Strong Q4 GDP lifts bourses (Post Market Report:: 30.05.2008)

Falling global crude oil prices and strong Q4 GDP data kept market
up throughout the day. Power and oil & gas stocks tumbled.
Information technology stocks were in demand.

Crude oil was trading around $125 a barrel, nearly $5 lower than
its level on Thursday, 29 May 2008. It hit a record $135 last week.

European markets, which opened at Indian markets, were trading
firm. Key indices in UK, France and Germany were up by 0.21% to
0.49%. Asian markets were mostly in the green. Key indices in Hong
Kong, China, Japan, Singapore and South Korea were up by 0.59% to
1.52%. However, the key index in Taiwan was down 0.76%.

India's GDP grew a strong 8.8% in Q4 March 2008 from a year
earlier, led by strong expansion in the services sector, data
released by the government earlier in the day showed. The Q4 annual
GDP growth matched an upwardly revised 8.8% growth in Q3 December
2007. The GDP growth was 9% in FY 2008 (year ended March 2008). The
government had earlier estimated annual growth of 8.7% in FY 2008.

India's inflation based on the wholesale price index rose 8.1% in
12 months to 17 May 2008, the highest reading in more than 3-½
years and above the previous week's annual rise of 7.82%,
government data released today, 30 May 2008, afternoon showed.
Inflation for the week ended 22 March 2008 was revised upwards to
7.85% from 7%.

The 30-share BSE Sensex rose 99.31 points or 0.61% to 16,415.57.
The index climbed 224.23 points at day's high of 16,540.49, hit at
the onset of trading session. Sensex lost 1.27 points at the day's
low of 16,314.99, hit in afternoon trade.

The broader based S&P CNX Nifty rose 34.8 points or 0.72% at
4870.10. Nifty June 2008 futures were at 4848, a discount of 22.10
points against the spot closing.

The NSE's futures & options (F&O) segment turnover was at Rs
35,883.79 crore, lower than Rs 64758.96 crore on Thursday, 29 May
2008. BSE clocked a turnover of Rs 5478 crore in the cash segment
as against Rs 6,230.43 on Thursday, 29 May 2008.

The Securities & Exchange Board of India (Sebi) on Thursday, 29 May
2008, allowed sovereign wealth funds, university funds, endowments
and charitable trusts to register as foreign institutional
investors. (FIIs).

The government on Thursday, 29 May 2008, announced relaxation on
restriction imposed last year on external commercial borrowings
(ECBs). The limit on the amount that a company can borrow by way of
ECB and repatriate, has been raised to $50 million from $20
million. The government has allowed infrastructure firms to borrow
up to $100 million from abroad.

Derivative contracts for May 2008 series expired yesterday. As per
reports, rollover of Nifty positions from May 2008 series to June
2008 series stood at 66% as compared to 71% in the previous expiry.
Marketwide rollovers were 82% as compared 81% in the previous
series.

US markets advanced for a third straight day yesterday, 29 May
2008. The rally was led by strength in the financial sector and a
big decline in oil prices.The Dow Jones industrial average advanced
52.19 points, or 0.41%, to 12,646.22. The Standard & Poor's 500
index rose 7.42 points, or 0.53%, to 1,398.26, and the Nasdaq
composite index gained 21.62 points, or 0.87%, to 2,508.32.

The market breadth was weak on BSE with 1008 shares advancing as
compared to 1701 stocks that declined. 58 stocks remained
unchanged.

The BSE Mid-Cap index rose 0.28% to 6,760.54, while BSE Small-Cap
index fell 0.59% to 8,133.04. Both these indices underperformed the
Sensex.

India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries fell 2.63% at Rs 2401.65.

India's largest private sector bank by assets ICICI Bank was down
1.13% at Rs 788.30.

The top Sensex gainers were, Housing Development Finance
Corporation (up 5.59% at Rs 2569.15), Ranbaxy Laboratories (up
4.77% at Rs 528.65), Bharat Heavy Electricals (up 3.89% at Rs
1662.15), HDFC Bank (up 2.53% at Rs 1357.85).

India's largest engineering & construction firm by revenue Larsen &
Toubro soared 3.19% at Rs 2981.35. The company, on Thursday (29 May
2008) recommended a liberal 1:1 bonus issue and a total dividend of
Rs 17 per share for the year ended March 2008. The company reported
a 37.95% rise in net profit to Rs 966.76 crore on a 34.79% increase
in total income to Rs 8715.92 crore in Q4 March 2008 over Q4 March
2007.

The top Sensex losers were, Jaiprakash Associates (down 5.39% at Rs
213.20), Ambuja Cements (down 2.66% at Rs 95.20), Mahindra &
Mahindra (down 2.26% at Rs 592.50), State Bank of India (down 1.43%
at Rs 1443.35), and Reliance Infrastructure (down 1.25% at Rs
1230.75).

The BSE IT index outperformed the Sensex, gaining 2.11% at
4,643.79. Infosys Technologies (up 3.64% at Rs 1,957.55), TCS (up
3.41% at Rs 1,029.25), and HCL Technologies (up 0.92% at Rs
312.90), gained. However, Wipro (down 0.88% at Rs 508) and Satyam
Computer (down 0.485 at Rs 523.75), slipped.

The BSE Power index underperformed the Sensex, falling 3.69% at
2,936.24. Power Grid Corporation of India (down 3.48% at Rs 98.50),
GVK Power & Infrastructure (1.85% at Rs 47.75), Torrent Power (down
1.45% at Rs 115.50) and Tata Power (down 0.65% at Rs 1,356.65),
slipped.

Reliance Power traded ex-bonus on a bonus of 3:5 at Rs 235.85. The
record date for bonus issue is on Monday, 2 June 2008.

State-run oil firms, which were marginally up earlier in the day,
fell even as the Reserve Bank of India (RBI) raised banks'
borrowing limit to state-run refining companies to 25% keeping in
mind the current situation in the oil sector. The BSE Oil & Gas
index underperformed the Sensex, falling 1.65% at 10,396.85. HPCL
(down 1.94% at Rs 244.655), BPCL (down 0.33% at 357.70), declined.

Among the private sector oil firms, Essar Oil (down 2.78% at Rs
223.65), Reliance Petroleum (down 1.02% at Rs 174.55) and Cairn
India (down 0.64% at Rs 285.65), slipped.

AIA Engineering galloped 5.95% to Rs 1559.15 after the company
scheduled a board meet on 4 June 2008 to consider stock split
proposal.

Stock brokerage firm Geojit Financial Services vaulted 4.09% to Rs
56.05 on reports the Reserve Bank of India has cleared French bank
BNP Paribas' open offer for Geojit Financial Services shareholders.

Steel products maker Sujana Metal Products surged 4.42% to Rs 24.80
after the company announced the acquisition of three steel units
with an investment of Rs 180 crore.

