Category: Economy, Markets and Macro Views

ASK Raymond James has upgradded HCL Technologies Ltd to BUY with a 12 month price target of Rs 740 from current levels of Rs 640.

After reviewing Q3 results, ASK analysts believe that HCL Tech is one of the cheapest stocks in the large-cap universe.

Strong volume growth: Revenue growth was driven by a strong growth in volumes of 7.1% sequentially and improved price realization (+1.3%) in core software services (IT & Infrastructure). Infrastructure services (+11.8% QoQ), Engineering services (+7.1% QoQ), BFSI (+26.7% QoQ) and Life Sciences, though on a smaller base, (+21.4% QoQ) surpassed the company growth rates.

Margins increase by 47 bps: Margins increased by 47 bps to 22.1% mainly due to higher utilization (+120 bps) and improved price realization (+140 bps). This was offset to a certain extent by rupee appreciation (-150 bps) and increased SG&A (-90 bps) as there was a customer summit held during the quarter. The management noted that the large deals, in contrary to the belief are proving to be margin accretive for them.

Maintain Buy at a price target of Rs 740: In view of the quarterly results, we have revised our FY07E earnings marginally to Rs32.6 (+1.4%). However, we are maintaining our FY08E earnings at Rs39.1.

Tags: Invest India, Dalal Street, Indian IT Stocks, Outsourcing

Macquaire in its latest research report is bearish on the prospects of Cairn India and has set a 12 month stock price target of Rs 130, a potnetial for Cairn India to slide 10% from current levels of Rs 145. Macquaire has arrived at Rs 130 based on the sum of parts valuation model.

Cairn India recently completed its IPO at a price of Rs 160 / share. We had asked the readers of DalaStreet.Biz not to subscribe to Cairn India IPO. It is a good BUY around Rs 100 but only for the long term investor.

Tags: Invest India, Dalal Street, Cairn India, Energy Stocks

Infosys Technologies Ltd has announced its results for the quarter ending Dec-31st, 2006. The results have no surprises and are mostly in-line with expectations. Most brokerage houses were expecting a Q3 net profit of Rs 982 crores except Karvy which was expecting 993 crores and Infy has reported 982 crores.

Infosys full year FY 2007 guidance:

* Revenues: Rs 13853 – Rs 13899 crore
* Growth: 45.5 – 45.98%
* Net Profit: Rs 3602.7 crore
* EPS: Rs 66
* Growth: 46.56%

Infosys stock is down 1.5% and is currently trading at Rs 2130 on the NSE.

Tags: Invest India, Dalal Street, Infosys Results, India Earnings

Here are some Investment Strategies for 2007 in Indian Stock Market.

Download – CLSA Investment Ideas for 2007. [PDF]

Also the performance and expectations from Indian Inc for Q3 [PDF] as reported by ASK Raymond James is here.

Tags: Invest India, Dalal Street, 2007 Investment Strategies, Q3 Results India

Reliance Money, the retail stock broking arm of Anil Ambani group is planning for a two way authentication process of its customers to login to the portal.

What is two way authentication ?
1. Normal Login & Password.
2. Additionally, Reliance Money will provide a device which will generate a password and that has to be keyed into the login page within 20 seconds. You have to carry this device always with you.

Now, wait a minute why do we require such 2 way authentication mechanism ? Aren’t other broking houses providing services without it ? Such high security systems are usually implemented by corporates who have access to highly confidential and sensitive data.

Tags: Invest India, Dalal Street, Stock Broking, Reliance Money

Punj Lloyd Limited (PLL) is one of India’s best Construction and Infrastructure company. We are initiating coverage on PLL with a BUY recommendation and a 12 month target price of Rs 1,500. 50% upside from current levels.

PLL operates in India, Middle East, Africa and entire Asia. PLL mainly implements mega infrastructure projects. Some Key Statistics of Punj Lloyd Limited.

CMP – Rs 1018. Buy Upto Rs 1075.
52 week High / Low – 1254 / 544
Book Value – Rs 203.7
P/E for H1FY07 Annualized – 44
Equity : 52.22 crores. Face Value Rs 10

For H1, FY07, Punj Lloyd recorded a sales of Rs 2022 crores and a PAT of Rs 22.91. PLL management has guided for revenues of Rs. 5800 crores for FY07. Margins are likely to expand going forward as its acquired company Sembawang engineers and Contractors’ Operations are streamlined and larger number of higher margin urban infrastructure projects flow through.

Large and diverse order book: Punj Lloyd continues to have a large overseas exposure to tap potential opportunities across the globe, especially in the oil & gas and petrochemicals space. Punj Lloyd had an order backlog of INR 13394cr as at Sept-06 of which Rs. 12500cr is with an average duration of 2.5 years.

For FY07, We expect PLL to deliver a PAT of 220cr resulting in EPS of Rs 40. Compared to other infrastructure and construction stocks, PLL with a very strong management and execution track record is quoting at a forward P/E of mere 25. We recommend a BUY on Punj Lloyd Ltd with a target price of Rs 1,500.

Tags: Invest India, Dalal Street, Punj Lloyd, Infrastructure Stocks