Indian Stock Market

Weekender 27-06-08.pdf ONMOBILE GLOBAL Research Report

Patel engineering 30.6.08.pdf Patel Engineering Research Report

Ciba India Ltd – Investment Idea 270608.pdf

Hotel_Leela _Visit_Note.pdf Hotel Leela Venture Ltd – Visit Note
We met the management of Hotel Leela and came away cautiously positive on the company’s growth prospects amidst moderate room rental increases and volume expansion from new hotels in Chennai and Udaipur. Mumbai and Delhi ARRs are expected to remain healthy, but the company foresees, contrary to our expectations, a room tariff growth in Bangalore in FY09. Fuel expenses could dent margins by 150-200bps in current fiscal while FCCB conversions and longer payback period for the 330 room Delhi hotel remain key risks. Downgrade to MP.

ONGC – RU4QFY2008-260608.pdf

Tata Steel-RU4QFY2008-270608.pdf

abn on mindtree.pdf

The Ministry of Shipping, Road Transport and Highways is =C2=91actively=C2= =92 =20 considering Cochin Shipyard Ltd=C2=92s (CSL) proposal to raise funds =20 through an initial public offering (IPO) for the public sector =20 shipyard=C2=92s expansion plans, reports The Hindu Business Line.=

Sejal Architectural Glass, a glass processing house in India, will list on the bourses with its initial public offering of 9,194,155 equity shares of Rs 10 each on July 1, 2008. The issue price has been fixed at Rs 115 per share.

Jay Shree Tea Industries Ltd, belonging to the B K Birla Group, has acquired Jayantika Tea Co Ltd having a tea estate in Dooars.

Power-starved state electricity boards can now vie among themselves on a common platform for extra power to run industries or light households.

Indian Energy Exchange Ltd (IEX), the country’s first power exchange, commenced operations on Friday, ushering in a new way of demand-supply management of electricity.

The exchange received bids for 13,176 Mwh (mega watt hour) of power on the first day which were cleared at prices between Rs 6.46kwh (kilo watt hour) and Rs 8.01kwh for the different hours of the market.

IEX has been promoted by Financial Technologies (I) Ltd, which runs commodity exchange MCX, and the state-owned Power Trading Corporation.

Its other shareholders are TPC, REL, Lanco Electric, Adani Enterprises, REC and IDFC.

Unlike commodity exchanges which trade only futures, IEX will facilitate spot electricity trade which will settle with the delivery of electricity. The price of electricity would be determined on the basis of bids and offers during the transaction period. Power Grid will manage the transmission and scheduling of power.

Joseph Massey, director, IEX, said, “We are currently focusing on the day-ahead market under the first phase of operations and other features will be added once we embark on the second phase.”

Massey, however, said it will be tough to give a timeframe as to when the second phase will start.

The country’s second largest real estate player Unitech Ltd on Friday said it would dilute 26 per cent stake in its telecom arm to a strategic foreign partner, for which it is in discussion with a few telcos.

“We are looking for a minority dilution of 26 per cent stake to a strategic foreign player in Unitech Wireless,” Unitech Ltd Managing Director Sanjay Chandra told reporters.

Unitech was one among the many unified licenses issued by the Department of Telecom earlier this year.

Unitech Wireless, which has bagged a pan-India GSM license, has already got the crucial spectrum for five circles and the company is planning to roll out telecom services by the last quarter of the current financial year, he said.

To fund the telecom operations, it is considering to raise debt up to Rs 8,000 crore in the next five years once the company starts services.

“Raising Rs 8,000 crore is the peak amount. Once we finalise the partner and start services, we will look at raising the amount. We will also have vendor financing,” Chandra said, adding that at a future date the company would spin off the telecom arm into a separate company.

“Unitech Wireless is currently a subsidiary of the main company, but in the future we will see it as a separate company,” Chandra said.

The company would invest the money in purchase of telecom equipment and developing infrastructure, he added.

“Currently, we are talking to three European and two Chinese firms for supplying telecom equipment,” he said.

When asked if the company would bid in the auctioning of 3G spectrum, Chandra replied in positive.

There has been a further cost overrun for the Tata Motors Nano project at Singur. “It now stands at more than Rs 2,000 crore,” said Mr Ravi Kant, managing director of the company at Writers’ Buildings on Saturday.
Mr Kant said the original project cost was at Rs 1,700 crore and there has been a cost escalation of 17.6%. However, at the time of signing of the MoU with the West Bengal government in May 2006, the project cost figure doing the rounds was Rs 1,500 crore.

Still, even at a near 18% rise in the project cost, Nano is becoming dearer by the day. Whether this would have any impact on the final declared pricing of Rs 1 lakh remains to be seen. Mr Kant didn’t offer a reply to that very obvious question.

