Mumbai In High Growth Lane.

Govt said it plans to turn Mumbai into a global financial centre to provide a host of services to clients across the world.

A committee is looking into this aspect and expected to submit its report by November end, Finance Minister P Chidambaram said at the annual conference on Indian Financial Market, organised by CII and the Asia Society here.

Mumbai, he said, is geographically an ideal location for establishment of such a centre.

Pointing out that long term funds are the key issue in developing infrastructure, Chidambaram said pension and insurance reforms are overdue.

There is a need for changes in the insurance laws and insurance penetration also needs to increase, he said, adding that pension reforms is another key area.

But the government's Left allies have, however, opposed a bill to amend the Insurance Act to increase FDI cap in the sector to 49 per cent from the current 26 per cent and a bill to set up a regulator in pension sector.
The Finance Minister had earlier sought political space to pass these legislations.

Chidambaram said he had absolute confidence that India could rank in the top three global manufacturing hubs for industries linked to steel, refining, textiles, automobiles, automobile parts, light engineering goods and leather and food products.

He said the capital markets in India was one of the best regulated in the world but stressed on the need for developing the debt markets, which are at a very nascent stage.

Delivery Picks.

Buy in delivery IDBI (97.60/=) and IFCI (27.25/=) for delivery. Both of them are allready in bullish terretory. IDBI is tipped to target 150/= while IFCI is tipped to target 35/=.

Regards,
Bhavin.

Intraday Performance-- at 13:00hrs.

Except for Rolta all stocks very strong.

Great Off->749/=(749/=)
Tech Mahi->1790/=(1800/=)
Rel Capit->626/=(625/=)
Bombay Dy->722/=(725/=)
ROLTA ->311.20/=(316.50/=).

Hold and be patient. Keep appropriate S.L. Mkt expected to remain dull. http://investmentpark.blogspot.com

Dabur- Use Dips To Buy.

VK Sharma of Anagram Stock Broking is of the view that one can use Rs 3-4 correction from current levels to go long in Dabur India.

Sharma told CNBC-TV18, "Dabur is one stock, which made a skyscraper both in terms of volumes and in terms of the price. You don’t usually see this kind of volumes, this kind of price rise in an FMCG stock, but nevertheless it has taken to an all time high of Rs 175 yesterday, it closed slightly lower at around Rs 171, it has now set up a higher base which would means that the stock is unlikely to go below the level of 160-163. Probably this is the range in which this stock will settle now. But any Rs 3-4 correction from here could be use by investors to go long in the stock."

Supply Unlimited.

The CEO of Morgan Stanley Investment Managers, Narayan Ramachandran, comments on emerging markets. He says that the first few months of 2007 may be a bit choppy for emerging markets. Fresh money may also come into EMs during that point of time, opines Ramachandran.

Morgan Stanley Investment Managers observed there were no major interruptions in overall flows to EMs.However competition from global interest rates is a worry for EMs and India. Ramachandran states that a higher than expected US growth may be a short-term risk for it.

Morgan Stanley Investment Managers believe that India is a major gainer of minor disinflationary boom.

Excerpts from CNBC-TV18;s exclusive interview with Narayan Ramachandran:


Q: How are things looking to you globally? What signals are you picking up from your peers and your teammates globally on what the outlook could be in terms of flows into emerging markets in the next quarter?


A: It looks good; I do not think there is any major interruption in the emerging market story. Obviously, outside of India, in the first several business days of this year things have gone little slowly, India has done quite well but the others are sort of flattish. But, overall no major interruption in the story and in the flow story.



Q: How is India looking - despite all concerns expressed on valuations, we are at all time highs and do not seem to be particularly under performing the emerging market basket?



A: I think India is a beneficiary of this kind of climate in which global growth is good but not at a tear away pace, which then implies that inflation in general is sort of contained and India is one of the biggest beneficiaries even among emerging markets of a scenario of a minor disinflationary boom. That said, I have to say that as people adjust to a higher growth rate than expected, in the US in the next few months. I think the first couple of months of this year are going to be bit choppy for emerging markets, not just one way up.



I think the start of the year has been good for India particularly for midcap that’s been a little bit of catch-up from rather bad performance in the second half of last year after the May correction. But beyond that I see a bit of choppy immediate future for emerging markets but the medium-term is good indeed.



Q: How volatile do you expect it to get? What do you think might trigger it and tactically at this point, would you sit on more cash waiting for slightly better price levels?



A: It depends on whether you have big or small money. If you have big money, I wouldn’t worry about sitting on cash, in the meantime as I said the most important thing is that the medium-term looks good and it’s very difficult to catch these little gyrations.



The biggest worry for emerging markets in general and India in particular is competition from global interest rates. If you have a scenario in which for whatever reason global interest rates have to go up significantly, then emerging markets will under perform but I do not see too much of that situation. Now the short-term risk is that people are a bit pessimistic about US growth in the last three-four months; the Q4 of last year was not very good but that is most likely a bit of inventory correction compounded with the housing slowdown in the US.



So as people adjust to a slightly slower but more normalized growth pattern in the US maybe somewhere between 2.5-3 rather than between 3-3.5 that we saw in the first half of last year.I think, at that point people will get a little worried that the Fed is not ready to cut rates right away and the inflation bogeyman will come out all over again. That’s the point at which you get the choppiness but I think that’s choppiness to build further into rather then to reduce into.



Q: You made the point about liquidity. What exactly is it that you are seeing - money staying put and no large-scale redemption, or that fresh funds have been pumped into our market at more than 14,000?



A: I do not know it for a fact. Obviously it’s just been a few days but I would suspect there is actually new money, there was some money that’s been sort of locked away towards the end of the year once reasonable returns had been had for the calendar year 2006. So I suspect there is fresh money available now to comeback into the emerging markets since it’s the beginning of the year and usually at the beginning of the year there is more risk taking then towards the end of the year.



Q: You had a good calendar 2006 in terms of earnings and the debate is on whether 2007 calendar will see the first signs of slowdown or could there even be positive surprises on this base in the current year. Which camp are you on because some believe that we will be surprised once again maybe not to the same extent and that might fuel the kind of upward rerating this market has seen?



A: I do not know in what combination the returns come from - combination of earnings and PE expansion or mostly earnings. I come from the camp that says that there will be solid returns this year and by that I mean low double digit return perhaps not quite as much as we enjoyed last year. But I do not see the reason for us to have an eminent PE collapse, which is what you would require for markets to go down sharply.



So 12-15% earnings growth with probably no major contribution from PE expansion or if there is its very slight so those kinds of returns this year as oppose to the very good returns we enjoyed in 2006. But that would make it several years in a row now, I am not exactly sure but I think it would be the either fifth or sixth year, in which we had positive returns from emerging markets.



Q: What about the non-Index space then? If your case is that maybe we will see the Index expand by 12-13-14% this year not much more than that, can you build a case lower down where a stock portfolio of midcaps or several midcaps outperform this benchmark return by quite a margin since they have been under performing for the better part of the last half year?

A: That’s always the temptation; the temptation is to reach beyond the Index stocks into other stocks and my view is that in terms of smallcap or midcap, Index is behind us already. You can obviously get the odd stock doing well and if you are really good at stock picking you should go ahead and do that. But in Index terms I would stick with what we called secular growth stocks within the context of the largecap Index and time and again we have seen that in the second half of the cycle, which is where I firmly believe we are beginning to be this year - that is the largish companies that do well and the odd midcap companies that join the parade rather then a big smallcap effect that you might see more in the early part of the cycle which we did see in 2004 pretty much around all of the emerging markets.

Q: What have you made of the flux that’s come into the commodity universe very early in this year and how that might some stocks and families within our market?

A: I think emerging markets have begun the process of de-linking with the US and similarly I think they might have begun the process of de-linking with commodities. And there was this view that emerging markets were effectively a commodity surrogate pretty much through this cycle and at least the correlations did bear them our initially so that as the commodity boom started in the bottom of the cycle in 02-03 so did emerging markets.

But I think you are beginning to see that correlations fray the edges and if you look fundamentally, several markets - India being one of the major one, Korea to a lesser extent, China and so on are big beneficiaries of dollar price of commodities going down, macro economic situation of India is clearly helped by the fact that oil prices in dollar terms are going down for example other commodity prices are declining. So the strong correlations will fray and will get steady performance from emerging markets even if commodities hold their downtrend in dollar term.

Q: Just to get back to that Index return of 12-13% that you spoke about - in 2006, if you were within the Index if you chose to be in largecaps but stayed away from oil, metals maybe even FMCG, your return would be far in excess of Sensex return. Can you construct an Index within an Index leaving out what you expect to be the relative under performers in 07 and then expect or hope to get more then 20% return even this year?

