Derivatives trading to get tougher

BS Reporter / Mumbai April 1, 2008

Investors may be required to have a certain minimum amount of net worth for trading in the derivatives segment, according to the Securities and Exchange Board of India’s (Sebi) proposed policy for improvement in the sales practice of members of stock exchanges.

A net worth certificate from a practising chartered accountant or acknowledgement for income tax return filed would be accepted in this regard, said the draft proposal.

“This is a good proposal because only those who can afford will be allowed to trade in the F&O segment. Earlier, people were playing beyond their means as people were using the derivatives segment more for speculation rather than hedging,” said Ambareesh Baliga,

There is a tendency to overtrade in the F&O segment. While trading volumes in this segment will be hit in the short run, in the long run this is healthy for the market,” said Anita Gandhi, institutional head, Arihant Capital Markets.

Currently, there is a net worth requirement of Rs 3 crore for clearing members, who are permitted to settle their own trades and trades of other non-clearing members known as trading members, who have agreed to settle trades through them.

They are also required to furnish an auditor’s certificate for the net worth every 6 months to the exchange. For a self-clearing member, members who clear and settle their own trades only, the minimum net worth requirement is Rs 1 crore, according to the Sebi website.

While there is an option on the net worth requirement of individual clients, this is not strictly enforced, pointed out dealers.

The proposals further say that the exposure/turnover limit given by trading members should be commensurate with the financial details of the clients reported in the Know Your Client (KYC).

“In the short term, volumes will be hit, but in the long run, this will be healthy for the market. In fact, even when the F&O segment was introduced in 2001, clients had to pay an upfront margin at the time when there was no culture or concept of margin. Initially, there was some kind of furore, but soon the practice of margin payment was also introduced in the cash market segment,” said the derivatives head of a local broking house, who did not wish to be identified.

The proposals have made the rules for trading members with regard to disclosure more stringent as brokers now have to inform the client at the time of entering into the member-client agreement about work history and background of the firm, actions against the trading member for non-compliance/breach of regulatory requirements, investor grievances and arbitration cases filed and pending.

“Trading members shall not recommend to their clients securities or derivatives contracts on such securities in a concentrated manner, which represent a subjective or arbitrary supply of information,” said the Sebi proposals.

The regulator has also come down on practices such as front-running, fictitious accounts, unauthorised transactions and misuse of customers’ funds or securities.

“Trading members shall not encourage or induce excessive trading or speculative activity in a client’s account, which is not in accordance with the objectives, risk appetite and financial situation of the client involved,” said the proposal.

MORE -TROUBLED WATERS- POURING IN.......

DOMESTIC FRONT:

The sentiment was also hit by reports that the Institute of Chartered Accountants of India (ICAI) has asked companies to disclose losses on a mark-to-market basis incurred due to derivatives trades from the current financial year onwards (year ending March 2008), as a precursor to making a new accounting standard -- the AS-30 -- mandatory from 1 April 2011. This may hit Q4 March 2008 and FY 2008 (year ending March 2008) bottom line of Indian firms.

The ICAI norm requires companies to provide for all losses, including those that may occur due to trading in derivatives. Indian companies are sitting on huge losses on account of the forex derivative transactions they undertook during the year. A steep decline in the value of the US dollar against the Japanese Yen and the Swiss Franc has hit Indian corporates which have used these two currencies (Yen and Franc) extensively to swap their rupee denominated debt.

There are many companies, which are not disclosing these losses, as it is not mandatory to show these numbers in the balance sheets. But with the new accounting norms they now have some compulsions. Companies, which thought that they could escape declaring the losses, will now have to come forward and show their numbers, which could hit their balance sheet, which, in turn, may impact their market capitalisation.

FOREIGN:

-- A profit warning from US department store chain J.C. Penney raised concerns about slowing consumer spending while persistent worries about credit-related problems throttled financial stocks. A prominent analyst warned that earnings will not support current dividend payouts in 2008 at Citigroup, Wachovia Corp and other US banks.

Shilpa Medicare gains on overseas acquisition

Shilpa Medicare gained 0.66% to Rs 76 at 15:30 IST on BSE after the company said it has acquired Austrian firm LOBA Finchemie.

The stock hit a high of Rs 90.10 and a low of Rs 73.30 so far during the day. The stock had a 52-week high of Rs 130.40 on 11 September 2007 and a 52-week low of Rs 59.85 on 24 March 2008.

The company’s current equity is Rs 3.47 crore. Face value per share is Rs 2.

The current price of Rs 76 discounts its Q3 December 2007 annualized EPS of Rs 7.08, by a PE multiple of 10.73.

Shilpa Medicare’s net profit rose 57.4% to Rs 3.07 crore on 47.9% growth in net sales to Rs 24.57 crore in Q3 December 2007 over Q3 December 2006.

LOBA is an ISO 9001 certified company, approved by Austrian Ministry of Health and US Food and Drug Administration (USFDA) for good manufacturing practice (GMP) for production of active pharmaceutical ingredients (APIs). Following this acquisition, Shilpa Medicare will access the highly regulated markets of Europe and US.

Shilpa Medicare manufactures pharmaceuticals and APIs related to the oncology and non-oncology segments. Oncology refers to the branch of medicine that deals with tumors, including study of their development, diagnosis, treatment and prevention.

Aksh Optifibre in demand after new initiative

Aksh Optifibre hit 5% upper circuit at Rs 44.40 at 15:09 IST on BSE after it signed a 3-year agreement with Eros for distributing its movie content for its IPTV services with Mahanagar Telephone Nigam.

The stock hit a high of Rs 44.40 and a low of Rs 42.60 so far during the day. The stock had a 52-week high of Rs 96 on 3 January 2008 and a 52-week low of Rs 36 on 23 August 2007.

The company’s current equity is Rs 27.15 crore. Face value per share is Rs 5.

The current price of Rs 44.40 discounts Q1 December 2007 annualised EPS of Rs 0.09 by a PE multiple of 493.33.

Aksh Optifibre on 24 March 2008 in association with MTNL had launched the IPTV services - IPTV-Aksh-Tel in Mumbai and video phone calling services, V Spyk services in Mumbai and Delhi.

The service will offer traditional television broadcast with a high standard reception and several add on features like time-shift television, video on demand and video phone calling services between two users enabling real time calling at a personalized level over the broadband network of MTNL.

Aksh Optifibre produces variety of cables such as single-mode, multi-mode, duct, armoured, aerial, indoor and outdoor. It also has facilities to produce ribbon fibre optic cables.

Nagarjuna Fertilisers exiting from power project

Nagarjuna Fertilisers and Chemicals declined 1.3% to Rs 37.95 at 14:38 IST on BSE after selling remaining 26% stake in the inter-state mega power project under construction in Udupi, Karnataka, to Lanco group.

The stock hit a high of Rs 40 and a low of Rs 37.50 so far during the day. The stock had a 52-week high of Rs 89 on 3 January 2008 and a 52-week low of Rs 12.65 on 2 April 2007.

The company’s current equity is Rs 428.18 crore. Face value per share is Rs 10.

The current price of Rs 37.95 discounts Q3 December 2007 annualised EPS of Rs 0.51 by a PE multiple of 74.41.

NFCL's net profit rose 35.1% to Rs 5.47 crore on 28% rise in sales to Rs 624.20 crore in Q3 December 2007 over Q3 December 2006.

Lanco had earlier acquired Nagarjuna Fertilizers and Chemicals’ (NFCL)’s 74% stake in the power project in May 2006. Nagarjuna Power Project has now been renamed as the Udupi Power Project. The project has a power purchase agreement for 913.5 megawatt (MW) with Karnataka and another 101.5 MW with Punjab. The purchases by the two states are backed by a three-tier payment security mechanism.

Nagarjuna Fertilizers and Chemicals’ principal activity is to manufacture urea and ammonia. The company also sells pesticides, seeds and other fertilisers in India.

Diamond Cables wins Order

Diamond Cables dropped 2.17% to Rs 328.90 at 13:59 IST on BSE even as the company said it has received an engineering procurement and construction order for implementation of Rajiv Gandhi Gramin Vidyutikaran Yojna in Gujarat.

The stock hit a high of Rs 340 and a low of Rs 326 so far during the day. The stock had a 52-week high of Rs 599.20 on 1 January 2008 and a 52-week low of Rs 125 on 5 April 2007.

The company’s current equity is Rs 16.77 crore. Face value per share is Rs 10.

The current price of Rs 328.90 discounts its Q3 December 2007 annualized EPS of Rs 31.49, by a PE multiple of 10.44.

Diamond Cables’ net profit rose 75% to Rs 13.32 crore on 95.8% growth in net sales to Rs 126.96 crore in Q3 December 2007 over Q3 December 2006.

The project is to be executed within a period of 22 months.

On 19 March 2008, Diamond Cables received an engineering, procurement and construction (EPC) order for implementation of Rajiv Gandhi Gramin Vidyutikaran Yojna for Bhavnagar district of Gujarat.

Diamond Cables manufactures wire products such as cables, conductors and wire rods.

Bhushan Steel slips

Bhushan Steel slipped 1.70% to Rs 710 at 13:08 IST on BSE after the company said it is planning to set up a value added steel plant in Chennai with a production capacity of 0.5 million tonne per annum and total investment of about Rs 500 crore.

The stock hit a high of Rs 790 and a low of Rs 702.0 so far during the day. The stock had a 52-week high of Rs 1730 on 7 January 2008 and a 52-week low of Rs 498.50 on 29 March 2007.

The company’s current equity is Rs 42.47 crore. Face value per share is Rs 10.

The current price of Rs 710 discounts its Q3 December 2007 annualized EPS of Rs 70.23, by a PE multiple of 10.11.

