Wednesday, August 17, 2005

Indices hit new all time highs; Vivimed ends at 217% premium

The Sensex and Nifty repeated their feat of hitting all-time highs today,
after achieving this yesterday as well. Buying in heavyweight counters
propelled the markets higher today.
After opening at 7771.78, the Sensex immediately slid to a low of 7735.37.
It gradually recovered from this level and, in last leg of trading, hit an
all time high of 7870.62 points.
The Sensex ended the day at 7,859.53, up 91.29 points from its previous
close. This is also a new all time closing high for the Sensex.
Meanwhile, the NSE Nifty also hit an all time high of 2,406.25 points and
finally ended the day at 2401.9 points, adding 32.1 points from its previous
close. This is also a new all time high closing for the Nifty. The low for
the day was at 2357.5.
Total turnover amounted to Rs 3199 crore. While the advance decline ratio
was around 2.5:1. 1,870 shares closed higher and 741 declined. About 46
shares remained unchanged.
Among Sensex stocks, 21 shares ended higher while 9 shares ended lower. ONGC
(up 5.18% to Rs 1006) was the biggest gainer, after the company said it has
plans to open 25 retail outlets. Infosys (up 2.75% to Rs 2,313), rose after
a foreign brokerage house maintained the buy rating on the stock with a
target of Rs 3,000. Bajaj Auto added 2.98% to Rs 1451.45. Bhel (down 2.67%
to Rs 1091.05), Gujarat Ambuja Cement (down 1.45% to Rs 64.9) and Ranbaxy
Labs (down 0.86% to Rs 531) comprised the losers.
Among sectoral indices, the BSE Oil & Gas Index closed up over 2.50%, the
BSE IT Index closed up over 2% and the BSE Metal Index closed up over 1%.
The CNX Midcap index ended 0.43% higher.

Vivimed Laboratories made a dream debut. The stock listed at Rs 115 on the
BSE attracting 64% premium over the IPO price of Rs 70. But later it kept on
rising steadily, finally closing at Rs 221.95 , a 217.07% premium to the
offer price of Rs 70 per share. 1.25 crore shares changed hands over the
day. The high for the day was Rs 223.80 and low for the day was Rs 70.

Construction sector shares ended higher on the back of constant order flow
coming in and strong order book position of the company. Notable winners
were Simplex Concrete Piles (up 11.4% to Rs 1,021.9), Era Construction (up
6.85% to Rs 138.2), Gammon India (up 7.83% to Rs 340), JMC Projects (up 5%
to Rs 92.05), IVRCL Infrastructures (up 5.07% to Rs 793), Valecha
Engineering (up 3.67% to Rs 192), Patel Engineering (up 3.35% to Rs 210.65),
and HCC (up 2.9% to Rs 748) among others.
Notable block deals for the day included Exide Industries (1 lakh shares at
Rs 190.1 per share), Geometric Software (1.98 lakh shares at Rs 115.5 per
share), Gujarat Alkali (3 lakh shares at Rs 142.15 per share), Indian
Overseas Bank (6.12 lakh shares at Rs 89.5 per share) and SKF India (1.06
shares at Rs 215.5 per share) among others.
Garden Silk Mills ended 10.45% higher at Rs 77.7 on volumes of 12.61 lakh
shares after the company said that it has commenced production of its 600
tonnes per day continuous polymerisation project in Surat.
DCM Shriram Consolidated ended 4.6% higher to Rs 885 on volumes of 71,927
shares after the company’s board announced a liberal 1:1 bonus and 5-for-1
stock split.
Vaibhav Gems ended 2.2% higher to Rs 292.9 on volumes of 72148 shares after
the company said that its board will meet on 24 August 2005 to consider
acquisition of overseas companies.
Harita Seating and Sai Service Stations were locked at the 20% upper circuit
filter each at Rs 165.3 and Rs 101.25 respectively. As per reports, service
centers and garages are already overbooked, with cars for repairs, where the
waiting period is as high as two months.
SpiceJet ended 7.65% up to Rs 85.2 on volumes of 27.6 lakh shares on reports
that the Hinduja Group was close to buying out strategic stake in the
IDFC ended up 4.32% to Rs 67.6 on volumes of 83.22 lakh shares. The share
hit a high of Rs 68 earlier.
Lloyds Steel ended 10% higher at Rs 19.95 on volumes of 28.17 lakh shares.
International Home Textiles ended 7.83% up to Rs 31 on volumes of 2.55 lakh
shares after the board approved issue of shares on preferential basis.
Praj Industries ended the day to close at Rs 112.55 on volumes of 3311
shares. It went ex-bonus in the ratio (1:1), and split (from Rs 10 to Rs 2)
today. Yesterday it closed at Rs 1072.4.


