Thursday, August 18, 2005

Market loses ground after hitting new high at above 7,900


Profit booking took centrestage today. Volatility was high as the Sensex
gyrated between positive and negative territory. After hitting a new high at
above 7,900 within minutes of commencement of trading, market soon did a
reversal. A sharp fall in global crude oil prices on Wednesday had triggered
a firm opening today.
A bounce back at the fag end of trading in cement scrips and two private
sector banks HDFC Bank and ICICI Bank restricted the fall in Sensex.
Pivotals like State Bank of India, ITC, Infosys weakened further in late
trading. Car major Maruti Udyog (MUL), too, lost ground in late trading.
21 out of 30 Sensex constituents ended in the red.
Select paper scrips, some construction stocks, print media shares and select
textile scrips were among those that were hotly pursued.
While a host of side counters dropped on profit taking, select side counters
were on the rise on renewed buying. Side counters like Birla Global Finance,
Geojit Financial Services, Aplab, NRB Bearings, Kamat Hotels, Sabero
Organics, Alps Industries, Voltas, PSL, Liberty Shoes, Blue Star, Satnam
Overseas, Pantaloon Retail, Century Enka, Jain Irrigation, Bayer
Cropscience, NIIT Technologies, Clariant, Cranes Software, Elecon
Engineering, Praj Industries, Goodlass Nerolac, KEC International and Radico
Khaitan were all up the incline by between 4.7% to 20%.
The 30-share BSE Sensex lost 48.20 points or 0.6% to 7,811.33. At the day’s
close of 7,811.33, the barometer index shed 110.06 points from the day’s
peak of 7,921.39.
The S&P CNX Nifty shed 14.70 points or 0.6% to 2,388.45.
Oil exploration major ONGC fell 1.8% to Rs 985. A sharp fall in global crude
oil prices triggered profit taking in the counter. 2.5 lakh shares changed
hands in the counter on BSE. Light, sweet crude for September delivery
dropped $ 2.83 to settle at $ 63.25 a barrel on the New York Mercantile
Exchange on Wednesday, well below the all-time high of $ 67.10 reached on
Friday.
Index heavyweight Reliance Industries moved lower by 0.8% to Rs 708.65. The
stock failed to sustain higher level. 27.2 lakh shares changed hands in the
counter on BSE.
FMCG major Hindustan Lever (HLL) (down 2.6% to Rs 168), Hindalco (down 2% to
Rs 1,411), HDFC (down 1.7% to Rs 923), Bajaj Auto (down 1.7% to Rs 1,426),
Tisco (down 1.4% to Rs 408), Ranbaxy (down 1.3% to Rs 523), Infosys (down
1.1% to Rs 2,290) and ITC (down nearly 1% to Rs 1,693). Car major Maruti
Udyog shed 0.9% to Rs 471.30.
Cement scrips bounced back from lower level due to firmer cement prices. ACC
(up 2.4% to Rs 470.95), Gujarat Ambuja Cements (up 1.3% to Rs 65.90), and
Grasim (up 0.7% to Rs 1,310) all moved upstream. South based India Cements
(up 10.8% to Rs 103.45), J K Corporation (up 5.7% to Rs 71.85), Mangalam
Cement (up 5% to Rs 83.50), Chettinad Cement (up 3.6% to Rs 186) and
Kakatiya Cement (up 3% to Rs 103.90) made solid headway.
Mysore Cement soared 20% to Rs 31.05. The stock rose on huge volume of 86
lakh shares.
ICICI Bank (up 1.2% to Rs 510) and HDFC Bank (up 1.5% to Rs 665.50), mvoed
strong.
United Western Bank jumped 10% to Rs 64.70 after the company said its board
would meet on 26 August 2005 to consider issue of bonus and right shares.

Bonus announcement has United Western Bank soaring to highs


United Western Bank set off on a 20% surge to Rs 64.70, which happens to be
a lifetime high for this counter.
About 2.43 lakh shares of the company were exchanged on BSE in the course of
the day.
The bank had witnessed rally from the close of Rs 41.95 on 30 June 2005, to
close at a high of Rs 55.05 on 10 August 2005. The previous all-time high
for this counter was Rs 60, hit on 23 May 2005.
United Western Bank earlier today said that a meeting of the board of
directors of the bank will be held on 26 August 2005 to consider subject
matters relating to the issue of bonus and rights shares.
United Western Bank is among the largest private sector commercial banks in
India. Its network comprises 230 branches spread over 47 districts in 9
states. These come under the control of five zonal offices located at
Mumbai, Pune, Kolhapur, Jalgaon, and Nagpur.
The bank's portfolio of services include retail banking , accepting deposits
and lending money, leasing and hire-purchase, foreign exchange, letters of
credit and bank guarantees, credit cards, investment assistance and merchant
banking.
For the quarter ended June 2005, the bank turned out a hefty 62.26% jump in
net profit to Rs 8.47 crore (Rs 5.22 crore). Total income went up marginally
though, by 0.23% to Rs 141.76 crore (Rs 141.43 crore).