Bhushan Steel’s net profit rose 4% to Rs 74.57 crore on 1.8% fall in net sales to Rs 982.73 crore in Q3 December 2007 over Q3 December 2006.

On 26 February 2008, Bhushan Steel signed two joint ventures with Bowen Energy, Australia regarding exploration and commissioning of coalmines in Australia.

On 20 February 2008, Bhushan Steel signed a memorandum of understanding with Madhya Pradesh Trade and Investment Facilities Corporation for setting up of manufacturing facilities in the state at an investment of Rs 3000 crore.

Bhushan Steel makes cold rolled, galvanized and special steel and strips. It also produces angles and wire rods. The company's plants are located in Uttar Pradesh, Maharashtra and Orissa.

"Cairn India" losses widen in FY 2007

Cairn India declined 5.30% to Rs 217.90 at 12:58 IST on BSE after posting net loss of Rs 78.82 crore in the year ended 31 December 2007 as compared to net loss of Rs 29.22 crore in the year ended 31 December 2006.

The stock hit a high of Rs 229.70 and a low of Rs 209.10 so far during the day. The stock had a 52-week high of Rs 268.50 on 7 January 2008 and a 52-week low of Rs 123 on 29 March 2007.

The company’s current equity is Rs 1779.19 crore. Face value per share is Rs 10.

Cairn India's total income rose 474.60% to Rs 33.96 crore in the year ended 31 December 2007 over the year ended 31 December 2006.

Cairn India recently said it plans to raise $625 million, or Rs 2534.60 crore via private placement of shares.

The company’s principal activity is to explore, develop and produce crude oil and natural gas.

Era Infra Engineering survives market fall on securing new contract

Era Infra Engineering was flat at Rs 596.95 at 12:38 IST on BSE bucking the weak market trend after the company secured a contract worth Rs 20 crore for supply of ready mix concrete in New Delhi.

The stock hit a high of Rs 605 and a low of Rs 595.50 so far during the day. The stock had a 52-week high of Rs 957 on 28 December 2007 and a 52-week low of Rs 301 on 4 April 2007.

The company’s current equity is Rs 23.10 crore. Face value per share is Rs 10.

The current price of Rs 596.95 discounts Q3 December 2007 annualised EPS of Rs 47.86 by a PE multiple of 12.47.

Era Infra Engineering (EIEL)'s net profit rose 38.9% to Rs 27.64 crore on 63.3% growth in net sales to Rs 335.11 crore in Q3 December 2007 over Q3 December 2006.

Era Infra Engineering builds industrial complexes, residential buildings, multiplexes, super malls, power projects and airports. The company is diversifying its revenue stream by entering into new segments such as irrigation and build operate and transfer (BOT) projects.

Suven Life Sciences gains on patent rights

Suven Life Sciences gained 1.66% to Rs 33.60 at 11:48 IST on BSE after the company said it has secured patent rights in Mexico and Korea for two of its new chemical entities for the treatment of disorders associated with neurodegenerative diseases.

The stock hit a high of Rs 34.50 and a low of Rs 32.05 so far during the day. The stock had a 52-week high of Rs 64.45 on 28 December 2007 and a 52-week low of Rs 28 on 19 October 2007.

The company’s current equity is Rs 11.57 crore. Face value per share is Rs 1.

The current price of Rs 33.60 discounts its Q3 December 2007 annualized EPS of Rs 0.70, by a PE multiple of 48.

Suven Life Sciences net profit declined 47.5% to Rs 2.01 crore on 12% fall in net sales to Rs 27.46 crore in Q3 December 2007 over Q3 December 2006.

The patents are valid till 2023.

Suven Life Sciences’ principal activity is to design, manufacture and the supply of bulk active, drug intermediates and fine chemicals to the life science industry. The company mainly operates in the USA, Europe, Asia and India.

Chowgule Steamships expansion plan

Chowgule Steamships hit 5% upper circuit at Rs 38.90 on BSE after Chowgule Ports & Infrastructure, a company co-promoted by Chowgule Steamships, signed an agreement with Maharashtra Maritime Board (MMB) for development of a minor port at Jaigad.

The stock hit a high of Rs 38.90 also a low for the day. The stock had a 52-week high of Rs 104.55 on 2 January 2008 and a 52-week low of Rs 21.10 on 3 April 2007.

The company’s current equity is Rs 36.31 crore. Face value per share is Rs 10.

The current price of Rs 38.90 discounts Q3 December 2007 annualised EPS of Rs 1.05 by a PE multiple of 37.04.

Chowgule Steamships' net profit rose 43.9% to Rs 0.95 crore on 110.1% rise in sales to Rs 21.98 crore in Q3 December 2007 over Q3 December 2006.

Chowgule Ports & Infrastructure, a company co-promoted by Chowgule Steamships, is a special purpose vehicle (SPV) floated to undertake the port infrastructure development and ship repair projects at Jaigad.

Chowgule Steamships' main business is owning and chartering vessels and providing shipping services such as manning ships, fixing vessels, taking ships on bareboat charter and other activities connected with shipping.

Investors withdraw from City Union Bank

City Union Bank declined 1.03% to Rs 28.70 at 11:14 IST on BSE after bank said it would issue 80 million shares by way of qualified institutional placement.

The stock hit a high of Rs 29 and a low of Rs 27.15 so far during the day. The stock had a 52-week high of Rs 51.55 on 3 January 2008 and a 52-week low of Rs 15.10 on 2 April 2007.

The bank’s current equity is Rs 32 crore. Face value per share is Rs 1.

The current price of Rs 28.70 discounts Q3 December 2007 annualised EPS of Rs 3.17 by a PE multiple of 9.05.

City Union Bank’s net profit rose 83.1% to Rs 25.38 crore on 59.7% rise in operating income to Rs 176.15 crore in Q3 December 2007 over Q3 December 2006.

The price at which the shares will be issued will be decided later, it said.

The bank had recently announced a 10-to-1 stock split. The record date for stock split was 30 January 2008.

City Union Bank is a leading scheduled private commercial bank with a strong base in urban, semi-urban and rural centres of south India.

Amtek Auto skids on currency market losses

Amtek Auto declined 2.3% to Rs 254.40 at 10:53 IST on BSE after company said it may suffer losses up to $18 million in the next two years due to volatility in the global currency market.

The stock hit a high of Rs 261.50 and a low of Rs 240 so far during the day. The stock had a 52-week high of Rs 526 on 31 October 2007 and a 52-week low of Rs 228 on 24 March 2008.

The company’s current equity is Rs 28.20 crore. Face value per share is Rs 2.

The current price of Rs 254.40 discounts Q2 December 2007 annualised EPS of Rs 19.38 by a PE multiple of 13.12.

Amtek Auto’s net profit rose 10.2% to Rs 64.66 crore on 18% rise in sales to Rs 319.91 crore in Q2 December 2007 over Q2 December 2006.

The company, however, is taking proactive steps to restrict the losses. Amtek Auto said it had undertaken hedges and swaps on the basis of its underlying exposure of loans, convertible bonds and exports in various currencies.

The company said the promoters have undertaken to bring the matching amount to meet the obligation through 10-year debentures or preference shares.

Despite these setbacks, the future business outlook of the company continues to be robust and is poised for growth organically and inorganically, both within and outside India, the company said.

Amtek Auto is a leading Indian supplier of automotive components and an integrated automotive component manufacturer of forgings, machining and sub-assemblies.

Spanco Telesystems rings on new orders

Spanco Telesystems & Solutions surged 5.07% to Rs 172.05 at 10:33 IST on BSE after the company said on Monday, 31 March 2008, it won orders worth Rs 166 crore from various parties.

The stock hit a high of Rs 176 and a low of Rs 168.85 so far during the day. The stock had a 52-week high of Rs 300 on 28 May 2007 and a 52-week low of Rs 136.30 on 26 March 2008.

The company’s current equity is Rs 20.65 crore. Face value per share is Rs 10.

The current price of Rs 172.05 discounts its Q3 December 2007 annualized EPS of Rs 27.91, by a PE multiple of 6.16.

Spanco Telesystems & Solutions’ net profit rose 32.08% to Rs 14.41 on a 38.44% growth in net sales to Rs 188.3 crore in Q3 December 2007 over Q2 September 2007.

On 7 January 2008, Spanco Telesystems secured a contract worth Rs 13.75 crore to connect jails and courts in Haryana through statewide area network for various E governance initiatives.

On 24 December 2007, the company secured an order worth Rs 40 crore contract from the Andhra Pradesh state government for providing Internet services for five years.

Spanco Telesystems has two main segments, viz. telecommunication and call centre-international.

Binani Cement builds on overseas acquisition

Binani Cement rose 0.49% to Rs 60.95 at 9:56 IST on BSE after the company said on Friday, 28 March 2008, its wholly owned subsidiary Mukundan Holdings has acquired 49% stake in a company in Dubai and 30% stake in Krishna Holdings, Singapore..

The stock hit a high of Rs 61 and a low of Rs 60.80 so far during the day. The stock had a 52-week high of Rs 130 on 16 October 2007 and a 52-week low of Rs 58.75 on 22 June 2007.

The company’s current equity is Rs 203.10 crore. Face value per share is Rs 10.

The current price of Rs 60.95 discounts its Q3 December 2007 annualized EPS of Rs 10.63, by a PE multiple of 5.73.

Binani Cement’s net profit rose 209.2% to RS 53.95 on 41% growth in net sales to Rs 233.31 in Q3 December 2007 over Q3 December 2006.

Following this acquisition, the company and its wholly owned subsidiary Mukundan Holdings now hold 100% of the equity shares of Krishna Holdings.

On 18 March 2008, Binani Cement’s wholly owned subsidiary Mukundan Holdings proposed to acquire 49% of the paid up capital of Binani Cement Factory LLC, Dubai, UAE.