Pharmaceuticals firm Cadila Healthcare gained 1.35% to Rs 295.50
after the company said it has acquired 100% stake in Laboratories
Combix, a Spanish pharmaceutical company, for an undisclosed
amount.

Real estate developer Sobha Developers gained 2% to Rs 498.85 after
posting 13.23% rise in net profit to Rs 228.3 crore on 32.77%
increase in total income to Rs 476.50 crore in Q4 March 2008 over
Q4 March 2007.

Tamil Nadu Newsprint & Papers rose 1.11% to Rs 100.10 after posting
26.1% rise in net profit to Rs 27.38 crore on 10.9% increase in net
sales to Rs 250.22 crore in Q4 March 2008 over Q4 March 2007.

Among the side counters, Spice Communication (up 10% at Rs 59.65),
Bhushan Steel (up 8.67% at Rs 909.15), Hindustan Construction
Company (up 7.25% at Rs 119.10) and Sintex Industries (up 7.06% at
Rs 418.55) and Sun TV Network (up 6.81% at Rs 354.35), soared.

Indian Overseas Bank (down 5.93% at Rs 115.75), Adani Enterprise
(down 5.79% at Rs 794.05), Indiabulls Financial Services (down
5.56% at Rs 367.15), and Dish TV (down 5.50% at Rs 46.40), lost
ground.

Reliance Power clocked a highest turover of Rs 354.21 crore on BSE.
Reliance Industries (Rs 290.11 crore), larsen & Toubro (Rs 224.07
crore), Piramal Life Sciences (Rs 169.61 crore) and IFCI (Rs 166.31
crore), were the other turnover toppers on BSE in that order.

IFCI reported a highest volume of 2.62 crore shares on BSE.
Reliance Power (1.44 crore shares), Spice Communication (1.35 crore
shares), Ispat Industries (1.20 crore shares) and Reliance Natural
Resources (88.22 lakh shares), were the other volume toppers on BSE
in that order.

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Sharekhan Investor's Eye dated May 28, 2008

Investor's Eye [May 28, 2008] Please see the attachment for details Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE Crompton Greaves Cluster: Apple Green Recommendation: Buy Price target: Rs367 Current market price: Rs230 Strong operating performance Result highlights In Q4FY2008, Crompton Greaves Ltd (CGL) reported a revenue growth of 17.1% in its standalone revenues on the back of a robust 27.3% growth in the revenues of the consumer products business. The operating profit of the company grew by 36.9% to Rs156.6 crore, while the operating profit margin (OPM) improved by 200 basis points year on year (yoy) to 13.5%. The net profit grew by 47.4% to Rs103.1 crore. On a consolidated basis, for FY2008 the CGL group reported an increase of 21.2% in the revenues, while the operating profit increased by 54.1% to Rs743.9 crore. Led by strong operating performance by Pauwels, the OPM on a consolidated basis improved by 230 basis points for the full year. The profit after tax (PAT) grew by 44.4% to Rs406.7 crore. The current order book the company stood at Rs5,120 crore of which Rs2,128 crore worth of orders are for the standalone entity, while the balance orders forms part of international subsidiaries. The management expects a strong order inflow for FY2009.  The management has guided for a 20% growth in FY2009 in both its domestic and international subsidiaries. We expect CGL's revenue to grow a compounded annual growth rate (CAGR) of 20.4%, while the profits are expected to grow at a CAGR of 26.7% over FY2008-10E.  Against the backdrop of a steep increase in commodity prices, the margins of the standalone entity are expected to remain under pressure during FY2009. We have factored the same in our estimates and have revised out FY2009 estimates downwards by 4.1% to Rs13.8 and FY2010 by 2.1% to Rs18 per share. The power transmission & distribution (T&D) space is expected to witness a strong order inflow and revenue growth over the next five years given the emphasis on power generation and T&D in the Eleventh Five Year Plan (2007-12). In our opinion, CGL, a key integrated player in the space with proven track record is all set to witness a robust growth, going forward.  At the current market price the stock is trading at 16.6x and 12.8x FY2009E and FY2010E earnings. We believe the current valuations of the stock are extremely attractive and recommend a Buy on the stock with a price target of Rs367. Mahindra & Mahindra Cluster: Apple Green Recommendation: Buy Price target: Rs900 Current market price: Rs641 Q4FY2008 results: First-cut analysis Result highlights The Q4FY2008 results of Mahindra & Mahindra are a little lower than expectations due to higher than anticipated tax expenses. The net sales grew by 14.6% to Rs3,148.2 crore and were higher than our estimate due to a stronger performance of both the business divisions, automotive and farm equipment. The operating profit margin declined by 50 basis points year on year (yoy) and by 40 basis points sequentially to 10.9%, as the operating profit grew by 9.2% to Rs342.4 crore. Looking at the segmentals, the automotive revenues grew by 16% to Rs2,077.9 crore while the profit before interest and tax (PBIT) margin of this division remained almost flat yoy at 10%. The revenues of the farm equipment division grew by 9% while its margin improved by 270 basis points yoy and by 70 basis points sequentially to 14.5%.   Tata Motors Cluster: Apple Green Recommendation: Buy Price target: Under review Current market price: Rs634 Q4FY2008 results: First-cut analysis Result highlights Tata Motors' performance for Q4FY2008 was in line with our expectation. The net sales for the quarter grew by 6.2% to Rs8,749.5 crore on the back of a 2.3% growth in volumes and a 3.8% growth in realisation. Higher raw material costs adversely affected the operating profit margin of the company, which was down by 410 basis points to 7.6%. However adjusting for the foreign exchange gain/loss, the OPM stood at 9.1% as against 11.4% for the same quarter last year.  Higher other income, lower interest costs and stable depreciation charge led to a 7% drop in the reported net profit for the quarter to Rs536.3 crore. After accounting for the profit on the sale of shares in HV Axles of Rs73.8 crore, the adjusted net profit for the quarter declined by 19.8% to Rs462.5 crore.  Looking at full-year numbers, the net revenue grew by 4.6% to Rs28,730 crore led by a 3.6% realisation growth, while the profit grew by 6% to Rs2,028.9 crore. Looking at the consolidated numbers, the net sales grew by 10.2% to Rs35,651.5 crore and the adjusted net profit remained more or less flat at Rs2,234.8 crore, growing by only 1.4%.  In order to fund its Jaguar Land Rover acquisition, the company is also looking to raise Rs7,200 crore through three rights issues of the following securities: a) Rights issue of equity shares up to Rs2,200 crore; b) Rights issue of 'A' equity shares carrying differential voting rights (1 vote for every 10 'A' equity shares) up to Rs2,000 crore; c) Rights issue of five-year 0.5% convertible preference shares (CCPs) up to Rs3,000 crore, optionally convertible into 'A' equity shares after three years but before five years from the date of allotment. Further, on completion of the rights issues, the company has proposed to raise about $500/$600 million through an appropriate issue of securities in the foreign markets on terms to be decided at the time of issuance. The outlook for commercial vehicle industry remains weak, considering high interest rates and lower availability of finance in view of rising delinquencies.  At the current levels, the stock trades at 12.9x its FY2009E consolidated earnings and is available at an enterprise value (EV)/earnings before interest, depreciation, tax, and amortisation (EBIDTA) of 6.6x. We would come out with our detailed result note soon while our target price on the stock is under review.   ITC Cluster: Apple Green Recommendation: Buy Price target: Rs247 Current market price: Rs222 Smokers to pay more As was expected, ITC has increased the prices of select brands in its cigarette portfolio. It has raised the price of its Classic brand cigarettes by 10% to Rs88 for a pack of 20 cigarettes and that of Gold Flake Kings by 5.3% or Rs2 to Rs40 for a pack of 10 cigarettes. These 84mm cigarettes fall under the Kings category and contribute ~10% to ITC's total cigarette sales volume. We had factored in an overall hike of 7% for the category in our estimates. We expect ITC to follow this up with a hike in the prices of longs category (71-75mm) cigarettes in the near future. SECTOR UPDATE Cement Government partially eases export ban The government has partially relaxed the ban on cement exports that was imposed on April 11, 2008. According to a notification by the Directorate General of Foreign Trade, the government has allowed 2 million metric tonne of cement to be exported from Gujarat. This is a positive development for cement manufacturers in Gujarat as the region was already experiencing a slowdown in demand. The demand slowdown would have worsened during the monsoons, forcing the manufacturers to either cut down on production or sell cement at lower prices.