A: Within the largecaps I think there is a decent shot at that obviously it’s a probability but I would say if you hold telecom and technology and very select FMCG stocks then you have a decent chance of making it into the high teens possibly even 20’s this year. Particularly if in the latter half of the year you get the first signal that global interest rates maybe on a downtrend. I think there is a 2/3 chance that that could occur in ‘07

Daily Idea From JM Morgan.

• Jaiprakash Associates (Rs. 729)
Buy only in the region 728-732 with a stop loss below 719 for an intra-day target of 748 and 754.

• Bharat Forge (Rs. 368)
Buy only in the region 367-369 with a stop loss below 363 for an intra-day target of 377.

• HLL (Rs. 224)
Buy only in the region 223-224 with a stop loss below 221 for an intra-day target of 229 and 232.

• Maruti Jan Future (Rs. 921)
Buy only on a move above 925 with a stop loss below 913 for an intra-day target of 940.

Intraday 19-01-07

Buy:

Tech Mahindra (1800/=);

Great Off (749/=);

ROLTA (316.50/=);

Rel Capital (625/=);

Bombay Dye (725/=).

Today Market Expected To Be Dull and Down. Carry forward all past delivery calls.

Regards,
Bhavin Mehta.

Corporate News:

Insul Electronics to acquire 50% stake in Satguru Infocorp

Elecon Engg plans Rs 400 cr investment in Gujarat

Surana Telecom develops 96,000 sq ft facility in Hyderabad

Gupta Synthetics allots bonus shares in 2:1 ratio

SKF India to declare December ended quarterly results in March

GE Shipping to consider dividend

Centurion Bank of Punjab allots 7.5 crore equity shares

ACC to declare December ended quarterly results

KLG Systel to allot 10 lakh convertible warrants to promoters

Bill to hike FDI in insurance in budget session

Liberty Shoes to raise Rs 125 crore viz QIPs, FCCBs

Spanco Telesystems bags order from IRCTC

Suryadeep Salt Refinery plans consolidation of equity shares

Sona Koyo Steering Systems allots equity shares, warrants

Ranbaxy Labs mulls to acquire 14.9% in Krebs Biochem

Kirloskar Brothers announces dividend of 100%

Apar Industries allots bonus shares in 1:3 ratio

Ruchi Strips mulls to issue redeemable preference shares to promoters

Subex Azure mulls to acquire a Canadian telecom provider

IOL Broadband to issue 5 lakh equity shares

Sun TV to declare December ended Q3 results

Madras Cements to declare December ended Q3 results

Geodesic Information record date on 2 February 2007

Champagne Indage acquires 52.63% stake in SIL

Pritish Nandy Comm to raise Rs 50 crore via QIPs

Kirloskar Oil Engines record date on 2 February 2007

Virinchi Technologies pospones board meet

Dollex Industries to set up ethanol unit at Nanded

Pantaloon Retail inks JV with US firm

Tech Mahindra allots 28,000 equity shares to employees

Panyam Cements to allot 20 lakh equity shares

Biocon to sell its cancer drug in Pakistan

MRO-TEK to consider December ended Q3 results

Nestle India to declare December ended quarterly results in March

Corporate Results:

Corporate Results

Tech Mahindra net profit at Rs 145.30 crore in December 2006 quarter

Kirloskar Brothers net profit at Rs 31.77 crore in December 2006 quarter

Bharat Bijlee net profit at Rs 13.37 crore in December 2006 quarter

Bharat Seats net profit at Rs 0.93 crore in December 2006 quarter

Sona Koyo Steering Systems net profit at Rs 6.63 crore in December 2006
quarter

Reliance Energy net profit at Rs 201.03 crore in December 2006 quarter

Zuari Industries net profit at Rs 12.25 crore in December 2006 quarter

JK Lakshmi Cement net profit at Rs 55.06 crore in December 2006 quarter

PSL net profit at Rs 20.80 crore in December 2006 quarter

Ultratech Cement net profit at Rs 212.46 crore in December 2006 quarter

Reliance Industries net profit at Rs 2799 crore in December 2006 quarter

Riddhi Siddhi Gluco Biols net profit at Rs 8.30 crore in December 2006
quarter

Unichem Laboratories net profit at Rs 19.18 crore in December 2006 quarter

Emco net profit at Rs 9.90 crore in December 2006 quarter

Oil Country Tubular net loss at Rs 0.69 crore in December 2006 quarter

Genus Overseas Electronics net profit at Rs 6.26 crore in December 2006
quarter

Canara Bank net profit at Rs 363.02 crore in December 2006 quarter

Siemens net profit at Rs 98.07 crore in December 2006 quarter

Panacea Biotec net profit at Rs 27.10 crore in December 2006 quarter

Nicholas Piramal net profit at Rs 43.30 crore in December 2006 quarter

Shardul Securities net profit at Rs 4.57 crore in December 2006 quarter

Godavari Fertilisers net profit at Rs 13.89 crore in December 2006 quarter

Ranbaxy Laboratories net profit at Rs 139.07 crore in Deember 2006 quarter

Plethico Pharmaceuticals net profit at Rs 19.73 crore in December 2006
quarter

Black Rose Industries net profit at Rs 0.26 crore in December 2006 quarter

Exide Industries net profit at Rs 34.85 crore in December 2006 quarter

Chambal Fertilisers & Chemicals net profit at Rs 70.13 crore in December
2006 quarter

Krebs Biochemicals net loss at Rs 0.26 crore in December 2006 quarter

Emmsons International net profit at Rs 3.20 crore in December 2006 quarter

Shree Digvijay Cement net profit at Rs 18.41 crore in December 2006
quarter

Tata Metaliks net loss at Rs 1.12 crore in December 2006 quarter

3i Infotech net profit at Rs 36.78 crore in December 2006 quarter

NIIT Technologies net profit at Rs 30.10 crore in December 2006 quarter

Ficom Organics net loss at Rs 0.88 crore in December 2006 quarter

New Delhi Television net profit at Rs 7.06 crore in December 2006 quarter

Biocon net profit at Rs 47.51 crore in December 2006 quarter

Alps Industries net profit at Rs 7.76 crore in December 2006 quarter

RIL Ind.

Reliance Industries announces Q3 results
Reliance Industries Ltd has announced the following Unaudited results for the quarter ended December 31, 2006:

The Company has posted a net profit of Rs 27990 million for the quarter ended December 31, 2006 where as the same was at Rs 17760 million for the quarter ended December 31, 2005. Total Income (net of excise) is Rs 265140 million for the quarter ended December 31, 2006 where as the same was at Rs 183480 million for the quarter ended December 31, 2005.

The figures for the corresponding periods of the previous year are not strictly comparable in view of the planned shutdown of the refinery during October and November 2005.

As per this we can see market touching 20000 by March-2008. Specially if Crude stays below $52.

KS Oil- Accumulate.

Buy atleast 25 KS Oil at current price and keep for three months if possible. Previously Recommended at Rs.167/= for Tgt 300/= and upgraded it to 350/=. Now 346/= again upgrading it to buy for target 450/= minimum.

X-Stocks.

* CEAT LTD. !
Moving in Consoldation Pattern - Buy on Every Decline for Short Term Target of 150+
* DIVI'S LAB !
Strong Resistance @ 3200 - Bullish Breakout with Volumes to Target 3650-3700 in coming Weeks
* INDUSIND BANK (FUT) !
Breakout from Bullish Pattern in Extreme Short Term - Buy on every decline with SL for Target of 64
* ICICI BANK !
Ready for Another Upmove of Rs50/ - Buy with Strict SL for Target of 1020+ in Few Hours
* IKF TECHNO. !
Bullish Indications in Short Term Charts - Likely to Cross 10+ in coming Sessions
* ZENSAR TECH !
Short Term Resistance @ 260 - Bullish Crossover with Volumes will Target 300+ in Coming Days
* I T I LTD. !
Bullish Indications in Hourly Charts - Likely to Cross 54+ in coming Sessions
* UNITED PHOS. !
Moves Past Crucial resistance @ 335-338 / Another Close above 340 will Target 390+ in coming
Sessions
* VIDEOCON APPLIANCES !
Moves Out of Extreme Short Term Bullish Pattern - Indicators favour rise to 38-40 in Few Days
* SONA KOYA STEERING !
Bullish Indication in Short Term Charts - Buy on Every Declines for Short Term Bullish Target of 72+
* XPRO INDIA !
Bullish Indications in Short Term - Indicators favour Rise to 65+ in coming Days
* GENUS OVERSEAS !
Heading for 280+ in Coming Days - Buy on Pullback till Support with SL
* NOCIL LTD. !
Likely to face Small Resistance @ 31-32 / Bullish Crossover from Resistance to Target 38-40 in Few Days
* KALE CONSULTANTS !
Breakout from Bullish Pattern - Buy on Declines for Target of 155+ in Few Sessions
* ROLTA LTD. !
Medium Term Charts Highly Bullish - Use Every Corrective Decline to Buy only with For Target of
400+
* MUKAND ENGG. !
On Verge of Bullish Breakout in Daily Charts - 2 Close above 38 will Target 50+ in Near Term

Headline Reviews.