The company is engaged in manufacturing and marketing cement and non-ferrous metal. The group operates in three segments: cement, zinc and by-products and glass fibre.

POST MARKET COMMENTARY-31-MARCH-08

Sensex Dipped 808 Points on The last Day of financial year ended March 2008

BSE Sensex plunged 726.85 points or 4.44% at 15,644.44. Sensex had opened with a downward gap of 144.63 points at 16,226.66 and slipped 808.14 points to touch day’s low of 15,563.15 in late trade.

As per provisional data, foreign funds sold shares worth a net Rs 865.79 crore today. Domestic funds bought shares worth a net Rs 566.03 crore.

The BSE Sensex lost 4642.55 points or 22.88% in the quarter ended March 2008. The Sensex gained 2572.34 points or 19.67% in the financial year 2008, from its close of 13072.10 on 30 March 2007.

S&P CNX Nifty plunged 207.50 points or 4.20% at 4,734.50.

Earlier, robust corporate advance tax payments in Q4 March 2008 indicated that corporate profit growth will be strong in the quarter. Advance tax figures showed banks, hospitality and software firms were doing better than sectors like automobiles and cement.

Despite the market crash, the market breadth was positive: On BSE 1,356 shares advanced as compared to 1,302 that declined. 45 shares remained unchanged.

Housing Development Finance Corporation slumped 9.10% to Rs 2376.20 on 2.74 lakh shares. It was the top loser from Sensex pack.

Banking shares slumped. HDFC Bank (down 6.87% to Rs 1304.85), ICICI Bank (down 8.03% to Rs 768.10), and State Bank of India (down 4.26% to Rs 1608.15), also slipped.

Reliance Industries lost 4.11% to Rs 2251 on 11.24 lakh shares. The stock moved in a range of Rs 2251 and Rs 2340 during the day.

IT pivotals were hit on worries a recession in US may impact their revenues. Infosys Technologies (down 6.31% to Rs 1429), Satyam Computers (down 3.42% to Rs 394.50), Wipro (down 8.59% to Rs 415), and TCS (down 7.94% to Rs 801), declined. IT firms derive majority of their revenue from exports to US markers.

Reliance Energy, slipped 6.12% to Rs 1252. The company has bought back 6.50 lakh equity shares since the start of the offer on Tuesday, 25 March 2008 aggregating Rs 83.15 crore

Hindalco Industries (down 6.13% to Rs 164.70), DLF (down 7.14% to Rs 646) and ONGC (down 6.61% to Rs 982), edged lower from the Sensex pack.

Cipla, gained 0.96% to Rs 219.60 on 4.83 lakh shares. It was the lone gainer from Sensex pack.

Among the side counters, Axon Infotech (up 19.11% to Rs 41.45), Aro Granite (up 19.51% to Rs 102), Indowind Energy (up 20% to Rs 68.20), and Sulzer India (up 20% to Rs 687), surged

Action Construction Equipment (down 13.45% to Rs 75.75), ECE Industries (down 11.95% to Rs 330), India Infoline (down 11.30% to Rs 760), and Indiabulls Financial Services (down 13.12% to Rs 410), slipped.

Tyre stocks rose on reports that tyre manufacturers are gearing up to increase prices following a surge in input costs. CEAT (up 6.10% to Rs 108), Govind Rubber (up 3.91% to Rs 14.60), Premier Tyre (up 2.63% to Rs 29.25) edged higher.

Era Infra Engineering was down 0.25% to Rs 594.90 after the company secured a contract worth Rs 20 crore for supply of ready mix concrete in New Delhi.

Cairn India slipped 3.02% to Rs 223.15. The company posted net higher loss of Rs 78.82 crore in the year ended December 2007 as compared to net loss of Rs 29.22 crore in the year ended December 2006. Cairn India's total income rose 474.60% to Rs 33.96 crore in the year ended 31 December 2007 over the year ended 31 December 2006. The company announced the results before trading hours today, 31 March 2008.

Bhushan Steel slipped 8.76% to Rs 659 after the company said it is planning to set up a value added steel plant in Chennai with a production capacity of 0.5 million tonne per annum and total investment of about Rs 500 crore. The company made this announcement during trading hours today, 31 March 2008.

Suven Life Sciences declined 4.24% to Rs 31.65 after the company said it has secured patent rights in Mexico and Korea for two of its new chemical entities for the treatment of disorders associated with neurodegenerative diseases.

City Union Bank declined 2.76% to Rs 28.20 after bank said it would issue 80 million shares by way of qualified institutional placement. The bank made this announcement after market hours on Friday, 28 March 2008.

Spanco Telesystems & Solutions fell 2.14% to Rs 160.25. The stock surged to a high of Rs 180 after the company said on Monday, 31 March 2008, it won orders worth Rs 166 crore from various parties.

Amtek Auto declined 0.92% to Rs 258 after company said it may suffer losses up to $18 million in the next two years due to volatility in the global currency market. The company made this announcement after market hours on Friday, 28 March 2008.

Diamond Cables rose 1.13% to Rs 340 after the company received an engineering procurement and construction order for implementation of Rajiv Gandhi Gramin Vidyutikaran Yojna in Gujarat.

Ballarpur Industries (BILT)- BUY

Ballarpur Industries, BUY

Price : Rs 29 Target Price : Rs 45

Re-listing gains

Ballarpur Industries (BILT) is expected to get re-listed on 31st March 2008 at theoretical price of Rs 29 per share after the successful completion of its restructuring, buyback and stock split exercise. We expect that at given price, the stock offers attractive upside considering the aggressive growth plans of the company and favourable industry scenario.

We expect company to post an EPS of Rs 3.9, Rs 4.5 and Rs 5.5 in FY08E-10E. At given
price the stock will be available at 7.5x, 6.5x and 5.3x FY08E-10E, respectively.

We reiterate BUY recommendation on the stock with a price target of Rs 45, based on 10x FY09E EPS

by: KUKU-MK

Goldman Sachs (GS.N) was also caught in the scam,

Lehman loses $ 353 mn in Japan

U.S. investment bank Lehman Brothers was defrauded of some $353.1 million after it was caught in a scam in Japan, a source familiar with the situation told Reuters on Saturday, and trading house Marubeni said some of its staff were involved.

Goldman Sachs (GS.N) was also caught in the scam, daily Asahi Shimbun said on Saturday, citing sources familiar with the issue. The full scale of the fraud was not immediately known.
"no involvement by Marubeni as a company."

No comment was immediately available from Goldman Sachs.

ANOTHER TROUBLED FISH-Lehman hit by $355 mln fraud

Lehman hit by $355 mln fraud, blames Marubeni – source-Reuters

Sunday March 30, 01:07 PM

NEW YORK/TOKYO (Reuters) - Lehman Brothers was fleeced out of more than $355 million in a fraud the U.S. investment bank believes was perpetrated by two employees at Japanese trading house Marubeni Corp., according to a person briefed on the matter.

The fraud may have hit other financial institutions as well, according to the source, who spoke on condition of anonymity.

If Lehman's arguments are true, the scamsters perpetrated one of the more sophisticated corporate con jobs since Enron set up a fake trading floor to impress analysts. Lehman believes the scam included forged documents and an imposter.

Lehman is trying to recover a loan to a fund headed by Asclepius Ltd -- a now-bankrupt unit of LTT Bio-Pharma Co. Lehman had believed the money, supposedly to be used to finance medical leases, was backed by Marubeni.

The bank believes Marubeni is now shirking its obligations to pay back the partnership between Lehman, Marubeni and the fund, the person told Reuters.

Marubeni, which fired the two employees on March 10, said the two employees may have been manipulated by the former president of Asclepius, that Marubeni had not approved the leases and that police are working on the case.

The employees were contractors, spokesman Hirokazu Iwashima said, adding that there was "no involvement by Marubeni as a company."

Lehman plans to sue Marubeni, spokesmen in Tokyo and New York said. They declined to say how much money it had put into the business or elaborate on what exactly the former Marubeni employees did.

"We are confident in our legal claim which we will pursue until we receive repayment from Marubeni," said Matthew Russell, Lehman Brothers head of Corporate Communications, Asia-Pacific, in a statement sent to Reuters.

The person briefed in the matter told Reuters that two former Marubeni employees -- Shingo Yamaura and Takuro Nitahara -- convinced Lehman to help finance what it understood were Marubeni's equipment leases and supply contracts with hospitals. Lehman gave the partnership money in advance to fund initial leases and contracts.

When Lehman sought payment under its deal on Feb 29, 2008, Marubeni said the seals on the contracts had been forged, and refused payment, according to the person briefed on the matter.

Marubeni declined comment on Lehman's statements, and said it could not give information on people no longer with the trading house or comment on ongoing investigations.

Yamaura and Nitahara were not able to be reached for comment.

Before agreeing to fund the venture, Lehman asked to meet the Marubeni general manager involved. The man Lehman employees met was an imposter, Lehman believes, the source said.

Lehman said in a statement on Saturday, "Lehman Brothers Japan Inc. today confirmed that it is working closely with the authorities to seek full recovery of funds it believes to have been fraudulently misappropriated from transactions in which an affiliate provided financing."

LTT Bio-Pharma officials were not available for comment.

The company announced on March 19 that bankruptcy proceedings filed by Asclepius were approved by the Tokyo District Court and also announced that Asclepius was suspected of being involved in illegal dealings.

Kyodo News said Asclepius dismissed its then-president on March 7.

A spokesman at the Metropolitan Police Agency declined to comment on ongoing investigations.

Bata India net at Rs 47 cr, up 18%

Saturday March 29, 06:57 PM

The net profit of Bata India for the year ended December 31, 2007, stood at Rs 47.4 crore as compared to Rs 40.1 crore in the previous year, registering a rise of 18.15 per cent.