HCL Infosystems gains after reporting strong annual consolidated figures


HCL Infosystems is currently up 3.3% to Rs 264.50 on volumes of 2.32 lakh
shares.
The counter had hit an intra-day high of Rs 272 and low of Rs 257.
The stock witnessed solid surge from Rs 155.92 on 6 July 2005, to Rs 256.15
on 17 August 2005.
HCL Infosystems today reported a 30% increase in consolidated net profit at
Rs 227.70 crore for the year ended 30 June 2005 as against Rs 175.11 crore
in FY04. Total income increased to Rs 7,784.25 crore in FY05 from Rs
4,329.63 crore in FY04.
HCL Infosystems is India's premier information enabling and integration
company. It offers technology solutions across multiple platforms. It works
closely with many leading global players like Intel, Toshiba, HP, Ericsson,
Microsoft, Nokia and Sun Microsystems among others.
HCL Infosystems manufactures wide range of computers, laptops, servers,
storage, enterprise networking, copiers, digital projectors and
communication devices. Apart from this, the company also manufactures
workstations, servers, display products, networking products, security
products and storage solutions.
The company has direct customer services centres across more than 260
locations and two ISO 9001 certified state-of-the-art manufacturing
facilities.

Shares of print media firms came strongly in focus today, and Deccan Chronicle Holdings, in particular, powered up 18% to Rs 337.55.


Mid-Day Multimedia jumped up 16.9% to Rs 95 and Sandesh rose 4% to Rs 246.
Mid-Day Multimedia rose on high volume of 38.9 lakh shares. 3.4 lakh shares
changed hands in Sandesh and 3.1 lakh shares got traded in Deccan Chronicle
Holdings.
The renewed buying interest in these stocks has materialised on the
reckoning that FIIs would mop up shares of print media companies with RBI
recently (on 11 August 2005) issuing a notification allowing FII investment
in print media firms.
Following the RBI notification allowing FII investment in the print media
companies, Sandesh has gained a staggering 49.8% in four trading sessions to
the current Rs 246 from Rs 164.20 on 11 August 2005.
Deccan Chronicle Holdings jumped 9.6% in a single trading session on 12
August 2005 to Rs 292.85. Profit taking pulled the stock down and in the
next two days the stock slipped to Rs 285.70 (closing price on BSE on 17
August).
Mid-Day rose 4.7% in two trading sessions to Rs 81.65 on 16 August from Rs
77.95 on 11 August. It declined slightly to Rs 81.30 on 17 August 2005.
The last few months saw print media shares gain ground after the government
announced that it would allow FII investment in print media shares.
The Government of India has permitted foreign direct investment and
portfolio investment within the composite limit of 26% of the paid-up
capital of an Indian company publishing newspapers, periodicals and dealing
with news and current affairs. Accordingly, RBI has issued a notification
withdrawing the prohibition placed on FIIs to purchase shares of print media
companies.

Eveready Industries flares up on FCCB/GDR/prefrential allotment proposal


Eveready Industries is currently up 12.3% to Rs 98.65.
Volumes amounted to 12.42 lakh shares on the counter. The counter hit a high
of Rs 101.55 and low of Rs 85.15 in intra-day trades.
From Rs 101.30 on 21 June 2005, the counter has moved a tad lower to Rs
87.85 (on 17 August 2005).
Eveready Industries has just announced that its board of directors will be
meeting on 26 August 2005, to consider whether to issue convertible warrants
on private placement basis and / or Foreign Currency Convertible Bonds
(FCCB) and / or Global Depository Receipts (GDR) and / or other equity
linked securities in foreign currency in order to raise funds for the
company's future business requirements.
BM Khaitan group company, Eveready Industries, is a market leader in the dry
cell batteries and flashlights segment in the country. The products of the
company are marketed under the brand name ‘Eveready’. The company’s
portfolio spread includes carbon zinc batteries, rechargeable batteries,
alkaline batteries and flashlights.
For the quarter ended 30 June 2005, Eveready came out with turnaround
results. Net profit amounted to Rs 6.3 crore in the Q1 ended June 2005 and
net sales rose 8.47% to Rs 188.29 crore.