Wipro reported a 41% rise in cons. net profit at Rs 765 cr for the
qtr ended Dec’06 compared with Rs 543 cr in the qtr ended
Dec’05. –BS
n NIIT Technologies reported 47% increase in cons. revenue at
Rs 231.5 cr and a 92% YoY increase in net profit at Rs 34.6 cr for
the third qtr ended Dec’06. –BS
n Infotech Enterprises has recorded 52.1% increase in revenues
at Rs 143 cr in the third qtr ending Dec’06 compared to Rs 94 cr
in qtr ending Dec’05. –ET
n SQL Star International is looking at acquisitions in the US. It is
also planning to raise $20 mn for funding its inorganic growth
plans besides investing in the current lines of business. –ET
n Lupin reported a cons. net profit of Rs 62.02 cr for the third qtr
ended Dec’06. Total income stood at Rs 515.32 crore. –BS
n The board of BAG Films cleared a proposal to issue 2.025 cr of
Rs 2 each at Rs 13 per share Sameer Gehlaut, one of the
promoters of Indiabulls. –ET
n Virgin Mobile is readying to enter the Indian market in a venture
with Tata Teleservices (Maharashtra) Ltd. –ET
n L&T has signed a JV agreement with A A Turki Contracting &
Trading Corporation of the Kingdom of Saudi Arabia. –BS
n ICSA Ltd has attracted foreign investment of $52 mn through 2
deals – A private placement to Citigroup Venture Capital of $30
mn and FCCB issue to Investment banking firm Goldman Sachs
of $22 mn. –ET
n The board of TV Today Network will meet on January 29, 2007 to
consider buy-back of shares up to 5% of the paid up capital and
free reserves aggregating approximately Rs 23 crore. –BS
n ABG Shipyard has secured an order worth $229 mn for
construction of 12 vessels from Singapore’s Pacific First
Shipping Pte. –ET
n Yemen has invited ONGC to set up a 1 bn dollars refinery on its
Arabian coast. –ET
n Lakshmi Mittal may take 49% stake in HPCL’s $3 bn, underconstruction
refinery in Bhatinda, Punjab while state-run OIL is
likely to get 15% equity stake, leaving HPCL with 36%. –BS

Kirloaskar Oil- Angels.

KIrloskar Oil Engines (KOEL) reported Q3FY2007 results, showing 33%
YoY growth in topline to Rs 456.4cr (Rs 343.3cr). Operating margins has
fallen by ~160bps, mainly on account of rising raw material cost, which
has gone up by ~190bps YoY. Reported PAT has shown substantial jump
of 66% YoY due to sale of investment in G G Dandekar company.
Adjusted PAT reported 18% growth YoY to Rs 25.1cr (Rs 21.3cr). Due to
increased interest cost as well as higher depreciation has impacted pat
margin, which has shown a dip of 70bps YoY to 5.5%. However, fourth
quarter we expect company to deliver better results in terms of
profitability. We remain positive on the future prospects of the company.
At CMP of Rs 264, the stock trades at 16.1x and 12.3x its FY2008E and
FY2009E EPS respectively. We recommend BUY on the stock with Price
Target of Rs 340.

Top News Headlines:

Today's Top Newspaper Headlines:-

The Economic Times

Norway's Orkla may buy MTR Foods for Rs 350 cr

IPR issues sink McCormick talks

Wipro logs 41% jump in Q3 net

Total income up 45%

Nissan, Renault may build new small car in India

Hatchback to serve emerging markets

The Hindu Business Line

Indian crude basked at $50.60

Till date in January average basket stood at $52.77

Citigroup may pump in up to $1 bn in 2-3 years


Investments could spread across sectors

Mittal group in talks with HPCL for stake in Bhatinda refinery

OIL shows interest as negotiations centre on equity structure

The Financial Express

Deora: let Budget fund LPG, kerosene subsidy

Seeks extension on subsidy scheme on the two sensitive fuels until 2010

Twice-bit Bengal may shy from land buys

State may now play the role of facilitator and not acquirer


Coca-Cola to launch Minute Maid

To roll out Minute Maid in select metros in Tetrapaks at competitive prices

Daily News & Analysis - Money

Soon, you can buy paper gold on bourses

UTI & Benchmark to launch India's first gold exchange traded funds

Buy India? Sell India?

Big-money investors can't quite seem to decide how Indian stocks will fare in '07

CAS to be brought to more cities

But no time-frame set for the roll-out

Technocraft- Subscribe.

For Red Herring Prospectus Click Here.

Can expect 50% return on listings.

Regards,
Bhavin.

~Remains Of Fear~

"I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when it has gone past I will turn the inner eye to see its path. Where the fear has gone there will be nothing. Only I will remain."

Ranbaxy has acquired a 14.95% stake in Krebs Biochemicals.

Ranbaxy has acquired a 14.95% stake in Krebs Biochemicals, a strong player in fermentation technology space.

Ranbaxy picks up 14.95% stake in Krebs biochemical by pref allotment of 10.5 lakh shares to Ranbaxy at Rs 85 per share. The issue of 20-lakh shares warrants to promoters. IPCA labs was also believed to have been in the race.

Krebs Biochemicals has interests in Pravastatin & Simvastatin. It has a state of the art manufacturing facility at Vizag. It is a strong player in fermentation technology space.

CNBC-TV18 DISCLAIMER:This information has not been provided to the stock exchanges, and is source-based

Rolta- Value Buy from Fundamental And Technical Point.

Technical Analyst, Vijay Bhambwani is of the view that Rolta can touch Rs 370 in the coming 3-4 quarters.

Bhambwani told CNBC-TV18, "Rolta is poised for a breakout, should we see a closing on Friday, above Rs 285 we could have indicated a clear breakout. Should the volumes be higher than the previous weekly volumes, chances are Rolta is heading towards the Rs 370 mark in the coming 3-4 quarters. Having said that I think Rs 250 remains a very strong flow and all long positions must be protected with a stoploss at Rs 250 or maybe Rs 4-5 lower. So downside from Rs 285 breakout level would be Rs 35 and upside would be almost Rs 85, so the risk reward ratio clearly indicates that the stock is in favour of the bulls and I think keeping a limited exposure on this stock on the long side actually makes sense."

X-Stocks.

Kashyap Pujara of Sushil Finance picks up Automotive Axles and Concor. According to Pujara, Automotive Axles has a good growth in volume terms and this stock should do well over a period of 6-8 months. Concor saw a good improvement on the margin front and there seems to be room for further growth, he comments.

Tarun Sisodia of Anand Rathi picks up Gujarat Ambuja and Anant Raj Industries. According to Sisodia, Gujarat Ambuja has seen a strong volume growth which will give it a boost in the market share. On Anant Raj Industries, he says that it has a strong business model which will create a much healthier balance sheet.

Q: Do you like the Gujarat Ambuja's exports numbers?

Sisodia: I think it should qualify for a hit, the primary reason being they have seen a strong volume growth, especially from the maize and the cotton yarn segment and both of these have shown improvement in the margin part of it.

They have also introduced Sorbitol in the base segment, which is a very high yield product. They get better margins as well as realizations in that product, so that is the second reason why it is really good.

Third reason is the increase in the capacities in maize, which is going up from 500 tonnes per day to 700 tonnes per day and that should happen by the end of this quarter.

Q: Is Automotive Axles a hit for you?

Pujara: Yes, because if one looks at the capabilities that the company has in terms of axle then it is one of the largest in the country today. The topline growth was close to 43-44% for this quarter and even the operating profits grew by another 28%, so these are good signs.

There were some concerns on margins being under pressure but due to higher input costs, since nickel prices have moved up, but overall if one looks at the quarterly earnings, we are looking at Rs 9 earning for this quarter and for full year one could expect Rs 36 earning in ’07 and that would move to Rs 45 in FY08.

There is good growth in volume terms and looking at the kind of ROC and return on net worth which the company enjoys is evident that this stock should do well over a period of 6-8 months. We have a buy on it with a target price of Rs 750.

Q: You didn’t think much of RPG Transmission numbers - were the numbers disappointing?

Sisodia: It qualifies for a miss because the whole space has been growing so dynamically that RPG has posted good numbers as a part of it but the disappointment is that there is very little happening on the transparency front in terms of declaration happening from the management on the order book size etc.

Secondly, on the margin front, if one looks at all the other players and the kind of improvement they have shown in margins especially KEC, Jyoti etc, RPG has not shown that kind of improvements in the margins, they are about 12% whereas that of the other players was at 14%. YoY the margins have definitely gone up but relative to other players they are still a laggard and though despite the fact that the profits have grown to almost 2.5 times on a YoY basis, we still think there are other players who are better placed in this market right now. So it is purely relative call that we are taking.

