Market News
Fed raises the interest rate by 25 bps
US Fed has increased its short term interest rate (fed rate) by 25 bps. The Fed also said in its statement that any additional firming if required would depend on the future economic data. The statement, less hawkish then the earlier ones as it seems, was taken positively by the markets & the US Fed future rate for the month of September 2006 declined by 8 bps.
TCS lines up Rs1300 crore capex
Tata Consultancy Services (TCS) has earmarked a capex of Rs 1,300 crore for the current financial year. The investment plan is a part of the company's target to become a $10 billion company by 2010, mainly through acquisitions & alliances both across India & overseas. The company would also look at acquisitions & strategic alliances, which would enable it to expand capacity & reach international markets. TCS had posted revenues of around $2.1 billion in the last financial year. Out of the total Rs 1,300 crore, Rs 1,000 crore would be utilised for its real estate foray & the balance for information technology-related activities.
ONGC may buy 5% in Rosneft
The Oil & Natural Gas Corporation (ONGC) may take upto 5% equity in Russian state oil firm, OAO Rosneft, which will be making an initial public offering (IPO), if the Indian company was given a stake in one of the big-ticket oilfields in Far East Russia or Siberia. ONGC Videsh, the overseas arm of ONGC, has told Russian authorities that it may participate in the $11.6 billion IPO provided it gets stake in Sakhalin-3, Vankor or Timano-Pechora oilfields. OVL has got a mandate to scout for oil & gas abroad to meet India's energy security. Earlier, OVL sought stake in OAO Yuganskneftegaz, a unit of Yukos, which was taken over by Rosneft for $9.3 billion in 2004.
ICI India decides to sell surfactant business
ICI India Ltd has approved the sale of the Company's Uniqema Business to the Croda group based in the UK for a total consideration of about Rs260 crore. The sale follows the strategic decision by the ICI PLC announced in February 2006.
Uniqema comprises of the textile chemicals business which recorded a turnover of Rs147 crore for FY2006. A back of the envelope calculation suggests that the sale of the division would reduce the earnings for FY2007 & FY2008 by 20%. However, the sale consideration would add Rs64 per share of cash on books.
BHEL gets Rs220 crore contracts in Afghanistan
State-run Bharat Heavy Electricals Ltd (BHEL) has bagged two contracts cumulatively worth Rs 220 crore for power projects in Afghanistan. The first contract is from Power Grid Corporation of India for setting up a substation at Kabul. The second project is from Water & Power Consultancy Services for the supply & installation of equipment for 42 MW Salma hydel project. The company's work in the first project includes design, manufacture, supply & commissioning of a 220 KV substation in Kabul. It would also supply turbines & generators for Salma hydroelectric project.
NIIT Limited, improving growth outlook
· NIIT Limited, education & training company of NIIT group, reported 13.1% growth in net revenues to Rs450.7 crore in the fiscal ended March 2006.
· The operating margins improved by 107 basis points to 13.4% on the back of better performance form its individual training business.
· The net profit grew by 14% to Rs23.6 crore. After including the minority share of profits in associate companies ( related to 25% stake in NIIT Tech) the adjusted earnings stood at RS40 crore, up by 12.4% from Rs35.6 crore in FY2005.
· The company is witnessing a strong growth in individual segment & expects a much better growth in FY2007. The margins are also likely to improve due to its focus on high end courses & the declining contribution from the low-margin institutional business.
· At the current price the stock trades at 17x FY2006 earnings & around 14.5x FY2007 estimated earnings. But considering the value of its 25% stake in NIIT Technologies (amounting to around Rs80 per share), the forward valuation stand at around 11.2x its FY2007 earnings.
Praj Ind plans industrial biotech foray
Pune-based Praj Industries Ltd (PIL) is enhancing its R&D capabilities & chalking out a Rs 20-crore expansion plan, including entry into the industrial biotech space. The company's blueprint for R&D expansion is expected to be ready in three months.
