Friday, May 30, 2008

Report for Mahindra and Mahindra

One should keep buying on Mahindra and Mahindra with a target price of Rs 730. For 4QFY2008, Mahindra and Mahindra (M&M) clocked net sales of Rs 3148 crore, which was marginally above our expectation of Rs 3021 crore. There was an exceptional profit of Rs 13.9 crore during the quarter, arising mainly from a merger scheme of subsidiaries approved by the High Court of Bombay. Net Profit for the quarter after Exceptional Items, Prior Period Adjustments and Taxation stood at Rs 207.2 crore, down 9.1% yoy.

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Thursday, May 29, 2008

Report for Rolta India

One Should keep buying on Rolta India with a target price of Rs 435. The company management has indicated there is a huge opportunity for it in terms of airport redevelopment, 3D city mapping and work related to power distribution companies (discoms). Rolta is already involved with 26 airport projects across the country. Mapping a single city would be a Rs 1.5-Rs 2.0 billion project. Rolta has hands on experience in this as it has done 3D city mapping for Dubai. We also understand that Rolta is working on nine projects for power distribution companies.

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Some Good Buy Call For investors

Buy HDIL for target of Rs.2050,
Buy Praj induestries for target of Rs.241,
Buy Tatachem for target of Rs.529.

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Decision on fuel price hike

Oil minister, Murli Deora, said on Thursday that the government would take a decision on raising fuel prices in the next two to three days. Earlier it was reported that the government would decide on the fuel price hike on Friday.

The cabinet is expected to discuss a range of proposals to ease losses at state oil firms due to crude oil's record run later on Thursday, and an increase in petrol and diesel prices is one option.

Reports say that the bailout package for oil companies would be a mix of price hike, duty cuts and bonds. The Finance Ministry may also agree to some cut on excise, customs on petro products.

The Petroleum Ministry has been pushing for a Rs 10 per litre hike petrol prices, Rs 5 a litre in diesel and Rs 50 per LPG (cooking gas) cylinder.

In the absence of a hike, state-run oil companies HPCL and BPCL would run out of cash to import crude in the next two months, while Indian Oil Corp has said it would run out of money for buying crude by September-end.

Resources - Economictimes

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Monday, May 26, 2008

Report for ITC

Buy ITC, target of Rs 258:

IndiaInfoline has maintained its buy rating on ITC with a target price of Rs 258 in its May 26, 2008 research report. "ITC recorded 14.7% yoy growth in revenues at Rs 139.5 billion slightly below our expectation of Rs 140 billion during FY08 led by 7.7% yoy growth at Rs 138 billion in the core cigarettes segment. We believe ITC to have recorded a flat growth (or a decline of 1%) in cigarette volumes during FY08. The non-cigarette businesses recorded 18.9% yoy growth at Rs 98.4 billion driven by strong 48.6% yoy growth in FMCG [led by branded packaged foods - 57%, biscuits – 53%, confectionary – 40%, lifestyle retailing – domestic 26%, exports 17%], 10.5% yoy in agri, 12.6% yoy in paper and packaging and 11.6% yoy rise in hotels segment. The leaf tobacco exports recorded a new high in tobacco exports for the third consecutive year growing by 21% yoy in value terms and 27% yoy in volume terms (at 62mn kgs)."

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Increament in petrol prices

Petrol, a fuel used primarily by urban consumers, could soon be selling at market prices. This would mean an increase of Rs 10-16 per litre at current prices.

Officials told ET that a proposal to sell petrol at market prices, while keeping diesel, cooking gas and kerosene at subsidised rates was under consideration. According to a Union minister, some Cabinet members are in favour of market-determined petrol prices. The Cabinet is likely to take up the proposal at a meeting soon, which will discuss a bailout package for state-owned oil marketers.

“With crude oil prices breaching $132/barrel, nothing can be ruled out in the domestic market. Some members in the Cabinet favour prices of petrol to be market-determined, while regulating prices of diesel, cooking gas and PDS kerosene to safeguard the poor and avoid stoking inflation,” he said.

Resources :- Economictimes

“I strongly believe that subsidising petrol not only encourages its misuse but also discourages use of public transport. Having a market-determined price would help in the survival of oil cos without any significant inflationary impact. The poor, anyway, don’t use personal vehicles,” added another Cabinet minister. He added that there were other members with similar views.

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Friday, May 23, 2008

ITC Q4 Results

ITC has announced its fourth quarter and FY08 results. It has posted growth of 13.08% in its Q4 net profit of Rs 735 crore as against Rs 650 crore in same period of last year and 13.5% growth in net sales of Rs 3,934 crore from Rs 3,466.3 crore YoY. Other income stood at Rs 163 crore versus Rs 102 crore.

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Results of L&T

L&T is to announce its Q4FY08 numbers. the company is expected to post standalone profit after tax of Rs 871 crore as against Rs 700 crore in same period of last year.

Net sales is seen going up at Rs 7923 crore versus Rs 6248 crore. EBIDTA is likely to go up at Rs 1336 crore from Rs 809 crore. OPM is expected to improve at 16.86% versus 12.96%.

Factors to watch

  • Strong order backlog execution would lead to a 25% growth in topline
  • Operational efficiences to lead to YoY margin expansion

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Thursday, May 22, 2008

Buy Recommendation - Voltas

cmp: Rs 163.45
target price: Rs 190
Q4 Numbers are lower than our estimates mainly because lower revenue and profit-booking in the projects segment have reduced earnings downwards in FY09 in view of the high steel and aluminium prices, which may constrain margin expansion, especially in the engineering services and products segment

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Buy Recommendation - SAIL

cmp: Rs 176.85
target price: Rs 327
upgrading its earnings forecast for the steel major in FY09 and FY10 by 19.2% and 11.5%, in anticipation of buoyancy in steel prices, introduction of value-added products, operational efficiency and volume growth.

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Buy Recommendation- Dabur India

Dabur India
cmp: Rs 97
target price: 120
he stock was fairly valued at current levels. The brokerage expects the company’s consolidated revenues and earnings to grow at a compounded annual growth rate of 14.7% and 11.5% between FY08 and FY10, and has forecast an earnings per share of Rs 3.60 for FY09.

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Report for KS Oils

KS Oils
cmp: Rs 76
target price: Rs 117
he company would be the biggest beneficiary as the mustard oil market gets increasingly organised. KSO has embarked upon a capex programme of over Rs 650 crore to expand crushing/refining capacities by 3.5-4 times and solvent capacity by 6 times in the next two years.

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Friday, May 16, 2008

Some Good investment tips for an equity investor

Equity investment is a must have in one's portfolio if he is serious on accruing wealth. Lots of time time to research and good amount of patience required (read this article, the Requirement of patience by an investor) to an equity investor to succeed. Here are some best practices for investors who's serious on direct equity investment. For simplify, these practices divided to three, self assessment, fundamental research and profit analysis as well as some best practices:

Self assessment

1. What is your investment objective?

2. What is your perspective? Long term or short term? (To get profit from equity investment, one should have a long term perspective. It is advisable to have a 5 to 10 years time perspective for a successful investor to double his money or receive proper returns from his stock investments. Building wealth is not an hour, a day or some months process. It is a time taken process)

3. What is your risk profile? Can you bear a lose of 35 to 45% of capital in case of fluctuations and market volatility? If not, direct stock investment is not yours. You can go with debt instruments that is providing guarantee to capital but low returns.

4. What is you goal while investing in equities? It may be higher study, marriage of your daughter, buying a home, vehicle or even a holiday in later years.

5. Do you have enough knowledge about stock market, how it is working and its various cycles?

6. Are you starting your investment in early years? Ideally, subtract your age from 100 and the resulted percentage of your money should be in equity. If you are near to the pension age, it is not your choice but go for debt or secure investments like fixed deposits, debt funds etc.