Total income of the company during the period stood at Rs 890.8 crore as against Rs 797.3 crore in the same period previous year.

Bata India managing director Marcelo Villagran said that improved financial performance was a result of sustained efforts made by the company.

He said that the company was on an aggressive growth path and had implemented forward looking initiatives like investments in large format stores.

Towards this, Bata had adopted an ambitious strategy of opening 70 stores every year for the next few years.

The board declared a dividend of 20 per cent, inclusive of five per cent additional dividend.

Indian Oil plans to enter ethanol production

Looking at organic, inorganic prospects to expand bio-fuel biz

The company plans to seek expert advice on the viability of purchasing sick sugar mills or setting up a new project. – Mr B.M. Bansal

New Delhi, March 30 Indian Oil Corporation Ltd (IOC) is studying various options for becoming an ethanol producer from being just a buyer. The company would be looking at both organic and inorganic prospects for expanding its business in the bio-fuel category.

Mr B.M. Bansal, IOC’s Director, Planning and Business Development, told Business Line that the company plans to seek expert advice on whether it is viable to purchase sick sugar mills or if it is better to set up a new project.

Currently, to sell the five per cent ethanol-blended petrol, IOC has been procuring ethanol from other suppliers. The Government has already made five per cent blending of ethanol mandatory in notified States and Union Territories and 10 per cent blending is to become effective from October this year.

Requirements

The purchase price of ethanol has been fixed at Rs 21.50 per litre ex-factory on a uniform basis for three years from October 2007. Total requirement of ethanol by oil marketing companies for five per cent ethanol-blended petrol programme implementation is 0.6 million kilo litres per year and for 10 per cent, 1.20 million kilo litres per year for the notified States and Union Territories.

Recently, Reliance Industries Ltd and public sector oil company Hindustan Petroleum Corporation Ltd (HPCL) were among the companies which were awarded financial contracts for the revival of State-run sugar mills in Bihar. However, IOC had not participated in the bids.

amended MoA

IOC has been focussing on bio-diesel projects till now. The company has already amended its memorandum of association to get into agri-related activities, particularly bio-crops that would enable it to carry out business in bio-fuels and allied products. This in effect allowed IOC to go in for cultivation of plants like jatropha to be used for blending with diesel. The company plans to be part of the full chain in the alternative fuels category, he said.

Post Market Commentary - March 28 2008

Sensex adds 356 points in broad-based rally

Positive cues from Asian and European markets propelled the market higher today. The rally raised hopes that the market might have bottomed out after a recent steep fall. The market today shrugged off a surge in inflation and overnight slide in US stocks. Capital goods stocks soared at the fag end of the session, followed by metal and IT stocks.

Banking shares, which hovered in negative territory on surge in inflation, turned green at the fag end of the trading session. Mid-caps and small-caps surged with their barometer indices on BSE outperforming the Sensex.

As per market talks, mutual funds provided support to share prices to prop up year-end net asset values (NAVs) for the quarter and year ending 31 March 2008. Net Asset Value (NAV) propping, or window dressing, happens as professional investors like mutual funds seek to make their quarterly or annual performance look good to clients.

Provisional data released by stock exchanges showed domestic funds which includes mutual funds and insurance firms bought shares worth a net Rs 729.50 crore today. Foreign institutional investors sold shares worth a net Rs 401.95 crore.

India's wholesale price index rose 6.68% in the 12 months to 15 March 2008, surging from the previous week's rise of 5.92%, government data showed on Friday. The rate is highest since 27 January 2007, when inflation was 6.69%.

BSE Sensex was up 355.73 points or 2.22% at 16,371.29.

CNX S&P Nifty was up 111.75 points or 2.31% at 4942.

The market breadth was extremely strong. On BSE, 2333 stocks advanced, 370 declined and 39 stocks were unchanged.

ONGC fell 1.65% at Rs 1051.55 on reports the company may report losses on every barrel of crude oil that it sells due to the high subsidy burden that it has to bear. The company’s margin on oil sales is currently at an all-time low of around 15 cents per barrel, almost a tenth of what it was two years ago, the reports added.

Reliance Industries (RIL) rose 3.19% to Rs 2347.55.

The BSE Metal index outperformed the Sensex, rising 5.78% to 14,654.19. Jindal Steel & Power (up 15.91% at Rs 2,218.65), Welspun Gujarat Stahl Rohren (up 7.12% at Rs 389.65), Ispat Industries (up 5.70% at Rs 32.45), Sterlite Industries (up 5.18% at Rs 756.15) and Shree Precoated (up 5% at Rs 171.45), surged.

Among the mid-caps, Global Broadcast News (up 23.57% at Rs 139.20), Moser Baer (20.01% at Rs 151.75), Asian Star Company (up 20% at Rs 985.85), Prakash Industries (up 18.28% at Rs 244.60) and Vishal Retail (up 17.38% at Rs 820), surged.

Among the small-caps, Nahar Industries (up 20% at Rs 90), Empee Distilleries (up 20% at Rs 169.05), Viceroy Hotels (up 20% at Rs 66.10), Donear Industries (up 20% at Rs 61.30) and Indowind Energy (up 20% at Rs 56.85), spurted.

Alembic surged 20% to Rs 55 on reports that the company plans to set up its own special economic zone dedicated to the pharma sector.

Tata Chemicals soared 6.21% to Rs 288.95 after the company said it has successfully completed the acquisition of US-based General Chemical Industrial Products Inc.

Varun Shipping surged 6.99% to Rs 72.70 after the company said it has acquired India’s third largest anchor handling and towing supply vessel.

Jupiter Bioscience soared 9.10% to Rs 148.70 after the company said on Thursday, 27 March 2008 it would acquire a manufacturing facility of Merck Life Sciences, Switzerland, for an undisclosed sum.

MIC Electronics advanced 4.23% to Rs 700.55 after the company informed stock exchange about it and its subsidiaries receiving new orders.

Era Infra rose 0.79% to Rs 596.40 after the company said its joint venture company with KMB has secured an order worth Rs 148.40 crore from Delhi Metro Rail Corporation.

TROUBLED WATERS: & TROUBLED FISH !!!

Markets worrie that there will be more bank write-downs in the US after a prominent analyst lowered first-quarter profit forecasts for four major US banks namely -- Citigroup, Bank of America Corporation, JPMorgan Chase & Co, and Wachovia Corp.

Monsoon Capital LLC, a $1.20 billion hedge fund firm run by Gautam Prakash, has been hit hard by a slump in Indian stocks this year. The news may trigger more redemptions from hedge funds with higher exposure to India, reports suggest.

Brokerage firm Prime Securities slumped 5% to Rs 87.95 after the firm said it incurred a loss of about Rs 3 crore in the futures and options segment and had made a provision of Rs 23 crore for 2007/08 towards depletion in value of securities. The comapny expects profit before tax for the current year to be Rs 27 crore after the write-off of investment, it said in a statement.

Subprime crisis to persist for 2-3 years
The impact of the subprime crisis is likely to persist for two to three year before the US economy recovers, Nobel laureate US economist Joseph E Stiglitz said here on Friday.

The book argues the IRAQ war will cost at least $3 trillion, assuming that US troops won't withdraw completely before 2017.

Kotak, Indiainfoline, Motilal, Religare, ILFS, ICICI and who else are the

big chaps who're in stock broking?

Who else lent huge monies in F&O and for

deliveries to their super-leveraged clients? Who else were earning oodles last

year from broking incomes?

Be sure all these brokers, and that last-mentioned who's really a bank, face the

brunt of the bad-bad-bad mood of stock players. Each of these shares will

continue getting beaten this year.

Sunday's Business Line: MFs selling to pay up for redemptions.

Mutual Funds selling stocks? Aren't they the ones who put thier hand on their

mothers' hearts and say they love buying low and selling high? Why're they

selling at these dirct cheap rates then?

Answer: Fund manager's job is at stake. Bonus is at stake.

Orchid Chemicals plunges on promoter follies

Shares of Orchid Chemicals & Pharmaceuticals Ltd. plunged nearly 50% this week on news that two financial institutions had sold promoters' shares as they could not meet margin calls. On March 17, the stock tumbled 39.09% to Rs127.05 and lost another 10% on Tuesday to Rs113.60. On Wednesday, the stock closed 2% higher at Rs116. Kailasam Raghavendra Rao, founder and MD of the Chennai-based company said it incurred a personal loss of Rs 750mn after his lenders sold off 7.5% stake from his family's holdings on March 17. He denied market talk that the company has suffered forex losses. However, some industry analysts feared that the biggest danger is that the company could become a takeover target now that the promoters' stake in the company is just 17%. In March-April 2007, Rao borrowed around Rs 850mn from Indiabulls and Religare to raise the promoters' stake from 17% to 24%. Rao cleared his dues to the two lenders, but still owed nearly Rs 650mn to the FIs and his current stake is pledged to them. Commenting on the recent developments, Orchid Chemicals spokesperson said a combination of macro factors and market rumors contributed to the sudden negative sentiment on the stock.

BROKERS IN TROUBLED WATERS: Prime Securities

Prime Securities hammered after disclosing losses in F&O

Prime Securities plunged 4.97% to Rs 87.95 at 14:12 IST on BSE after the firm said it incurred a loss about to Rs 3 crore in the futures and options segment and had made a provision of Rs 23 crore for 2007/08 towards depletion in value of securities.

The stock hit a high of Rs 87.95 and a low of Rs 87.95 so far during the day. The stock had a 52-week high of Rs 345.05 on 18 January 2008 and a 52-week low of Rs 36.90 on 28 March 2007.

The company’s current equity is Rs 12.23 crore. Face value per share is Rs 5.