IndusInd Bank is currently quoting at Rs 77.45, down 3.55% from its previous close.


About 3.61 lakh shares changed hands by now. Rs 77 is the low and Rs 79.9 is
the high for the day.
From the close of Rs 50.25 on 2 May 2005, the counter witnessed decent rally
to close at a high of Rs 81.40 on 16 August 2005 as the business prospects
improved.
IndusInd Bank has denied yesterday's rumours vide its letter inter-alia
stating that they were not aware of any such developments taking place in
this regard. The press had reports on 17 August 2005 stating that a leading
corporate house is expected to pick a 10% strategic stake in IndusInd Bank.
IndusInd Bank, a new-generation private-sector bank, has capital funds of
over Rs 1,200 crore as on 31 March 2005. Driven by technology, IndusInd Bank
has taken steps to establish and upgrade its support systems for the
introduction of retail banking products and alternative delivery channels,
while continuing to expand its network of branches.
The bank, as on 31 March 2005, has 115 branches, 9 extension counters and
195 ATMs, spread over 95 geographical locations in 23 states as against 61
branches, 12 extension counters and 147 ATMs spread over 50 geographical
locations in the previous year.
For the quarter ended June 2005, the bank reported a 11.3% fall in net
profit to Rs 40.36 crore (Rs 45.48 crore). Net operating income however was
higher by 3.7% to Rs 349.86 crore (Rs 337.30 crore).

Infrastructure Development Finance Company (IDFC) held firm on the back of strong Q1 numbers.


Infrastructure Development Finance Company (IDFC) scrip was up nearly 2% to
Rs 68.80. However, in a weak market the stock pared gains. It was hovering
at Rs 89.60 in early afternoon trade when the results hit the market.
89.5 lakh shares changed hands in the counter on BSE.
The stock made a sparkling debut on BSE on Friday (12 August 2005). It
settled at Rs 69.55 on the day one of its debut – attracting 104.5% premium
over the IPO price of Rs 34. The stock plunged the next day (16 August) to
Rs 64.80. It recovered on 17 August 2005 to Rs 67.50.
IDFC’s net profit has jumped 113% to Rs 108.28 crore from Rs 50.80 crore in
Q1 June 2004. Total income has risen 85% to Rs 256.36 crore from Rs 138.56
crore.
IDFC is positioned as a specialised intermediary in infrastructure
financing. It also offers non-fund-based products such as guarantees, debt
syndication, and advisory services on project and financial structuring. The
company’s main focus is on energy (power generation & distribution),
telecommunication and transportation projects (roads, ports & airports).
IDFC has a strong asset quality with zero net NPAs.
IDFC was sponsored by the Government of India (GoI), the Reserve Bank of
India (RBI), and IDBI as a private sector enterprise to promote
infrastructure financing. In January 2005, RBI, transferred its shareholding
in IDFC to the GoI. Post-issue, GoI and IDBI have a 23.29% and 3.12% stake,
respectively. A clutch of domestic and foreign institutions and banks (like
SBI, HDFC, Asian Development Bank, and International Finance Corporation)
hold 37.41%.

Hindustan Construction Company is currently up 6.72% to Rs 797.5 on volumes of 21,717 shares.


The counter hit a high of Rs 845 in intra day trades. This is also a new all
time high for this counter. The intra day low is at Rs 770.
The counter witnessed a solid surge from the close of Rs 516 on 21 June
2005, to close at Rs 730 yesterday on the back of consistent order flow and
strong order book position.
Hindustan Construction Company (HCC) today informed NSE that it has been
awarded a contract for construction of Mughal Road from Bafliaz (Poonch) to
Shopian (Pulwama) in Jammu and Kashmir from the office of the Joint Dev.
Commissioner (Works) / Ex-Officio Chief Engineer, Mughal Sarai Project,
Srinagar. The value of the contract is Rs 214.40 crore.
Last week, HCC won a contract for construction of the Pir Panjal Tunnel from
Ch.152+600 to Ch.158+730 (Zone- VA) on Laole- Qazigund section of Udhampur -
Srinagar - Baramulla New BG Railway Line Project from IRCON International,
New Delhi. The value of the contract was Rs 218.35 crore.
The Walchand Group construction major, HCC is one of the largest
construction and infrastructure building companies in the country. It
specialises in construction activities in diversified areas like hydel,
power, roads, bridges, dams, barrages, marine works, buildings and
environmental projects in both domestic as well as international markets.
For the quarter ended 30 June 2005, the company posted a 71.54% jump in net
profit to Rs 22.66 crore (Rs 13.21 crore). Net sales increased 32.1% to Rs
461 crore (Rs 349.22 crore).

