Jaiprakash, BUY, T=300, CITI GROUP

Jaiprakash,

Buy: India’s Infrastructure Capex Play at Stress-case Valuation

Buy/Low Risk 1L

Price (01 Apr 08) Rs230.75 Target price Rs300.00

from Rs462.00

Expected share price return 30.0%

Target price cut to Rs300 — We are cutting our target price to Rs300 from Rs462 to factor in (1) an EV/EBITDA of 12.0x (16.0x previously) for Construction; (2) an EV/ton of US$120 (US$160 earlier) for Cement; (3) Jaypee Power at a 60% discount to P/E valuations as we no longer value projects in the initial planning stages; and (4) a 14% cut in realizations/sq ft for Jaypee Infratech. We maintain our earnings estimates.

Stock looks compelling... — After a 50%-plus correction, the stock is close to our stress-case value of Rs196.

CITI, 1 April 2008

US data lifts IT stocks

Five IT pivotals gained between 2.77% to 5.69% on BSE on hopes a US recession might not be deep as feared.

The BSE IT index was up 3.31% at 3,765.07. Wipro (up 5.69% at Rs 438), Satyam Computer (up 4.97% at Rs 427.50), Rolta India (up 4.27% at Rs 282.35), TCS (up 3.45% at Rs 880.20) and Infosys Technologies (up 2.77% at Rs 1523), edged higher.

The US private sector added 8,000 jobs in March 2008, according to a report on Wednesday by ADP Employer Services, surpassing economist expectations. IT firms derive more than half of their revenue from exports to US.

RIL Diversification plan fuels

Reliance Industries gained 1.77% to Rs 2385 at 14:40 IST on BSE on reports it has submitted two proposals to the government totaling $7.55 billion to build semiconductor and micro-processor making units.

The stock hit a high of Rs 2415 and a low of Rs 2344 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 1309.55 on 3 April 2007.

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

The current price of Rs 2385 discounts its Q3 December 2007 annualized EPS of Rs 222.26, by a PE multiple of 10.73.

The semiconductor facility will cost $4.64 billion and the polysilicon microprocessor unit will involve an outlay of $2.91 billion.

On 1 April 2008, Reliance Industries (RIL) made second gas discovery in deepwater exploration block off the east coast in Krishna Basin.

RIL’s 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.

RIL 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.

Spice Communications rings on stake sale buzz

Spice Communications rose 1.77% to Rs 34.50 at 13:35 IST on BSE on reports Emirates Telecommunications is in talks to take a stake in the company.

The scrip had touched a high of Rs 36 and a low of Rs 34.10 so far during the day. The stock had hit a 52-week high of Rs 69.65 on 13 December 2007 and a 52-week low of Rs 23.25 on 22 January 2008.

The mid-cap telecom service provider has an equity capital of Rs 689.92 crore. Face value per share is Rs 10.

At the current price of Rs 34.50, the scrip trades at a PE multiple of 1.48, based on Q4 December 2007 annualised EPS of Rs 23.19.

Spice Communications reported a net profit of Rs 399.92 crore in the Q4 Decmeber 2007 as against net loss of Rs 13.89 crore in the Q4 December 2006. Sales rose 24.8% to Rs 255.57 crore in Q4 December 2007 over Q4 December 2006.

Spice Communications provides mobile telecommunication services in India. The company also provides Internet telephony, Internet services and broadband services, in addition it has commenced offering national and international long distance services.

Moser Baer gains on deal with Chinese firm

Moser Baer India gained 2.54% to Rs 163.50 at 13:23 IST on BSE after the company said Moser Baer Photo Voltaic, a subsidiary, has signed a ten-year agreement with China-based LDK Solar for purchase of high-quality multi-crystalline silicon wafers.

The stock hit a high of Rs 167.50 and a low of Rs 158 so far during the day. The stock had a 52-week high of Rs 344.80 on 3 January 2008 and a 52-week low of Rs 177 on 22 January 2008.

The company’s current equity is Rs 168.21 crore. Face value per share is Rs 10.