The current price of Rs 87.95 discounts its Q3 December 2007 annualized EPS of Rs 43.70, by a PE multiple of 2.01.

Prime Securities’ net profit rose 323.5% to Rs 26.81 crore on 351.5% growth in net sales to Rs 36.75 crore in Q3 December 2007 over Q3 December 2006.

The company expects profit before tax for the current year to be Rs 27 crore after the write-off of investment, Prime Securities said.

Prime Securities deals in financial instruments such as shares, bonds, units, securities, and also provides merchant banking advisory services, issue management services and other fund-based investments.

Sesa Goa slips as government seeks price cut of iron ore

Sesa Goa was down 1.77% to Rs 3026.10 at 14.41 IST on BSE, on reports the government will ask iron ore producers to lower prices of the key steelmaking ingredient to curb inflation which is at 10-month high.

The stock gained 2.10% at day’s high of Rs 3145. The stock touched a low of Rs 2964 so far during the day. The stock had a 52-week high of Rs 3969 on 1 January 2008 and a 52-week low of Rs 1618.45 on 12 April 2007.

The company’s current equity is Rs 39.36 crore. Face value per share is Rs 10. The current price of Rs 3026.10 discounts its Q3 December 2007 annualized EPS of Rs 500.72, by a PE multiple of 6.49.

As per reports, government officials will meet iron-ore miners on 1 April 2008 to discuss price cut.

Sesa Goa is largest private sector iron ore producer in India. Exports accounted for 68.87% of the company total sales in year ended March 2007.

Sesa Goa’s net profit rose 152.7% to Rs 492.71 crore on 99.4% growth in net sales to Rs 1172.38 crore in Q3 December 2007 over Q3 December 2006.

Sesa Goa, an iron ore mining company of the Vedanta group, has been involved in iron ore mining, beneficiation and exports besides. It is also into the manufacture of pig iron and metallurgical coke.

Allahabad Bank banks on rate cut

Allahabad Bank was up 0.88% to Rs 80.70 at 14:37 IST on BSE having recovered from the session's low of Rs 77.95 after cutting its benchmark prime lending rate by 25 basis points from the present rate of 13.25% to 13.00% with effect from 1 April 2008.

The stock hit a high of Rs 81 and a low of Rs 77.95 so far during the day. The stock had a 52-week high of Rs 143 on 3 January 2008 and a 52-week low of Rs 68.10 on 2 April 2007.

The bank’s current equity is Rs 446.70 crore. Face value per share is Rs 10. The current price of Rs 80.70 discounts its Q3 December 2007 annualized EPS of Rs 32.69, by a PE multiple of 2.47.

Allahabad Bank’s net profit rose 27.6% to Rs 365.05 crore on 38.6% growth in operating profit to Rs 1965.41 crore in Q3 December 2007 over Q3 December 2006.

Allahabad Bank provides treasury and banking operations. The activities include accepting deposits, lending loans and to provide other financial related services

Hindustan Zinc shrugs of product price cut

Hindustan Zinc rose 0.71% to Rs 539 at 12:50 IST on BSE even as the company said it had cut its zinc prices by 4.6% or Rs 5,200 a tonnes to Rs 1.07 lakh per tonne with immediate effect.

The stock hit a high of Rs 541 and a low of Rs 524.50 so far during the day. The stock had a 52-week high of Rs 969 on 18 October 2007 and a 52-week low of Rs 507 on 18 March 2008.

The company’s current equity is Rs 422.53 crore. Face value per share is Rs 10.

The current price of Rs 539 discounts its Q3 December 2007 annualized EPS of Rs 74.23, by a PE multiple of 7.26.

Lead prices were kept unchanged at Rs 1,31,200 per tonne, the company said in a statement.

Hindustan Zinc’s net profit declined 41.2% to Rs 785 crore on 33.2% fall in net sales to Rs 1658 crore in Q3 December 2007 over Q3 December 2006.

Hindustan Zinc’s activities comprise mining and smelting of zinc and lead. The products include zinc ingots, lead ingots, silver, sulphuric acid, cadmium ingots, copper cathode and others.

Rajesh Exports shines after denial of incurring losses on currency options

Rajesh Exports jumped 5.48% to Rs 74.15 at 11:17 IST on BSE after the company clarified that it has not suffered any losses in any type of currency options, commodity trading or any other speculative business.

The stock hit a high of Rs 74.50 and a low of Rs 69.25 so far during the day. The stock had a 52-week high of Rs 170 on 12 December 2007 and a 52-week low of Rs 57.54 on 3 April 2007.

The company’s current equity is Rs 22.17 crore. Face value per share is Rs 2.

The current price of Rs 74.15 discounts its Q3 December 2007 annualized EPS of Rs 66.31, by a PE multiple of 1.18.

Rajesh Exports posted 117.8% jump in net profit to Rs 61.25 crore on 10.4% growth in net sales to Rs 2067.23 crore in Q3 December 2007 over Q3 December 2006.

The company made the clarification amid rumours that many Indian corporates have suffered losses in the currency derivatives, options and commodity trading. Rajesh Exports (REL) further said that its performance will not be affected by rising gold prices. The company is confident of reporting a robust business and surpassing the guidelines of sales and profitability for the current year.

The company's principal activity is to manufacture gold jewellery. REL is the country's largest exporter of gold jewellery.

Gitanjali Gems Acquisition

Gitanjali Gems declined 3.19% to Rs 244.30 at 10:58 IST on BSE after the company said on Wednesday, 26 March 2008, it has acquired 100% shares of Modali Jewels, earlier a joint venture company.

The stock hit a high of Rs 252.05 and a low of Rs 244.05 so far during the day. The stock had a 52-week high of Rs 480 on 5 December 2007 and a 52-week low of Rs 176.50 on 13 June 2007.

The company’s current equity is Rs 85.06 crore. Face value per share is Rs 10.

The current price of Rs 244.30 discounts its Q3 December 2007 annualized EPS of Rs 14.22, by a PE multiple of 17.18.

Gitanjali Gems’ net profit rose 20.70% to Rs 26.85 crore on 19.80% rise in net sales to Rs 598.28 crore in Q2 September 2007 over Q2 September 2006

Modali Jewels (MJPL) is engaged in establishing and operating chain of showrooms/outlets for selling gold & diamond studded jewellery. After the acquisition, it has become a wholly owned subsidiary of Gitanjali Gems.

In January 2008, Gitanjali Gems acquired 100% shares Mumbai based Brightest Circle Jewellery, which is engaged in manufacturing, distributing and selling of diamonds and jewellery products.

In December 2007, the company’s wholly owned subsidiary Gitanjali Lifestyle signed a memorandum of understanding with Mariella Burani Fashion Group, Italy to form a joint venture in India.

The company manufactures, exports and markets diamonds and jewellery. It owns a number of jewellery brands, including D'damas, Nakshatra, Sangini and Asmi.

J B Chemicals & Pharmaceuticals Buyback plan

J B Chemicals & Pharmaceuticals surged 8.85% to Rs 40.75 at 10:23 IST on BSE after the company scheduled a meeting of the board of directors on 8 April 2008 to consider buyback of equity shares.

The scrip touched a high of Rs 41.35 and a low of Rs 37.50 so far during the day. The stock had hit a 52-week high of Rs 101.70 on 2 January 2008 and a 52-week low of Rs 31.80 on 24 March 2008.

The small-cap pharmaceuticals firm has an equity capital of Rs 16.87 crore. Face value per share is Rs 2. Promoters hold 55.47% stake in the company (as at end December 2007).

At the current price of Rs 40.75, the scrip trades at a PE multiple of 8.05, based on Q3 December 2007 annualised EPS of Rs 5.06.

The company’s latest reserves and latest book value per share stand at Rs 404.26 crore and Rs 49.93 respectively.

J B Chemicals & Pharmaceuticals’ net profit declined 45.30% to Rs 10.67 crore on 2.90% rise in net sales to Rs 139.02 crore in Q3 December 2007 over Q3 December 2006.

J B Chemicals & Pharmaceuticals manufactures basic chemicals, petrochemicals, pharmaceuticals, photographic chemicals and agro-based products.

Valecha Engineering builds on new order win

Valecha Engineering gained 1.91% to Rs 170.40 at 10:18 IST on BSE after the company said it has bagged new projects worth Rs 250 crore which includes road works at Pune, Delhi airport express line work and piling projects.

The stock hit a high of Rs 175 and a low of Rs 170.30 so far during the day. The stock had a 52-week high of Rs 358 on 4 January 2008 and a 52-week low of Rs 127.47 on 5 April 2007.

The company’s current equity is Rs 11.95 crore. Face value per share is Rs 10.

The current price of Rs 170.40 discounts its Q3 December 2007 annualized EPS of Rs 11.58, by a PE multiple of 14.72.

Valecha Engineering’s net profit declined 84.4% to Rs 3.46 crore on 68.7% growth in net sales to Rs 116.20 crore in Q3 December 2007 over Q3 December 2006.

The Rs 250 crore company is primarily a player in the road construction business, from which it derives 70% of its revenues. Its road projects are present across many states in the country.

Post Market Commentary - March 27 2008

Small-caps gain in volatile market

IT and banking shares fell sharply whereas FMCG and realty stocks bucked the weak trend. Gains in mid-cap and small-cap stocks led to positive market breadth.

Sensex fell 71.27 points or 0.44% at 16,015.56.

CNX S&P Nifty rose 1.40 points or 0.03% at 4830.25.

As per provisional data, foreign institutional investors bought shares worth a net Rs 247.98 crore today. Domestic funds bought shares worth a net Rs 339.84 crore.