The company, which has bagged an order from a US-based group for setting up two corn-based ethanol plants, is simultaneously preparing to meet expected demand from the US & has short-listed some companies in the US/Europe for acquisition. Praj is expanding manufacturing capacities by setting up two additional workshops near the Mumbai port & plans 30% addition to the existing manpower.
GAIL signs MoU with Govt
State gas utility GAIL (India) Ltd has signed an annual performance target Memorandum of Understanding (MoU) with the Ministry of Petroleum & Natural Gas for the financial year 2006-07. The company has targeted transmission of 76.67 mscmd (million standard cubic metres per day) of natural gas from domestic sources & through LNG route, which includes gas-marketing target of 69 mscd. The MoU also provides for a production target of 320,000 million tonnes of polymers & about 1.25 million tonnes of liquid hydrocarbons.
Aurobindo gets USFDA nod for Stavudine
Aurobindo Pharma Ltd has announced that it has received tentative approval from the US Food & Drug Administration (USFDA) for Stavudine capsules in 15 mg & 20 mg dosages. This is in addition to the 30 mg & 40 mg capsules already approved in July last year. According to the company, the USFDA tentatively approved the total application covering 15, 20, 30 & 40 mg. Stavudine would now be available for consideration for purchase under the US President's Emergency Programme for AIDS Relief. The company manufactures both active pharmaceutical ingredients & formulation for this generic.
Steel prices set to rise by upto Rs1000
Steel prices are set to rise by Rs500-Rs1000 per tonne from July 1. Steel companies are expected to meet again today to decide on further price hike owing to higher iron ore prices & rise in international prices of steel. Car companies have already said that they would be going for a price hike. Hyundai has already increased the prices last month. Others including Maruti, General Motors, & Toyota are expected to follow suit. Typically, Rs1000 rise in steel prices leads to Rs2000-3000 hike in the car prices.
United Breweries Raises Money to Buy Company
According to media reports, United Breweries Group, India's biggest distiller, has arranged to raise 500 million euros ($635 million) to buy a wine company in Europe. United Breweries will borrow from banks such as Standard Chartered Plc & sell foreign-currency-convertible bonds. The company has short-listed three companies, & will buy one of them soon. The UB Group, which has relied on acquisitions to expand its market share, wants expertise & brands acquired overseas to win more discerning customers at home, where rising disposable incomes have spawned more liquor & beer drinkers. The company has bought three local brewers since August 2000.
Pratibha Syntex plans Rs349 crore expansion
Pithampur-based Pratibha Syntex has lined up Rs 349 crore for expansion that includes setting up a terry towel unit in the Pithampur SEZ with an initial capacity of 12,000 metric tonne per annum.This would be commissioned by October next year. A bulk of this investment will go towards the terry towel project with an outlay of Rs217 crore.
The company plans to raise capital for the expansion by borrowing Rs233 crore through term loans from eight different financial institutions. Remaining Rs 116 crore would be raised through internal accruals & equity.
The company will also invest in a 6-MW captive gas plant (Rs 8 crore) at its Pithampur manufacturing unit, an open ended spinning project (Rs54 crore) & expansion of its knitting, dyeing & garmenting operations (Rs 60 crore).
GM to launch mini car next year
General Motors will launch a mini car in India in the first half of next year, even as it is yet to take a final decision on its second plant. The mini car will be rolled out from our Halol facility & this would get the benefit of excise duty cut. The company will utilise the increased capacity of the plant for the initial roll out of the mini car, which is widely speculated to be the Chevrolet Spark. "By the end of this year, we will touch an overall production capacity of 85,000 units per annum. Our current sales target for the year being 45,000-50,000 units, we will utilise the additional capacity for the small car. The company today launched a sports car, Chevrolet SRV, with price starting from Rs 6.97 lakh ex-showroom in Delhi. Targeted at young professionals, the car is also available with 'option pack' with additional features at a price of Rs 7.51 lakh (ex-showroom Delhi).