Fundamental Research

While selecting a company to invest in their stock, you should acquire reasonable knowledge about the company, product, management, competitors, market status etc.. Below self assessment questionnaire help you to identify and decide whether the company is best to invest or not?

1. Are you better aware about the company? When did the company established and what is their history?

2. What are their businesses/services portfolio? Is that legal?

3. Is the product or services portfolio diversified well enough to confirm market status in case any produce or service failure occurred in future?

4. Is the company's business/service quality is enough to retain market trust for long term compare with similar product or services in the market?

5. Who are the main competitors?

6. How competitors product or service compare with? Is that better or less compare with?

7. How well the company management?

8. How innovative the company is, for product and services?

9. How many locations the company have factories or manufacturing units?

10. Do they have an international business and in that case do they have any facilities other than your country as well as how well their product movement in other markets?

11. What are their major profit source?

12. What is the share holding status? Do any foreign investments made on the company? Is there any reputed financial institutions/banks holding their shares?

13. How well the management completing the future plans declared in the company annual general meetings?

14. Do they have an investor friendly atmosphere?

15. Do they providing proper informations to investors about major activities as well as respecting their investors?

16. Is there any legal actions against the company or any pending cases against them?

17. In case of legal proceedings in the past, what are the reason and how company faced them?

18. do they have received any resistance or rejection from govt authorities in the past or present about any of their product or services?

20. Is there any labor issues within the company?

21. How the satisfactory level of staff those who working with company? This information you can receive by approaching those who are working with company. Always ask to 5 or more people.

As a most important factor, you should be well aware about companies business style and the network all over country and internationally.

Profit Analysis

To analyze the profit, you are required to collect informations from the companies or stock exchanges. This includes the Annual Report and financial reports for last few years (minimum 5 years). This will be available from various financial sites too.

1. What are the profit sources to an investor from the company in the past?

2. Are they a consistent dividend payer? (Check the dividend history for last 20 years and find out any failure occurred in any years withing this 20 years. A history of paying dividend continuously these 20 years, you can confirm that the company is a good dividend payer.)

3. What is the dividend percentage and is that increasing or decreasing year to year?

4. Does the company giving bonus issues to their investors?

5. What are the sales growth for last five years at least? Are they maintaining the sales growth consistency year to year?

6. What is the profit growth rate in an year to year? Are they maintaining the year to year profit consistency continuously? (If the company continuously have a minimum 25% growth in sales and net profit year to year, it can be a considerable point to buy the stock)

7. What is the Debt to Equity Ratio? This is a measure of the total debt a company owes compared to the equity of the shareholders. It tells you just how much of the capitalization is the owners vs. the creditors

8. What is the ROE (Return on Equity) ratio? This reveals how much profit a company earned in comparison to the total amount of shareholder equity on the balance sheet. For those of you interested in long-term investing with rich rewards, companies that have high return on equity ratios can provide the biggest payoff.

9. What are the Current Ratio? It serves as a test of a company's financial strength and relative efficiency

10. What is the Asset Turnover Ratio? The asset turnover financial ratio calculates the total sales for each dollar of asset a company owns. It measures a company's efficiency in using its assets.

11. What is the PBR (Price to Book value) Ratio? (A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share. A lower P/B ratio could mean that the stock undervalued. However, it could also mean that something is fundamentally wrong with the company. As with most ratios, be aware that this varies by industry.)

An in depth details of all these ratios available here

As well as the above, find out the PE ratio (A valuation ratio of a company's current share price compared to its per-share earnings. This is calculating by dividing the Market Value per share with EPS (Earning per share). An Example: if a company is currently trading at $43 a share and earnings over the last 12 months were $1.95 per share, the P/E ratio for the stock would be 22.05 ($43/$1.95). Compare this ration with competitor companies will give you an exact idea about the stock is under values or over valued.

12. Wheather the EPS, Earning Per Share, of the company increasing and year to year basis?

There are more ratio analysis available for understand a companies growth and profit screening. As an ordinary investor with less financial background, you can research the above mentioned ratios and that will give you the required information about the company and the possibility of profit in a long term run.

Some Don't while investing in Equity

1. Don't believe the analysts and tips from public

2. Don't follow public

3. Market will fluctuate always. Required enough patience to have good profit in the future.

4. Buy when others are selling and sell when others are buying.

5. Don't over diversify. Have enough diversification between Large, mid and small cap companies as well as among multiple industries.

6. Don't buy small number for stocks to test. Once if you found a very good company, go an buy the maximum possible buy you.

7. Don't buy any stocks without doing proper research from all angles.

If possible, buy and read some very good books available in the market. For starters, "Buffet: Making of an American Capitalist" is a good buy. Peter Lynch's "Once upon the Wall Street" will give you good ideas that an investor must have. Read my article "One up on wall street by Peter Lynch - The investors best friend" to have a look on what he said in this best seller.

Have better idea about Margin of Safety advice from Benjamin Graham. Read his Last will and Testament, a set of best available advices from Legend investor to investors those who investing in equities. The great book: Interpretation of Financial Statements from Benjamin Graham will be a very good guide for you to properly analyze the financial ratios.

Be a conscious and intelligent investor all the time.

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Thursday, May 15, 2008

How NRI Can Invest in India

Direct Investment

Foreign companies are now permitted to have a majority stake in their Indian affiliates except in a few restricted industries. In certain specific industries, foreigners can even have holding upto 100 percent.

Investment through Stock Exchanges

Foreign Institutional Investors (FIIs) upon registration with the Securities and Exchange Board of India (SEBI) and Reserve Bank of India (RBI) are allowed to operate on the Indian stock exchanges subject to the guidelines issued for the purpose by SEBI.

Important guidelines are as under :

Portfolio investment in primary or secondary market of a company by all registered FIIs, NRIs and OCBs is subject to a ceiling of 30/40 per cent of issued share capital. In any one company, holding by a single FII, NRI or OCB is subject to a ceiling of 10 percent of the total issued capital. However, in applying the ceiling of 30/40 percent the following are excluded:

Foreign investment under a financial collaboration which is permitted upto 51 percent in all priority areas.

Investment by FII's through offshore single/regional funds, GDR's and euro convertibles.

Disinvestment is allowed through a member broker of a Stock Exchange.

A registered FII is required to buy or sell securities on the Stock Exchanges only for delivery. It is not allowed to offset a deal in the same settlement. It is also not allowed to sell short, i.e., sell a security without having the stock in its portfolio.

Investment in Euro Issues/Mutual Funds floated overseas

Foreign investors can invest in Euro issues of Indian companies and in India-specific funds floated abroad.

Broking Business

Foreign brokers upon registration with the SEBI are now allowed to route the business of their registered FIIs clients through the members of Stock Exchanges. Guidelines for the purpose have been issued by SEBI.

Asset Management Companies / Merchant Banking

Foreign participation in Asset Management Companies and Merchant Banking Companies is permitted.

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Differance between PPF and NSC

When we carried an earlier piece on PF vs PPF: What's the difference?, we were flooded with mails telling us to do a piece on PPF vs NSC.
This is what we attempt to do here. Explain the difference between the Public Provident Fund and the National Savings Certificate.
The NSC is a post-office savings scheme while the PPF was established by the central government in 1968. But both are very safe since they are backed by the government.
How much goes in?
The minimum amount you have to put into your PPF account in a year is Rs 500. The maximum you can put is Rs 70,000 per year.
With NSC, the minimum amount is Rs 100. Here, is no upper limit on investment.
However, NSC is sold in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000. So, if you want to invest Rs 30,000, you will have to buy three certificates of Rs 10,000 each.
What do I get?
On the face of it, both give an identical rate of interest: 8% per annum. Or so it seems.
The only difference is in the way it is computed. PPF is compounded annually. NSC is compounded half-yearly (twice a year).
Let's say on April 1, 2006, you invested Rs 30,000 in PPF and the same amount in NSC.
On April 1, 2007, your PPF account will have Rs 32,400 while your NSC will have Rs 32,448.
What's the tax impact?
The most important issue!
Both these investments fall under Section 80C. That means the investments made under this section are eligible for an income deduction upto a maximum Rs 1,00,000.
This is as far as your principal investment goes.
Let's look at the interest earned.
With PPF, you pay no tax on the interest you earn.
What about NSC?