LDK Solar will deliver multicrystalline solar wafers to Moser Baer Photo Voltaic (MBPV) for producing photovoltaic (PV) cells that can generate 640 megawatt (MW) of solar power. MBPV will make a suitable prepayment to LDK Solar reflecting the contract value. The delivery of wafers under the new contract is expected from July 2008 and will continue over a ten-year period from the first shipment.

Moser Baer India reported a net loss of Rs 20.45 crore in Q3 December 2007 as compared to net profit of Rs 37.62 crore in Q3 December 2006. Net sales rose 2% to Rs 511.66 crore in Q3 December 2007 over Q3 December 2006.

The company manufactures storage media for data applications and audio/video applications. It is India's second largest manufacturer of IT & entertainment peripherals in terms of sales.

BHEL trips on concerns about Q4 results

Bharat Heavy Electricals declined 4.02% to Rs 1778 at 12:47 IST on BSE after reporting provisional turnover of Rs 21,608 crore with 15.31% growth and net profit of Rs 2,815 crore with 16.56% growth in the financial year 2007-08 over 2006-07.

The stock hit a high of Rs 1888.20 and a low of Rs 1702 so far during the day.

The company’s current equity is Rs 489.52 crore. Face value per share is Rs 10.

The current price of Rs 1778 discounts its Q3 December 2007 annualized EPS of Rs 63.07, by a PE multiple of 28.19.

The 16.56% growth in Bharat Heavy Electricals (Bhel)'s net profit in the year ended March 2008 over the year ended March 2007 as per the provisional results, was muted in the backdrop of a 38% growth in net profit achieved in the nine months ended December 2007 over nine months ended December 2006, raising concerns that the Q4 March 2008 results would be bad.

On 17 March 2008, Bharat Heavy Electricals (Bhel) secured orders worth around Rs 2,030 crore for an upcoming 1,000-megawatt thermal power project.

On 29 February 2008, the company received an order worth Rs 1893 crore from GSPC Pipavav Power Co in western India for a 700 megawatt plant.

On 14 February 2008, Bhel bagged an order worth Rs 200 crore from Oil & Natural Gas Corporation for supplying oil field equipment.

On 8 February 2007, the company bagged an order worth Rs 3390 crore for setting up two units of 500 megawatt each in a thermal power station in northern Uttar Pradesh.

Bhel’s net profit rose 15.6% to Rs 771.90 crore on 14.4% growth in net sales to Rs 4964.14 crore in Q3 December 2007 over Q3 December 2006.

Bhel is engaged in manufacturing and distributing electrical, electronic, and mechanical and nuclear power equipment.

Mastek inches ahead on overseas contract

Mastek rose 0.27% to Rs 313.10 at 11:02 IST on BSE after the company said it in partnership with Thales, Fujitsu Services and Flyware has won a 27-million-pound contract from the UK defence ministry.

The stock hit a high of Rs 319.95 and a low of Rs 312.20 so far during the day. The stock had a 52-week high of Rs 419 on 12 October 2007 and a 52-week low of Rs 220 on 12 February 2008.

The company’s current equity is Rs 14.26 crore. Face value per share is Rs 5.

The current price of Rs 313.10 discounts its Q2 December 2007 annualized EPS of Rs 26.27, by a PE multiple of 11.92.

On 10 March 2008, Mastek acquired 100% stake in Systems Task Group International, New York, in an all cash deal for $29 million through its wholly owned US subsidiary MajescoMastek.

Mastek’s net profit rose 10.44% to Rs 18.72 crore on 2.13% fall in net sales to Rs 137.19 in Q2 December 2007 over Q1 September 2007.

Mastek is an information technology (IT) player with global operations providing enterprise solutions to insurance, government, and financial services organizations worldwide.

Post Market Commentary – 3-April-08

BSE Sensex gained 82.15 points or 0.52% at 15,832.55

S&P CNX Nifty gained 17.4 points or 0.37% at 4,771.60.

From recent low of 14,809.49 on 17 March 2008 Sensex has recovered 1023.06 points or 6.9% at current 15,832.55. From the recent high of 16,371.29 on 28 March 2008, Sensex is off 538.74 points or 3.29%

As per the provisional figure on NSE, foreign institutional investors were net sellers of Rs 393.21 crore in Indian equities while domestic funds were net buyers of shares worth Rs 265.39 crore.