Q: On Concor, it is a hit for you?

Pujara: If one looks at the overall economy and the kind of industrial growth that we are displaying, clearly with such kind of growth the companies in the logistic space are bound to do well and that is reflecting the way Concor is shaping up.

In Concor we are seeing a good improvement on the margin front and there seems to be room for further growth in both its segments be it the export or the domestic front, which has witnessed good topline growth and the margin growth is also coinciding with that.

So looking at all the ingredients in place with the kind of industrial growth that is shaping up, Concor numbers are a hit and should do well in the future.

Q: You have qualified Anant Raj Industries at hit, why?

Sisodia: It is one of the preferred picks in real estate plays and that is evident from the the Ceramic tile business which was almost 32% of the total revenues a year back, it is now down to 11% and that has a significant impact because whatever is coming to the topline straight away goes to the gross margins levels and that is why gross margins are at about 98%. Similarly on the EBITDA levels are almost 90% margins because of the real estate business.

Secondly it has got a strong business model in that it is not looking at one time cash flows happening from realty business. There is lot of rental business and rentals are where regular cash flows coming in without further costs attached. Obviously a much healthier balance sheet is created.

These two things put together are why we are looking at it and currently it has got almost Rs 250-300 crores run rate happening. We believe that in the next 2-3 years time they will be touching Rs 700 crore plus run rate and all this happening on a steady cash flow business.

Q: You like the South Indian Bank?

Sisodia: On the Net interest margin it is about 3%, it has got a slight improvement on a sequential basis from over 2.9% but it is the other revenues which are coming into play. There are lot of new product revenues which have come in - whether it is from Internet banking or mobile banking. They are distributing about 4-5 large mutual fund products right now and all this is contributing to the overall total income apart from the net interest income coming into play.

We have seen NPAs down to about 1.49% and by the end of the year it will probably go down to about 1% and probably near to 0% by next year. There is 25% growth in total business from loans and deposits point of view. So all these numbers are fairly healthy plus coupled with the fact that it is a South India based bank and specifically in Kerala, the remittances itself has lent significant amount of growth. It has almost two-third of its business coming from the retail segment, which is a high margin business.

So as a package it comes out as an attractive bank right now and from regional perspective also it should start getting better premiums on the valuation primarily because then it also becomes one of the prime-acquisition candidate. It may or may not get acquired but the fact remains if any acquisition happens, people will start reflecting on the other standalone banks, which are more region specific and from valuation also it is fairly undervalued right now.

Centurion Bank Of Punjab.

VVLN Shastri of Firstcall India Equity Advisor is of the view that Centurion BoP has target of Rs 50.
Shastri told CNBC-TV18, "The topline growth rate expected from Centurion BoP for the next four quarters is in the range of about 50% and the bottomline growth rate expected from this bank is anywhere between 35-40%. Though it has shown tremendous amount of turnaround for the past one year and has shown increased growth trend but I feel going forward it is going to stabilize and the bank maybe in a position to show constant growth trend irrespective of that I feel the bank still requires a good amount of re-rating and I foresee a upward price target of Rs 50 for this bank in a time span of atleast 6 months going forward."

Intraday 17-01-07.

Buy:

Century Textile (770.40/=);

ICSA Ind(1115.35/=);

PRAJ IND(270.05/=);

Zee News at decline (32/=).

Sell:

Shree Ashtavinayak with 5/= trailing S.L..

Regards,
Bhavin.

Top News Headlines:

i-flex bags FLEXCUBE order from US bank
Pantaloon unit buys Internet company Officedge
Patel Engineering Q3 profit at Rs294.6mn (up 16%), revenue at Rs2.84bn (up 21.7%)
Mahindra to build new factory for CVs
Bajaj Auto Q3 profit at Rs3.45bn (up 23%), sales at Rs25.68bn (up 27%)
BPCL to sell shares in Bina refinery, to raise Rs10bn through IPO
Govt issues export permits for 37,000 tons of sugar
Aztecsoft Q3 profit at Rs111.5mn (up 12%) sales at Rs713.4mn (up 35%)
Indoco Remedies to consider buying SPA Pharma's drug business

Rain Comm. Buy for ST CMP: 204.90 Tgt: 219 & 231-Religare.

The daily candlestick chart of Rain Commodities shows a big bullish candle on extremely high volumes. It has broken above and closed above the resistance line in blue. The OBV oscillator has made a new high implying that the recent highs could be attempted. One can accumulate in small quantities in declines at Rs.198-202 with a strict stop loss below Rs.189.50 in close for a target of Rs.219 in the next 4-6 weeks and if that is sustained an optimistic medium term target of Rs.231 in the next 10-12 weeks.

BRFL Buy for ST CMP: 219.80 Tgt: 235.00- Religare.

The daily candlestick chart of BRFL shows a bullish candle on extremely high volumes. It has retraced 61.8% of the rise from Rs.196 to Rs.246. Strong support is
pegged from the trend line in blue at Rs.212. The short term oscillators are turning from the oversold zone. One can buy BRFL in small quantities in declines at Rs.215-217 with strict stop loss below Rs.208 in close for a target of Rs.235 in the next 10-12 trading sessions.

Intraday 16-01-07.

Buy for intraday:

LNT (1502/=);

Bayer (334/=);

ACE(324.50/=);

Siemens(1172/=);

Voltamp(700/=);

Unitech(439/=).

Regards,
Bhavin.

Top News Headlines:

The Economic Times

Centre may knock down FDI-FII boundary

All foreign investment will be brought under same umbrealla; Finmin to meet RBI, DIPP this week

GoM backs Trai plan to auction 3G spectrum

Move may net Rs 8,000 vt for government

ONGC seeks foreign partner for KG basin

In talks with BP, BG, Petrobras & ENI to sell stake worth $5bn in KG basin


The Financial Express

Ports for car exports soon

Maruti initiates talks with Hazira Port Authority, Suzuki begins due diligence at Kandla

TCS net up 48%

Q3 revenue at $1 bn


UK seeks fair play in Vodafone bid for Hutch Essar

Indian companies can invest in the UK in a free, transparent and fair manner

Daily News & Analysis - Money

Tatas ready 2-stage assault for Corus

Bid this week could offer 535 pence a share

SingTel may consider hiking stake in Bharti

The Singapore telecom operator holds a 30.49% stake currently

Reliance Retail to give Delhi a miss

Uncertain real estate situation in the capital the reason

O.E. & Market Breadth Key.

The markets opened on a firm note and proceeded to trade higher through the day. The benchmark indices gained over 0.5 per cent as the bulls managed to prevail over the bears for the third session in a row.

Traded volumes were marginally lower than the previous session as higher levels witnessed caution. Market breadth was highly positive as the BSE and NSE combined figures were 2395 : 1267 and the capitalisation of the breadth was also positive as the figures on a BSE & NSE combined basis were Rs 10,556 cr : Rs 2,683 cr.

The indices have closed at the median level of the trading session as the bulls have shown a tendency to book profits at higher levels. The 4123 level advocated as a resistance for Monday was not tested as upsides encountered overhead supply.

The lower traded volumes are indicating a lack of buying conviction at higher levels and unless the indices surge with high volumes, the retail segment is unlikely to participate in the buying process.

The coming session is likely to witness intraday levels of 4111 on advances and 4044 on declines. Watch the open interest and market breadth as the commitment of traders will be apparent from these parameters in the near term.

The outlook for the markets on Tuesday is that of cautious optimism as the upsides are likely to witness some profit sales. Fresh buying, if any, must be initiated on lower exposure only.

SEBI May Allow Short Sell By Institutions.

Sebi chief M Damodaran today said the market regulator is considering allowing institutions to short sell in the capital markets and expects to see it through in the current calendar year.

"We will persuade people concerned that it is (short selling by institutions) is needed, and we hope it could come through in the calendar year 2007," Damodaran said at the FICCI annual capital market conference here.Short selling allows sale of securities that is not owned by the holder. However, the seller re-purchases the securities later at a lower price and returns it to the holder.He also said Sebi had started work on the implementation of the R H Patil Committee recommendations on strengthening the corporate bond market and results would be out soon.

"We are well on our way in doing all that is required to be done for a long-awaited corporate bond market...You will see action, numbers and results." On a separate exchange for small and medium enterprises (SMEs), Sebi chief said the market watchdog was working on devising a model, which would facilitate smaller companies to tap the capital markets without lowering the bar for regulations."

The Over the Counter Exchange of India (OTCEI) was a failure but we could reinvent it," he said.Damodaran said Sebi would actively encourage trade groups to be self-regulatory bodies and was looking into the issue of reducing the time taken by companies to tap the capital markets.