Till FY 2004-'05, an individual could avail of a deduction under Section 80L of the Income Tax Act. This limit was Rs 12,000 of interest income received during the financial year.

This deduction has been done away with from FY 2005-'06. Now, all interest income is taxable at the respective slab rate of the individual.
The interest accrued on NSC is taxable. But, it is also eligible for a deduction under Section 80C.
Generally, it is advisable to declare accrued interest on NSC on a yearly basis. So, over the period of six years, you could declare the interest income for each year. In such a case, it does not amount to a huge sum.
If you do not declare the interest on accrual basis, then the entire interest earned (difference between the amount deposited and the maturity value) would accumulate in the year of maturity. You could then claim it under Section 80C but it would be a huge amount and would be taxable at the current applicable tax rate.
How long do I hold it?
PPF is for 15 years, but you can extend it for a block of five years. Let's say you open a PPF account when you are 21 years old. It matures when you are in your late 30s, when you may be earning well and may not need the money. In that case, you can continue with the account.
Of course, you do have the option of withdrawing the entire balance on maturity, that is, after 15 years of the close of the financial year in which you opened the account.
So, if you opened it in FY 2006-07 (this financial year), you will be able to withdraw it 15 years later, starting March 31, 2007 (end of this financial year). That is April 1, 2022.
If you extend it for five years after that, you continue to earn the rate of interest and can also make fresh deposits and get the tax benefit.
NSC is for a much shorter duration -- just six years from the date of investment.
How many can I have?
Once you open an NSC, you can't keep adding to it. You will have to buy another. Let's say you buy a NSC of Rs 30,000. In a year's time, you want to add another Rs 30,000. You cannot add it to this amount. You will have to buy another NSC.
With PPF, you can have just one account. But this does not matter because you have to make annual additions. Every year, you keep adding to it.
However, if you like the safety of the investment and a guaranteed return of 8% per annum, you can open one in your child's name.

So you can have one account for yourself and one for your child. But this does not mean the tax benefit is doubled. The limit is the same -- Rs 70,000, irrespective if it all goes in your account or in your account and your child's.
Let's say you open an account for your minor child. You can deposit Rs 70,000 in your account and Rs 70,000 in your child's account. But you will only get the tax benefit on Rs 70,000.
How is it held?
The PPF account cannot be held jointly. You can nominate someone but it cannot be jointly held with someone else.

With NSC, you can hold it jointly or you can hold it singly and nominate someone.
Where can I open it?
To open a PPF account, you can drop by a State Bank of India branch. No, you do not have to have an account with them.
You can also ask your nationalised bank where you have an account if they are authorised to open PPF accounts. You can also approach the head post office in your area. If that is inconvenient, ask your local post office (selection grade sub post offices are allowed to do so).
To buy an NSC, just approach any post office.
Resource -

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Results of Chennai Petroleum Q4

Chennai Petroleum is to announce its Q4 and FY08 numbers. According to CNBC-TV18 estimates, the company is expected to post 6.6% growth in its net profit of Rs 201.65 crore as against Rs 189.10 crore in same quarter of last year. Net sales is seen up 37.7% to Rs 7785 crore from Rs 5653.1 crore YoY.

FY08 net sales is likely to go up 12.1% to Rs 27624.2 crore from Rs 24653.3 crore and net profit seen up 73% to Rs 980.65 crore from Rs 565.3 crore.

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Results of PNB for Q4

Punjab National Bank has announced its FY08 numbers. The bank has reported Q4 net profit of Rs 544 crore versus Rs 237.7 crore, a growth of 128.86% and net interest income of Rs 1,517 crore versus Rs 1,423 crore, up by 6.6%.Q4 other income stood at Rs 537.21 crore. NIM was at 3.66% and CAR at 12.96%.FY08 net profit went up at Rs 2,048 crore from Rs 1,540 crore.

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Tuesday, May 13, 2008

How does transfer of physical shares take place?

After a sale, the share certificate along with a proper transfer deed duly stamped and complete in all respects is sent to the company for transfer in the name of the buyer. Once the transfer is registered in the share transfer register maintained by the company, the process of transfer is complete.

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Who has to replace the shares in case of company objections?

The member who has sold the shares first on the Exchange is responsible for replacing the shares within 21 days of the Exchange being informed. Company objection cases that are not rectified or replaced are normally auctioned.

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What should one do with company objections?

The broker must immediately be notified. Company objection cases should be reported within 12 months from the date of issue of the memo for the original quantity of share under objection.

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What are company objections?

A list documenting reasons by a company for not transferring a share in the name of an investor is called company objections. Rejection occurs due to a signature difference, or fake shares, or forgery, or if there is a court injunction preventing the transfer of the shares.

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What is bad delivery?

SEBI has formulated uniform guidelines for good and bad delivery of documents. Bad delivery may pertain to a transfer deed being torn, mutilated, overwritten, defaced, or if there are spelling mistakes in the name of the company or the transfer. Bad delivery exists only when shares are transferred physically. In "Demat" bad delivery does not exist.

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What happens if the shares are not bought in the auction?

If the shares are not bought at the auction i.e. if the shares are not offered for sale, the Exchange squares up the transaction as per SEBI guidelines. The transaction is squared up at the highest price from the relevant trading period till the auction day or at 20 per cent above the last available Closing price whichever is higher. The pay-in and pay-out of funds for auction square up is held along with the pay-out for the relevant auction.

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Is there a separate market for auctions?

The buy/sell auction for a capital market security is managed through the auction market. As opposed to the normal market where trade matching is an on-going process, the trade matching process for auction starts after the auction period is over.

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What is an auction?

An auction is conducted for those securities that members fail to deliver/short deliver during pay-in. Three factors primarily give rise to an auction: short deliveries, un-rectified bad deliveries, un-rectified company objections

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What is short selling?

Short selling is a legitimate trading strategy. It is a sale of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers take the risk that they will be able to buy the stock at a more favourable price than the price at which they "sold short."

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When does one deliver the shares and pay the money to broker?

As a seller, in order to ensure smooth settlement you should deliver the shares to your broker immediately after getting the contract note for sale but in any case before the pay-in day. Simliarly, as a buyer, one should pay immediately on the receipt of the contract note for purchase but in any case before the pay-in day.

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What is a rolling settlement?

The rolling settlement ensures that each day's trade is settled by keeping a fixed gap of a specified number of working days between a trade and its settlement. At present, this gap is five working days after the trading day. The waiting period is uniform for all trades.

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What is a settlement cycle?

The accounting period for the securities traded on the Exchange. On the NSE, the cycle begins on Wednesday and ends on the following Tuesday, and on the BSE the cycle commences on Monday and ends on Friday.
At the end of this period, the obligations of each broker are calculated and the brokers settle their respective obligations as per the rules, bye-laws and regulations of the Clearing Corporation.
If a transaction is entered on the first day of the settlement, the same will be settled on the eighth working day excluding the day of transaction. However, if the same is done on the last day of the settlement, it will be settled on the fourth working day excluding the day of transaction.

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What is a Buy Back?

