Category: Economy, Markets and Macro Views

Citigroup Research has re-initiated coverage on Everest Kanto Cylinders with a BUY rating on the back of new expansion plans announced by the company.

Besides the Dubai expansion (recently commenced) and China greenfield plant (to start next Quarter),EKC plans to: (1) expand the Gandhidham facility (0.2m industrial cyl/yr), (2) set up a greenfield plant at Kandla SEZ (0.3m CNG cyl/yr), and de-bottleneck Tarapur. Total capex envisaged is c.US$50m. The company has recently raised ~US$57m through an FCCB and private placement. All these expansions are positive as they diversify two key risks – RM supplies and the China market.

Citi adjusts FY08E earnings by 3% and significantly revise FY09-10E (more…)

Morgan Stanley has initiated coverage on Gitanjali Gems Ltd with an Overweight rating. The company is a pioneer in branded jewellery in India and is leveraging its brand equity to drive growth in the retail market through increased outlets and distribution.

The market is underestimating the value of the company’s real estate business. The standalone jewellery valuation looks cheap at 9x F09E earnings, given the 80%+ growth (F06-F07) in the branded jewellery business.

MS expects jewellery retail and exports to grow by 46% and (more…)

Tier-I Labor Arbitrage Software vendor, Satyam Computers Ltd still remains a top pick amongst research houses, particularly, CLSA and Macquarie. With two quarters remaining in the current fiscal year, expect tier-1 IT firms to finish the fiscal on a strong note. Satyam has progressively revised its FY08 US-dollar-terms revenue growth guidance from 29% at the start of the fiscal year, to 35% after 1Q FY3/08 and 42% after 2Q FY3/08. Both the houses have set a price target (more…)

Taking into scenario the Asian factors, ENAM after conducting an exclusive study in China, has rated the leading Indian Steel manufacturers – SAIL, Tata Steel, Jindal Steel & Power and JSW Steel Ltd.

Steel Authority of India Ltd:
Sizable presence and domestic leadership. Captive 2.9 bn tonnes iron ore reserves, scalable and integrated. Capacity: To rise from 12mn to 24+mn tonnes in FY11 through internal growth and acquisitions. Cost competitiveness: Captive resources (iron ore, coal) and modernization. The company enjoys attractive valuations, (more…)

Indiainfoline is recommending a BUY on Patel Engineering Ltd [PEL]. The company enjoys 22% market-share in Hydro Power construction in India. The company has an order book of Rs 5,400 crore. Though majority of the power sector investments in India will be Nuclear fuel based, hydro power will also see some investments and their are only handful of players in the segment.

PEL owns a land bank of 1200 acres in Hyderabad, Mumbai, Bangalore, (more…)

It’s Diwali weekend and I received this report by Morgan Stanley marked high priority. Here is the interesting part of the report.

I have modified the chart to suit the requirements of this article. The market has been through nine corrections over the past four years. (more…)