The market breadth was negative: On BSE 1215 shares advanced as compared to 1409 that declined. 63 shares remained unchanged.

The BSE Mid-Cap index down 0.4% to Rs 6,387.23 and BSE Small-Cap index down 0.91% to 7,840.29

IT stock surged on hopes a US recession might not be deep as feared. Wipro (up 5.04% to Rs 435.30), Infosys (up 2.68% to Rs 1,521.65), Tata Consultancy Services (up 4.13% to Rs 885.95) and Satyam Computer Services (up 5.11% to Rs 428.05) edged higher. The US private sector added 8,000 jobs in March 2008, according to a report on Wednesday by ADP Employer Services, surpassing economist expectations. IT firms derive more than half of their revenue from exports to US.

US stocks declined on Wednesday after Federal Reserve Chairman Ben Bernanke said a recession was possible, spurring profit-taking a day after the market's biggest rally in two weeks. The Dow Jones industrial average shed 48.53 points, or 0.38%, at 12,605.83. The Standard & Poor's 500 Index lost 2.65 points, or 0.19%, at 1,367.53. The Nasdaq Composite Index was down 1.35 points, or 0.06%, at 2,361.40.

Prospects of further monetary tightening by the Reserve Bank of India (RBI) following a surge in inflation is a cause for concern at a time when the already high rates are pinching the domestic industry. The surge in inflation has triggered fears that RBI my raise cash reserve ratio (CRR). An increase in CRR would suck out liquidity immediately pushing up the cost of funds and thereby curbing demand.

The next major trigger for the market is Q4 March 2008 results of India Inc. As per market talks IT bellwether Infosys may issue muted guidance for the year ending March 2009 in the backdrop of a slowdown in the US economy. Infosys unveils Q4 results on 15 April 2008.

Era Infra Engineering gains on new order win

Era Infra Engineering rose 1.21% to Rs 593.75 at 15:26 IST on BSE on bagging an order worth Rs 4 crore from Jeet builders for supply of ready mix concrete for the construction of multi storied residential complex at Greater Noida.

The stock hit a high of Rs 610 and a low of Rs 588.40 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 13.50 crore. Face value per share is Rs 10.

The current price of Rs 593.75 discounts its Q3 December 2007 annualized EPS of Rs 47.86, by a PE multiple of 12.41.

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.

On 31 March 2008, Era Infra Engineering (EIEL) secured a contract worth Rs 20 crore for supply of ready mix concrete in New Delhi.

On 28 March 2008, the company joint venture company with KMB has secured an order worth Rs 148.40 crore from Delhi Metro Rail Corporation.

On 18 March 2008, Era Infrastructure bagged an order worth Rs 86.50 crore from Central Park Estates to construct a residential complex, to be completed by March 2010.

On 26 February 2008, the company in joint venture with Ukraine's KMB secured an order worth Rs 77.92 crore.

On 18 February 2008, the company's construction and contracts division secured an order worth Rs 115.12 crore for construction of CBI head office building at New Delhi

On 13 February 2008, the company won an order worth Rs 126.29 crore for structural work for new CRM complex of Steel Authority of India’s Bokaro steel plant at Jharkhand.

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.

Royal Orchid Hotels gains on acquisition

Royal Orchid Hotels rose 0.48% to Rs 94.30 at 15:04 IST on BSE after company acquired 50% stake in Goan realtor Cosmos Premises.

The stock hit a high of Rs 96 and a low of Rs 93 so far during the day. The stock had a 52-week high of Rs 225 on 11 June 2007 and a 52-week low of Rs 88 on 24 March 2008.

The company’s current equity is Rs 27.23 crore. Face value per share is Rs 10.

The current price of Rs 94.30 discounts its Q3 December 2007 annualized EPS of Rs 11.59, by a PE multiple of 8.13.

Royal Orchid Hotels’ net profit declined 7.3% to Rs 7.89 crore on 6.8% growth in net sales to Rs 21.61 crore in Q3 December 2007 over Q3 December 2006.

Cosmos Premises is owner of the property The Galaxy Resorts having 65 room beach resorts, situated in village Utorda in the state of Goa.