TCS.

TCS (CMP: Rs1326)

Mkt Cap: Rs1,298bn; US$29.3bn

TCS reported 7.9% qoq volume growth, exactly in line with our expectations, but the billing rate increase of 2% qoq was above our forecast. The productivity improvement on fixed price contracts wasn't built into our forecasts. Though, gross margin expansion was in line, the SG&A cost containment led to higher EBITDA margin expansion of 90bp compared to our forecast of 30bp. The company announced 5 large deals between $70-140m across 5 continents and spoke of pursuing another 10 deals each in excess of US$50m. The company seems confident to show further improvement in margins due to financial prudence and productivity improvements. Also, it reiterated that contract renewals are occurring at 3-5% higher billing rates and that new contracts are being signed at 5-10% higher than average rates. Overall, the results beat our expectations largely due to the productivity improvements on fixed price contracts. We have raised our earnings forecasts by 4.3%, 7.1% and 10.4% for FY07E, FY08E and FY09E respectively. The stock price is already up by 8.5% YTD in anticipation of the strong performance. Given that the company delivered on its promise, at 23.3x FY08E and 19.1x FY09E earnings we maintain Out performer with a raised target price of Rs1,635 (earlier Rs1,512).

Lets Call It A Day.

Hot Pursuit

CMC surges a whopping 30%, tops 'A' group

Stellar Q3 results propel Geometric Software

Orders galore, grand Q3 show spawn interest in KEC International

Uttam Galva Steel charged up

European Bank alliance lifts SREI Infrastructure Finance

Support pours in for Sail on expansion plans

Sri Lankan aspirations drive VSNL

Rajesh Exports upbeat

Tata Steel rallies as new Corus bid likely

Cairn India gains after amicable end to pipeline tiff

Clamour for Tayo Rolls as Q3 figures impress

Tata Sponge sizzles as net profit soars

CMC leaps on prolific numbers

Fuel subsidies to continue

Asian leaders sign pact to reduce oil dependency

Rupee on high ground

Gold, silver trapped in a tight range

Rupee rises against dollar

Call money remains stable at 8% mark

Crude oil gains

Corporat Results:

TCS net profit at Rs 950.52 crore in December 2006 quarter

IPCL net profit at Rs 405 crore in December 2006 quarter

Panyam Cements net profit at Rs 3.15 crore in December 2006 quarter

Krishna Lifestyle Technologies net profit at Rs 1.50 crore in December
2006 quarter

HCL Technologies net profit at Rs 266.14 crore in December 2006 quarter

Tulip IT Services net profit at Rs 27.47 crore in December 2006 quarter

Geometric Software Solutions net profit at Rs 8.29 crore in December 2006
quarter

LT Overseas net profit at Rs 7.38 crore in December 2006 quarter

CHD Developers net profit at Rs 3.10 crore in December 2006 quarter

Maharashtra Scooters net profit at Rs 1.49 crore in December 2006 quarter

Jaybharat Textiles net profit at Rs 7.52 crore in December 2006 quarter

Sanwaria Agro Oils net profit at Rs 5.14 crore in December 2006 quarter

South Indian Bank net profit at Rs 24.84 crore in December 2006 quarter

Rajesh Exports net profit at Rs 28.12 crore in December 2006 quarter

Jay Bharat Maruti net profit in Rs 3.02 crore in December 2006 quarter

Lakshmi Precision Screws net profit at Rs 2 crore in December 2006 quarter

Tayo Rolls net profit at Rs 4.04 crore in December 2006 quarter

Corporate News :

Dazzel Confindive's board approves to allot 20 lakh convertible warrants

IPCL books net profit of Rs 405 crore in December ended Q3 results

No plans to buy Suntel: says VSNL

No plans to share Rajasthan pipeline project with ONGC: says Cairn India

HCL Technologies posts net profit of Rs 266.14 crore in December ended Q3
results

HCL Technologies declares 200% dividend

Spice changes financial year ending to 31 December 2006

GL Hotels acquires Kwality Resorts & Hospitality

MTNL to consider december ended Q3 results

Sun Pharmaceutical to consider december ended Q3 results

KSL & Industries allots 14 lakh equity shares to GIC

ABB bags Rs 186 crore contract

Mefcom Capital Markets to allot 23 lakh equity shares

Geometric Software books net profit of Rs 8.29 crore for the quarter ended
31 December 2006

VIP Industries to amalgamate with Blow Plast

GMR Infrastructure to consider December Q3 results

MRPL pre-pones board meet

Ramsarup Industries to raise $ 50 million

Maharashtra Seamless allots 8 lakh equity shares

Tata Steel to acquire Rawmet Ferrous Industries

Empower Industries inks JV agreement SPS, USA

Shreyas Shipping & Logistics' members approve investment / acquisition

United Breweries to consider interim dividend

Panyam Cements mulls expansion plans

CHD Developers to convert 76 lakh warrants into equity shares

Emaar-MGF JV to raise $2.9 bln through IPO

VSNL may buy Sri Lanka's Suntel

BSEL Infra to consider dividend

SREI inks MoU with EBRD

National Fertilizers to consider December ended Q3 results

GE Shipping receives new chemical tanker

Pratibha Industries to raise Rs 200 crore

Action Construction to acquire 74% stake in Romanian company

Indiabulls Financial allots equity shares to promoters

Saksoft to set-up subsidiary in Australia

Lakshmi Precision Screws to allot 8 lakh preferential shares

~Irritating IM~

Instant messaging can be great as a tool for collaboration, but it can also be disruptive and annoying. Now let’s see how you can use IM to bother your favorite and not-so-favorite work associates.

Remember that instant messaging is synchronous, intrusive, and often tedious: in other words, an ideal platform for making a pest of yourself.

Disregard any presence indicators your colleagues use such as busy or away. Your needs are more important than anyone else’s and you know that some people regularly set their IM status to busy or away even when they’re working on unimportant stuff. Bonus: if you catch someone at the computer when she says she’s away, berate her for it. She needs to set her presence indicators according to your needs not her own.
Never check whether a person has time to chat. If he’s online and reachable, he’s all yours! In particular, make sure you never ask about someone’s availability for a work-related chat at these special times of day: in the late afternoon, when he might be trying to finish his work so he can go home; early in the morning, when he might be taking advantage of quiet time to be productive; and the middle of the night, when, if he’s on the computer at all, he’s probably not thinking about work.

Don’t set your own presence indicators when you’re busy or away from the computer. That way people trying to get a quick answer from you will feel first hopeful and then frustrated. Long term, you can utterly confuse the people you work with by setting one IM account to “busy,” one to “away,” and one to “available,” making them into random noise. Then, when someone IMs you on the “available” account, chew him out for bothering you when you’ve got something important to do.

Don’t pause to give the person a chance to respond. Stream-of-your-own-consciousness is a great way to show that you matter and your conversational partner doesn’t. Ask a question, and then ask another, or answer it yourself. Type each sentence with a “…” after it so you can indicate that you have more (and more… and more…) to say.
But when you do pause, expect instantaneous replies. When someone is IM’ing with you, she should only be IM’ing with you, not doing anything else. You should expect her to close down all other chats, turn away completely from whatever she was doing, and give you her full attention.

Consider instant messaging as a way of getting personal therapy. This works especially well with your busiest and most driven associates. It’s good for them to help another. They need to be exposed to the reality of the human condition with all its angst and ennui. Don’t hold your pain inside–instant messaging equals instant catharsis. There. Don’t you feel better now?

Don’t ever use correct capitalization or punctuation. ur 2 kewl 4 dat! You feel comfortable with the brave new world of IM, why shouldn’t everyone else? Shift keys are for sissies.

Expect that IM conversations will always be like phone conversations, with a definite goodbye at the end. If your colleague hasn’t signed off, that means the discussion is still going, so keep on typing messages even if you’ve found out what you need to know. Don’t notice when the pauses between your entries and the responses get longer and longer and longer. The longer you keep the session going, the more likely you are to annoy.

Send large files without asking whether it’s okay. You know better than anyone what people need. Don’t have any qualms about using up other people’s download bandwidth and hard drive space.
Sprinkle emoticons liberally into your messages. One in a sentence is good, two is better, three provides maximum distraction and visual harassment. Don’t know all the ones you can use? Bookmark the one you need: AOL, GTalk, MSN, and Yahoo.

Try out all the abbreviations you can think of. Learn new ones every day, so you can be as compact and opaque in your communication as possible. Don’t stick with the ones everyone knows–lol (”laughing out loud”), brb (”be right back”), and np (”no problem”). Try out some new ones, especially on people you know are likely to be unfamiliar with them. How about ptmm (”please tell me more”) or wdalyic (”who died and left you in charge”) or issygti (”I’m so sure you get the idea”)?