Regards, The Sharekhan Research Team myaccount@sharekhan.com

 

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Entering the stock market? Be warned

 

Source: http://www.rediff.com/money/2008/may/29trans.htm

The market on Wednesday witnessed short covering a day before F&O expiry tomorrow.

Taking a cue from the Asian markets, the Sensex opened flat today. In a day when volatility ruled supreme, the Sensex swayed between the positive and negative.

What strategy should you adopt? Which sectors look promising? Which stocks to buy, sell and hold?

In a chat on rediff.com on Wednesday, stock market expert Pranav Sanghavi, director, Jitendra Harjivandas Securities (P) Ltd, replied to many such readers' queries. Here is the transcript:

PRANAV SANGHAVI says, Hello and good afternoon to all. Welcome to the chat and let's begin.

---

hiformVIz asked, Hi Pranav Good afternoon, please tell me your view on DLF,GMRinfra,IndianBank,IndionOil,AurobindoPharma,UcoBank,VijayBAnk, I am keep on averaging but these stocks going down day by day,I have following stocks:andrabank, ashokley,aurbindopharma,balrampur chini,dlf,gmrinfra,hindalco,indianoil,indianbank,ispat,ITC,JP associt ,L&T,nagfertilize,,NTPC,,Powergri,rel natural,rel patrolem,rel power,seimens,uco bank,vijaybank.Please suggest me which stocks to sell ,which stocks to avrg or buy.
PRANAV SANGHAVI answers,  at 2008-05-28 16:09:20You have mentioned a lot of stocks. I would hold on to most of the stocks that you have mentioned. In the short term the markets still look weak. A couple of stocks like Indian Oil [Get Quote], RNRL and RPL could be churned.

---

riyas asked, Hi Pranav,Is it wise to buy Bhushan Steel [Get Quote] shares at current price. Which steel share is good for 1 to 2 years outlook among Tata steel [Get Quote], JSW steel [Get Quote], Jindal saw [Get Quote], SAIL [Get Quote] and bhushan steel. Bhushan 52 week high price is Rs.1730.
PRANAV SANGHAVI answers, I would rater look at TISCO, JSW and SAIL.

---

Ritesh asked, I have thermax of Rs.460, and Andhra Cement of Rs. 25. Can I Hold this ?
PRANAV SANGHAVI answers, You could hold on to them fo 6 to 12 months.

---

Shakti asked, Hi, I have invested in REL POWER with 100 shares. What should be the strategy now? old or sell?
PRANAV SANGHAVI answers, You would have to hold on for 2-3 years to see any material benefit. I don't think the stock would see new highs very soon. You could switch to say a NTPC or Tata Power [Get Quote] but get in to these stocks also at lower levels.

---

kaake asked, WHAT DO YOU THINK PRICE OF RPL AND RNRL BY DEC 2009.
PRANAV SANGHAVI answers, By Decembe 2009 RPL should have appreceiated substantially from it's current levels. RNRL would only depend on the outcome of the court battle with RIL [Get Quote] for the gas fields.

---

sameer asked, What is your take on hindustan zinc, Kotak mahindra bank [Get Quote], Guj. Minerals and Adlabs [Get Quote]. Does these company have lot of potential to do better in the future? Shall i buy these stocks at current prices and hold it for 1 year outlook. Thanks
PRANAV SANGHAVI answers, Hind Zinc and GUj Min are cyclical metal commodity stocks so you will see a lot of price swings over a one year time frame. Kotak had an extremely high exposure to the capital markets and even RBI had asked them to prune their exposure. So this current quarter results will give more insight in to how they will fare over the next year.

---

IAMSUNIL asked, hI PRANAV, Your take on BHEL & SBI [Get Quote] if one wants to purchase at this level
PRANAV SANGHAVI answers, I would wait for a mild correction ad dips to get in to the stocks. I would surely look at them with a 1 year outlook.

---

jkl asked, view on jmc projects, GMDC, Saamya Biotech, Jetking
PRANAV SANGHAVI answers, GMDC could be looked at. Jetking is one of the leading training institutes spread accross India. That stock could be looked at on corretions.

---

sameer asked, Is there any bad news about IDBI as the share prices have fallen deeply recently.? Thanks
PRANAV SANGHAVI answers, The hgher interst costs, the higher consumer price index and probable lower corporate performance is being perceived as potential higher NPA's in the future and also thebanks profitability ould be hit if there is a low credit off take.

---

ravs asked, I want to invest 50k in stock for short tesrm. pls suggest right stock to invest
PRANAV SANGHAVI answers, When the market corrects you could look at stocks like RIL , SBI & L&T.

---

RamDongre asked, Should I buy LIC [Get Quote] Housing,Crompton at this level ?
PRANAV SANGHAVI answers, With the property markets expected to slump byt 10 to 20%, plus high nterest rates makes it a tough proposition for housing financ companies. Crompton could surely be lookd at with a 6 to 12 month outlook.

---

mnb asked, I had bought NTPC at 216.00. It is around 180.00 at present. Should I hold on ?
PRANAV SANGHAVI answers, I would look at buying more at these levels.

---

Phil asked, Hi Pranav,Can we hold onto SAIL and Gujarat Ambuja [Get Quote] in the current scenario.
PRANAV SANGHAVI answers, Yes you could. The Government has just relaxed the export norms and the major beneficiary should be Guj Ambjua due to its location in Gujarat. I would surely hold on. SAIL also can be held on.

