from Reliance Retail.

Here is a list of Most Preferred and Least Preferred stocks from Merill Lynch.

Top 3 preferred Stocks,

• BHEL – Maintained at the top spot with huge order book. Capex meeting schedule.
• Suzlon – Bharti Airtel is out after the recent spectrum imbroglio and Suzlon Energy is in. Successfully addressed law and order issues. Large order wins from DLF and Reliance Energy improve visibility.
• Grasim Industries – Strong cement prices in the upcoming construction season (Oct ’07 onwards)

Lest Preferred Stocks,

• Hindalco – September results likely to be hurt by strong rupee
• Tata Motors – Declining Volumes
• Pantaloon Retail India – Same stores sales growth is choppy. margin pressure. Inventory sell-off expected at lower prices

This does not necessarily mean a BUY or SELL on the stocks discussed above. Dig through our research reports to take an informed decision.