As the name suggests, it is a process by which a company can buy back its shares from shareholders. A company may buy back its shares in various ways: from existing shareholders on a proportionate basis; through a tender offer from open market; through a book-building process; from the Stock Exchange; or from odd lot holders.
A company cannot buy back through negotiated deals on or off the Stock Exchange, through spot transactions or through any private arrangement. Clearing and Settlement

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What is an ex-date?

The first day of the no-delivery period is the ex-date. If there is any corporate benefits such as rights, bonus, dividend announced for which book closure/record date is fixed, the buyer of the shares on or after the ex-date will not be eligible for the benefits.

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What is an ex-dividend date?

The date on or after which a security begins trading without the dividend (cash or stock) included in the contract price.

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What is a no-delivery period?

Whenever a company announces a book closure or record date, the Exchange sets up a no-delivery (ND) period for that security. During this period only trading is permitted in the security. However, these trades are settled only after the no-delivery period is over. This is done to ensure that investor's entitlement for the corporate benefit is clearly determined.

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What is the difference between book closure and record date?

In case of a record date, the company does not close its register of security holders. Record date is the cut off date for determining the number of registered members who are eligible for the corporate benefits. In case of book closure, shares cannot be sold on an Exchange bearing a date on the transfer deed earlier than the book closure. This does not hold good for the record date.

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What is a book-closure/record date?

Book closure and record date help a company determine exactly the shareholders of a company as on a given date.

Book closure refers to the closing of register of the names or investors in the records of a company. Companies announce book closure dates from time to time. The benefits of dividends, bonus issues, rights issue accruing to investors whose name appears on the company's records as on a given date, is known as the record date.

An investor might purchase a share-cum-dividend, cum rights or cum bonus and may therefore expect to receive these benefits as the new shareholder. In order to receive this, the share has to be transferred in the investor's name, or he would stand deprived of the benefits. The buyer of such a share will be a loser. It is important for a buyer of a share to ensure that shares purchased at cum benefits prices are transferred before book-closure. It must be ensured that the price paid for the shares is ex-benefit and not cum benefit.

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What is a contract note?

A contract note describes the rate, date, time at which the trade was transacted and the brokerage rate. A contract note issued in the prescribed format establishes a legally enforceable relationship between the client and the member in respect of trades stated in the contract note. These are made in duplicate and the member and the client both keep a copy each. A client should receive the contract note within 24 hours of the executed trade. Corporate Benefits/Action

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Why does one need a broker?

As per SEBI (Securities and Exchange Board of India.) regulations, only registered members can operate in the stock market. One can trade by executing a deal only through a registered broker of a recognised Stock Exchange or through a SEBI-registered sub-broker.

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How does one execute an order?

Select a broker of your choice and enter into a broker-client agreement and fill in the client registration form. Place your order with your broker preferably in writing. Get a trade confirmation slip on the day the trade is executed and ask for the contract note at the end of the trade date.

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What is an Index?

An Index is a comprehensive measure of market trends, intended for investors who are concerned with general stock market price movements. An Index comprises stocks that have large liquidity and market capitalisation. Each stock is given a weightage in the Index equivalent to its market capitalisation. At the NSE, the capitalisation of NIFTY (fifty selected stocks) is taken as a base capitalisation, with the value set at 1000. Similarly, BSE Sensitive Index or Sensex comprises 30 selected stocks. The Index value compares the day's market capitalisation vis-a-vis base capitalisation and indicates how prices in general have moved over a period of time.

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How many Exchanges are there in India?

The Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) are the country's two leading Exchanges. There are 20 other regional Exchanges, connected via the Inter-Connected Stock Exchange (ICSE). The BSE and NSE allow nationwide trading via their VSAT systems.

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What is electronic trading?

Electronic trading eliminates the need for physical trading floors. Brokers can trade from their offices, using fully automated screen-based processes. Their workstations are connected to a Stock Exchange's central computer via satellite using Very Small Aperture Terminus (VSATs). The orders placed by brokers reach the Exchange's central computer and are matched electronically.

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What is a Stock Exchange?

A common platform where buyers and sellers come together to transact in stocks and shares. It may be a physical entity where brokers trade on a physical trading floor via an "open outcry" system or a virtual environment.

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Market Basics Knowledge

What is a Stock Exchange?
How many Exchanges are there in India?
What is an Index?
How does one execute an order?
Why does one need a broker?
What is a contract note?
What is a book-closure/record date?
What is the difference between book closure and record date?
What is a no-delivery period?
What is an ex-dividend date?
What is an ex-date?
What is a Buy Back?
What is a settlement cycle?
What is a rolling settlement?
What is short selling?
What is an auction?
Is there a separate market for auctions?
What happens if the shares are not bought in the auction?
What is bad delivery?
What are company objections?
What should one do with company objections?
Who has to replace the shares in case of company objections?
How does transfer of physical shares take place?

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Types of Mutual Funds .

Mutual Funds in India
UTI was the first mutual fund in India which started in 1963 and from 1987 onwards some PSU banks like SBI, PNB, Bank of India, Canara Bank and Bank of Baroda started their own mutual funds. Some financial Institutions like LIC and GIC also joined the list. With the advent of this the Assets under management increased dramatically. A new phase started in the history of Mutual funds when in 1993 Private Sector institutions were allowed to set up mutual funds in India. Kothari Pioneer was the first Private sector mutual fund. Thereafter Private sector Banks started their Mutual Funds joining with the experience of some foreign partners. ICICI Bank partnered with Prudential to launch ICICI Prudential mutual fund and then many others joined the list.
Types of Mutual Funds
Following types of mutual fund are currently prevalent in India.

Equity Funds
Equity funds are Mutual fund schemes which invest money in equity shares only. A pure equity fund can give you very high returns, but it carries maximum risk. Investors with very high risk appetite would invest in these types of schemes.

Sector Funds
Sector funds are Mutual fund schemes which invest in a particular sector such as IT Sector, Pharma Sector, Media and Entertainment, Banking, Infrastructure, etc. An investment can be made in a sector fund if the investor holds a view that a particular sector is performing very well or is expected to perform well in the near future. For example if an investor is very bullish on infrastructure sector in India, he may choose an Infrastructure fund to get maximum return on his investment.
A sector fund may be Small Cap fund, a Mid Cap fund or a Blue Chip fund investing in Small cap shares, Mid Cap shares and Blue chips respectively.

Debt Funds
Debt Funds are Mutual Fund Schemes which invest purely in Debt instruments which bear fixed rate of interest. In these types of schemes the risk is very low and the return is also low depending upon the prevalent rates of debt instruments. These are ideal for investors who do not want to take any risk on their investments.

Income Funds
These types of mutual fund schemes invest in such instruments so as to generate a fixed income.

Liquid Funds
In these types of schemes the money is invested in liquid instruments which can be redeemed any time. These types of schemes are suitable for investments of very short duration. Companies having excess cash for a short period of time generally keep it in liquid funds.

Hybrid or Balanced fund
These types of funds try to strike a balance between risk and return. A portion of money is invested in equity shares and rest of the fund is invested in debt instruments. The hybrid may be 80% in equity and 20% in debt or any other combination that the Fund manager may deem prudent depending upon the risk to be taken in the portfolio. If an investor wants to take a limited risk, he can choose from these funds with equity mix of his risk appetite.

Index Funds
These schemes invest in index stocks. These funds would give similar returns as the index would give. If an investor is generally bullish on market and is expecting the index to go up, he may invest in an index fund.

ELSS (Equity linked savings scheme)
These schemes are generally devised to give tax benefits to the investors. These schemes generally have a lock in period of at least 3 years. Which means the units once purchased under these schemes, to obtain tax deductions under section 80C of the Income Tax Act of India, can not be redeemed for at least 3 years. A deduction of up to a maximum cap of Rs. 1,00,000/- is allowed under the above mentioned section 80C as per the current provisions of Income Tax Act.