---

jai asked, Hi pranav, When buying shares, how the 52 week high and low price value significant. Thanks.
PRANAV SANGHAVI answers, It gives you an idea what level are you buying in to the stock at its yearly low or high.

---

Sunitha asked, Good Evening. I hold 500 shares of IFCI @65.What will be target of IFCI in a week. Shall i hold for better returns or exit with min.losses?
PRANAV SANGHAVI answers, I would switch the stock once I see marginal profit. You could minimize your losses and switch to a better stock.

---

Manish asked, Please inform your views on Brokerage firms Geojit, India Infoline [Get Quote] and Edelweissis. ALso, Is it right time to enter Gujrat Ambuja Cement [Get Quote] for long term ?
PRANAV SANGHAVI answers, The brokerage firms may have seen their worst quarter in the past couple of yars. So I would wiat for the quarter ended March 2008 to take a call. The volumes have also fallen drastically so their profitability will be affected. Companies like Edelweiss may balanc their income through other activitie like Investment Banking and Merchant Banking. Yes you could look at Guj Ambuja Cement wth along termoutlook too.

---

KUMAR asked, Whichsectors look promising? Which stocks to buy, sell and hold?
PRANAV SANGHAVI answers, With the dollar appreciating steadily against the Ruppee that sector could be looked at but with a short term outlook till the dollar appreciation continues. You could also look at cement and engineering stocks.

---

atufa asked, i have 220 ntpc@186,54 ongc@920 & 60 bhel@1620,when can get decent profit,atleast 15-20 %
PRANAV SANGHAVI answers, You would have to hold on for 6 to 9 months.

---

Gnan asked, Holding 100 nos of Powergrid @ Rs. 135 and 50 nos of RPL @ Rs. 215. when do u see the stocks reach above these levels with the present market conditions????
PRANAV SANGHAVI answers, t would surely be some time before you see those prices.

---

bhatkuly asked, what about sesa goa prospects
PRANAV SANGHAVI answers, I have liked the stock for some time. I would hold on to take benefit of the bonus. I think the stock will only rise post bonus too.

---

Pavan asked, I have MTNL [Get Quote] and IDBI is it ok if i hold onto them..
PRANAV SANGHAVI answers, Both could remain underperformers in this market scenario.

---

Balaji asked, HCL [Get Quote] Tech bought at Rs. 270/- should I sell or hold - what price it can reach in 3-6 months
PRANAV SANGHAVI answers, You could surely hold on to HCL with 3 to 6 month outlook.

---

gopi asked, when nifty crosses 5300 plus
PRANAV SANGHAVI answers, It looks difficult in the near term. THe Nify may take a downward turn once it breaches the 5100 range.

---

Chanakya asked, What is your view on ITC ?
PRANAV SANGHAVI answers, ITC is a fundamentally strong stock. Even in the Jan and Mar crash ITC did not correct in correlation to the market. It has shownsome good delivery based buying from institutions and I would surely hold on to the stock.

---

Haridas asked, Good Afternoon sir, I have 2 Shares of MMTC @29,000/-, Shall I want to hold it
PRANAV SANGHAVI answers, Yes wait for the bonus and split. I think the stock will move us subsequently.

---

GAURAV DOSHI asked, NTPC SHOULD BE BOUGHT OR NOT AND IF YES TILL WHEN IT SHOULD BE HOLD?
PRANAV SANGHAVI answers, Yes you could surley buy NTC on every dip and you could hold on for 6 to 12 months.

---

GANGAL asked, PL ADVICE ON ACC, INFOSYS [Get Quote] , SBI, GE SHIPPING ,HOTEL LEELA,RELIANCE INFRA ,BHEL,SAIL,RNRL. POWER GRID .
PRANAV SANGHAVI answers, HOld on to all the stocks you mention barring may be RNRL and Rel Infra.

---

Ganesh asked, How about oswal chemical and fert ? Is it good level to buy ?
PRANAV SANGHAVI answers, In the current market scenario I would probably not.

---

Chanakya asked, I have invested in City Union Bank [Get Quote] and Karnataka Bank [Get Quote]. At what rate can I buy more ?
PRANAV SANGHAVI answers,  You would have to wait for a 6 to 12 month period to see gains. You could buy more if the price corrects by another 4-5%.

---

aditya12 asked, I have United spirits [Get Quote] 200 shares. WIll it reach 2000 again in next 6 months ?
PRANAV SANGHAVI answers, You could see that price in9 to 12 months.

---

Chanakya asked, Mr. Pranav are you there. We are waiting for you to come online.
PRANAV SANGHAVI answers, Yes very much here and answering your queries.

---

GAURAV DOSHI asked, WHEN NTPC WILL CROSS 220?
PRANAV SANGHAVI answers, If you take a longer term view then yes it should.

---

kishor asked, are realty stocks worth buying at this time for period of one year or more?
PRANAV SANGHAVI answers, I would wiat for them to correct further as there is a general feel in the markets that the property markets may correct by 10to 20% in about 9 months period.

---

ASHISH asked, HMT LTD [Get Quote]. BOUGHT @86RS. SHOULD I SELL OR HOLD
PRANAV SANGHAVI answers, Hold.

---

rrrr asked, what is your outlook about idfc and chambal fertiliser?
PRANAV SANGHAVI answers, I like IDFC [Get Quote] as a stock. It is fundamentally strong and has performed well over the past fw years. Chambal also shoudl benefit form the governmet subsidies for the frtilizer sector.

---

ASHISH asked, Hiiii
PRANAV SANGHAVI answers, Hi Ashish and what is your query?

---

satish asked, hi pranav ihave invested in L&T POWER GRID RIL RPL ALOCK ICICI HDIL PFC RELINCE POWER ITC ICAN HOLD THE STOCK FOR 5 YEARS THANKS
PRANAV SANGHAVI answers, I think you have made a good choice of stocks. Over five years you should see agood profits on your investments.

---

Reddy asked, Hi, I bought Reliance Capital [Get Quote] on 1210 RS and IDFC on 151 RS can I hold or sell?
PRANAV SANGHAVI answers, You could hold on to both with a 6 to 12 month outlook though.

---

MPRAO asked, Hello sir iam planning to invest in alok industries for future as a invesment long term can you advise me whether this company is good for long term and you can specify any good companies for investment
PRANAV SANGHAVI answers, I would like to know wh have you chosen Alok Ind from all the other blue chip stocks available in the market?

---

hiformVIz asked, Can buy grasim,SBI,BHEL ,Rel Ind at current levels
PRANAV SANGHAVI answers, Yes you could but I would wait for a minor correction before I get in.

---

Chanakya asked, Can you recommend other good diversified stocks like ITC ?
PRANAV SANGHAVI answers, You could look at HUL, Nestle [Get Quote] from the FMCG segments and Indian Hotels from the hotel sector.

