Monday, November 30, 2009

[Investors] Indian economy displays healthy growth in second quarter, GDP grows @ 7.9% in Q2FY2010

Economy: Indian economy displays healthy growth in second quarter

  • India?s gross domestic product (GDP) growth for Q2FY2010 came in at 7.9% year on year (yoy), well above the consensus estimate of 6.3% as well as the GDP growth of 6.1% yoy for the previous quarter. The sturdy growth seen in Q2FY2010 was fuelled by a strong growth momentum in the community, mining and manufacturing segments, which grew by 12.7%, 9.5% and 9.2% yoy respectively. The surge in the GDP growth rate followed by a steady rise in inflation will reiterate the government?s stance of phasing out the stimulus measures announced earlier.
  • India?s trade deficit in September 2009 came in at $7.8 billion, declining both on a year-on-year (y-o-y) as well as a sequential basis. On a y-o-y basis, the trade deficit fell by a sharp 49.4% whereas the sequential decline stood at 7.2%. Notably, the exports for the month contracted at a much slower pace, as the same dipped by 13.8% yoy, lower compared with the 19.4% decline seen in the previous month. Meanwhile, the imports contracted at a faster pace than exports registering a decline of 31.3%.
  • The Index of Industrial Production (IIP) for September 2009 registered a stellar growth of 9.1% yoy, far outperforming the estimate of 7% yoy. On a sequential basis, however, the IIP witnessed a decline from the 11% y-o-y growth seen in the previous month. This was on account of a dip in the core sector?s growth. The core sector?s growth accounts for ~27% of the IIP. From a use-based perspective, the growth in the capital goods segment continued its upward trend, registering a stellar growth of 12.8% vs the 8.7% rise seen during August 2009. The growth in consumer goods stood strong at 8.2% vs the 7.4% growth seen during the previous year, led by a stellar 22.2% y-o-y growth in the consumer durables segment, which made up for the muted growth of 2.6% seen in the consumer non-durables segment.
  • During the month, the government switched to using monthly inflation data for all commodities from the earlier system of reporting weekly price movements. For the month of October, inflation continued its upward march with the Wholesale Price Index (WPI), registering a growth of 1.34% from the year-ago period. Importantly, the pace of annual price increase more than doubled on a sequential basis from the 0.5% y-o-y increase seen in the month of September. 
  • Globally, the macro economic data continues to point towards signs of economic recovery, pushing central banks to ponder over the withdrawal of various stimulus measures announced earlier. Meanwhile, the emerging economies too are showing signs of recovery as indicated by the trend in their leading indicators. However, events such as the deferral in the repayment of debt by Dubai World have caused concerns relating to the global financial crisis to resurge.

Banking: Credit offtake fails to pick up

  • Against the backdrop of the high base effect of the last year (a 27.4% y-o-y growth during the year-ago period) and a lower credit offtake the credit (non-food) growth continued its downward trend and declined further to 10.3% yoy. Furthermore, the deposit growth too slipped marginally to 18.6% from 18.9% in the previous month. 
  • The credit-deposit (CD) ratio remained more or less stable at 68.4% (as on November 6, 2009), in line with that of the previous month. Meanwhile, the incremental CD ratio dipped marginally to 41% from 41.4% in the last month. 
  • The money supply (M3) growth as on November 6, 2009 moderated further to 17.8% as compared with 19.7% in the previous month.
  • The yields on the government securities (G-Secs; ten-year) stood at 7.17% as on November 26, 2009, down by 25 basis points from the previous month?s levels. The G-Sec yields for all maturities fell on a month-on-month (m-o-m) basis with five-year, three-year and two-year yields, falling by over ~40 basis points each, while one-year G-Sec yields declined by 14.5 basis points. 

Equity markets: Industry AUMs display healthy growth

  • During the month-till-date (MTD) period (November 01-26, 2009), the average daily volume expanded in the futures and options (F&O) segment but contracted in the cash segment. 
  • The growth momentum in the industry assets under management (AUMs) continued during October 2009, as the industry AUMs grew by a strong 76.7% yoy to Rs763,162 crore, significantly higher than the 40.6% y-o-y growth seen in the previous month. Importantly, on an m-o-m basis, the industry AUMs registered a growth of 2.6%.