The company's principal activity is operation of hotels in India.

Kilburn Engineering spurts on new order win

Kilburn Engineering advanced 10.18% to Rs 46 at 12:57 IST on BSE after the company said it has received an order worth Rs 11 crore from GHCL for manufacture of calciner.

The stock hit a high of Rs 49.30 and a low of Rs 41.75 so far during the day. The stock had a 52-week high of Rs 80 on 20 August 2007 and a 52-week low of Rs 31.50 on 10 March 2008.

The company’s current equity is Rs 13.50 crore. Face value per share is Rs 10.

The current price of Rs 46 discounts its Q3 December 2007 annualized EPS of Rs 83.29, by a PE multiple of 0.55.

Kilburn Engineering’s net profit rose 2131% to Rs 28.11 crore on 58.8% growth in net sales to Rs 22.03 crore in Q3 December 2007 over Q3 December 2006.

With the latest order, the total order book of Kilburn Engineering stands at Rs 69.42 crore.

On 4 March 2008, Kilburn Engineering had secured total orders worth Rs 3.34 crore.

In December 2007, the company received letter of intent from Deepak Fertilizers & Petrochemicals Corporation for dryer, pre dryer & coating drums, aggregating Rs 10.05 crore.

The company's principal activity is to design, manufacture, supply and installation of various types of drying systems for chemical, petrochemicals, food, oil, gas and other industries.

Steel Strips Wheels gains on overseas contract

Steel Strips Wheels gained 2.31% to Rs 172.50 at 12:40 IST on BSE after the company said it has bagged an export order worth Rs 110 crore from Renault, France for supply of one million steel wheel rims over five years.

The stock hit a high of Rs 179 and a low of Rs 171 so far during the day. The stock had a 52-week high of Rs 256.25 on 2 January 2008 and a 52-week low of Rs 126.10 on 19 March 2008.

The company’s current equity is Rs 12.56 crore. Face value per share is Rs 10.

The current price of Rs 172.50 discounts its Q3 December 2007 annualized EPS of Rs 12.88, by a PE multiple of 13.39.

Steel Strips Wheels’ net profit rose 30% to Rs 3.64 crore on 33.3% growth in net sales to Rs 64.12 crore on Q3 December 2007 over Q3 December 2006.

Steel Strips Wheels expects its exports to grow over 200% in financial year (FY) 2008-09 and hopes to cross export of 4.25 lakh wheels rims in FY 2008-09.

In January 2008, the company bagged an export order worth Rs 75 crore from PSA Peugeot Citroen, France for supplying 13.75 lakh steel wheel rims.

On 18 December 2007, Steel Strips Wheels received an export order from PSA Peugeot Citroen, Europe for supplying 15,000 steel wheel rims.

On 28 November 2007, the company secured an export order for tractor wheel rims from Kubota, Japan, a globally renowned manufacturer of tractors.

The company is engaged in manufacturing wheel rims. The company caters largely to the two-wheeler industry.

Gujarat Gas in demand after gas procurement pact

Gujarat Gas Company gained 2.39% to Rs 239.85 at 12:16 IST on BSE after the company said it has signed a contract for supply of 2.13 million cubic metres of gas per day with GAIL (India).

The stock hit a high of Rs 244.75 and a low of Rs 238.50 so far during the day. The stock had a 52-week high of Rs 379 on 8 January 2008 and a 52-week low of Rs 215 on 24 March 2008.

The company’s current equity is Rs 12.83 crore. Face value per share is Rs 2.

The current price of Rs 239.85 discounts its Q4 December 2007 annualized EPS of Rs 24.20, by a PE multiple of 9.91.

Gujarat Gas Company’s net profit rose 112.9% to Rs 38.81 crore on 46.9% growth in net sales to Rs 344.46 crore in Q4 December 2007 over Q4 December 2006.

The gas supplies had started with immediate effect and the contract was valid up to 21 December 2019 or the expiry or termination of the joint venture's production sharing contract with the Indian government, Gujarat Gas Company said in a statement.

Gujarat Gas Company (GGCL) started operations in 1988 with the primary objective to procure, distribute and in every way utilize natural gas and allied technology.