---

qurious asked, should i hold Gujrat NRE coke? i bought it at 162, 200 shares
PRANAV SANGHAVI answers, You can surely hold on but witha 6 to 12 month outlook.

---

Shailendra asked, Hi Pranav, I have brought 5000 shares of Chemplast Sanmar [Get Quote] at 22.25. Today it has a rate between 9-10 Rs. What is the future of Chemplast Sanmar?
PRANAV SANGHAVI answers, I don't follow that stock so I wouldn't be able to help you sorry.

---

sivaram asked, Hi Pranav, I have Rel Pet 800@160, Panacea Biotech 100@297.1, Dishman [Get Quote] Pharmacetical 100@286, Teledata Info 1000@16.8, ICICI Bank [Get Quote] 50@840, Yes bank [Get Quote] 480@204.38, NTPC 200@189.5, Power Grid 350@93.1, Suzlon [Get Quote] 100@291, Idea Celluear 200@97.5, GMR Infra 400@137.4, SAIL 100@163.4, Indian Hotels 200@110.5, L&T 50@2794.5, Jain Irrigation 25@590 and Zee Entertainment 200@243. Please advice which to hold and which to sell? Thanks
PRANAV SANGHAVI answers, You have mentioned too many stocks for me to reply within a minute. I would hold most of the stocks you have mentioned as your rates are pretty low.

---

Chanakya asked, Should I buy/sell or hold Ballarpur Industries [Get Quote] ?
PRANAV SANGHAVI answers, It is one of the largest paper players in the country. I would hold on to the stock.

---

Ganesan asked, What are the future prospects of Hdfc [Get Quote],hdfc bank and Thermax?
PRANAV SANGHAVI answers, I like both HDFC and HDFC Bank. But with the high interest rates both the housing finance and banking stocks are being hammered over the past couple of weeks. They have lost nearly 15 to 25% off their price.

---

Chanakya asked, Hi Pranav Do you think the oil rally will put speed breakers on our stock market ?
PRANAV SANGHAVI answers, Its not only the Oil rally but the high infltion numbers, potential slow down of profitability of the corporates which is scaring the markets right now.

---

kkp asked, WANT TO BUY DLF & ICICI BANK TELL ME SCOPE
PRANAV SANGHAVI answers, I would wait for a minor corrction to get in.

---

PranavSanghavi asked, ADLABS is a tremendous buy opportunity at CMP.
PRANAV SANGHAVI answers, Adlabs has corrected nearly 50% off its highs. I think the stock will take a very long time to reach it's previous highs. You could look at the stock witha 6 to 12 month outlook.

---

Chinku asked, Pranav what is your take on the current market levels - is it a good time to invest ?
PRANAV SANGHAVI answers, Wait for a minor dip before making investments.

---

suresh123 asked, Sir i am holdinh HCC @144, NTPC@195 & IDFC @ 160, Yes bank @187 & Canara bank [Get Quote] @ 275 levels... what is your views on these in shrttermm.. when can i expect atleast a break even????
PRANAV SANGHAVI answers, You would have to hold on for atleast 6 months to see some profits.

---

ranjita asked, I have ABB @1350/- Bhel @2200/- L& T @3500/-Bharat Forge @335/-Spanco Tele @245/-&NTPC@210/-What to should I average or Book Loss & enter at lower level
PRANAV SANGHAVI answers, You could average ABB, BHEL, L&T and NTPC at lower levels.

---

ManishS asked,  hi.. I would like to know the future of RPL. I have purchased 200 shares of RPL @ 250. I can hold the stock for 6-8moneths. thanks
PRANAV SANGHAVI answers, RPL will only tart moving when its commercial production begins or is soon to begin. Once that happens the stock will see an upward movemen again.

---

sachinkw asked, Hi Pranava, I have reliance power 60@350 should I sell them now or wait for bonus? Thanks Sachin
PRANAV SANGHAVI answers, Wait for the bns so your cost is lowered. You could then look to switch to anther stock.

---

Kris asked, How is the outlook for GMDC, GVK, GMR, Mundra & FirstSource?
PRANAV SANGHAVI answers, Firstsource is one of the largest players in the outsourcing market and with the dollar appreciating it will only benefit them positively. GMR is a long term infrastructure bet.

---

prav_001 asked, I have BHEL at 1690. Whats ur say?
PRANAV SANGHAVI answers, I would dive in to the stock between 1350 and 1450 levels.

---

sunilkrsehgal asked, what is the future of teledata informatics?
PRANAV SANGHAVI answers, Some months back they had applied to the high courts for a demerger scheme. Each shareholder would get 1 shre of 3 to 4 new companies each against each share held of Teledata. I have not rechecked on the company but one should wait to receive the free shares before taking a call on the stock.

---

PRANAV SANGHAVI says, Well it hs been great chatting with you all. Hope to see you next week. Bye for now.

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Summary only...

Sharekhan Investor's Eye dated February 06, 2008

Ratnamani Metals and Tubes
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,440
Current market price: Rs1,070

Steady growth momentum

Result highlights

For Q3FY2008, Ratnamani Metals and Tubes Ltd (RMTL) reported a growth
of 14.3% year on year (yoy) in the net sales to Rs214.4 crore. The net
sales were however marginally below our expectation.
The operating profit grew by 13.9% to Rs48.1 crore and the operating
profit margin (OPM) remained flat at 22.5%. The OPM remained flat on
the back of stable raw material prices and improved operational
efficiency.
The other income showed a steep increase on a year-on-year (y-o-y)
basis and came in at Rs3.3 crore. The increase in other income is
attributed to the foreign exchange (forex) gain.
The interest cost was up 28.1% to Rs4.4 crore, while the depreciation
charge jumped by 85.9% to Rs6.2 crore.
The net profit increased by 25.7% to Rs27.3 crore inline with our
expectation of Rs28.5 crore.
The order book stood at Rs532 crore executable over the next six-month
period. Orders worth Rs132 crore came in from direct exports.