Insurance: Industry growth back in the green

  • The annualised premium earnings (APE) for the life insurance industry increased by a healthy 35.7% yoy during October 2009 compared with a 6.1% decline registered in the previous month. The growth primarily stemmed from a 45% y-o-y increase in the APE for Life Insurance Corporation of India (LIC) while the private players also witnessed a healthy 29.6% y-o-y growth in their APE.
  • In October 2009, the gross premium underwritten for the general insurance industry grew by 16% yoy, higher than the 10.4% growth seen in the previous month. The public sector players posted a healthy growth of 13.4%, while the private sector players registered a growth of 19.8% yoy, higher than the growth seen for the public sector players during the month.

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[Investors] Tata Motors 2QFY10 Conso result update ; Mixed bag, Maintain SELL ; Target: Rs 415

Tata Motors Ltd.  

 

Mixed bag, Maintain SELL


SELL

 

CMP: Rs 630                            Target Price: Rs 415


Tata Motors' (TML) 2QFY10 consolidated results were mixed bag. While net sales and EBIDTA were in line with expectation, net profits were below expectation. JLR reported below expected EBIDTA (₤42 mn vs expectation of ₤51 mn), however, other subsidiaries adequately compensated for the same. JLR continues to capitalize ~₤100 mn pound of R&D spend per quarter. TML has provided for (in reserves) actuarial loss of Rs7.4 bn for JLR pension revaluations.

We expect JLR to remain FCF negative despite factoring in a strong turnaround in profitability. We expect JLR to report sales of ~167000 units and ~185000 units in FY10 and FY11 respectively. At the current juncture, we do not expect a strong recovery in the US/EU (for details refer to our note 'Tata Motors – Expecting too much too soon')

We continue to have concerns with respect to the balance sheet of the company (net D/E-ex financing business of 3x, ROCE of 11% despite a stronger ROE of 33%, P/B of 3.8x). Hence we are not comfortable giving a higher valuation multiple to stock. We continue to value the stock at discount to other automobile stocks.

We have valued TML standalone at target EV/EBIDTA multiple of the standalone business to 7x (20% discount to M&M). We have valued JLR at 5x EV/EBIDTA and other subsidiaries (ex TMFSL) at 20% discount to TML. We maintain our SELL rating on the stock with a target price of Rs 415 (upgraded by 4%).

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[Investors] LATEST IPO / NFO / FMP

                                                                      "IPO/NFO /FMPS/"

"ONGOING IPOs"

Sr. No

NAME OF ISSUE

OPENS ON

CLOSES ON

PRICE BAND

BID LOT

TOTAL SHARES

LEAD MANAGER/ SYNDICATE MEMBER

1

MBL INFRASTRUCTURLTD

27.11.2009

01.12.2009

165-180

35

57,00,000

MOTILAL OSWAL /ENAM

2

JSW ENERGY LTD

07.12.2009

09.12.2009

-

-

-

JM/KOTAK/ISEK/IDFC/JPMORGAN,

SBI

 

"ONGOING NFOs"

Sr. No

ONGOING NFOs

OPENS ON

CLOSES ON

TYPE

MIN AMOUNT

 

1

 

 

AXIS EQUITY FUND

 

11.11.2009

 

08.12.2009

 

OPEN ENDED

 

5,000

2

 

FIDELITY INDIA VALUE FUND

16.11.2009

15.12.2009

OPEN ENDED

5,000

3

 

 

DSP BR WORLD MINING FUND

23.11.2009

18.12.2009

OPEN ENDED

5,000

4

SUNDRAM SELECT THEMATIC FUNDS-PSU OPPORTUNITIES FUND

25.11.2009

23.12.2009

OPEN ENDED

5,000

 

 

   

                                                                 LATEST FMPS

 

Sr.No

      AMC

SCHEME

OPENING ON

CLOSING    ON

TENURE

MIN

AMOUNT

 

1

 

  RELIANCE

 

RELIANCE FIXED HORIZON             FUND -X11-SERIES-5

24.11.2009

30.11.2009

605 DAYS

5000

 

2

 

   TATA

 

 

TATA FMP Series25

21.11.2009

04.12.2009

18 Months

10000

 