Mahindra & Mahindra surge in sales

Mahindra & Mahindra rose 1.77% to Rs 661.80 at 12:13 IST on BSE after the company said on Tuesday, 1 April 2008, its vehicle sales rose 20% to 24,682 units in March 2008 over March 2007.

The stock hit a high of Rs 680 and a low of Rs 655 so far during the day. The stock had a 52-week high of Rs 872 on 1 January 2008 and a 52-week low of Rs 543 on 22 January 2008.

The company’s current equity is Rs 245.74 crore. Face value per share is Rs 10.

The current price of Rs 661.80 discounts its Q3 December 2007 annualized EPS of Rs 67.79, by a PE multiple of 9.76.

M&M’s net profit rose 67.6% to Rs 405.15 crore on 14.1% growth in net sales to Rs 2940.15 in Q3 December 2007 over Q3 December 2006.

Mahindra & Mahindra (M&M) said domestic auto sales, including utility vehicles, light commercial vehicles and three-wheelers, rose 17% to 23,128 units in March 2008 over March 2007. Exports more than doubled to 1,554 units from 754 units.

Mahindra & Mahindra (M&M)’s sales rose 30% to 2,31,355 vehicles, in the financial year to March 2008 over the financial year to March 2007.

M&M’s tractor sales rose 8% to 8,403 units in March 2008 over March 2007. Its tractor sales declined 4% to 98,710 units in the financial year to March 2008 over the financial year to March 2007.

The company is engaged in manufacturing and distributing automobiles and farm equipment.

Reliance Industries finds New gas

Reliance Industries rose 3.75% to Rs 2,433 at 11:23 IST on BSE after the company said on Tuesday, 1 April 2008, it had made second gas discovery in deepwater exploration block off the east coast in Krishna Basin.

The stock hit a high of Rs 2,455 and a low of Rs 2,400 so far during the day. The stock had a 52-week high of Rs 3,252.10 on 15 January 2008 and a 52-week low of Rs 1,305 on 2 April 2007.

The company’s current equity is Rs 1,453.65 crore. Face value per share is Rs 10.

The current price of Rs 2,433 discounts its Q3 December 2007 annualized EPS of Rs 222.26, by a PE multiple of 10.94.

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.

The potential commercial interest of the discovery is being ascertained through more data gathering and analysis, the company said in a statement. Reliance Industries (RIL) holds 90% participating interest (PI) and Hardy Exploration and Production India Inc holds 10% of PI in the block. RIL has made four discoveries, two in Krishna basin deep waters, one in shallow waters of Krishna basin and one in Mahanadi basin.

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.

Speciality Papers surges on setting record date for bonus issue

Speciality Papers was locked 5% upper limit of Rs 57.75 at 10:57 IST on BSE after the company set record date for a liberal 1:1 bonus issue.

The stock hit a high of Rs 57.75 and a low of Rs 57.75 so far during the day. The stock had a 52-week high of Rs 107.50 on 18 January 2008 and a 52-week low of Rs 26 on 3 April 2007.

The company’s current equity is Rs 3.84 crore. Face value per share is Rs 10.

The current price of Rs 57.75 discounts its Q3 December 2007 annualized EPS of Rs 5.73, by a PE multiple of 10.08.

Speciality Papers’ net profit rose 3.8% to Rs 0.55 crore on 1.6% growth in net sales to Rs 14.31 crore in Q3 December 2007 over Q3 December 2006.

Speciality Papers has fixed 16 April 2008 as the record date for a 1:1 bonus issue. The company announced the record date for bonus issue after trading hours on Tuesday, 1 April 2008.

On 7 March 2008, Speciality Papers bagged an export order worth $0.5 million in Latin America.

The company is engaged in manufacturing and selling paper and paper related products. The company’s products include tissue papers, hygiene products and printing and writing papers.

Post Market Commentary 2-April-08

Market fails to sustain higher level as heavyweights give up early gains

Strong cues from global markets had boosted domestic bourses earlier in the day. US stocks rallied on Tuesday, 1 April 2008, after Lehman Brothers said it raised $4 billion in an offering of convertible preferred shares, which soothed fears it was heading for a fate similar to that of Bear Stearns.