Infosys Technologies in focus

Software giant Infosys Technologies surged 3% to Rs 2,322 on renewed buying
1.7 lakh shares were traded in the counter on BSE by mid-afternoon trade.
With its huge weightage of 10%, the rally in Infosys contributed to the
gains in Sensex. The barometer index rushed up 87 points to 7,856.
Infosys stock has seen a solid upward incline during late April 2005 to late
June 2005 boosted by its sponsored ADR issue and amid expectation of an
upward revision in guidance for FY 2006. Since late June 2005, the stock
witnessed immense volatlity due to alternate bouts of buying and selling.
The stock moved between a low of Rs 2,134 and a high of Rs 2,395 since late
June 2005.
On a sequential basis, Infosys’ Q1 consolidated net profit climbed 3.5% to
Rs 531.92 crore. Consolidated revenue, on a sequential basis, spurted 4.2%
to Rs 2,071.59 crore. The company’s profit margins were under pressure in Q1
due to increase in salaries and visa charges and adverse impact of rise in
rupee versus euro/pound. There was an increase in domestic salaries by
13-15% and US compensation by about 3%.
At the time of announcing Q1 results, Infosys revised upwards its earnings
and revenue guidance for FY 2006. The company has pegged FY 2006 EPS at
between Rs 84.70 and Rs 86.00 – a growth of 23.12% to 25.02%. The software
major sees FY 2006 revenue in the range of Rs 8,947 crore and Rs 9,051
crore – a growth of 25.49%-26.95%.

Select auto parts makers have a ball as floods set off demand spurt

Select auto parts makers and auto service station Sai Service Station surged
today, extending a recent rally in these counters.
Sai Service Station streaked up 20% to Rs 101.25, the maximum permissible
level of the day. 34,033 shares changed hands in the counter on BSE. Harita
Seating also soared 20% to Rs 165.30 – the maximum permissible level of the
day. 15,163 shares were exchanged in the counter on BSE.
Clutch Auto climbed 3.7% to Rs 125. 2.7 lakh shares changed hands in the
counter on BSE.
Among batteries manufactures, Amara Raja Batteries (up 1.9% to Rs 164.30)
and Exide Industries (up 1.5% to Rs 193) moved upstream. 1.1 lakh shares
changed hands in Exide and 6,870 shares got traded in Amara Raja Batteries
Some of these stocks have been on the ascendant in the past few days on
expectations of an increase in demand in the short term due to damage caused
to vehicles because of the floods that hit Mumbai late last month. For
instance, Sai Service Station has jumped 82.7% in just five trading sessions
to current Rs 101.25 from Rs 55.40 on 9 August 2005.
Amara Raja Batteries has zoomed up 14% in five trading sessions from Rs
143.95 on 9 August 2005. Harita Seating has spurted 40% in four trading
sessions from Rs 117.90 on 10 August 2005.
A short-term demand hike is expected in the replacement market for select
auto parts such as alternators, starters, clusters, batteries, clutches,
brakes, engines, wires and other small parts, according to analysts.
As per reports, service centers and garages are already overbooked, with
cars for repairs, where the waiting period is as high as two months.