 

 

 Aditya Kachru - Wealth Manager | Call @ 0-9818-26-9396 | Email @ investorspleaselisten@in.com

 

 

 

 

                                                                        

 

                                                                                             

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[Investors] Subscription figure for MBL Infrastructures Ltd - (Day 2) Overall – 0.45x @ 12PM

 

Please find here Subscription figure for MBL Infrastructures Ltd – (Day 2) – 12PM

 

QIB         – 0.68x

HNI        – 0.95x

RETAIL – 0.03x

EMPL    –0.10x

Overall – 0.45x

 

 

Total Application – 524 (Approx)

 

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Sunday, November 29, 2009

[Investors] Tata Steel - Consolidated 2QFY10 Result Update ; Results below estimates, downgrade to REDUCE ; Target: Rs 466


Tata Steel reported consolidated 2QFY10 results, which were below our estimates. Net sales stood at Rs253.9bn (yoy down 42.5%, qoq up 9%), EBITDA stood at Rs3.8bn (yoy down 95.5%, qoq loss of Rs299mn) and adjusted net loss stood at Rs17.9bn (yoy profit Rs50.3bn, qoq net loss Rs19.9bn). During the quarter, the company reported restructuring/impairment cost of Rs9.1bn. The average realization for Corus for 2QFY10 stood at USD894/t and average cost of production stood at USD990/t, implying a negative EBITDA of USD96/t (qoq –ve EBITDA of USD117/t). As per the management, 2HFY10 is expected to be better than 1HFY10 and expects Corus to be EBITDA neutral in 3QFY10 and to be EBITDA positive in 4QFY10. Corus has turned marginally EBITDA positive in Oct '09. However, we believe Corus will make EBITDA loss of Rs17.9bn for full year FY10. As per the management, the prices in Europe have continued declining trend; however they are currently stabilizing. At the same time, Corus is also taking various measures to reduce cost of production. In 1HFY10, the company has achieved cost savings of USD738mn through "Weathering the storm program". In 2QFY10, EBITDA of Corus was negatively impacted to the tune of USD170mn due to unabsorbed fixed cost of Teeside plant (TCP). As per the management, the worst for TCP is over and they have started signing contracts for selling the slab produced at a rate higher than the cost of production. Currently, Tata Steel has consolidated net debt of USD10.25bn. We expect company to report net loss of Rs14.6bn for FY10 on consolidated basis. At the CMP of Rs545, the stock is trading at 8.9x FY11E EPS of Rs61. On EV/EBITDA basis the stock is trading at 17.2x FY10E EV/EBITDA and at 6.9x FY11E EV/EBITDA; while on P/B basis, the stock is trading at 5.4x FY10E book value and at 3.7x FY11E book value. We are downgrading the stock from HOLD to REDUCE with revised target price of Rs466 (6.5x FY11E EV/EBITDA) (Previous target – Rs409).

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Thursday, November 26, 2009

[Investors] Tata Steel: report net sales of Rs236bn (yoy down 46.6%, qoq up 1.3%), EBITDA of Rs6.9bn (yoy down 91.6%, qoq loss of Rs299mn) and net loss of Rs12bn (yoy net profit Rs50.3bn, qoq net loss Rs19.9bn).


We expect Tata Steel (consolidated) to report net sales of Rs236bn (yoy down 46.6%, qoq up 1.3%), EBITDA of Rs6.9bn (yoy down 91.6%, qoq loss of Rs299mn) and net loss of Rs12bn (yoy net profit Rs50.3bn, qoq net loss Rs19.9bn). Key things to watch out for – company's outlook on volume growth, cost reduction and improvement in Corus performance.

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Wednesday, November 25, 2009

[Investors] Religare Tax Plan - an open-ended Equity Linked Savings Scheme (ELSS)

Religare Tax Plan - an open-ended Equity Linked Savings Scheme (ELSS) with a lock-in period of 3 years, seeks to generate long term capital growth from a diversified portfolio of predominantly equity and equity related securities. Its performance has been in the top quartile in the recent past. The scheme has generated a 1 year CAGR of 81.36% while the benchmark indices 'BSE 100' rose by 68.21% during the same period. The fund has outperformed its benchmark in 2 years, 1 year and 6 months tenure.