An early surge on the bourses proved short-lived as index heavyweights Reliance Industries, ICICI Bank and L&T, gave up initial gains. The Sensex, which had surged past 16,000 mark in early trade, fell below that level later. Nevertheless, the market breadth remained strong. 16 shares advanced from the 30-member Sensex pack.

Sensex settled 123.78 points or 0.79% higher at 15,750.40. Sensex gained 92.85 points at day’s low of 15,719.47 hit in late trade. Sensex opened with an upward gap of 396.68 points at 16,023.30 and advanced further to hit a high of 16,236.70 in early trade. At the day’s high, the Sensex rose 610.08 points. It oscillated in a band of 517.30 points in volatile trade

S&P CNX Nifty was up 14.65 points or 0.31% at 4,754.20.

The market breadth was strong on BSE: 1734 shares advanced as compared to 938 that declined. 50 shares remained unchanged.

The BSE Consumer Durables index (up 0.80% to 3,917.70), the BSE IT index (up 2.93% to 3,644.35), the BSE Auto (up 1.56% at 4,539.52), the BSE Bankex (up 2.34% at 7,822.56), the BSE Health Care index (up 0.82% at 3,862.83), the BSE TecK index (up 2.04% to 3,078.22), outperformed the Sensex

The BSE Metal index (down 2.15% to 13,516.89), the BSE FMCG index (down 0.79% at 2,318.80), the BSE Oil & Gas index (down 0.25% to 10,328.08), the BSE Realty index (up 0.46% at 7,501.17), the BSE Power (down 0.49% to 3,137.12), the BSE Capital Goods index (down 0.46% at 13,498.15), and the BSE PSU index (down 0.11% to 7,387.62), underperformed the Sensex

Reliance Petroleum Fund raising plan

Reliance Petroleum surged 7.26% to Rs 167.60 at 15:06 IST on BSE after the company said it has executed a facility agreement to raise $500 million for the refinery project at Jamnagar, Gujarat.

The stock hit a high of Rs 168 so far during the day. The stock had a 52-week high of Rs 277.55 on 2 January 2008 and a 52-week low of Rs 64.30 on 2 April 2007.

The company’s current equity is Rs 4500 crore. Face value per share is Rs 10.

Reliance Petroleum (RPL) was incorporated as a 100% subsidiary of Reliance Industries (RIL) in October 2005 to set up a grassroot petroleum refinery and polypropylene (PP) plant in the special economic zone (SEZ) at Jamnagar.

Cambridge Solutions gains on expansion plan

Cambridge Solutions gained 3.69% to Rs 37.90 at 13:01 IST on BSE after its its wholly owned subsidiary Cambridge Solutions Pte announced expansion of its Lenovo ThinkPad quality development and assurance business.

The stock hit a high of Rs 38.50 and a low of Rs 37.40 so far during the day. The stock had a 52-week high of Rs 146 on 23 May 2007 and a 52-week low of Rs 34.60 on 25 March 2008.

The company’s current equity is Rs 111.34 crore. Face value per share is Rs 10.

Cambridge Solutions Pte currently deploys a large team in Singapore and Japan to support Lenovo's ThinkPad initiatives and is now extending its operations to Kuala Lumpur with a plan to grow aggressively in the coming years.

Cambridge Solutions reported a net loss of Rs 1.65 crore in Q3 December 2007 as compared to net loss of Rs 2.35 crore in Q2 September 2007. Net sales rose 5.27% to Rs 45.17 crore in Q3 December 2007 over Q2 September 2007.

The company provides information technology and information technology (IT) enabled services. It operates through two segments, business process outsourcing (BPO) and IT.

Gujarat Apollo Industries in demand

Gujarat Apollo Industries rose 4.29% to Rs 184.80 at 12:40 IS on BSE after company further invested Rs 7.4 crore in Apollo Earthmovers to make it a subsidiary company as a part of consolidation of construction equipment business of the group.

The stock hit a high of Rs 187 and a low of Rs 173.65 so far during the day. The stock had a 52-week high of Rs 399 on 2 January 2008 and a 52-week low of Rs 111 on 2 April 2007.