Among the small-caps, Ankur Drugs And Pharma (up 20% at Rs 190.95), Classic Diamonds (India) (up 20% at Rs 62.15), Renaissance Jewellery (up 20% at Rs 61.30), BAG Films & Media (up 18.51% at Rs 38.10), and Grabal Alok Impex (up 17.14% at Rs 95), surged.

Power Grid Corporation of India rose 1.13% to Rs 98.50 on reports that the company may win a Sri Lankan sub-sea cable order worth Rs 2500 crore.

Great Offshore slipped 1.65% to Rs 614.75 after the company said it has sold its vessel - Malaviya Nine, a 1983 built anchor handling tug - supply vessel.

Power Finance Corporation gained 2.03% to Rs 166 after the company said it has signed a memorandum of understanding with RITES to combine its resources and expertise to facilitate import of coal from African countries.

Valecha Engineering, which is primarily into road construction business, jumped 5.23% to Rs 175.95 after the company said it has bagged new projects worth Rs 250 crore which includes road works at Pune, Delhi airport express line work and piling projects.

J B Chemicals & Pharmaceuticals surged 20% to Rs 44.80 after the company scheduled a meeting of the board of directors on 8 April 2008 to consider buyback of equity shares.

i-flex Solutions declined 3.02% to Rs 953.75 even as the company said Lien Viet Bank, Vietnam has selected Flexcube, i-flex�s core banking solution for its banking operations.

Rajesh Exports jumped 2.92% to Rs 72.35 after the company clarified that it has not suffered any losses in any type of currency options, commodity trading or any other speculative business.

Term insurance plans to get cheaper

BS Reporter / Mumbai March 26, 2008

In a move aimed at making term insurance products cheaper and popular among customers, the Insurance Regulatory Development Authority of India (IRDA) has decided to reduce the solvency margin on these products under traditional business.

Term insurance policies provide pure life cover with no maturity or survival benefits. Since there are no maturity benefits in these policies, they are not as popular as, say, the money back covers.

Currently, insurers have to maintain a solvency margin of 150 per cent on insurance products. The move will ease the capital requirement by one third for term policies for both individual and group policies. Solvency margin requirements are the prudential norms on capital requirement for insurance companies. They are the equivalent of capital adequacy ratios for the banking industry. Insurers are likely to pass on the benefit to customers.

"With the IRDA reducing the solvency margin on term products, the premium for these policies is likely to come down by 5% to 10%," said GN Agarwal, executive director and appointed actuary of Life Insurance Corporation of India.

For example, if a person is, say, 35 years old and buys a term insurance policy which has a sum assured of Rs 1 lakh, the premium would work out to around Rs 250 a year. However, the insurer had to provide a solvency capital of Rs 450. With the IRDA reducing the solvency margin to one-third, the solvency margin required to be maintained henceforth will be reduced to Rs 300.

“The proposed required solvency margin at lower level for pure term products would provide significant relief to life insurers both under individual products and under group products. This measure, it is hoped, would pave the way for enhancing the interest among insurers to launch pure term products for a sufficiently long period and at affordable rates, which would ultimately result in increased insurance coverage," said R Kanan, member actuary of IRDA.

Financial Technologies hardens as foreign fund hikes stake

Financial Technologies India gained 2.27% to Rs 1409 at 14:02 IST on BSE after the company said foreign funds FMR LLC and FIL have acquired a further 0.17% stake in the company to raise their total holdings to 10.13%.

The stock hit a high of Rs 1428 and a low of Rs 1360 so far during the day. The stock had a 52-week high of Rs 3048 on 29 June 2007 and a 52-week low of Rs 1340 on 24 March 2008.

The company’s current equity is Rs 9.18 crore. Face value per share is Rs 2.

The current price of Rs 1409 discounts its Q3 December 2007 annualized EPS of Rs 469.46, by a PE multiple of 3.

Financial Technologies India's net profit surged 58.63% to Rs 536.95 crore on 27.24% growth in net sales to Rs 39.38 crore in Q3 December 2007 over Q2 September 2007.

Financial Technologies develops software solutions used in online trading terminals. Multi Commodity Exchange of India (MCX), IBS Forex and Tickerplant Infovending are the subsidiaries of the company.

"Roman Tarmat" bagged New order

Roman Tarmat declined 2.25% to Rs 69.60 at 13:05 IST on BSE even as the company said it has bagged an order worth Rs 29.42 crore from New Mangalore Port Trust, Mangalore for concreting the existing roads in Mangalore.

The stock hit a high of Rs 73 and a low of Rs 69.20 so far during the day, which is a 52-week low. The stock had a 52-week high of Rs 376.25 on 9 July 2007.

The company’s current equity is Rs 10.96 crore. Face value per share is Rs 10.

The current price of Rs 69.60 discounts its Q3 December 2007 annualized EPS of Rs 7.01, by a PE multiple of 9.93.

Roman Tarmat’s net profit declined 40.9% to Rs 1.92 crore on 3.1% fall in net sales to Rs 26.37 crore in Q3 December 2007 over Q3 December 2006.

The project is to be executed within a period of 18 months.

The company provides engineering, procurement and construction services for infrastructure projects. The services include construction of airside works, highways, roads and other civil work.

Tata Motors acquire Ford Motor's premium British brands Jaguar and Land Rover

Tata Motors acquire Ford Motor's premium British brands Jaguar and Land Rover for around $2.5 billion.

The stock hit a high of Rs 690 and a low of Rs 657 so far during the day. The stock had a 52-week high of Rs 840 on 12 October 2007 and a 52-week low of Rs 535 on 22 January 2008.

The company’s current equity is Rs 385.55 crore. Face value per share is Rs 10. Promoters hold 33.42% stake in the company (as at end December 2007).

The current price of Rs 658 discounts its Q3 December 2007 annualized EPS of Rs 51.78, by a PE multiple of 12.70.

Tata Motors’ net profit declined 2.8% to Rs 499.05 crore on 5.2% growth in net sales to Rs 7251.83 crore in Q3 December 2007 over Q3 December 2006.

As per reports, the deal which took almost nine months to be finalised was signed in evening yesterday, 25 March 2008. With this deal, Tata Motors will get access to three manufacturing facilities at Solihull, Castle Bromwich and Halewood. The Jaguar and Land Rover (JLR) acquisition would be the biggest made by Tata Motors. In 2004, the company acquired Daewoo Commercial Vehicles for Rs 465 crore and Hispano Carocera, a Spanish bus body building firm for Rs 70 crore.

The Jaguar and Land Rover are luxury brands belonging to Ford, the world's third-largest automaker. Ford had announced it was selling Jaguar and Land Rover late last year as part of a restructuring after posting a record $12.6 billion loss. Demand for the luxury vehicles had fallen at the fastest pace in at least three years. Jaguar sales dropped 33% in the US and Europe in the first two months of 2008 while Land Rover sales fell 13% in the U.S. and 7.7% in Europe in this period.

Tata Motors is engaged in manufacturing and marketing heavy, medium and light commercial vehicles, utility vehicles and passenger cars.

Simplex Infrastructures builds on new orders

Simplex Infrastructures gained 2.72% to Rs 538 at 12:07 IST on BSE after the company said it has bagged new orders worth Rs 653 crore from different sectors.

The company made this announcement during trading hours today, 26 March 2008.

The stock hit a high of Rs 549.80 and a low of Rs 456 so far during the day. The stock had a 52-week high of Rs 774 on 9 January 2008 and a 52-week low of Rs 315 on 25 May 2007.

The company’s current equity is Rs 9.85 crore. Face value per share is Rs 2.

The current price of Rs 538 discounts its Q3 December 2007 EPS of Rs 17.82, by a PE multiple of 16.31.

SIL’s net profit rose 28.5% to Rs 22.03 crore on 57.7% growth in net sales to Rs 703.98 crore in Q3 December 2007 over Q3 December 2006.

On 21 February 2008, Simplex Infrastructures (SIL) received an order worth Rs 302 crore for construction of six flyovers on Seeb Corniche road in Muscat in Sultanate of Oman.

On 15 February 2008, the company secured an order worth Rs 406 crore comprising of civil construction work for a metro rail project in Mumbai.

On 4 February 2008, the company received an order worth Rs 287 crore for Qatalum thermal power plant project in Qatar.

In January 2008, Simplex Infrastructures received an order worth Rs 481 crore for civil work for 1050 mega watt Maithon thermal power project.

Simplex Infrastructures provides infrastructure solutions in power, industrial construction, urban infrastructure, marine, high-rise building, roads and bridges segments. The company provides comprehensive services across ground engineering.

K S Oils Overseas acquisition

K S Oils gained 4.20% to Rs 67.05 at 11:48 IST on BSE after the company said it has acquired a single palm plantation over a vast area spread across 50,000 acres of green land in Indonesia.

The stock hit a high of Rs 68.90 and a low of Rs 63.50 so far during the day. The stock had a 52-week high of Rs 142.40 on 8 January 2008 and a 52-week low of Rs 26.60 on 26 March 2007.

The company’s current equity is Rs 31.53 crore. Face value per share is Rs 1.

The current price of Rs 67.05 discounts its Q3 December 2007 EPS of Rs 4.11, by a PE multiple of 16.31.

K S Oils’ net profit rose 60.5% to Rs 32.43 crore on 84.7% growth in net sales to Rs 563.67 crore in Q3 December 2007 over Q3 December 2006.

The company said the plantation will be developed over next three years with an investment of Rs 230 crore. The company is resorting to backward integration to secure raw material supplies and avoid global price volatility.

K S Oils is engaged in producing mustard/rapeseed oil. K S Oils provides all type of cooking media, which include edible oils like mustard, refined oils, vanaspati and non-edible solvent oil. The main manufacturing plant of the company is situated within a large industrial complex at Morena, Madhya Pradesh.