 

A few strengths & characteristics of ELSS:

 

  • Tax Saver Funds have a lock-in period of just 3 years – in comparison, theother tax saving instruments like NSC / Bank Fixed Deposits / PPF have aminimum lock-in period of 5 to 6 years.
  • The dividends which you receive for your investments in Tax Saver Funds are completely tax free in your hands.
  • Tax Free Profits - Currently, capital gains arising at the time of redemption are exempt from tax thus allowing you to keep more of what is yours.
  • Tax Exemption Twice in 6 Years – You can withdraw your tax saver funds at the end of 3 years and if you reinvest the same* , you get tax exemption twice in six years compared to just once in case of NSC.
  • Return Potential - Tax Saver Funds invest in equities; which despite the short term volatility have the potential to build wealth over the long term. As these funds have a 3 years lock-in, the fund manager tends to deploy majority of the assets in equity with a long-term perspective; thus having the potential to deliver superior returns over the long term.

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Tuesday, November 24, 2009

[Investors] MBL Infrastructures Ltd - IPO Price Band:Rs.165 to Rs.180, ssue Opens Nov27, 2009, focused on Highway Construction, Road Maintenance, Industrial Infrastructure Projects, Other Civil Engineering Projects and BOT Projects.

Issue Closes on:            December 1, 2009

 

Bid Lot:                         35 Equity Shares

 

Please find attached IPO Note of MBL Infrastructures Ltd



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Given below are the issue details.

 

Issue Opens on:            November 27, 2009

 

 

Price Band:                   Rs.165 to Rs.180

 

No. of Shares:               5,700,000 Shares

 

Issue size:                     Rs.94   - 103 cr

                                    

Issue highlights

l  MBL Infrastructures Ltd (MBL Infra) is primarily engaged in the construction and maintenance of Roads and Highways, industrial infrastructure projects and other civil engineering projects for various government bodies and other clients.

l  It provides integrated engineering, procurement and construction services for civil construction and infrastructure sector projects. 

l  MBL Infra is focused on Highway Construction, Road Maintenance, Industrial Infrastructure Projects, Other Civil Engineering Projects and BOT Projects.

l  MBL Infra intends to concentrate on projects where it believes there is high potential growth and where it enjoys a competitive advantage.

l  The company is able to undertake all the activities related to a BOT projects in-house- from tendering for the project to the collection of tolls. This helps to ensure the timely completion of projects reduces reliance on subcontractors and decreases cost. 

l  MBL Infra has developed a reputation of undertaking challenging infrastructure and construction projects and completing such projects in timely manner. The company intends to continue to focus on performance and project execution in order to maximize client satisfaction and margins.  

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[Investors] Latest IPO-NFO-FMP


"ONGOING IPOs"
Sr. NoNAME OF ISSUEOPENS ON CLOSES ONPRICE BANDBID LOTTOTAL SHARES LEAD MANAGER/ SYNDICATE MEMBER
1MBL INFRASTRUCTURLTD 27.11.200901.12.2009   165-18035 199,5000,00         MOTILAL OSWAL /ENAM
 
  "ONGOING NFOs"
Sr. NoONGOING NFOsOPENS ON CLOSES ONTYPEMIN AMOUNT
 
1
 
 
AXIS EQUITY FUND
 
    11.11.2009
 
     08.12.2009
 
OPEN ENDED
 
5,000
  
FIDELITY INDIA VALUE FUND
    16.11.2009     15.12.2009OPEN ENDED5,000
2 
DSP BR WORLD MINING FUND
    23.11.2009     18.12.2009OPEN ENDED5,000

 

LATEST FMPS 
Sr.NoAMC SCHEMEOPENING ONCLOSING  ONTENURE MIN AMOUNT
 
1
RELIANCE      
RELIANCE FIXED HORIZON FUND -X11-SERIES-5
24.11.200930.11.2009 605 DAYS5000
 
2
 
DWS           

DWS FIXED TERM FUND SERIES-66
13.11.2009 24.11.2009374 DAYS5000
 
3
 
TATA
 
TATA FMP Series25
21.11.2009 04.12.200918 Months10000
 
 
 
 

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