The company’s current equity is Rs 10.5 crore. Face value per share is Rs 10.

The current price of Rs 184.80 discounts its Q3 December 2007 annualized EPS of Rs 20.27, by a PE multiple of 9.11.

Gujarat Apollo Industries net profit rose 10.8% to Rs 5.32 crore on 12.1% rise in sales to Rs 37.98 crore in Q3 December 2007 over Q3 December 2006.

This has increased Gujarat Apollo Industries (GAIL)' investment in Apollo Earthmovers (AEML) from Rs 5.9 crore as of 31 March 2007 to Rs 13.3 crore. Also, an investment of about Rs 1.2 crore has been made by the company in Apollo Construction Equipments (ACEPL). The company plans to make ACEPL as its subsidiary in FY 2008-09.

AEML was an original promoter company of GAIL and has been engaged in the manufacturing of construction equipment for state and rural roads. Apollo Industrial Products (AIPL) which is a wholly owned subsidiary of AEML also now comes under Gujarat Apollo Industries' fold. The consolidated revenue of AEML in FY 2007-08 is estimated to be Rs 80 crore which was Rs 52 crore during FY 2006-07.

Gujarat Apollo Industries is a leading manufacturer of road construction and maintenance machinery.

Sunil Hitech Engineers bagged New order from JSW Steel

Sunil Hitech Engineers surged 5.76% to Rs 203 at 12:25 IST on BSE after the company said it has bagged orders worth Rs 100.68 crore from JSW Steel for structural works.

The stock hit a high of Rs 207.80 and a low of Rs 194 so far during the day. The stock had a 52-week high of Rs 415 on 2 January 2008 and a 52-week low of Rs 72.50 on 2 April 2007.

The company’s current equity is Rs 12.28 crore. Face value per share is Rs 10. The current price of Rs 203 discounts its Q3 December 2007 annualized EPS of Rs 20.14, by a PE multiple of 10.08.

Sunil Hitech Engineers’ net profit rose 230.1% to Rs 5.05 crore on 120.6% growth in net sales to Rs 79.10 crore in Q3 December 2007 over Q3 December 2006.

Following these projects, the company’s unexecuted order book position has reached Rs 823.94 crore. These projects are to be executed within a period of 15 to 36 months.

Sunil Hitech specializes in fabrication, erection, testing & commissioning of thermal power plants, both in the private as well as the public sector.

Pratibha Industries wins New order

Pratibha Industries declined 1.78% to Rs 323.25 at 11:52 IST on BSE despite bagging an order worth Rs 37.03 crore from Sunshine Housing Development for construction of a commercial building Sunshine Towers at Dadar in Mumbai.

The stock hit a high of Rs 334.10 and a low of Rs 323.25 so far during the day. The stock had a 52-week high of Rs 469.80 on 2 January 2008 and a 52-week low of Rs 144 on 2 April 2007.

The company’s current equity is Rs 16.69 crore. Face value per share is Rs 10.

The current price of Rs 323.25 discounts its Q3 December 2007 annualized EPS of Rs 26.51, by a PE multiple of 12.19.

Pratibha Industries’ net profit rose 69.1% to Rs 11.06 crore on 81.3% growth in net sales to Rs 149.52 crore in Q3 December 2007 over Q3 December 2006.

The project involves construction of a commercial building of basement plus 41 floors in structural steel work. The project is to be executed within a period of 18 months.

On 5 March 2008, Pratibha Industries bagged an order worth Rs 53.81 crore from Municipal Corporation of Greater Mumbai for construction of 900 million litres a day capacity water pumping station at Bhandup.

The company is engaged in constructing buildings and infrastructure development projects. It designs and constructs integrated water transmission including treatment, re-cyclanation, storage and distribution projects, water treatment plants, elevated and underground reservoirs, mass housing including real estate projects, commercial complexes, precast design and construction and road construction services.

Torrent Cables gains plan for merger with group firm

Torrent Cables rose 0.83% to Rs 188.20 at 11:19 IST on BSE after it said on Monday its board would meet on 5 April 2008 to consider merging itself with Torrent Gujarat Biotech.