Canara Bank
Cluster: Apple Green
Recommendation: Hold
Price target: Rs315
Current market price: Rs308

Margins continue to remain under pressure

Result highlights

Canara Bank reported a profit after tax (PAT) growth of 26.4% year on
year (yoy) to Rs458.8 crore. The PAT growth was mainly due to a 92.4%
year-on-year (y-o-y) jump in the non-interest income driven by higher
treasury profits. The core-operating performance was however
disappointing with the net interest income (NII) down by 10% (which is
a slight improvement over Q2FY2008, when it was down 19.8% yoy).
The NII was down by 10% yoy, but up 18.7% quarter on quarter (qoq) to
Rs934.4 crore. Canara Bank is perhaps the only public sector bank
(PSB), which reported a y-o-y decline in its NII. The calculated net
interest margin (NIM) for Q3FY2008 stood at 2.2%, down 63 basis points
yoy from 2.83% for the year ago period. The significant y-o-y
contraction in the NIM was mainly due to the higher cost of funds
offsetting the yield improvement.
However, the reported non-interest income increased by a whopping
92.4% yoy though down 4.5% qoq to Rs554.6 crore. The rise in the
non-interest income was mainly from higher treasury income and cash
recoveries.
The operating expenses grew by 13.5%, as the bank has not yet provided
for the revised AS-15 transitional liability expenses. Hence the AS-15
related costs are likely to keep the operating costs high in Q4FY2008.
Overall the operating performance remained weak with the operating
profit up by only 10.5% yoy to Rs757.8 crore.
The business growth moderated with the advances up by 8.7% yoy
compared with 24% for FY2007. The deposit growth was also moderate at
9.4%. The management has put in place a strategy of repaying the
high-cost deposits and reducing the low-yield advances.
Asset quality levels showed some marginal improvement with the gross
non-performing assets (GNPA) in percentage terms down by 12 basis
points to 1.54% sequentially (and down from 2.06% in December 2007).
The net NPA (NNPA) were down by 10 basis points to 0.89% sequentially
(and down from 0.96% in December 2006). The coverage ratio of the bank
continued to remain low at 42.8%.
The core operating performance of the bank was disappointing during
Q3FY2008 with pressure on NIM and slowdown in the growth of deposits
and advances. However the directors have put in place a strategy of
repaying the high-cost deposits and reducing the low-yield advances.
This strategy is likely to show results after a few quarters. The
pressure on NIM is also likely to continue for a couple of quarters
before the same stabilises. The operating expenses are likely be back
ended, as the bank is expected to provide for the revised AS-15
transitional expenses during FY2008, which would restrict the earnings
growth in the fourth quarter.
At the current market price of Rs308, the stock is trading at
inexpensive valuations of 7.1x its FY2009E earnings per share (EPS),
3.6x pre-provisioning profit (PPP) and 1x book value (BV). We don't
foresee a major downside for the stock considering its inexpensive
valuations. We therefore continue with a Hold recommendation with a
price target of Rs315.

Mahindra Lifespace Developers
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs1,096
Current market price: Rs629

Q3FY2008 results—in line with expectation

Result highlights

Please note that Q3FY2008 numbers are standalone numbers, which does
not give a complete picture, as the company's major SEZ projects
(Chennai and Jaipur SEZ projects) are executed through its
subsidiaries. The consolidated numbers are eported on an annual basis.
Mahindra Lifespace Developer's (MLD) revenues grew by 3.8% year on
year (yoy) to Rs43.4 crore in Q3FY2008. During the quarter, the
revenues were booked from Mahindra Eminente in Goregaon, Mahindra
Royale in Pune and Sylvan County in Chennai. In M9FY2008, MLD's
revenues declined by 7.4% yoy to Rs112.5 crore, due to delay in the
projects launches for the standalone properties in the previous
quarters.
The operating profit margin (OPM) contracted by 329 basis points yoy
to 19.1%. Consequently, the company's operating profit declined by
11.5% yoy to Rs8.3 crore.
MLD's net income grew by 17.6% yoy to Rs11.2 crore primarily due to
the increase in the other income to Rs5.2 crore in Q3FY2008 from Rs3.1
crore in Q3FY2007. The other income rose on account of higher interest
income generated on cash surplus. In M9FY2008, MLD's net income grew
175.8% yoy to Rs10.6 crore primarily due to higher other income on
account of dividend income received from its subsidiary, Mahindra
World City Developers.

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Summary only...

Natural Resources: Stock Up For 2008

At this very moment, we are witnessing a natural resource explosion of massive global dimensions ...

 

Nearly every resource under the sun is surging in value — gold busting through the $800 level ... silver up 18% ... platinum, 33% ... oil nearly reaching $100, its highest level ever ... and more.

 

Nearly every stock linked to natural resources is powering higher.

 

Every natural resource-based stock market — Brazil, Canada , Australia, New Zealand and more — is enjoying spectacular gains. Every natural resource-based foreign currency and every commodity-driven ETF is surging in tandem.

 

In sum, we have a natural resource explosion of massive, global dimensions.

Of course, corrections — sometimes moderate, sometimes sharp — are inevitable. But they're bound to be short-lived as three megaforces come together to drive the biggest natural resources boom of all time ...

 

Megaforce #1
Massive, Rapid Growth of the World's Largest and Most Populous Continent

 

Imagine a continent five times larger than the lower 48 states with thirteen times the population.

 

Then imagine a socio-economic transformation that combines the Industrial Revolution, the Information Age, and the rapid birth of fervent entrepreneurial spirit, all concentrated into one short generation.

 

That's the phenomenon called Asia today — steam­rolling ahead, overtaking the world's leading industrial powers and leaving many in the dust. Here are just the most recent results:

 

* China's third-quarter growth was an astonishing 11.5%, four times faster than ours, with spending on factories and property surging 26.4%, industrial production expanding 17.9%, and the country's trade surplus up 70% in the first nine months.

 

* India is not far behind. Economy — up 8.9% in the third quarter. Money flooding into the Indian stock market — $19 billion so far this year, already double last year's record $9.5 billion. Money to be spent on infrastructure and manufacturing — more than $500 billion in the next three years.

 

* Singapore's economy surged 9.4%, the longest expansion since 1991. Factories, financial services, construction — all booming.

 

* South Korea, Malaysia , Hong Kong, even traditionally troubled sisters like Indonesia and the Philippines — all following a similar path.

 

End result: A megaforce of unprecedented dimensions driving the demand for energy, metals, foods and more. Some examples ...

 

Aluminum consumption is rising at nearly 30% annually, hitting a record 14.6 million metric tons this year.

 

Nickel, used to make aluminum, is in such intense demand that inventories monitored by the London Metal Exchange have plunged a whopping 89% in the past 12 months to 3,702 tons. That's less than enough to last two meager days of global consumption.

 

Zinc stockpiles just hit their lowest level since 1991 due to overwhelming demand.

 

And despite the U.S. housing bust, copper demand has exploded to more than 18 million metric tons annually.

 

Gold demand is jumping 20% annually. In the third quarter, which ended August 31, India alone consumed more than half the world's total production.

 

Platinum demand is growing at the highest rate of all time.

 

Demand for coffee, wheat, corn, soybeans, even palm oil is off the charts.

And don't forget crude oil. OPEC nations are pumping at near capacity.

 

Mother Earth is straining to pony up the black gold. But it's still not nearly enough to satisfy the spiraling demand from Asia.

 

Result: The highest crude oil prices of all time in nominal terms, and very close to the highest of all time even in inflation-adjusted terms.

Megaforce #2
The Plunging U.S. Dollar

 

The U.S. dollar has now crossed a landmark that will go down in history as the turning point of our era: The greenback has plunged below its all-time low in 1992 to its lowest level of all time.