You may disagree about whether some of these ways of using IM are irritating or not. That’s part of IM’s unique ability to annoy–no one quite agrees on its proper use.

What irritates you most about instant messaging?

Well now my last words but not least...Dont Irritate me with your IMs Plzzz. DMAF.

~BULL TIME WITH THE RIL GURU. ~

The market kept its upward momentum intact, advancing on the third consecutive day, with the BSE Sensex and NSE Nifty index finishing at their all-time highs. The benchmark index has advanced 767.49 points in these three days, from a close of 13,362.16 on 10 January 2007.

Much of today's rally materialised after index heavyweight Reliance industries (RIL), advanced to an all-time high of Rs 1372.30.

The 30-shares BSE Sensex advanced 73.11 points, at 14,129.65. It had opened strong, extending gains from Friday, and surged to strike an all-time high of 14,202.12, as buying continued. The benchmark index had also dipped to a low of 14,103.12, earlier.

The S&P CNX Nifty rose 25.95 points to 4,078.40. It also struck an all- time high of 4,099.65 during intra-day trade.

The market-breadth was strong on BSE, as buying happened across small-cap and mid-cap counters. On BSE, there were close to 2 gainers for every loser. For 1,749 shares advancing, 913 declined and 45 remained unchanged.

The total turnover on BSE amounted to Rs 4677 crore.

Among the 30-Sensex pack, 18 advanced while the rest declined.

Tata Steel was the top gainer, up 4.36% to Rs 487.80, following reports that the steel major may soon put in a new bid for Corus. As the 30 January 2006 deadline, set by the UK Takeover Panel nears, the market expects an announcement anytime. Tata Steel will need to beat the 515 pence-per-share bid made by its Brazilian rival, Companhia Siderurgica Nacional (CSN), on 11 December 2006. The Indian major revised its bid to 500 pence per share from 455 pence, which CSN pipped within hours. A newspaper citing sources in investment banking circles said Tata Steel’s bid may go up as high as 550 pence, “but not necessarily in one go’’.
HDFC Bank gained 2.70% to Rs 1092, on a volume of 2.90 lakh shares. Two block deals of 62,904 shares at Rs 1086.10 per share and 82,287 shares at Rs 1091.60 per share, were struck in the counter on BSE in early trade. The stock also struck a high of Rs 1096.

Index heavyweight Reliance Industries (RIL) advanced 1.93% to Rs 1366 on a volume of 12.13 lakh shares. The market is rife with rumours that the company will announce a stock-split along with its quarterly results on Thursday.

India's top private oil refiner, Reliance Industries, is expected to report on Thursday, a 26% rise in quarterly earnings due to strong margins from petrochemicals. Analysts estimated Reliance's petrochemical margins in October-December to increase by more than 35% from a year earlier, helped by higher product prices and a drop in raw material costs. Analysts forecast 39.5% rise in net sales to Rs 25300.40 crore.
L&T (up 2.69% to Rs 1507.20), Ranbaxy Laboratories (up 2.26% to Rs 430.50) and REL (up 1.61% to Rs 533.25) were the other gainers.

Tata Motors rose 0.66% to Rs 947. Media reports that the company may bid for Daewoo Automobile, Romania.

ITC gained 0.38% to Rs 172, on a volume of 17.41 lakh shares. It had recovered from a low of Rs 169.05. A block deal of 10.31 lakh shares was executed in the counter at Rs 171.40 per share, by 10:09 IST.
Maruti Udyog was the top loser, down 1.72% to Rs 904.90, on a volume of 2.48 lakh shares.
ICICI Bank (down 1.56% to Rs 955), Bhel (down 1.59% to Rs 2221) and Hero Honda (down 1.37% to Rs 732.95) were the other losers.

Reliance Communications (RCL) was down 0.81% to Rs 430.25. It plans to list its wholly-owned Flag Telecom unit on the London Stock Exchange to raise $500-$550 million, according to newspapers. Reliance Communications will dilute up to 24% stake in the undersea cable unit, a newspaper said citing unnamed sources. Another newspaper said, the company will begin procedures related to an initial public offering in February. RCL recently revealed it will invest $1.5 billion in increasing Flag Telecom's network capacity.

ONGC slipped 0.93% to Rs 916.25. The company will offer stakes in its deepwater blocks off the east coast to Brazil's Petrobras, Italy's ENI, Norway's Norsk Hydro and Malaysia's Petronas, Chairman RS Sharma said Friday. He also said that the state-run explorer earned $42 - $45 a barrel for crude sold to state-run refiners in the December 2006 quarter. ONGC will report December 2006 quarter earnings on 30 January 2007.
CMC jumped 28.66% to Rs 898, after the company reported a 69% jump in net profit for December 2006 quarter. CMC’s consolidated net profit jumped 69% in December 2006 quarter, to Rs 20.40 crore (Rs 12.07 crore). Consolidated sales jumped 44% to Rs 298.63 crore (Rs 207.25 crore). For April-September 2006, CMC’s net profit rose 26% to Rs 48.50 crore (Rs 38.59 crore). During the same period, consolidated revenue rose 30% to Rs 790.69 crore (Rs 609.24 crore).

State run steel major Sail surged 10.10% to Rs 99.80, extending Friday’s rally triggered by the steel minister’s statement of massive expansion proposed at the company. Steel minister Ram Vilas Paswan said on Friday that the Steel Authority of India (Sail) will invest Rs 100,000 crore to raise capacity from 14.6 million tonnes per annum to 40 mtpa by 2020. Sail had earlier announced scaling up capacity to 23.8 mtpa by 2010.
Cairn India jumped 5.11% to Rs 141.80, amid reports of reaching an agreement with ONGC to build a $340-million pipeline to transport crude oil from Rajasthan to Gujarat. ONGC and Cairn will share the cost of the pipeline project in 70:30 ratio. The new arrangement will also mark Cairn India’s involvement in the mid-stream segment of the petroleum business in the country. As per reports, Cairn and ONGC will first build a 340-km line to Indian Oil Corp’s (IOC) Viramgam pipeline terminal in Gujarat. The construction will take 12-18 months.

Ispat Industries rose 20% to Rs 15.42. The company had recently entered a memorandum of understanding (MoU) with the Chhattisgarh Government for setting up a coal-based 600 Mw power project in Janjgir, Champa district, for Rs 2,500 crore. Recently, the company also signed an agreement with the Maharashtra Government for expansion of capacity to manufacture steel at its integrated steel complex located at Dolvi.

Uttam Galva Steels jumped 12.32% to Rs 41.95, after the company raised galvanised steel prices by Rs 1,500 a tonne to Rs 50,000 per tonne on Monday. The hike in domestic zinc prices appear to have triggered the move by the company to raise zinc prices. Zinc is a key raw material in the manufacture of galvanized steel.
Geometric Software Solution surged 4.25% to Rs 141.25, after it unveiled a net profit growth of 254% for Q3 December 2006 to Rs 8.29 crore in Q3 December 2006, compared to Rs 2.34 crore in Q3 December 2005. Total income has increased from Rs 31.84 crore to Rs 52.98 crore.

Videsh Sanchar Nigam (VSNL) rose 6.74% to Rs 465, on reports that it is in talks to buy a telecom operator, Suntel, in Sri Lanka. Suntel is a joint venture backed by Sri Lanka's National Development Bank, Sweden's Overseas Telecom AB, Metrocorp, Hong Kong's Townsend and International Finance Corporation (IFC). VSNL Global, VSNL’s international arm, recently won licences to provide international long distance and Internet services in Sri Lanka, and wanted to enter the outbound voice traffic, data and enterprise businesses, a newspaper said, quoting company sources. The company, however, shot down the reports.

Tata Sponge Iron spurted 20% to Rs 124.80, after the company reported a 193% surge in net profit in December 2006 quarter. Tata Sponge Iron reported a 192.9% surge in net profit to Rs 7.06 crore in December 2006 quarter. Net sales rose 98.9% to Rs 82.13 crore (Rs 41.29 crore).

Sterlite Industries lost 0.80% to Rs 536.50, after its Q3 December 2006 consolidated net profit jumped to Rs 1293 crore, compared to Rs 395 crore in Q3 December 2005. Net sales increased to Rs 6814.3 crore (Rs 3511.4 crore).

Indian Oil Corporation declined 1% to Rs 478.15. There are reports that it has put plans for an Indonesian foray into the freezer. However, the company is likely to continue with its lubricant distribution business in Indonesia. Indian Oil was looking at launching its retail outlets in Indonesia by floating a fully-owned subsidiary. If the plans had materialised, it would have been Indian Oil's third retail venture overseas.
SREI Infrastructure Finance advanced 3.95% to Rs 55.35, after it announced it will shortly enter into a strategic partnership with the European Bank for Reconstruction and Development. The strategic partnership comprises an investment by the EBRD in the equity of SREI Russia, and extension of credit lines to support the company's business overseas.