Torrent Gujarat Biotech hit 5% upper circuit at Rs 9.28.

The stock hit a high of Rs 199 and a low of Rs 185 so far during the day. The stock had a 52-week high of Rs 440 on 4 January 2008 and a 52-week low of Rs 143 on 3 April 2007.

The company’s current equity is Rs 7.50 crore. Face value per share is Rs 10.

The current price of Rs 188.20 discounts its Q3 December 2007 annualized EPS of Rs 34.44, by a PE multiple of 5.46.

Torrent Cables' net profit declined 8.3% to Rs 6.44 crore on 3.1% rise in net sales to Rs 49.15 crore in Q3 December 2007 over Q3 December 2006. The company declared its results on 12 January 2008.

Torrent Cables manufactures power cables and control cables. Torrent Gujarat Biotech is a producer of Penicillin drug.

Front line steel shares ease

Steel stocks were mixed on reports steel ministry plans a series of fresh initiatives to rein in surging steel prices.

Shree Precoated Steel (up 4.44% to Rs 188), Bhushan Steel (up 3.5% to Rs 686), Jindal Steel and Power (up 2.49% to Rs 2,124), JSW Steel (up 2.31% to Rs 838) edged higher.

Steel Authority of India (down 0.41% to Rs 184) and Tata Steel (down 1.18% to Rs 685) edged lower. Meanwhile, shares of iron ore miner and exporter Sesa Goa declined 2.25% to Rs 3,055.

The steel ministry has reportedly proposed a series of fresh initiatives like cutting duties in inputs like refractories, zinc and met coke; lowering excise duty on the product from present 14% to 8% curbing iron ore exports through higher export duty and introducing duty on steel exports and reducing rail transportation charges (for ore moved to ports) for iron ore. Reports add that the government is also actively considering reducing import duties on steel. Steel imports today carry an import duty of 5%.

POST CLOSING COMMENTARY 1-APR-08

Market settles slightly lower in choppy trade; turnover drops

As some arbitrageurs and jobbers stayed away from the market to protest change in tax treatment of the Securities Transaction Tax (STT) that came into force from today,

The change in tax treatment of securities transaction tax (STT) is seen raising cost for arbitrageurs, which in turn may result in fall in arbitrage volumes. STT will now be treated like any other deductible expenditure against business income of the assesses. This is against the earlier practice of 100% rebate for STT paid against the tax liability for the year.

low volumes saw share prices swing wildly on the first day of the new financial year FY 2009 (year ending March 2009). After opening on a firm note, market lost ground by early afternoon trade only to recover in mid-afternoon, led by recovery in index heavyweights Reliance Industries (RIL) and ICICI Bank. The market breadth was strong. 16 shares from the 30-member Sensex pack advanced.

BSE Sensex was down 17.82 points or 0.11% at 15,626.62. Sensex lost 342.59 points at day’s low of 15,301.85 touched in early afternoon trade. Sensex rose 189.61 points at day’s high of 15,834.05 hit in early trade. Sensex oscillated in a band of 532.20 points in volatile trade.

S&P CNX Nifty rose 5.05 points or 0.11% at 4,739.55.

As per provisional data, foreign funds sold shares worth a net Rs 638.86 crore today. Domestic funds sold shares worth a net Rs 289.56 crore.

The market breadth was strong: On BSE 1,722 shares advanced as compared to 924 that declined. 51 shares remained unchanged.

The market sentiment remains edgy as Indian companies are sitting on huge losses on account of the forex derivative transactions they undertook last 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.

The sharp rise in inflation has also been a cause of concern. Inflation has now risen above the Reserve Bank of India’s caution limit of 5%. India's wholesale price index surged to 13-month to 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, 28 March 2008.

Finance minister P Chidambaram yesterday, 31 March 2008 announced a slew of measures, in an attempt to rein in commodity prices. The measures include a total ban on non-basmati rice exports, a reduction in import duty on edible oils, allowing states to impose stock limits with traders, and also warning the steel lobby to hold the priceline.

Meanwhile the Reserve Bank of India’s governor in a statement on the same day said that he was ready to tackle unacceptably high inflation, underscoring the seriousness across government quarters on tackling the issue.