 

With this single, landmark event, the dollar has crossed from a period of slow, orderly declines ... to a new era of rapid, chaotic declines; from a time when its impact could be ignored ... to a time when its impact will be felt everywhere, especially on those assets that rise the most when the dollar falls — natural resources.

 

And as the greenback sinks, foreign currencies soar:

 

The euro is on a rampage, surging by more than 10 U.S. cents just since August and up 11.5% since the beginning of the year.

 

The Canadian dollar surpassed par with the dollar for the first time in 30 years — and then kept right on going. It now buys around $1.00 U.S., the most since 1960.

 

The Australian dollar, which bought 78 U.S. cents just two and a half months ago, now buys 88 cents ...

 

The Brazilian real has set a seven-year high ... the South Korean won and the Singapore dollar just hit their highest levels in a decade ... even the Chinese yuan, forcibly held down by the Chinese authorities, has jumped to a new high.

 

The impact on natural resources is both immediate and long term.

 

The reasons: Nearly all of the world's resources are priced in dollars. So almost as soon as the dollar falls, their prices have to adjust upward to compensate for the dollar's decline.

 

Meanwhile, international investors, still stuck with trillions in falling U.S. dollars, are not standing still. They see what's happening. And they're running for cover, switching from dollars to any and every contra-dollar asset they can lay their hands on — foreign currencies, gold, silver, other natural resources.

 

Buying contra-dollar investments has been the core of our strategy, and we certainly hope you've followed our lead. If so, you already own what millions of investors around the world now crave — investments that go up when the dollar goes down. If not, it's certainly not too late to start, thanks to ...

 

Megaforce #3
Central Banks Flooding The World With Paper Money And With Wild Abandon

 

The world's monetary authorities see the U.S. housing market in its worst downturn of modern times. They see hundreds of mortgage lenders going broke or on the brink.

 

And they see financial firms reeling from tens of billions of dollars in losses.

 

So they're panicking. Running the printing presses overtime.

 

In the U.S., the Fed has been injecting the most money into the banking system since the 9/11 attacks.

 

In Europe, the supply of money is exploding at its fastest pace in 28 years. In Asia, it's even more extreme — money pouring out of every nook and cranny and flooding into the global markets.

 

Meanwhile, interest rates — normally driven higher by surging economies and soaring commodity prices — are, instead, being held down or even pushed sharply lower.

 

Just in the last two months, the U.S. Fed has slashed its discount rate by 1.25 percentage points and its fed funds rate by .75!

 

The European Central Bank, hell bent on hiking its official rates just three months ago, abruptly stopped. And central banks all over the world did the same.

 

 

No Time Left! Take Action Now ... or Never

 

Look. We're not talking about a long-forgotten event or even a soon-to-come storm on the horizon. This is it! These megaforces are here now. Either you do something to adapt ... or you could be left behind.

 

These are opportunities that can change your life and secure your future ... while the pitfalls could erode — and ultimately destroy — your earnings, your savings and your retirement.

 

And if you're thinking the bulk of the commodity-price rises are behind us, think again. Measured in today's dollars, the price of almost every natural resource on the planet is still far, far below the peak price levels established the last time central banks did what they're doing today.

 

Just to match that peak, the price of aluminum would have to surge by over 2.2 times from its recent peak and the price of tin would have to jump by nearly 2.4 times.

 

If gold rises to the same level as it did back in 1980, measured in today's dollars, it would go to $2,271 per ounce — almost triple its most recent peak.

And for some commodities, the undervaluation today relative to their prior peaks is even more extreme: Cocoa, now in rising demand in Asia, would have to sextuple in price. Sugar would have to go up by more than eleven times!

 

Silver, meanwhile, would have to surge to $145, nearly 10 times today's peak.

No one can say with certainty that they will go that far. Nor can anyone be sure their rise will be contained to those levels. But one thing is obvious: There is no evidence that commodities are peaking ... and there's abundant evidence that they have much more upside potential.

 

Ditto for ETFs that track commodity-sensitive economies ... shares of companies profiting from the resources boom ... and foreign currencies that are rising in value as the dollar sinks.

 

What would it take to end this boom?

 

Almost three decades ago, Fed Chairman Paul Volcker ended the last commodity boom with Draconian money-tightening actions — jacking up interest rates by three full percentage points in one single announcement, slapping credit controls on the entire economy, sucking up the world's excess money like a giant vacuum cleaner.

 

Think about that scenario for a moment. Even in your wildest dreams, could you see today's Fed Chairman, Ben Bernanke , doing something similar?

 

If your answer is "no," then you can rest assured that the end of the natural resource boom is not today or any time in the foreseeable future.

 

So ... stick with it. Ride this boom as far as it will take you. When we see the opportunity, we will have you take profits along the way. But for the most part, our strategy is to guide you to opportunities that are still in their pre-take-off stage ... and use every subsequent correction as a buying opportunity.

 

This South American country's GDP surged 6.1% in the second quarter. It's where we're seeing the biggest gains in decades in employment, consumer spending, and investment ... where the single largest export is booming ... and where the currency is rising steadily against the U.S. dollar.

 

So how can a conservative investor participate in that country's stable-but-rapid growth?

 

Alternative energy company with soaring profits

 

A torrent of forces have converged to create the perfect storm for skyrocketing oil prices:

• Surging worldwide demand ...
  
  
• A new string of Fed rate cuts ...
  
  
• The U.S. dollar teetering on the verge of collapse ...
  
  
• New tensions between Turks and Kurds ...
  
  
• New attacks on oil-producing facilities ...

And no matter what you may already own in this sector, the time is right to branch out into alternative energy, fast becoming a national — and global — priority. One of our favorites: Solar energy.

 

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Summary only...

Ispat to fund expansion plans via equity route

Source : CNBC-TV18

Ispat Industries has a debt of about Rs 6500 crore. However, the company has plans for expansion, for which it wants to take the equity route. Speaking to CNBC-TV18, Anil Sureka, ED Finance said that they expect debt to come down by close to Rs 800 crore over the next four quarters. He added that they will finance their capex plans via promoters, internal accruals and convertible instruments.


Talking about the company’s expansion plans, Sureka said they will up their HR coil capacity to 3.6 mt and will also add a blast furnace. A 4.5 mt pellet plant and a one mt coke over battery has also been planned. They will also be setting up a 1200 MW power plant costing about Rs 5000-5500 crore in Chhatisgarh

Sureka clarified that LN Mittal has showed no interest in Ispat Industries. According to him, steel prices will improve further on raw material pressures.

Excerpts of CNBC-TV18’s exclusive interview with Anil Sureka:



Q: Before we talk about your expansions, just talk to us a little bit about what you are doing on the capital side. You’ve got nearly Rs 7,000 crores of debt. How much of that are you in a position to repay over the next four quarters? Would you need to raise any equity to finance some of these expansion plans? Just give us a layout.
A: Today you must have seen that our company has given a notice to the stock exchange for giving a warrant to the sponsors and that meeting will be taking place on December 22. This is basically to raise the equity side and the expansion scheme which of which we are now are in the implementation process, most of the money will be raised through the equity rated instrument only. That is also the way we are going to correct our debt equity ratio.