Tayo Rolls surged 12.80% to Rs 154.70, after the company performed well in Q3 December 2006. Tayo Rolls posted a net profit of Rs 4.04 crore in Q3 December 2006, compared with the net profit of Rs 0.01 crore in Q3 December 2005. Net sales rose to Rs 45.25 crore from Rs 37.41 crore.

Rajesh Exports rose 5% to Rs 455.75, after it posted a net profit growth of 57.71% to Rs 28.12 crore in Q3 December 2006 compared to Rs 17.83 crore in Q3 December 2005. Net sales rose to Rs 1872.45 crore from Rs 1294.02 crore.

Rallis India slumped 3.87% to Rs 287, after it reported a net profit of Rs 8.70 crore in December 2006 quarter compared to a net profit of Rs 8.56 crore in December 2005 quarter. Net sales rose to Rs 172.19 crore (Rs 166.26 crore).

All the Asian and European markets were trading in the green.

The Nikkei 225 index rose 0.9% on Monday, with investors buying exporters such as electronic parts maker Kyocera Corp., following gains on Wall Street and a softer yen. Nikkei jumped 152.91 points, to 17,209.92.
Hong Kong’s Hang Seng index advanced 455.15 points (2.32%), to 20,068.56.

FIIs were net buyers to the tune of Rs 159 crore on Thursday (11 January), when the Sensex rallied 269 points. As per provisional data, FIIs were net buyers to the tune of Rs 397 crore on Friday (12 January), the day when the benchmark index spurted 426 points. FIIs were net buyers to the tune of Rs 919 crore and Rs 86 crore in index-based futures and individual stock futures, respectively, on 12 January 2006.
Mutual Funds were net sellers to the tune of Rs 250 crore in equity on 11 January 2006.

US stocks rose for a third day on Friday, driving the Dow to another record high as energy shares rebounded on oil prices. Data showing surprisingly robust December retail sales underscored optimism about economic growth also aided the upmove. US retail sales grew in December at the fastest pace since July. The Dow Jones industrial average rose 41.10 points, or 0.33%, to end at 12,556.08. The Standard & Poor's 500 Index advanced 6.91 points, or 0.49%, at 1,430.73. The Nasdaq Composite Index was up 17.97 points, or 0.72%, at 2,502.82.

Oil prices rose above $53 a barrel Monday amid reports that OPEC may hold an emergency meeting to reverse the 13% plunge in oil prices this year. Light, sweet crude for February delivery gained 31 cents to $53.30 a barrel in electronic trading on the New York Mercantile Exchange in Singapore.
Crude oil futures plummeted as low as $51.56 Friday, the lowest in 19 months, before closing at $52.99 a barrel, up $1.11, on news that producer cartel, OPEC, was considering an emergency meeting and new production cuts.

Sector Specific Analysts View.

The week ended on a very high note. A slew of analysts, while speaking to CNBC TV-18 gave their views on the stocks and sectors for next week.

Investment Advisor PN Vijay

In the midcap sector, I like technology and banking. Banking is back to being a value play, still the valuations are reasonable and the net interest margins as we saw in HDFC Bank were very good indeed. Probably this SLR reduction would improve liquidity. So banks would continue to be a good value play. Midcap IT would be a very exciting sector too right through the year.

In media, I like WWIL because it’s a very tried and tested business model and DTH (Direct-to-home) is not going to mean the end of the world for the MSOs (multiple system operator) and cable operators. All that you are going to get is more amount of transparency and regulation and this is going to bring lot of pricing power back to the MSOs who control the cable industry which is as big as telecom industry in India

Deepak Mohoni of trendwatchindia.com
It’s a very strong move obviously in banks particularly ICICI Bank. But until today the banks were not really among the leading gainers for at least one-two months. Since today is the first move we are seeing we will have to see whether it sustains in the next week or two or whether it’s a one-week step-up to catch-up and then go sideways or a little down.

Ratnesh Kumar of Citigroup
As far as technology is concerned, it has been a good set of indicators in terms of pricing, in addition to which, the ability of various companies in the sector to hold on to growth and margins, despite some unfavourable trends on the currency side is laudable. So I think that is one of the sectors I continue to be extremely positive on.

Banking and financial services as a business is something I like a lot in the context of where the economy is going. Obviously, it is a sector, which is fundamentally linked to the growth of the economy. For the time being however, I am underweight on the sector overall, simply because of the fact that I see some moderation and credit growth driven by many factors.

As far as the oil sector is concerned, the outlook is driven by two to three factors. Oil price is one of them, then, of course there is the big government policy interface. The overall view on the sector obviously is an underweight one. Within that context, we are a bit more positive on the gas chain as well as on the upstream side.

India Investment Strategy.

In most parts of the world and particularly in India, 2006 has been an extremely good year on the macro front. We have entered 2007 with greater uncertainty on global growth front. However, as far as India is concerned, while we expect some softening from the very strong gains made in 2006, both in terms of GDP and stock market, we expect the year to yield a satisfactory outcome.



~Despite considerable slowdown in G-3, strong domestic demand would make growth moderation in India modest
~Fiscal correction on track but concerns remain
~Slowdown in domestic credit coupled with deceleration in foreign inflows could result in continuation of tight liquidity especially on the short end
~Sensex PEG has remained at comfortable level, despite strong gains in valuation multiples
~The appreciation of rupee against US dollar is unlikely to adversely affect India’s goods and services exports

ION Exchange.

ION Exchange (Rs.129) – BUY
The capability to provide Total Water Management will be one of the major growth areas for the company as more and more customers would be looking for outsourcing complete water management and would like to concentrate on their core processes. Other key drivers will be international business, which is expected to grow at 25% per annum. Focus on providing excellent quality of service to the customers and achieve customer satisfaction, with the help of a well established and elaborate service infra-structure, the company is in a position to excel in the fragmented market area it operates in.

Valuation
The company presently trades at a P/BV of 1.4x and PE of 28x its TTM earnings.

Rallis India.

Rallis India (Rs.298)-BUY
Rallis India Ltd, a Tata Group is India’s no. 2 agrochemical player with a robust product pipeline, strong international alliances (like FMC, Syngenta, Nihon Nohyaku, Dupont and Nuziveedu) and a geographical reach to India’s 80% of district. The Company's Agribusiness division is the distributor of Pesticides, fertilizers, micro-nutrients, seeds, animal feed and other agro inputs. The company has started the sourcing and markeitng of Bt Cotton Seeds in an alliance with Nuziveedu Seeds. An Alliance with Nuziveedu Seed Company, a Major Player in hybrid and Bt Cotton seed market, has been established for purposes.

At the No 2 position in the industry, Rallis is trading at the current CMP of Rs 295 at annualized P/E of 36.8x 9mnths Fy07 Earnings.

S Kumars Nationwide Ltd.

S Kumars Nationwide Ltd: (Rs.77)
The company has come out with good results at the end of Q3 FY07, in terms of growing sales, profits and expending margins. The performance was boosted by several new launches in the past quarter. The company is looking forward at closing the year with revenue to the tune of Rs.1240cr and around 140% yoy growth in the full yrs EPS. The company has a list of new launches lined up for the coming year. We recommend a BUY on the stock.

~Be a TIGER, not a HEN~

As a pointer to investment success, Warren Buffett once said, "Be a tiger, not a hen'' with your investments. He meant target a few large, meaty investments like a tiger, rather than pecking away at numerous small pickings like a hen. By researching and focussing on a few, select investments, Buffett demonstrated excellent long-term investment results.
Declutter it
There is another reason to avoid over-cluttering your money with dozens of small-value investments and that is to save time and reduce costs. In today's world, each investment is typically accompanied by a plethora of paperwork, numbers to remember, regulatory do's and don'ts, tax treatments and transaction/maintenance fees. By spreading money wide, the collective time, trouble and expenses are rarely worth whatever returns they deliver.
Upon reflection, how do we end up with such a cluttered portfolio ? It is because we don't say `no' enough. The sequence is like this: Each time a company or a financial institution wants to raise money, it launches an IPO or a new product designed partly to increase its own size and stature. The timing and nature of this investment may hold no relevance to us, yet we sometimes get excited by this "hot new IPO'' or this "uniquely innovative product'' and invest our funds without too much thought.
Control it
The solution is for us to retain full control — tell yourself that you will invest only when convenient and appropriate to you, and not whenever an institution and their marketing brigade decide they need some extra money. There is an inherent divergence in interest between you as an investor and the various players earning revenues in the financial industry.
Assuming you have started with a sensible investment, the less you transact, the faster your money grows. However, the well-being and performance of many of the financial intermediaries depends on how `active' you are and how fast you keep your money moving. In short, each time you transact, you lose and they gain.
Slow it down
This is not to say you stay stuck and stationary with your investments... just slow them down. Each time you move, ensure you get a convincing reason from your financial advisor as to why they are recommending a particular switch or a new investment.
The tax implications and extra accounting that accompanies each transaction should further make you pause and reflect before signing on to a new destination for your money.
In conclusion, reduce the number of your investments, control when and where you make them, and slow the pace of your transactions — a clear case where `less' usually leads to `more'.