Media Video edged higher by 2.96% to Rs 40 after achieving a record high of Rs 44 in early trades.


The low for the day so far was Rs 39.40. 2.93 lakh shares were traded so
far.
The counter had rallied from the close of Rs 28.60 on 29 July 2005 to Rs
38.85 yesterday.
Media Video stated today that Amoi Electronics, a USD 2-billion consumer
electronics, telecommunication, digital audio and IT company has tied up
with it as its sourcing partner in India.
This purpose of this tie-up is developing exclusive gaming software for its
range of mobile phones being exported to the US, Asia and other regions of
the world. The company expects that revenue accrued from this business will
be between Rs 20 to 25 crore annually.
Media Video, earlier in July 2005, decided to issue 26.8 lakh shares
aggregating 14.93% of the post issue share capital of the company to Bennett
Coleman and Company on preferential basis at a price of Rs 26 per share.
Media Video is engaged in the assembly and marketing of consumer electronic
goods under the brand name `Media'. Its products include TV games and other
related electronic equipment such as rechargeable emergency lights. MVL has
a tie-up with Nintendo for marketing the former’s products in India. The
company also manufactures white goods like VCD players, home theatre
equipment, toys, and torches .
For the quarter ended 31 March 2005, the company posted a net profit of Rs
1.22 crore on net sales of Rs 26.73 crore.

GHCL has risen 2.52% to Rs 97.6 on volumes of 15.67 lakh shares.


It hit a new all time high of Rs 100.75 in intra day trades. The intra day
low was Rs 93.5.
The counter has flared up from the close of Rs 44.15 on 16 June 2005, to Rs
95.2 yesterday. The stock spurted 33.5% in just five trading sessions.
Gujarat Heavy Chemicals (GHCL), the flagship company of the Dalmia Group, as
per reports, is all set for a series of acquisitions in the US and Europe,
which would enable it to enter the home textiles export market in a big way.
These acquisitons would cost the company in excess of $100 million (Rs 435
crore), part of which would be raised through issue of securities in foreign
markets. The company is in the final stages of negotiation for these
acquisitions.
Reports add that the company is on the verge of acquiring at least four
large home textile companies in the US and Europe in the coming months.
With home furnishing products such as bed sheets, table cloths, curtains and
a whole finished product range, GHCL will target the US, Japanese and
European markets, taking advantage of the existing quota-free regime.
Currently, the textile division of GHCL has a total installed capacity of
68,000 spindles and is dedicated to the manufacture of cotton and polycotton
yarn. The Vapi unit's capacity currently is 36 million metres per annum.
GHCL’s profit after tax (PAT) rose sharply to Rs 21.47 crore in Q1 ended
June 2005 from Rs 7.40 crore in Q1 June 2004. Net sales increased 17% to Rs
139.11 crore from Rs 118.87 crore.

Greaves Cotton rose nearly 3% to Rs 223 on the back of robust Q4 June 2005 results


3,250 shares were exchanged in the counter on BSE by the first few minutes
of trade.
The stock was subject to a pre-results rally. From a recent low of Rs 188.85
on 8 August 2005, the stock leaped up to Rs 216.60 by 17 August 2005 on the
eve of the results announcement. The results hit the market after trading
hours on Wednesday, 17 August 2005.
The stock moved strongly upward from the beginning of July 2005. From a low
of Rs 149 on 8 July 2005, the stock spurted 45% in a short while to Rs
216.60 by 17 August 2005 ahead of the results announcement.
Greaves Cotton’s net profit jumped 150.8% to Rs 23.71 crore from Rs 9.45
crore in Q4 June 2004. Net sales rose 6% to Rs 186.24 crore from Rs 175.65
crore.
For full year FY 2005 (year ended 30 June 2005), net profit rose 185.7% to
Rs 62.09 crore from Rs 21.73 crore in FY 2004. Net sales rose 1% to Rs
730.17 crore from Rs 722.61 crore.
The company’s board has declared a final dividend of Rs 3 per share taking
the total dividend for the year to Rs 7 per share.
After divesting its polymer business in FY 2004 and power transmission
(industrial products segment) from 1 July 2004, Greaves Cotton is left with
the core business of engines and infrastructure equipment. Its core
competencies are in diesel/petrol engines, gensets, agro equipment and
construction equipment.
Greaves Cotton is planning to leverage the current strong demand conditions
by hiking its capacity to 2,50,000 light diesel engines a year from
approximately 1,50,000 currently at the Ranipet unit. For this, it has drawn
capex plans of Rs 100 crore.

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