Kirloskar Oil Engines block deal

Kirloskar Oil Engines jumped 5.45% to Rs 105.50 at 11:16 IST on BSE after three block deals aggregating 30.99 lakh shares were executed on the counter at an average price of Rs 100.03 per share in opening trade on BSE.

The stock hit a high of Rs 109.85 and a low of Rs 100 so far during the day. The stock had a 52-week high of Rs 200 on 13 July 2007 and a 52-week low of Rs 90 on 17 March 2008.

The company has equity share capital of Rs 38.83 crore. Face value per share is Rs 2. Promoters holds 60.79% stake in the company (as at end December 2007).

At the current price of Rs 105.50, the scrip trades at a PE multiple of 23.54, based on Q3 December 2007 annualised EPS of Rs 4.48.

The company’s net profit slipped 12.60% to Rs 21.76 crore in Q3 December 2007 on 17.70% rise in net sales to Rs 537.10 crore in Q3 December 2007 over Q3 December 2006.

Kirloskar Oil Engines (KOEL) exports diesel engines, pumpsets and generating sets mainly to Africa, the Middle East, and to other Asian countries.

SEL Manufacturing gains on fund raising plan

SEL Manufacturing Company rose 0.91% to Rs 265.35 at 11:15 IST on BSE after the company said its board has approved raising upto $250 million through issue of foreign currency convertible bonds and global depository receipts.

The stock hit a high of Rs 276 and a low of Rs 265 so far during the day. The stock had a 52-week high of Rs 330 on 7 March 2008 and a 52-week low of Rs 76.65 on 22 October 2007.

The company’s current equity is Rs 15.22 crore. Face value per share is Rs 10.

The current price of Rs 265.35 discounts its Q3 December 2007 EPS of Rs 35.80, by a PE multiple of 7.41.

SEL Manufacturing Company’s net profit rose 236.3% to Rs 13.62 crore on 103.2% 99.87 crore in Q3 December 2007 over Q3 December 2006.

SEL Manufacturing Company manufactures and exports knitted garments, fabrics and combed and carded yarn.

Avantel Softech surges on new order win

Avantel Softech surged 8.01% to Rs 57.95 at 10:19 IST on BSE after the company said it has bagged an order worth Rs 8.25 crore from the Ministry of Defence, Government of India, for supply of satellite communication receiver terminals for Indian Navy

The stock hit a high of Rs 58.85 and a low of Rs 55.25 so far during the day. The stock had a 52-week high of Rs 138.50 on 10 January 2008 and a 52-week low of Rs 36 on 28 March 2007.

The company’s current equity is Rs 5.15 crore. Face value per share is Rs 10.

The current price of Rs 57.95 discounts its Q3 December 2007 EPS of Rs 4.50, by a PE multiple of 12.88.

Avantel Softech’s net profit declined 67.60% to Rs 0.58 crore on 54.15% fall in net sales to Rs 4.36 crore in Q3 December 2007 over Q2 September 2007.

The company's principal activity is to design and manufacture repeaters, filters, combiners and amplifiers to enhance the capacity and coverage of wireless communication networks, for use in GSM, CDMA and 3G networks.

GEI Industrial soars on new order win

GEI Industrial Systems soared 10.08% to Rs 71 at 10:42 IST on BSE after the company said it has bagged an order worth Rs 30 crore from Essar Construction for a refinery expansion project in Vadinar, Gujarat for supply of air cooled heat exchangers.

The stock hit a high of Rs 72.10 and a low of Rs 66 so far during the day. The stock had a 52-week high of Rs 152 on 3 January 2008 and a 52-week low of Rs 48 on 28 March 2007.

The company’s current equity is Rs 14.27 crore. Face value per share is Rs 10.

The current price of Rs 71 discounts its Q3 December 2007 EPS of Rs 6.64, by a PE multiple of 10.69.

GEI Industrial Systems’ net profit rose 25.4% to Rs 2.37 crore on 102.9% growth in net sales to Rs 49.56 crore in Q3 December 2007 over Q3 December 2006.

The company is engaged in manufacturing air-cooled heat exchanger and fin tubes. It provides innovative engineering systems and solutions. The products include air cooled heat exchangers, air cooled steam condensers, plant thermal equipments, water cooling modules and air blast oil coolers, radiators for gas and diesel engines, inter and after coolers for compressors, modular oil coolers for large transformers, coolers for motors and generators and finned tubes.

Post Market Commentary - March 26 2008

Sensex sheds 131 points on uncertainty about US outlook

Mixed global cues and imminent expiry of March 2008 derivative contracts kept the market volatile throughout the day. Concerns about the US economy which is said to be already in recession resurfaced following data that showed that US consumer confidence fell to a five-year low in March 2008.

Investors turned cautious after the previous day's 6.1% jump. Majority of the sectoral indices on BSE slipped into red. ICICI Bank was the top loser from the Sensex pack. The market breadth was positive.

Sensex was down 130.66 points or 0.81% at 16,086.83.

CNX S&P Nifty was down 48.65 points or 1% at 4828.85.

As per provisional data, foreign institutional investors (FIIs) bought shares worth a net Rs 393.91 crore today. Domestic funds sold shares worth a net Rs 108.65 crore.

India's largest private sector bank by assets ICICI Bank fell 4.17% at Rs 843.25.

Reliance Industries (RIL) fell 0.68% to Rs 2298.70.

Tata Motors ended almost unchanged at Rs 679.40. As per reports, US automaker Ford has agreed to sell its luxury brands Jaguar and Land Rover to India's Tata Motors for more than $2 billion. Ford, which signed the deal on Tuesday, 25 March 2008, plans to publicly announce the transaction in New York today, reports suggest.

Mercator Lines rose 6.59% to Rs 76 after the company said its subsidiary Mercator Lines, Singapore has entered into negotiation with Refined Success for the time charter-out of Geastiniono TBN, a gearless panamax vessel.

Avantel Softech surged 9.41% to Rs 59 after the company said it has bagged an order worth Rs 8.25 crore from the Government of India for supply of satellite communication receiver terminals for Indian Navy

GEI Industrial Systems soared 10.85% to Rs 71.50 after the company said it has bagged an order worth Rs 30 crore from Essar Construction for supply of air cooled heat exchangers for a project in Gujarat.

Axis Bank vaulted 4.34% to Rs 826.50 after a two block deals totaling 45.46 lakh shares were struck on the counter at average price of Rs 799.89 per share on BSE.

SEL Manufacturing Company (Garment manufacturer) rose 5% to Rs 276.05 after the company said its board has approved raising upto $250 million through issue of foreign currency convertible bonds and global depository receipts.

Kirloskar Oil Engines jumped 5.55% to Rs 105.60 after three block deals aggregating 30.99 lakh shares were executed on the counter at an average price of Rs 100.03 per share in opening trade on BSE.

K S Oils gained 0.78% to Rs 64.85 after the company said it has acquired a single palm plantation over a vast area spread across 50,000 acres of green land in Indonesia.

THE NEXT - FRESH TROUBLED WATERS-FX-DERIVATIVES

Banks blame law firms for 'misguiding' firms on Fx derivatives

Private sector lenders on Tuesday criticised law firms and consultants for wrongly prompting corporates not to meet their payment commitments to banks after the companies started making losses due to volatility in global markets.

Besides, the banks also wanted more finite guidelines from the Reserve Bank on structured derivative products such as interest rate swaps and currency swaps. It is believed that the exposure of Indian banks in forex (Fx) derivative products is Rs 10,000 -15,000 crore.

In derivatives, however, foreign bankers are the major players. The exposure of the public sector banks, barring State Bank of India, Bank of India and Bank of Baroda, is limited in forex derivative products.

The private sector banks, which did not want to be quoted, said many law firms acting as intermediaries between banks and SMEs are now taking advantage of the confusions in the foreign exchange and derivatives products market prompting companies not to m eet their obligations and thus to prolong the litigations.

"We have seen many lawyers (of SMEs that made losses in derivative products) prompting their clients not to meet their obligations to banks citing various reasons. It's high time for the Reserve Bank to come out with a more finite guideline on such produ cts," Head of a private sector bank said.

A host of private sector banks such as Axis Bank, ICICI Bank, HDFC Bank, Kotak Bank and Yes Bank are understood to be in legal battles with their corporate clients who question the validity and legality of the derivative products when they started incurr ing losses in derivatives market.

Corporates started making losses following the high volatility and the consecutive widening in spreads in a variety of derivative products such as interest rate swaps and currency swaps. - PTI

IIM-B hikes annual fee to Rs 4 lakh

The Indian Institute of Management-Bangalore (IIM-B) has hiked the fee for post graduate programme (PGP) from the existing Rs 2.5 lakh per annum to Rs 4 lakh per annum. The decision to hike the fee, to be effective from the next academic year, was approved by the IIM-B Board of Governors meeting chaired by Chairman Mukesh Ambani on Tuesday here. The decision to hike the fee was long pending as the premier academic institution was subsidising the education of the students. According to IIM-B, the institute incurred an expenditure of Rs 5 lakh per student per year whereas the fee charged was just 50% of it. The balance 50% of the fee was being subsidised. All incoming PGP students will pay Rs 4 lakh for the first year and another Rs 5 lakh in the second year. “Since the cost of the education per year per student is Rs 5 lakh, there is a proposal to collect the same. The IIM-B is planning to fix the fee at Rs 5 lakh per year from the 2009 academic year,” a spokesperson of IIM-B said. Besides, the IIM-B was failing to attract faculty due to compensations that were not on a par with the private universities. “The hiked fee will go towards the functioning of the institute, improvement of infrastructure,” the spokesperson added. Though the number of full time faculty at the institute is 120, it has fallen below 100. The institute hopes to regain its full faculty strength. IIM-B Director Pankaj Chandra said the institute provided financial assistance amounting to Rs 91.13 lakh to 49 students during the year 2007-08. “No student will be denied an opportunity to pursue the PGP for want of financial resources. Besides the financial assistance provided by the institute, several students won awards and merit and need-based scholarships,” he said in his report at the thirty-third annual convocation of IIM-B on Friday. He pointed out that all 266 students were successfully placed with top Indian and international firms. “In order to encourage alternative career choices, IIM-B has become the only institution to allow students to defer placement by two years. Five students have taken advantage of this flexibility to pursue other interests. Two of them are looking to start entrepreneurial ventures,” Chandra pointed out. Amit Gupta secured the first rank in the PGP 2006-08 batch. Mukesh Ambani gave away the awards to passing out students of PGP, Fellow Programme in Management, PGP in Public Policy and Management and PG Diploma in Software Enterprise Management. In all, 424 students passed out of the IIM-B.