Q: Could you throw some numbers here? How much money would be pumped in by the promoters specifically, what their stake would go up to, whether you would issue any equity to non-promoter shareholders and what the debt will come down to in the next four quarters?
A: In the next four quarters the debt will come down by close to Rs 800 crore. How much equity we allot to sponsors will be decided in the board meeting only. Normally in a year we can give 5% equity voting rights to the sponsors. So it will be within that range.



Q: Where does your total debt stand at right now?
A: It is actually Rs 6500 crore.


Q: There are all kinds of rumours circling the market and you would be the best person to address them. Is it true that the Mittal family is showing any kind of interest in Ispat and you are in any sort of talks with them for some kind of stake sale?
A: This company belongs to the Mittal family only, Pramod and Vinod own the company.



Q: We are talking about Lakshmi Mittal’s family out here?
A: No I don’t thinkso, there is no such thing.



Q: Along with the debt reduction, what kind of capacity addition plan is it that Ispat has over the next four-six quarters?
A: We have planned that we’ll increase the HR coil capacity to 3-3.6 million tonne and we are also adding a blast furnace to support the capacity. We have also planned a pellet plant of roughly 4.5 million tonne. These are the major capex plan we have launched.

In addition to these, we have also launched a coke oven battery of 1 million tonne capacity. That will be in a separate SPV and it will be in a joint venture. All other projects will be in Ispat Industry.


Q: Could you give us a timeline of when this coke oven and the pellet plant would be up and running? What is the total investment that is required for all these expansions that you are talking about?
A: The coke oven will cost roughly Rs 900 crore and the pellet plant and the 3.6 million tonne blast furnace it will cost roughly Rs 1600 crore. The timeline for the pellet plant is roughly 27-months, coke oven is about 24-months and the other project between 12-16 months time.



Q: What kind of pricing do you see steel holding over the next four-six months as you go through the process of cleaning out debt and expanding capacity as well?
A: The steel prices will further improve, that is the industrial view because there is a lot of pressure on raw materials also. Raw material prices are going up and everybody knows that next year, the way things are happening in the iron ore business, industrially also the prices will go up.

Everybody is expecting that there will be a bit of upward movement in the raw material and that it should be the same in the HR finish goods also.



Q: Give us some details on the power project in Chhattisgarh. What kind of investment it would entail, by when you expect to commence work out there and what the capital investment structure is out there?
A: First I would like to address the 110-megawatt power plant which is already in the construction. This will be commissioned by November 2008. This is based on the blast furnace gases at Dolvy and it will meet roughly 30% of the requirement of the steel plant. So that will bring down the cost of power substantially.

Now coming to Chhattisgarh, we have signed an MoU with the government of Chhattisgarh for setting up a power plant of 1200 megawatt. It should cost around Rs 5000-5500 crore. Presently we are in the process of tying up the fuel, once that is tied up, then we will do the other activities too like the environmental clearances of the sector, etc parallel to that. But this will all be in a separate company, not in Ispat Industry.



Q: Just to ask that question again, since it keeps cropping up, are you sure that Lakshmi Mittal and Vinod Mittal have had no discussions about any kind of a joint development plan or expansion plan under the Ispat umbrella in India?
A: To my knowledge I am 100% sure.



Q: One word as well on what exactly you might look at in this equity route to raise finances?
A: One, we are talking to the sponsors. This week we will have a meeting for the allotment of warrant to them and the Board will decide. The other is we are raising finances for this Rs 1600 capex that we have planned. This will be mostly support by the sponsors, it will be a combination - sponsors, intellectuals or maybe some convertible instruments.

Q: But no more debt will be loaded on balance sheet, right?
A: The debt burden will not be much, we are trying to bring down the debt.

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Summary only...

New Multibagger: Shiv-Vani Oil

Shiv-Vani Oil-Drilling Profits

BSE 522175;

CMP Rs 551

Target: 1000 in 12 months

 

Shiv-Vani Drilling is likely to become one of the prime beneficiaries of the near $ 3 bn Oil Exploration Budget of Ongc over the next 2-3 years. The hunt for Crude Oil is on in right earnest, as the GOI opens ever more larger blocks to foreign and domestic oil explorers both on-shore and off-shore. The Key Mantra these days is Oil Security and beyond Mukta, Panna, Tapti, Lakshmi, Aishwarya and Cairns Mangala on-shore prospects, only the Deen Dayal and Dhirubhai fields in AP offshore have discovered either oil or gas, since Crude was discovered in the Assam-Arakan belt before independence and in the Bombay High segments in then early 70s.

 

Shiv-Vani has 25 onshore rigs under operation with one more getting added in FY08. Additionally, it has 4 offshore vessels and is seeking to acquire jack-up rigs and PSVs, which would diversify its Revenues from just onshore oil exploration to the Offshore Oil, Pipeline Construction, Gas Compression and Allied Services segment especially development of Coal Bed Methane blocks and gasification and re-gasification of Natural Gas as more gas becomes available for transport, in about 8 months from now from the Krishna-Godavari fields. Shiv-Vani is the biggest private sector rig owner and operator in India for on-shore operations with 4 seismic data acquisition equipment, 4 crew boats, 7 compressors, 233 drilling rigs, 425 logistic supply vehicles, that include cranes, bunk houses, trailers, prime movers and forklifts.

 

Shiv-Vani is undergoing a CAPEX of Rs 600 crore, a part of which has been financed through private equity placed with Citigroup Internationational Growth Partnership Mauritius at Rs 375 per share. This CAPEX is being made to prepare Shiv-Vani for the NELP VII which will offer 80 to 85 blocks covering an area of 352,000 sq kms.

 

While Ongc has been accounting for nearly 60 per cent of Shiv-Vani's Revenues, it is the entry of Cairn, Reliance, Videocon and GSPC which is making the field bigger and wider. Earlier this year Ongc had made an attempt to acquire 25 onshore rigs from UPET of Romania, which ultimately did not work out. Now Ongc is trying to acquire 17 Rigs for exploration in the Assam-Arakan Oil belt. Shiv-Vani is likely to be the prime beneficiary of this effort as it possesses the largest number of onshore drilling rigs in the country. Any newsflow on this count will work as a price trigger for Shiv-Vani.

 

Even though FY09 will turn out to be a year of massive growth for Shiv-Vani, but at 16 times FY08 forecast earnings Shiv-Vani Oil appears to be amongst the cheapest plays in the sector when compared to marginal oil drilling players like Garware Offshore and Jindal Drilling which offer just OSVs and 2 Oil Drilling Rigs between themselves.

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Summary only...