US Fed has increased its short term interest rate (fed rate) by 25 bps. The Fed also said in its statement that any additional firming if required would depend on the future economic data. The statement, less hawkish then the earlier ones as it seems, was taken positively by the markets & the US Fed future rate for the month of September 2006 declined by 8 bps.
TCS lines up Rs1300 crore capex
Tata Consultancy Services (TCS) has earmarked a capex of Rs 1,300 crore for the current financial year. The investment plan is a part of the company's target to become a $10 billion company by 2010, mainly through acquisitions & alliances both across India & overseas. The company would also look at acquisitions & strategic alliances, which would enable it to expand capacity & reach international markets. TCS had posted revenues of around $2.1 billion in the last financial year. Out of the total Rs 1,300 crore, Rs 1,000 crore would be utilised for its real estate foray & the balance for information technology-related activities.
ONGC may buy 5% in Rosneft
The Oil & Natural Gas Corporation (ONGC) may take upto 5% equity in Russian state oil firm, OAO Rosneft, which will be making an initial public offering (IPO), if the Indian company was given a stake in one of the big-ticket oilfields in Far East Russia or Siberia. ONGC Videsh, the overseas arm of ONGC, has told Russian authorities that it may participate in the $11.6 billion IPO provided it gets stake in Sakhalin-3, Vankor or Timano-Pechora oilfields. OVL has got a mandate to scout for oil & gas abroad to meet India's energy security. Earlier, OVL sought stake in OAO Yuganskneftegaz, a unit of Yukos, which was taken over by Rosneft for $9.3 billion in 2004.
ICI India decides to sell surfactant business
ICI India Ltd has approved the sale of the Company's Uniqema Business to the Croda group based in the UK for a total consideration of about Rs260 crore. The sale follows the strategic decision by the ICI PLC announced in February 2006.
Uniqema comprises of the textile chemicals business which recorded a turnover of Rs147 crore for FY2006. A back of the envelope calculation suggests that the sale of the division would reduce the earnings for FY2007 & FY2008 by 20%. However, the sale consideration would add Rs64 per share of cash on books.
BHEL gets Rs220 crore contracts in Afghanistan
State-run Bharat Heavy Electricals Ltd (BHEL) has bagged two contracts cumulatively worth Rs 220 crore for power projects in Afghanistan. The first contract is from Power Grid Corporation of India for setting up a substation at Kabul. The second project is from Water & Power Consultancy Services for the supply & installation of equipment for 42 MW Salma hydel project. The company's work in the first project includes design, manufacture, supply & commissioning of a 220 KV substation in Kabul. It would also supply turbines & generators for Salma hydroelectric project.
NIIT Limited, improving growth outlook
· NIIT Limited, education & training company of NIIT group, reported 13.1% growth in net revenues to Rs450.7 crore in the fiscal ended March 2006.
· The operating margins improved by 107 basis points to 13.4% on the back of better performance form its individual training business.
· The net profit grew by 14% to Rs23.6 crore. After including the minority share of profits in associate companies ( related to 25% stake in NIIT Tech) the adjusted earnings stood at RS40 crore, up by 12.4% from Rs35.6 crore in FY2005.
· The company is witnessing a strong growth in individual segment & expects a much better growth in FY2007. The margins are also likely to improve due to its focus on high end courses & the declining contribution from the low-margin institutional business.
· At the current price the stock trades at 17x FY2006 earnings & around 14.5x FY2007 estimated earnings. But considering the value of its 25% stake in NIIT Technologies (amounting to around Rs80 per share), the forward valuation stand at around 11.2x its FY2007 earnings.
Praj Ind plans industrial biotech foray
Pune-based Praj Industries Ltd (PIL) is enhancing its R&D capabilities & chalking out a Rs 20-crore expansion plan, including entry into the industrial biotech space. The company's blueprint for R&D expansion is expected to be ready in three months.