Construction scrips on a roll

A host of share sof construction companies edged higher today extending
their recent rally.
Simplex Concrete Piles (up 9.8% to Rs 1,007.50), Gammon India (up 6.8% to Rs
336.75), Era Construction (up 6.4% to Rs 137), JMC Projects (up 5% to Rs
92.05), IVRCL Infrastructures (up 4.6% to Rs 789), Valecha Engineering (up
4.7% to Rs 194), Unitech (up 3% to Rs 670), Hindustan Construction (up 3.8%
to Rs 755), Nagarjuna Construction Company (NCC) (up 2.8% to Rs 1,114),
Patel Engineering (up 2% to Rs 208), Madhucon Projects (up 1.8% to Rs 875)
and MSK Projects (up 1.7% to Rs 85.40) were all strong gainers.
Renewed buying interest has triggered a solid rally in construction scrips
in the past few days. For instance, Gammon India has gained 23% in just five
trading sessions to current Rs 336.75 from Rs 273.60 on 9 August 2005. IVRCL
Infrastructures has risen 20% in four trading sessions from Rs 655.35 on 10
August 2005. Madhucon Project has spurted 26% in six trading sessions from
Rs 693.25 on 8 August 2005. NCC has jumped up 16.9% in six trading sessions
from Rs 952.45 on 8 August 2005.
Last few months have seen construction scrips build on strong gains on the
Continued flow of orders in diverse segments like water management projects,
highways construction projects from National Highways Authority of India,
power projects and civil construction projects have seen construction stocks
on an onward march. Most construction companies are the subject of healthy
order book positions. The order book of frontline companies, in fact, is at
an impressive 3 to 4 times their full year revenue.
Moreover, with the current boom in oil prices, construction companies are
also bagging good orders from Middle Eastern countries. Indian companies
have started taking on increasing number of projects overseas and are now
involved in turnkey projects like power plants, transmission lines,
pipelines, dams and roads in Malaysia, the Middle East, Central Asia, Africa
and the US.

ONGC gets boosted by record high oil prices

Oil exploration major ONGC was the market's cheer today, climbing 3.8% to Rs
993, by mid-morning trade.
3.1 lakh shares changed hands in the counter on BSE by one-and-half hours of
trade on BSE.
The stock bounced back from lower level since late July 2005 after it fell
nearly 3% in one trading session on 29 July 2005 following the major fire at
ONGC’s offshore oil platform near Mumbai, which completely destroyed the
highly productive platform. The stock regained ground to Rs 956.50 by 16
August 2005.
Firm global crude oil prices set off renewed buying interest in the stock
today. US crude futures edged up on Wednesday from losses in the previous
two sessions, with upcoming weekly data on US oil inventories expected to
show a drop in gasoline stocks. NYMEX crude for September delivery was at $
66.30 a barrel, up 22 cents or 0.33 percent, in ACCESS electronic trading.
On Tuesday, the contract settled at $ 66.08, down 19 cents. The oil price
holds close to a record high of $67.10 that it struck on Friday (12 August
Meanwhile, ONGC is expected, this month, to restore 70,000 barrels per day
(bpd) out of 123,000 barrels of crude oil capacity lost last month when a
fire destroyed a platform in its Bombay High field.
ONGC has struck gas in two blocks, GS-15-9 and GS-15-10 off Amalapuram coast
in Andhra Pradesh and G-4-4 and GS-KW-3 in the Krishna-Godavari offshore
well. The company has also struck gas in a coal-bed methane block in Bokaro
district, estimated to hold reserves of 1.625 trillion cubic feet of gas.
The company has also announced discovery of oil at the RV-1 structure off
the Ratnagiri coast in Maharashtra.
Meanwhile, as per media reports, ONGC has bid to acquire Petrokazakhstan, a
Canadian firm with operations in Central Asia.

Vivimed Labs spurts on debut

Vivimed Labs got listed at Rs 115 on BSE, a 64% premium over the IPO price
of Rs 70.
In early trade, the stock was trading at Rs 170.50. Early volumes in the
stock were high, at 22.4 lakh shares, on BSE in the first one hour or so of
Vivimed had launched its maiden IPO last month to finance an expansion
project. Vivimed makes personal care ingredients. The company operates a
plant in Bidar, Karnataka. The company plans to establish a Rs 26.5-crore
facility to increase production capacity of triclosan from 480 tonnes to 750
tonnes at Choutuppal in Nalgonda, AP. Vivimed earned net profit of Rs 4.83
crore on a turnover of Rs 55.19 crore in 2004-2005.

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