Madras Cements Ltd. (CMP Rs 3200)

Madras Cements has chalked a capex of Rs15.24bn by the end of this year to expand its cement capacity to 10 MTPA by the second quarter of FY09, from 8 MTPA now. It is also raising grinding capacity by 1 MTPA each at the Kolaghat (West Bengal), Chennai and Salem facilities. In addition, the company will step up wind power capacity from 64 MW to 120 MW by end-FY08 and has targeted to generate 123 MU per annum. We believe that capacity expansion will lead to volume growth. Further, given the fact that power accounts for major proportion of the total cost and cola prices hovering around $125/tonne, the expansion in wind power capacity will help the company to reduce its power cost. The stock may some positives on the update.

Grasim Industries sells Digvijay Cement

The board of Grasim the company at its meeting held on December 04, 2007 had approved the sale of its entire holding of 75,816,681 equity shares representing 53.63% of the capital of Shree Digvijay Cement Company Ltd (SDCCL) to CIMPOR Inversiones SA ("Cimpor"), Calle Brasil, 56-36024 Vigo, Spain.

Grasim Industries Ltd has informed BSE that with the completion of the sale of Shree Digvijay Cement Co on March 25, 2008, SDCCL has ceased to be a subsidiary of the company.

"Satra Properties" New project

Satra Properties India jumped 10.10% to Rs 80.70 at 14:34 IST on BSE after the company said it has acquired a prime property in Jodhpur, Rajasthan for building a shopping mall, which would generate a revenue of around Rs 133.78 crore.

The company made this announcement during trading hours today, 25 March 2008.

The stock hit a high of Rs 83.50 and a low of Rs 72 so far during the day. The stock had a 52-week high of Rs 114 on 18 January 2008 and a 52-week low of Rs 35.08 on 29 March 2007.

The company’s current equity is Rs 31.07 crore. Face value per share is Rs 2.

The current price of Rs 80.70 discounts its Q3 December 2007 EPS of Rs 12.97, by a PE multiple of 6.22.

Satra Properties India’s net profit rose 769.9% to Rs 16.79 crore on 262.5% growth in net sales to Rs 57.16 crore in Q3 December 2007 over Q3 December 2006.

The project is to be executed within a period of 18 to 20 months.

The company is engaged in developing commercial, retail, hotel and residential properties. The properties include shopping malls, luxurious apartments and star hotels.

Martin Burn spurts

Martin Burn surged 9.97% to Rs 48 at 15:06 IST on BSE after the company said it is negotiating with various parties for acquisition of about 36 to 40 acres of land at Rajarhat, Kolkata.

The company made this announcement during trading hours today, 25 March 2008.

The stock hit a high of Rs 48 and a low of Rs 42 so far during the day. The stock had a 52-week high of Rs 188 on 1 January 2008 and a 52-week low of Rs 42.10 on 24 March 2008.

The company’s current equity is Rs 4.78 crore. Face value per share is Rs 10. The current price of Rs 48 discounts its Q3 December 2007 EPS of Rs 17, by a PE multiple of 2.82.

Martin Burn’s net profit declined 30.7% to Rs 1.87 crore on 95.5% fall in net sales to Rs 0.20 crore in Q3 December 2007 over Q3 December 2006.

The company is engaged in constructing commercial and institutional buildings.

RCom rings as LIC goes long

Reliance Communications advanced 4.96% to Rs 534 at 14:29 IST on BSE after Life Insurance Corporation raised its stake in the telecom services provider to over 5%.

The stock hit a high of Rs 541.70 and a low of Rs 514.80 so far during the day. The stock had a 52-week high of Rs 844 on 10 January 2008 and a 52-week low of Rs 389 on 2 April 2007.

The company’s current equity is Rs 1032.01 crore. Face value per share is Rs 5. The current price of Rs 534 discounts its Q3 December 2007 annualized EPS of Rs 8.46, by a PE multiple of 63.12.

Life Insurance Corporation (LIC) acquired 3 lakh shares representing 0.015% stake in Reliance Communications (RCom) through open market transaction on 13 March 2008. Promoters After this acquisition, LIC’s holding in RCom has gone up to 10.33 crore shares (5.009%) from the earlier 10.30 crore shares (4.994%). Promoters hold 66.16% stake in RCom.

Reliance Communications (RCom)’s net profit declined 43.4% to Rs 436.48 on 11.8% growth in net sales to Rs 3403.52 crore in Q3 December 2007 over Q4 December 2006.

RCom provides telecommunication services. The company provides wireless, wire line, voice, data and Internet communication services.

Reliance to close petrol pumps by April-end

Reliance Industries, India's largest private sector oil firm, plans to shut down all its 1,400 petrol pumps by April-end as it is unable to match the fuel price offered by state-run retailers, who get compensated by the Government for selling fuel below the cost.

Reliance has sent internal mails to its petrol pump operators about the phased closure, industry sources said. The company plans not to replenish petrol and diesel stocks once the existing lot at its retail outlets gets exhausted.

The owner of nation's largest refinery suffered huge losses despite selling petrol and diesel at prices higher than the state-run retailers Indian Oil, Hindustan Petroleum and Bharat Petroleum.

On an average, petrol from Reliance outlets costed between Rs 4 and 5 a litre more than the PSU pumps. Reliance still lost Rs 3.4 a litre on petrol and Rs 5.8 per litre on diesel and had seen its market share fall from 14.3 per cent to less than a per c ent in diesel.

Public sector retailers too lose Rs 9.68 on sale of every litre of petrol and Rs 12.21 per litre on diesel but the losses are made up by issue of oil bonds by the Government and discounts from ONGC, GAIL and Oil India.

The same compensation is not given to the private retailers such as Reliance and Essar. Reliance spokesperson was not immediately available for comments. The company, sources said, had invested about Rs 4,000 crore in setting up close to 1,400 retail o utlets for selling petrol and diesel in the country.

Out of these, Reliance owns and operates about 450 outlets. Besides, transporters had invested over Rs 524 crore in a transport fleet of nearly 3,745 trucks, who after the closure would idle.

Over 55,000 jobs, which had been created by Reliance retail operations at outlets, transporters and within the company are now at risk. Sources said the shift of huge volumes from Reliance outlets to PSU outlets would increase the burden of support on t he Government to the tune of nearly Rs 4,000 crore. - PTI

Reliance Industries Expansion buzz

Reliance Industries surged 5.10% to Rs 2313 at 13:41 IST on BSE on reports the company plans set up its third refinery at Jamnagar in an ambitious project to reach a total capacity of 100 million metric tonnes per annum.

The stock hit a high of Rs 2313.30 and a low of Rs 2220 so far during the day. The stock had a 52-week high of Rs 3252.10 on 15 January 2008 and a 52-week low of Rs 1305 on 2 April 2007.

The company’s current equity is Rs 1453.65 crore. Face value per share is Rs 10.

The current price of Rs 2313 discounts its Q3 December 2007 EPS of Rs 222.26, by a PE multiple of 10.41.

Reliance Industries net profit rose 162.2% to Rs 8,079 crore on 22.7% rise in sales to Rs 34,590 crore in Q3 December 2007 over Q3 December 2006.

As per recent reports, the company has appointed a global oil and refinery consultancy firm to evaluate the feasibility of the project, which will help capitalize the increased requirement for global crude distillation capacity.

Also, the company has decided to shut down all the petroleum retail outlets owned by it directly as surging crude prices and the absence of government subsidies have made operations unviable, reports suggested.

Reliance Industries is engaged in oil refining, producing and distributing plastic and intermediates, polyester filament yarn, fibre intermediates, polymer intermediates, crackers, chemicals, textiles. It is also into exploration and production of oil and natural gas.

GHCL restructuring plan

GHCL gained 3.15% to Rs 77 at 13:05 IST on BSE after the company’s board approved plan to spin off home textile and retail businesses into separate units, as part of a restructuring strategy to enhance growth.

The company made the announcement after market hours on Monday, 24 March 2008.

The scrip had touched a high of Rs 78.95 and a low of Rs 75.30 so far during the day. The stock had hit a 52-week high of Rs 208.40 on 24 December 2007 and a 52-week low of Rs 67.50 on 19 March 2008.

The company’s current equity is Rs 100.02 crore. Face value per share is Rs 10.

The current price of Rs 77 discounts its Q3 December 2007 annualized EPS of Rs 12.45, by a PE multiple of 6.19.

GHCL’s net profit rose 1.4% to Rs 31.14 crore on 37.6% rise in sales to Rs 298.57 crore in Q3 December 2007 over Q3 December 2006.

As per the company’s announcement, GHCL, which is mainly into making soda ash, would continue to be listed. The home textile business, comprising sourcing and manufacturing, is proposed to be transferred to a 100% subsidiary of GHCL. The retail entity would look after the India and UK retail ventures, including that of Rosebys UK, which it acquired in 2006.

GHCL is currently engaged in chemicals business through the soda ash division apart from home textiles.