Arbitrage Fund
Under this scheme the fund manager benefits from the difference of rates quoting in different exchanges or the difference in rates of a stock in cash and futures market. Here the returns are less, but the chances of negative portfolio are very rare. A slow and steady growth is expected.

Open-ended and Close-ended
These funds may be open ended or close ended. An open ended fund remains open for purchase or sale of units after the close of New Fund Offer scheme whereas in a close ended scheme the units cannot be purchased after close of New Fund Offer, however in some schemes the units can be sold with an exit load at any time after the close of scheme.

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What is NAV ?

What is NAV?
When you buy a mutual fund, some units are allotted to you against your investment at a certain price. This price of units is called NAV or Net Asset Value. The NAV is updated on each trading day to reflect the latest position of the portfolio. This is a barometer to measure the health of your investments.
Calculation of NAV
Calculation of NAV is simple, it is arrived at after dividing the total assets of the mutual fund (current value of securities and cash and reduced by the liabilities, if any) by the number of units outstanding. Suppose the total assets of a mutual fund are Rs. 200 crores and the total allotted units are 2 crores, then the NAV of the fund is Rs. 100. Which means that on that date the purchase or redemption price of units shall be Rs. 100, plus entry or exit loads if any.
NAVs are used to track the performance of the mutual funds. Unlike the prices of stocks which keep changing every second, the NAV is calculated on the closing prices of the stocks. NAV is an important tool to see the returns on your mutual fund investments. If your purchase price was Rs. 10 and the current NAV of the same scheme is Rs. 15, it means that your investments have appreciated 50%.
You can keep a check on the NAVs to see the performance of your mutual fund. NAVs of all the schemes of all mutual funds operating in India are available at the website of The Association of Mutual Funds in India (AMFI) at Check out the latest NAV of any mutual fund here
Effect of dividend payout on NAV
While analyzing a mutual fund scheme on the basis of its NAV performance, you must also check, whether the scheme is a dividend paying scheme or a growth scheme. In case of a dividend paying scheme, the NAV shall not reflect the actual returns of the scheme, because, each time when the dividend would have been declared, the NAV would have come down to off set its effect. If you compare the same scheme with dividend payout and growth option you would discover that the NAV of the growth option of the same scheme is much higher than that of the dividend option scheme.

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What is a Mutual fund ?

At the beginning of this millennium, mutual funds out numbered all the listed securities in New York Stock Exchange. Mutual funds have an upper hand in terms of diversity and liquidity at lower cost in comparison to bonds and stocks. The popularity of mutual funds may be relatively new but not their origin which dates back to 18th century. Holland saw the origination of mutual funds in 1774 as investment trusts before spreading to Anglo-Saxon countries in its current form by 1868.

We will discuss now as to what are mutual funds before going on to seeing the advantages of mutual funds. Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies. The stocks these mutual funds have are very fluid and are used for buying or redeeming and/or selling shares at a net asset value. Mutual funds posses shares of several companies and receive dividends in lieu of them and the earnings are distributed among the share holders.

A Brief of How Mutual Funds Work

Mutual funds can be either or both of open ended and closed ended investment companies depending on their fund management pattern. An open-end fund offers to sell its shares (units) continuously to investors either in retail or in bulk without a limit on the number as opposed to a closed-end fund. Closed end funds have limited number of shares.

Mutual funds have diversified investments spread in calculated proportions amongst securities of various economic sectors. Mutual funds get their earnings in two ways. First is the most organic way, which is the dividend they get on the securities they hold. Second is by the redemption of their shares by investors will be at a discount to the current NAVs (net asset values).

Are Mutual Funds Risk Free and What are the Advantages?

One must not forget the fundamentals of investment that no investment is insulated from risk. Then it becomes interesting to answer why mutual funds are so popular. To begin with, we can say mutual funds are relatively risk free in the way they invest and manage the funds. The investment from the pool is well diversified across securities and shares from various sectors. The fundamental understanding behind this is not all corporations and sectors fail to perform at a time. And in the event of a security of a corporation or a whole sector doing badly then the possible losses from that would be balanced by the returns from other shares.

This logic has seen the mutual funds to be perceived as risk free investments in the market. Yes, this is not entirely untrue if one takes a look at performances of various mutual funds. This relative freedom from risk is in addition to a couple of advantages mutual funds carry with them. So, if you are a retail investor and planning an investment in securities, you will certainly want to consider the advantages of investing in mutual funds.
  • Lowest per unit investment in almost all the cases
  • Your investment will be diversified
  • Your investment will be managed by professional money managers
Mutual funds are investment companies that pool money from investors at large and offer to sell and buy back its shares on a continuous basis and use the capital thus raised to invest in securities of different companies.

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Aban Offshore Results

Aban Offshore has announced its fourth quarter results. The company's Q4 net profit was up at Rs 34.5 crore versus Rs 29.5 crore.Its net sales were up at Rs 248.62 crore from Rs 196.3 crore.

Its other income was up at Rs 215.3 crore versus Rs 153.5 crore.

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Low oil prices may spike equity markets

After winter’s rain and ruin, market behaviour over the past two months broadly mirrors a seasonal resurgence. But investors are unsure whether this warmth will last or if it’s all just a desperate pathetic fallacy.

Assuming that the big picture view for emerging markets is still valid, with the fall in stock prices November 2007 onwards representing a cyclical bear market within a secular bull run, the low hit in mid-March this year should indeed mark a major turning point.

Cyclical bear phases within other secular bull markets in post-war history typically lasted five months and peak-to-trough declines averaged 25%.

In the current cycle too, emerging markets dropped 25% from the high reached on October 31, 2007 to the low hit on March 18, 2008. Since then, the asset class has strongly bounced back, suggesting a trading pattern that is consistent with the history of secular bull runs.
Gold prices in the 1970s, Japan’s equity market in the 1980s and tech shares in the 1990s all witnessed similar cyclical bear markets amidst secular bull runs. During their previous major bull phase from 1987-94, even emerging markets suffered two major setbacks of 30% in 1990 and 20% in 1992.

Despite these parallels to history, hardly any market strategists are feeling sanguine about markets due to all the uncertainty regarding global growth prospects and the worrying inflation outlook in many developing countries. Most stock research analysts are also still busy downgrading their earnings estimates for companies.

This raises the question of how can stocks possibly rally in the face of earnings downgrades and a soggy macroeconomic outlook? Well, stock prices almost always move ahead of projections by analysts and economists, especially at the turning points of a cycle.

At previous inflection points in global equity markets, stocks often rallied six months before analysts were done with the downgrading process. Therefore, the commentary of economists on inflation and earnings research by company analysts is currently useful only for the purpose of rear-view mirror driving.

A re-rating of markets is the more important driver of returns in the recovery period of a secular bull trend. Valuation measures such as the price-to-earning or P/E ratio are very sensitive to changes in inflation and interest rates and usually expand first in anticipation of a better economic outlook and earnings growth follows later.

Many emerging markets rallied over the past two months as monetary authorities in their respective countries either indicated a pause in interest rate hikes or the nearing of an end to the tightening cycle.

But a view on commodity prices is critical in making any interest rate and stock market forecasts since the surge in the commodity complex is the main source of the global inflation problem.

A levelling off in commodity prices will ease the pressure on central banks in developing countries to tighten monetary policy further whereas a further escalation will prompt a new wave of rate increases and consequently another leg down for those equity markets.

The good news is that except for oil, most other commodity prices have largely tracked sideways since mid-March after rising in a parabolic way from August last year. If the past is any guide, then oil prices should also begin to subside soon as the fundamental backdrop is deteriorating for this commodity as well.

Until late last year, the rise in commodity prices — including oil — mainly reflected the economic demand surge in the developing world and so did not pose a problem for markets. But over the past six months while demand has slowed markedly in the developed world and softened (even if ever so slightly) in the developing world, commodity prices have gone on to rise at the fastest pace in recent history leading to the inflation problem.