AIA Engineering.

Investors can retain their exposure to the stock of AIA Engineering Ltd (AIAEL), a manufacturer of impact, abrasion and corrosion-resistant high chrome parts — which find application in the crushing and grinding operations in cement, coal-based power generation and mining industries. At current market price, the stock trades at about 38 times its FY-07 expected per share earnings on a fully diluted basis. Though the growth prospects of the company are robust, the valuations appear pricey. Moreover, given that the benefits due to the enhanced capacities and the proposed backward integration would effectively accrue from FY-09, short-term investors can consider booking partial profits and re-entering the stock at lower levels. However, the medium-to-long-term investors can remain invested.
Investment Rationale
Encouraged by increasing demand, AIAEL is expanding capacity over the next two-three years. Its recent addition of about 50,000 tonnes is likely to contribute to the revenues from the current quarter (January-March). The facility, being an export-oriented unit, could enjoy tax benefits. Further, about 50,000 tonnes of new capacity installation is expected by October 2007. With a robust demand outlook, AIAEL is planning a further addition of 1,00,000 tonnes of capacity. This, however, is likely to contribute to the revenues from FY-09 only. The capex plan, if executed on time, would result in the total installed capacity to 2,65,000 tonnes in FY-09.
Exports form a significant part of the company's revenues (roughly about 48 per cent of its total consolidated sales in FY-06). It has presence in the US, the UK and West Asia through its subsidiaries. Furthermore, it enjoys a decent visibility in the overseas market — Holcim, Lafarge and Cemex are among its clients.The company's focus on the export market is likely to drive revenues in the future, given the higher realisation from them.
Cement continues to be the highest revenue contributor for the company. For the second quarter FY-07, cement, utilities and mining contributed about 62 per cent, 26 per cent and 13 per cent respectively of the total domestic revenues.

However, in the overseas market, cement contributed to 100 per cent of the revenues. As a result of this, AIAEL plans to expand focus on global mining and the utility segment. Though the decision is a positive, it could take a couple of years before significant contribution starts pouring in from the segment.
Strategies
More than 70 per cent of the total revenues of AIAEL comes from replacements, which rules out the possibility of any significant drop in demand during times of recession in the capital spending cycle. Further, AIAEL's value-add services that improve its client's productivity and product quality have also helped it create a niche market. To get a better grip over its raw material cost, it is considering the possibility of backward integration (either by acquisition or setting up a new plant) for sourcing Ferro chrome, an important raw material.
Additionally, its strategy of building in an escalation clause into most of its contracts is likely to reduce the risk of any increase in raw material prices. It also plans to set up a 30 MW plant for captive consumption, which could result in significant cost cuts.
However, we have not taken into account any savings that might arise due to the proposed power plant.
Delay in expansion plans, lower than expected capacity utilisation and an extreme rise in raw material cost are principal risks to our recommendation.

Balrampur Chinni.

The prospect of an earnings slowdown for sugar companies due to weakening sugar prices has triggered a 60 per cent decline in the Balrampur Chini Mills stock since April 2006.
This has trimmed the price-earnings multiple for the stock from about 15 times the FY-07 earnings to about 8.5 times, presenting a good buying opportunity for long-term investors at the current price level of Rs 84. A significant slowdown in earnings growth from a scorching pace during the past two years is already factored into the stock price.
Going forward, Balrampur Chini Mills appears on course to deliver double-digit earnings growth over the next couple of years. The company's ongoing capex programmes, which will bolster volume growth, and an increasing contribution from power and distillery operations, are likely to offset the impact of flat or marginally lower sugar realisations on earnings. The lifting of the export ban on sugar is likely to lead to a tighter domestic supply scenario and provide support to domestic sugar prices at current levels.
Sugar scenario

Expectations of comfortable sugar supplies in the sugar season 2006-07 (October-September) have triggered a 15 per cent decline in sugar prices over the past couple of quarters. With sugar output expected to recover to about 227 lakh tonnes in the current season on top of opening stocks of about 36 lakh tonnes, total sugar availability is expected to be of the order of 263 lakh tonnes. Assuming domestic consumption of about 200 lakh tonnes and no exports, this would have resulted in the closing stock of about 63 lakh tonnes or four months' consumption by end of this season, a much higher inventory than in 2005 or 2006. However, the lifting of the export ban may lead to a significant draw down in the forecast inventories. The re-export obligations of mills and the freight advantages of shipping to neighbouring markets suggest that exports of about 20 lakh tonnes are likely, though they may not fetch a significant premium to domestic realisations. Sugar prices may find support at Rs 1,700-1,750 a quintal, on the back of higher consumption due to a buoyant economy, combined with depleting inventories due to exports.
Upside from diversification

Among the frontline sugar companies, Balrampur Chini Mills appears better placed to deliver reasonable earnings growth in a scenario of flat or marginally declining sugar prices. The company controls cane crushing capacities of 57,500 tcd (tonnes crushed per day) spread over seven locations in Eastern Uttar Pradesh, distillery capacities of 320 kilolitres per day and generates about 86 MW of surplus power from baggase.

For one, the company has managed to rein in increases in procurement costs over the years by virtue of its location. With few large players in this belt, Eastern Uttar Pradesh has not witnessed the intense competition for cane seen in the other belts. The sharp expansion in cane acreage in the current season could thus reduce procurement costs and provide relief on margins, while expanding revenues from by-products such as power and ethanol.
Second, significant capacities in downstream products have enabled the company to diversify its revenue stream outside of its sugar operations; this makes earnings less sensitive to small swings in sugar prices. Co-generated power and alcohol alone contributed 23 per cent of Balrampur Chini's operating profits in 2005-06 and this proportion is likely to rise over the next couple of years on the back of expansion projects.

Third, the company has already made significant investments in fresh capacities for sugar and by-products, which may boost volumes and revenues over the next couple of years. The ongoing projects are expected to expand sugar capacities by about 50 per cent, power generation by about 80 per cent and double distillery capacities by FY-08; a big portion of the earnings from these projects will flow in during the current financial year ended September 2007.
Though the undemanding valuation for the stock (at eight times forward earnings) reduces the downside risk at current levels, investors in the stock should take note of the risks arising from the commodity nature of the business. An upward revision in domestic sugar production estimates and any further policy intervention to curtail sugar prices are the key sector-specific risks, while any delays in stabilising production at the new facilities would be the key company-specific risks to earnings.

GSK Consumer-Buy.

Strong growth prospects for the health drinks business and improving pricing power make GlaxoSmithkline Consumer Healthcare a good investment proposition for investors with a medium-term outlook. At its current price of Rs.577, the stock trades at a price-earnings multiple of about 18 times its trailing 12-month earnings and just about 16 times its likely FY07 earnings. This places the stock's valuation at a significant discount to other FMCG companies, which enjoy multiples of between 25 and 28 times forward earnings.

Sales growth for categories such as malted food drinks have accelerated to double digits in recent months, on the back of higher promotional activity, improving income levels and higher offtake of FMCGs from the non-urban centres. As the dominant player in the health drinks business (Cadbury India being the only competitor of note), GSK Consumer appears a direct beneficiary of this trend. Over the past year, the company has made packaging innovations in its flagship brand, Horlicks, and rolled out new ad campaigns for brown drinks - Boost and Maltova. The company has also acquired a significant presence in the out-of-home segment through its vending machines in schools, railway stations and other high traffic areas. Rising input costs have been a problem area for the company in the first nine months of 2006, with rising prices of milk, wheat and sugar. However, imminent increases in output of wheat and sugar this year could moderate input price pressures on these commodities in the months ahead. In any case, GSK Consumer reported a 19 per cent growth in earnings in the first nine months of 2006 despite the margin pressures. This was on top of a 46 per cent expansion in earnings the previous year.

On the flip side, with its presence restricted mainly to health drinks, GSK Consumer's product portfolio continues to be limited and would justify a valuation discount to other FMCG companies. However, the significant valuation gap with other FMCG majors and reasonable growth prospects still offer scope for a 15-20 per cent return on the stock price from current levels. Strong growth prospects for the health drinks business and improving pricing power make GlaxoSmithkline Consumer Healthcare a good investment proposition for investors with a medium-term outlook. At its current price of Rs.577, the stock trades at a price-earnings multiple of about 18 times its trailing 12-month earnings and just about 16 times its likely FY07 earnings. This places the stock's valuation at a significant discount to other FMCG companies, which enjoy multiples of between 25 and 28 times forward earnings.