The company, which has bagged an order from a US-based group for setting up two corn-based ethanol plants, is simultaneously preparing to meet expected demand from the US & has short-listed some companies in the US/Europe for acquisition. Praj is expanding manufacturing capacities by setting up two additional workshops near the Mumbai port & plans 30% addition to the existing manpower.
GAIL signs MoU with Govt
State gas utility GAIL (India) Ltd has signed an annual performance target Memorandum of Understanding (MoU) with the Ministry of Petroleum & Natural Gas for the financial year 2006-07. The company has targeted transmission of 76.67 mscmd (million standard cubic metres per day) of natural gas from domestic sources & through LNG route, which includes gas-marketing target of 69 mscd. The MoU also provides for a production target of 320,000 million tonnes of polymers & about 1.25 million tonnes of liquid hydrocarbons.
Aurobindo gets USFDA nod for Stavudine
Aurobindo Pharma Ltd has announced that it has received tentative approval from the US Food & Drug Administration (USFDA) for Stavudine capsules in 15 mg & 20 mg dosages. This is in addition to the 30 mg & 40 mg capsules already approved in July last year. According to the company, the USFDA tentatively approved the total application covering 15, 20, 30 & 40 mg. Stavudine would now be available for consideration for purchase under the US President's Emergency Programme for AIDS Relief. The company manufactures both active pharmaceutical ingredients & formulation for this generic.
Steel prices set to rise by upto Rs1000
Steel prices are set to rise by Rs500-Rs1000 per tonne from July 1. Steel companies are expected to meet again today to decide on further price hike owing to higher iron ore prices & rise in international prices of steel. Car companies have already said that they would be going for a price hike. Hyundai has already increased the prices last month. Others including Maruti, General Motors, & Toyota are expected to follow suit. Typically, Rs1000 rise in steel prices leads to Rs2000-3000 hike in the car prices.
United Breweries Raises Money to Buy Company
According to media reports, United Breweries Group, India's biggest distiller, has arranged to raise 500 million euros ($635 million) to buy a wine company in Europe. United Breweries will borrow from banks such as Standard Chartered Plc & sell foreign-currency-convertible bonds. The company has short-listed three companies, & will buy one of them soon. The UB Group, which has relied on acquisitions to expand its market share, wants expertise & brands acquired overseas to win more discerning customers at home, where rising disposable incomes have spawned more liquor & beer drinkers. The company has bought three local brewers since August 2000.
Pratibha Syntex plans Rs349 crore expansion
Pithampur-based Pratibha Syntex has lined up Rs 349 crore for expansion that includes setting up a terry towel unit in the Pithampur SEZ with an initial capacity of 12,000 metric tonne per annum.This would be commissioned by October next year. A bulk of this investment will go towards the terry towel project with an outlay of Rs217 crore.
The company plans to raise capital for the expansion by borrowing Rs233 crore through term loans from eight different financial institutions. Remaining Rs 116 crore would be raised through internal accruals & equity.
The company will also invest in a 6-MW captive gas plant (Rs 8 crore) at its Pithampur manufacturing unit, an open ended spinning project (Rs54 crore) & expansion of its knitting, dyeing & garmenting operations (Rs 60 crore).
GM to launch mini car next year
General Motors will launch a mini car in India in the first half of next year, even as it is yet to take a final decision on its second plant. The mini car will be rolled out from our Halol facility & this would get the benefit of excise duty cut. The company will utilise the increased capacity of the plant for the initial roll out of the mini car, which is widely speculated to be the Chevrolet Spark. "By the end of this year, we will touch an overall production capacity of 85,000 units per annum. Our current sales target for the year being 45,000-50,000 units, we will utilise the additional capacity for the small car. The company today launched a sports car, Chevrolet SRV, with price starting from Rs 6.97 lakh ex-showroom in Delhi. Targeted at young professionals, the car is also available with 'option pack' with additional features at a price of Rs 7.51 lakh (ex-showroom Delhi).
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