Research shows that commodity prices always lag the economic cycle and start to fall in earnest only four to five months after a major economic slowdown sets in. Admittedly, over the past decade emerging market demand has come to be the most important factor in determining commodity trends.

But changes at the margin matter the most in driving prices and US demand is still relevant for commodities such as oil. The US consumes just under a fifth of the total global oil output and latest data reveal that oil demand in the US is down 7% from a year ago.

Even as a strong consensus is building for the view that “It’s different this time”, lower demand from the developed world is in the process of changing the fundamental dynamic on the commodity marketplace. The only wild card that poses a risk to a projection based on pure fundamentals is market psychology.

Towards the end of any major trend, prices can often get disconnected to fundamentals for a while as all sorts of spurious arguments are used to bid prices almost endlessly higher.

Such a feeding frenzy is building in the oil pits with old news about supply disappointments in places from Russia to Nigeria being bandied about to drive prices higher while data that show increasing inventory levels and falling demand are finding little purchase.

Similarly, financial flows into commodity-related products have risen by manifold over the past year.

Rising oil prices are currently the biggest obstacle in the way of stock markets rallying any further. Much of the bad news regarding the US credit crisis has already been discounted and valuations are supportive enough to engage long-term investors.

However, a runaway increase in oil prices poses the risk of spurring on other commodity prices all over again and triggering a second-round effect on inflation.

Headline inflation in many emerging markets is already outside tolerance levels and policymakers are on the edge regarding further monetary tightening.

If the fundamental factors of slowing oil demand and no major supply disruptions reassert themselves then oil should start to retreat.

Lower oil prices will ease inflationary pressures and allow equity market valuations to expand again. In short, for the script of a secular bull-run in emerging markets to remain on track, commodity prices led by oil need to come off the boil, pronto.
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Monday, May 12, 2008

Anu Laboratories Ltd.- IPO Open today

Anu’s Laboratories Limited opened today for subscription.
Issue Period May 12, 2008 to May 15, 2008
Issue Size 3820000 Equity Shares
Issue Type 100% Book Building
Face Value Rs. 10/-
Price Range Rs. 200 /- to Rs. 210 /-
Tick Size Re. 1/-
Market Lot 30 shares
Minimum Order Quantity 30 shares
Maximum Subscription Amount for Retail Investor Rs.100000
Anu Labs Valution
Anu’s Laboratories which has set its price band of Rs 200 gives the P/E of 17.8x times the EPS of Rs 11.3 for the year ending March 2007 (FY 2007) on post-issue equity of Rs 12.08 crore. At the upper band of Rs 210 per share, the P/E would be 18.7x times compared to march 2007 results. compared to other company like Neuland Labs, Aarti Drugs and SMS Pharma have TTM P/E of around 9.5, 4.8 and 10.4, respectively.

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Results of RCF

Rashtriya Chemicals and Fertilisers has announced its fourth quarter results. The company's Q4FY08 standalone net profit stood at Rs 51.7 crore versus Rs 33.31 crore, YoY.Its standalone net sales stood at Rs 1329.51 crore versus Rs 912.70 crore.

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Saturday, May 10, 2008

Dividend Declared on 09/05/2008

Dividend Declared Yesterday with Results.

532830 Astral Poly Technik Ltd BC 11-06-2008 10% Dividend
500820 Asian Paints (India) Ltd., BC 14-06-2008 105% Final Dividend
532757 VOLTAMP TRANSFORMERS LIMITED BC 30-07-2008 125% Dividend
522105 Birla Precision Technologies Ltd

15 % Dividend
500540 Premier Limited

25 % Dividend
506522 J.L. Morison (India) Ltd.,

25 % Dividend
506943 J.B. Chemicals & Pharmaceuticals BC 05-07-2008 25% Dividend
517096 Aplab Ltd. BC 03-06-2008 25% Dividend
526608 Electrotherm (India) Ltd BC 14-06-2008 25% Dividend
500335 Birla Corporation Ltd.

40 % Dividend
511676 GIC Housing Finance Ltd.

40 % Dividend
505196 TIL Ltd., BC 23-07-2008 40% Dividend
531213 Manappuram General Finance

5% Final Dividend
522241 M.M.Forgings Ltd.

50 % Dividend
500243 Kirloskar Oil Engines Ltd., BC 07-07-2008 50% Final Dividend
500877 Apollo Tyres Ltd

50% Final Dividend
500247 Kotak Mahindra Bank Ltd.

7.5 % Dividend
500083 Century Extrusions Ltd., RD 26-05-2008 Right Issue of Equity Shares
531703 Tribhuvan Housing Ltd. RD 09-06-2008 Stock Split from Rs.10/-to Rs.5/-

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Results Declared For 9/05/2008

Asian Paints has announced its fourth quarter numbers. It has posted consolidated net profit of Rs 94.52 crore as against Rs 63.92 crore in same period of last year and net sales of Rs 1,133.04 crore versus Rs 958.95 crore(YoY).
Apollo Tyre has announced its FY 2007 - 2008 results. The company’s consolidated net profit was at Rs 269.7 crore versus Rs 117 crore.
Ashok Leyland has announced its fourth quarter results. The company’s net profit was up at Rs 180.5 crore versus Rs 171 crore.
Birla Corporation has announced its results for the quarter ended Mar 2008 Fourth Quarter. The company’s net profit was at Rs 86.5 crore versus Rs 101.1 crore.
Hindustan Motors has announced its FY 2007 - 2008 numbers. It has reported net profit of Rs 30.8 crore and net sales of Rs 662 crore for FY 2007 - 2008.
JB Chemicals and Parmeceuticals has declared its results for the quarter ended (Q4). The company’s net profit was at Rs 10 crore versus Rs 10.9 crore.
Kotak Mahindra Bank reported Q4FY 2007 - 2008 consolidated net profit of Rs 240 crore (CNBC-TV18 estimated at Rs 221.27 crore) as against Rs 170.33 crore in same period of last year, a growth of 40.9% and net interest income of Rs 636.24 crore (Rs 445.33 crore)
Mid Day Multimedia has announced its results for the quarter ended Mar 2008 Fourth Quarter. The company resgistered a net profit of Rs 23 lakh versus a net profit of Rs 99 lakh on QoQ basis and versus a net loss of Rs 2.9 crore on YoY basis.
Shree Cements has declared its results for the quarter ended Mar 2008 Fourth Quarter. The company reported PAT at Rs 41 crore versus Rs 24.50 crore on YoY basis.
Voltamp Transformers has declared its results for the quarter ended Mar 2008 Fourth Quarter. The company’s net profit was at Rs 21.6 crore versus Rs 13.7 crore.

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Inflation at 7.61highest in 52 week

Inflation remains at 42-month high. Inflation for week ended April 26 stood at 7.61% Vs 7.57%. For March 1, inflation is revised to 6.21% Vs 5.11% (Prov).WPI for all commodities stood at 227.7, up 0.1%. April 26 WPI is up on rise in food prices. Tea prices for week ended April 26 is up 11%.Mr P Chidambaram is still saying that Inflation is at stable level ,I Dont understand not sure what measure they have taken to control the raise of commodity prices.

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Worst weekly fall for rupee

The Indian rupee had its biggest weekly loss in a decade as crude oil touched a near all-time high of US$125.98 per barrel, boosting demand for dollars from oil refiners. However, the local currency bounced back on the last trading day of the week, spurred by suspected dollar sales by exporters.

The rupee's 1% rally on Friday helped it pare this week's decline to 2.3%. It ended the week at 41.5950 as against last Friday's close of 40.6750, the biggest weekly decline since May 1998. During the week, the local currency touched a low of 41.8950 and a high of 40.53.