The Tata Motors chief met chief minister Buddhadeb Bhattacharjee on Saturday to review the progress of work at Singur. Addressing newsmen thereafter, Mr Kant said: “There has been a considerable progress in work at the factory. A number of shops have already come up. Work is going on at a break-neck speed. The project has faced many challenges till now.”

“Last year, floods had affected the factory and we were forced to redesign the layout of machines, uplift the shop floor and redo a number of things. This escalated the project cost, which now stands at more than Rs 2,000 crore” he said.

There wasn’t a reference to Friday’s violence at Singur, when parts of the factory wall were demolished by agitating locals. As always, the political issue was deftly side-stepped.

On the contrary, Mr Kant sought the cooperation of all to enable his company run the plant smoothly. “It is a matter of great pride that Nano will be produced from West Bengal. Everybody should ensure that Nano rolls out from West Bengal and becomes a ‘global phenomenon’. Nano will change the rules of the market and will bring a paradigm shift in individual transportation” the MD said.

Mr Kant made it clear that Tata Motors had come to West Bengal to manufacture cars, not to do politics. “We want everybody with us. Tata Motors is now very much a part of Singur,” he reiterated.

The car is slated to hit the roads in October. The company was also hopeful that trial production would commence sometimes July-August. “Barring any unforeseen incidents, we expect to start trial production shortly. A number of decisions were taken on Friday when I met contractors, suppliers, vendor park people and the senior management at Singur to expedite the project work. We are confident to roll out Nano in October, sometime during Durga Puja, “ Mr Kant said.

The Nano, he said, was receiving a huge response from international markets. Enquiries, he said, were pouring in from the US, Latin America, Europe and south east Asia, exploring the possibility of a Nano plant being set up anywhere in those countries.

Matterhorn Ventures, an FII, yesterday bought a 9.3 per cent stake in Mumbai-based IT firm Geometric for around Rs 25 crore — 57.75 lakh shares at Rs 43.50 per share.

The shares were sold by FID Fund Mauritius. The block deal saw the company’s share price going up by 14 per cent to close at Rs 52.60.

The company operates in the space of engineering and PLM services. Since January 2007 the company has been under a restructuring mode. The first step was the appointment of Ravi Gopinath as the CEO and managing director.

Analysts tracking the company said Geometric has not been able to remain consistent in its performance. For the last few quarters, the company has reported a dip in its net profits.

“Geometric has been a high-risk stock. While the company is in a niche space it has been inconsistent in performance. Restructuring is one of the reasons. However, this has also impacted the company’s valuations which are in single digits,” says a research analyst tracking the company,

“Their problem started when one of the acquisitions they did in 2006 did not auger well and saw the company’s performance going down,” said another analyst.

On a year-on-year basis the company’s net profit was down 55 per cent and sequentially it dipped by 30 per cent.

Vodafone and Airtel started pre-registering customers for the iPhone 3G this week, and ever since, offices and blogs have been abuzz with discussions on what Apple’s much-awaited product will be priced at.

Many think it will be just a shade over Rs 8,000 — the rupee equivalent of the price in the US, which is $199. Now, that’s a fantastic price for the 8GB product, and will certainly have every competitor worried.

Nokia’s 8GB N95 smartphone , for instance, is priced at well over Rs 25,000, and its new N96 is expected to come at over Rs 36,000.

But we think the iPhone, expected to hit the Indian market in September, will be priced substantially higher than Rs 8,000.

The $199 price is a hugely subsidised one, subsidised by the US operator AT&T. Market researcher iSuppli has just estimated that mobile phone service providers are subsidising each handset to the extent of $300.

Some other analysts think the subsidy is higher at $350 per unit. In other words, the actual price that AT&T pays to Apple for each iPhone unit is $499, going by the iSuppli estimate.

Vodafone and Airtel are unwilling to talk about the price they will offer the iPhone at, but Bharti Airtel CEO Manoj Kohli told TOI there is no question of subsidising the handset in India. “US operators are able to subsidise handsets because they can make up for that with their call charges. They charge rates like 25 cents a minute. In India, the charge is 1.5 to 2 cents a minute,” Kohli said.

In the absence of a subsidy then, the handset could be priced at $499 or a little over Rs 21,000 (governmental levies on mobile phones in India are marginal).

Unless Apple chooses to offer the iPhone at lower margins to countries like India. iSuppli estimates it costs Apple just $173 to produce the latest version (excluding the cost of software development, shipping, distribution, packaging and accessories included with each iPhone). So it enjoys a huge margin on the product.

We’ll have to see if Apple’s CEO Steve Jobs is willing to sacrifice some of that.

But any which way, even at a price of Rs 21,000, the iPhone looks certain to sizzle the handset market.