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Friday, May 9, 2008

Kotak Mahindra Bank Results

Kotak Mahindra Bank reported Q4FY08 consolidated net profit of Rs 240 crore as against Rs 170.33 crore in same period of last year, a growth of 40.9% and net interest income of Rs 636.24 crore (Rs 445.33 crore) versus Rs 328.99 crore, up 93.39% YoY.Q4FY08 total income increased by 30.57% to Rs 1426.44 crore from Rs 1426.44 crore. For FY08, the company reported 84.15% growth in its net profit of Rs 991.13 crore (Rs 972.4 crore) versus Rs 538.24 crore and net interest income went up by 74.9% to Rs 1831.91 crore (Rs 1641 crore) from Rs 1047.35 crore.

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JB Chemicals and Parmeceuticals Results

JB Chemicals and Parmeceuticals has declared its results for the quarter ended (Q4). The company's net profit was at Rs 10 crore versus Rs 10.9 crore.In the same quarter its net sales were at Rs 141 crore versus Rs 143 crore.

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Thursday, May 8, 2008

Ashok Leyland - double capacity

Ashok Leyland, India's second-biggest bus and truck maker, will spend 30 billion rupees in capex over the next three years to more than double capacity from 84,000 vehicles now, it said on Thursday.

The Chennai-based company, which trails leader Tata Motors Ltd, will launch its iBus this year and also extend its range of tractors, it said in a statement.

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Today's Market View 08/05/08

Today market will show resistance at 5150 level and may take support at 5100 level. Dow was closed 88 point down and nasdaq 12 point upside. Asian market are mixed.

Stocks for buy are BILT, Powergrid, FSL.

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Wednesday, May 7, 2008

Steel producers offer to cut prices by Rs4,000 a tonne

Leading steel producers have offered to reduce prices of hot rolled coils by Rs4,000 a tonne, as part of efforts to ease inflation.

Steel prices have risen 49% during the past one year triggering concerns that soaring prices of the metal was augmenting inflationary pressures on the economy.

Leading steel makers who formed the Indian Steel Alliance (ISA) as their umbrella organisation dissolved it amid fears that the industry was indulging in cartelisation.

Incidentally, ISA had been on the forefront of a campaign against imposing export duty and setting up a regulator for the industry.

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BEML - New plannings

Earth moving equipment major BEML is planning to enter the Indonesian and Australian markets while it expects rail and metro business to be its next engine of growth, propelled by massive spending by Indian Railways.

During the 11th five-year plan and beyond, the Railways is going in for diversification and modernization of its existing fleet. The Railways is planning additional seat capacity and that is an opportunity we are trying to seize. BEML already has orders worth Rs100 crore in this regard for the current year.

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New Zealand central bank boosts banking liquidity for second time

WELLINGTON: New Zealand's central bank announced further measures to boost liquidity in the banking system Wednesday, saying the country's economic slowdown could intensify if credit market conditions tighten further.

Reserve Bank Governor Alan Bollard said the local financial system had so far withstood the ``severe test'' of global financial market but that it was prudent to ensure sufficient liquidity in case disruptions intensify.

New Zealand banks have little exposure to offshore credit risk, but Bollard said the banks have been affected by the global tightening in liquidity and availability of funds.

``They are facing a higher cost of funds and reduced liquidity in some markets and this has flowed through to higher borrowing costs for businesses and households,'' Bollard said in the bank's twice-yearly financial stability report.
He said there is a risk local banks could tighten credit conditions too much, exacerbating the economic slowdown in New Zealand.

Bollard also said the slowdown under way in the New Zealand economy partly reflects a weaker global outlook, particularly evident in the domestic housing sector.

The governor last month acknowledged there was significant downside risks to economic activity. Financial markets interpreted that as a softening in the bank's long-held hawkish stance, providing an opening for interest rate cuts to occur late in 2008.

The central bank raised its key interest rate four times last year to its current 8.25 per cent, where it has stayed since July 2007 even as the US Federal Reserve embarked on an aggressive easing campaign to stave off a harsh landing for the US economy.

New Zealand's annual inflation is currently running above the Reserve Bank's target of 1 percent to 3 per cent the main stumbling block to rate cuts.

The new liquidity measures include extending the range of securities eligible for acceptance in the central bank's domestic liquidity operations to include residential mortgage backed securities and AA rated government sector debt.
The moves follow measures introduced last September to ease the impact of the international credit crunch.

Bollard also said the New Zealand dollar remains high relative to its long-term average and there is a risk of a sharp fall. The New Zealand dollar, trading locally at US$0.7915 before the announcement, eased back to $0.7899 afterward.

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Report of JSW Steel

HDFC Securities has down graded JSW Steel to sell rating from under performer with target price of Rs 716 in its May 06, 2008 report. "We have revised our fully diluted FY09E EPS estimates downwards by 7.7% to Rs. 102.3 to factor in higher raw material costs and higher financial expenses for debt on the accelerated capex. The stock is currently trading at 8.8x FY09E EPS and the risk reward is unfavourable due to the rising raw material cost pressure, Government intervention to control domestic prices through export taxes and diversification into other businesses " according to HDFC Securities

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Report for 3i Infotech

Angel Broking has maintained buy rating on 3i Infotech with target price of Rs 188, in its report. "Going ahead, we expect 3i Infotech to maintain a CAGR growth of 36.6% in Topline over FY2008-10E, while Bottomline is expected to grow at a CAGR of 27.4% in the mentioned period. We expect EBITDA Margins to fall by an average 50bp annually until FY2010, as the company’s focus shifts towards transaction processing, where Margins are typically lower. At the CMP, the stock is trading at 8.4x FY2010E EPS."

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Report of Ballarpur Indaustries(BILT)

One can keep buying on Ballarpur Industries with a price target of Rs 45.Its consolidated net revenues increased by 24.7% YoY to Rs 6.9 billion. EBITDA margins increased by 40 bps to 26.3% and adjusted PAT increased by 18.5% YoY to Rs 759 million. At CMP of Rs 34, the stock is trading at 6.6x FY08E EPS of Rs 5.2 and 6.3x FY09E EPS of Rs 5.4.

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Results of Union Bank for Q4

Union Bank has announced its FY08 numbers. The bank has posted Q4 net profit of Rs 521.1 crore as against Rs 228.6 crore in same quarter of last year and net interest income at Rs 833.9 crore versus Rs 842.4 crore (YoY). Other income was up at Rs 310.7 crore versus Rs 241.7 crore.
It has posted standalone net profit of Rs 1,387.03 crore for FY08 as against Rs 845.39 crore in last year. Standalone net interest income stood at Rs 3,086.35 crore versus Rs 2,790.22 crore.
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Aishwarya Telecom double on Listing

Aishwarya Telecom shares more than doubled on the listing on the Bombay Stock Exchange (BSE). The stock opened at Rs50.10 as against the issue price of Rs35. The stock was last quoted at Rs76.25 after hitting a high of Rs76.90 and a low of Rs50.10.

The company had come out with an initial public offering (IPO) of 40 lakh shares. The issue was subscribed 20 times. The company received bids for 80mn shares as against 4mn shares on offer.

Retail investors and HNIs were among the biggest contributors to the Aishwarya Telecom issue. While the retail portion was subscribed 34 times, the HNI segment was subscribed 29 times. The QIB part was subscribed 8.4 times.

Aishwarya Telecom plans to use the proceeds from the IPO to increase its manufacturing capabilities and infrastructure, and fund research projects.

The company manufactures Test and Measurement Instruments for telecom, defence, railways, and cable television companies.

Aishwarya Telecom's key clients include BSNL, Tata Teleservices and Bharati Telenet. It also exports cable fault locators to France, Taiwan, Czech Republic and Dubai.

SREI Capital Markets and Sobhagya Capital Options were the lead managers to the issue.

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Tuesday, May 6, 2008

Torrent Pharma's Q4 Results

Ahmedabad-based drugmaker, Torrent Pharmaceuticals posted a marginal decline in standalone net profit for the quarter ended March 2008, due to substantial fall in operating margin together with weaker revenue growth.

During the quarter, the profit of the company declined 4.82% to Rs 308.20 million from Rs 323.80 million in the same quarter previous year. The company reported earnings of Rs 3.64 a share during the quarter, registering 4.96% decline over previous year period.Net sales for the quarter declined marginally 1.42% to Rs 2,213 million, while total income for the quarter rose slightly 2.64% to Rs 2,311.60 million, when compared with the prior year period.

During the quarter, the company reported a fall in operating margin of 670.22 basis points to 12.04% on higher production cost. Interest cost increased 66.99% to Rs 52.10 million while depreciation cost rose 0.74% to Rs 81.50 million over previous year period.

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Market Review After Closing Bell 06/05/2008

I think right now there are no fresh buying and therefore the Nifty is straggling so far. I think it needs a bit of extra efforts to push it now to 5,400 level , I suspect from the global markets if the rally in the Dow persists or if it does not happen then the market might just resisted a bit and remain range bond around these levels for a while.I think we will watch global markets quite closely but in the near-term at least for the next couple of days it looks like we will be stuck in a 100 point zone for the Nifty not breakdown too much there is no need to neither go up significantly above 5,250 levels. So essentially this week probably 5,100-5,250 range looks possible.

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Bharti Airtel - Recommendation for BUY

One can 'buy' on the stock for a target price of Rs 1,130, an upside of 22.5 per cent. Bharti, with over 24 per cent market share, is a leader in the Indian telecom space. On average, the company is adding two million subscribers every month and currently has a subscriber base of 60 million. Bharti Airtel is likely to be a key beneficiary of the removal of the access deficit charge, to the extent of Rs 180-200 crore. The company is likely to pass on the benefits accruing from the ADC removal to the end consumers by way of reduced tariffs or similar benefits. At the market price the stock trades at 25.6x FY2008 and 21.2x FY2009 estimated earnings.

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Aban Offshore - Recommendation for BUY

Sharekhan has maintained buy on the stock for a target price of Rs 4,829, an upside of 37.7 per cent. Aban Offshore, one of Asia's largest oil drilling companies, is seen benefiting from the increase in oil exploration and production activities globally. The robust demand environment is resulting in firm day rates for its assets. The company is also benefiting from the efforts taken to substantially ramp up the asset base through organic and inorganic initiatives. This would significantly improve its financial performance over the next few years.At the market price, the stock trades at 9.7x FY2009 and 7.3x FY2010 estimated earnings.

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Larsen & Toubro Limited has bagged orders of Rs. 344 crores

Larsen & Toubro Limited (L&T) has bagged orders totalling to Rs 344 crores from Power Grid Corporation of India Limited (PGCIL) for the construction of 755 km of transmission lines associated with Western Region System Strengthening Scheme-II. The scope of work for this project, to be executed by L&T’s Engineering, Construction & Contracts Division (ECC), involves survey, fabrication & supply of towers and erection of 400 kV Direct Current transmission lines from Bhadrawati - Umarkhand - Parli & Raipur - Sakoli – Wardha in Maharashtra. The project will be completed in 30 months.

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Q4 Results of JSW Steel

JSW Steel post net profit of Rs 461cr
JSW Steel Limited posted a net profit of Rs.461 crores and Rs.1,728.19 crores for the Q4 2007-08 and financial year ended March 2008 respectively. The surging input costs squeezed the EBIDTA margins in Q4 by 11.6% and for the year ended March 2008 by 2.66%. The financial results for the quarter and year under consideration are not comparable with that of the previous corresponding period as the current period results include the financial results of erstwhile Southern Iron & Steel Co. Ltd. (SISCOL) which was merged with the Company with appointed date as of 1st of April 2007 pursuant to Scheme of Amalgamation approved by the Hon’ble High Court of Bombay.
Operational Performance

The significant volume growth during Q4 and financial year ended March 2008 is due to:
v The stabilization of brown field expansion from 2.5 MTPA to 3.8 MTPA.
v The stabilization of modernized Hot Strip mill from 2 MTPA to 2.5 MTPA.
v Commissioning of 1 MTPA of CRM complex enhancing the product mix.
v Capacity addition coming from acquisition of SISCOL (1 MTPA long product
capacity) pursuant to a Scheme of Amalgamation.
Financial Performance

The net sales for the year ended 31.3.2008 stood at Rs.11,420 crores showing a growth of 33% over previous year. The increase in net sales is accounted by a growth of 27% in the volume of saleable steel and higher blended sales realization of 8%. The Company could not maintain its margins in spite of impressive growth in volume and higher realization as the cost of production has in fact gone up by 16%. This led to a drop of 2.66% in the EBIDTA margin which stood at 30.93% for the year ended March 2008. The Company has a net foreign exchange gain of Rs.104.89 crores for the year ended March 2008 after netting out the foreign exchange losses of Rs.92.99 crores in Q4 FY 2007-08 arising mainly on account of translation of outstanding foreign currency liabilities.

Value Accretive initiatives

A) Volume : -

Brown field expansion from 3.8 MTPA to 6.8 MTPA to be completed by September 2008 (6 months ahead of schedule).

Commissioning further capacity expansion to 10 MTPA from 6.8 MTPA by March 2010 (once again 6 months ahead of schedule).

B) Product Mix Enrichment :

Commissioning of 2nd colour coating line with 0.1 MTPA by September 2008.

Conversion of two Galvalnising lines at Tarapur to Galvalume in fiscal 2008-09.

Setting up new Blooming mill at Salem works in fiscal 2008-09 increasing the capacity of rolled products from 0.45 MTPA to 0.9 MTPA.

Modernization of HSM - I from 2.5 MTPA to 3.2 MTPA in FY 2008-09.

Commissioning of new Hot strip mill with 3.5 MTPA capacity (Phase – I) by September 2009. Phase – II to expand it to 5 MTPA by September 2010.

C) Cost reduction initiatives :

Commissioning of 30 MW captive power plant to meet the power requirement at Downstream unit to be commissioned by October 2008.

Commissioning of railway siding at Vasind by December 2008.

Setting up 20 MTPA beneficiation plant to be completed in 2 phases of 10 MT each by March 2010.

Setting up new captive power plant of 300 MW to achieve self-sufficiency at Vijayanagar works by 2010.

D) Raw material security : -

The Company has been working to develop the iron ore mines in Chile,
Coal mines in Mozambique, Coal mines in Jharkhand, Orissa and West
Bengal in India to increase the self sufficiency by operationalising the
Mines over 36 months.

The Board has, subject to the approval of the Members at the ensuing Annual General Meeting, recommended dividend :

· at the stipulated rate of 10%, on the 27,90,34,907 10% Cumulative
· Redeemable Preference Shares of Rs.10/- each of the Company, for the year ended 31.03.2008; and
· at the stipulated rate of 11%, on the 99,00,000 11% Cumulative Redeemable Preference Shares of Rs.10/- each (11% CRPS) of the Company, for the year ended 31.03.2008, along with arrears for the period 10.03.2007 to 31.03.2007.

The Board has also, considering the performance of the Company for the year under review and the financial position of the Company, recommended dividend @. 140% (Rs.14 per Equity Share) on the 18,70,48,635 Equity Shares of Rs.10/- each of the Company for the year ended 31.03.2008, subject to the approval of the Members at the Annual General Meeting.

Together with the Corporate Tax on Dividend, the total outflow on account of Equity Dividend is Rs.306.37 crores, vis-à-vis Rs.233.73 crores paid for FY 2006-07, an increase of 31%.

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