Friday, October 07, 2005

Strong September sales spur Ashok Leyland


Ashok Leyland moved up 1.2% to Rs 28.60 as the stock recovered from the lower level in an otherwise weak market following a surge in sales in September 2005.
13.6 lakh shares changed hands in the counter on BSE.
The stock lost 3.4% on Thursday (6 October 2005) in a weak market to Rs 28.25.
The stock witnessed a sharp surge during late June 2005 and early August 2005. The stock turned volatile after the sharp surge. It moved between a low of Rs 26 and a high of Rs 30 since early August 2005. The scrip has a face value of Re 1.
Ashok Leyland’s total vehicle sales jumped 27.2% in September 2005 to 5,875 units from 4,617 units in September 2004. Domestic sales rose 26.6% to 5,284 units from 4,173 and exports climbed 33% to 591 units.
Ashok Leyland reported robust Q1 June 2005 results. Net profit jumped 101% to Rs 64.35 crore. Net sales improved 29% to Rs 1,063.23 crore.
Recently, Ashok Leyland disposed off its castings unit at Hyderabad, namely Ductron Castings, to Ennore Foundries as a going concern.

Simbhaoli Sugar Mills slips despite expansion plans


Simbhaoli Sugar Mills is down 2.36% to Rs 87 on volumes of 1.13 lakh shares.
The stock is witnessing a volatile momentum today, swinging in a range of Rs 86.50 and Rs 93.95 so far on BSE.
The stock climbed sharply from Rs 78.95 on 30 September 2005 to Rs 89.10 yesterday.
It slipped today, in line with the rest of the market.
The BSE Sensex is down by 65 points to 8463.
Simbhaoli Sugar Mills said that it proposes to double its ethanol production output from 18 million liters per annum to 36 million liters per annum by setting up a new ethanol plant adjacent to its Chilwaria Sugar Unit (Eastern UP). The financial closure for this ethanol project has been achieved and the production will commence in June 2006.
In August 2005, the company announced rights issue of 87.84 lakh shares at Rs 60 per share in the ratio of four shares for every five shares held. The issue opened on 9 September 2005 and closed on 9 October 2005.
Simbhaoli Sugar Mills is one of the largest sugar manufacturers in North India. At present, SSML operates two mills in Uttar Pradesh (at Simbhaoli and Chilwara) with crushing capacities of 7,500 TCD and 3,800 TCD respectively. SSML also has a distillery capacity of 75 KLPD and an ethanol production capacity of 30 KLPD.
SSML’s profit after tax rose a staggering 294% in Q1 June 2005 to Rs 7.05 crore from Rs 1.79 crore. Net sales jumped 51% to Rs 137 crore from Rs 90.78 crore. Firm sugar prices contributed to the robust results.
SSML has a well-diversified business model with revenue streams from sugar, rectified spirit, liquor and power.

Himatsingka Seide advances after fixing record date for stock split


Himatsingka Seide is currenly up 2.15% to Rs 550 on volumes of 34,869 shares.
The stock moved in a range of Rs 570 and Rs 540.10 so far on BSE.
The stock galloped from the close of Rs 388 on 3 August 2005 to close at a high of Rs 600.85 on 8 September 2005 on expectation of a liberal bonus issue.
Himatsingka Seide has stated that it has set 21 October 2005 as the record date for the purpose of sub-division of equity shares of Rs 5 each in lieu of each existing equity share of Rs 10. The same date is also applicable for the proposed issue of bonus shares.
Himatsingka Seide's board, had earlier granted its nod for a liberal 1:1 bonus issue to equity shareholders. The board also okayed a 1:2 stock split.
Himatsingka Seide's board also approved a $60 m GDR/FCCB/equity issue and a hike in FII limit to 40% from 24% earlier.
The company recently said it would be investing Rs 400 crore in setting up a bed linen fabrics unit and that, on reaching full capacity, the turnover of the unit will be about Rs 475 crore.
Construction activity at the new bed linen fabrics unit is expected to start by September 2005, and the project is likely to be completed within 12 months, the company said. The company had sales of Rs 137.98 crore for the full year FY 2005 (year ended 31 March 2005).
Himatsingka Seide is an 100% EOU, manufacturing and marketing natural silk fabric. Its products are well-received in the highly sophisticated markets of Europe and the US.
For Q1 June 2005, the company posted a 11% growth in net profit to Rs 11.27 crore (Rs 10.11 crore). Net sales rose 11% to Rs 34.17 crore (Rs 30.79 crore).

Bajaj Auto Finance spurts


Bajaj Auto Finance jumped 7.8% to Rs 319 after the company said it is considering raising of funds.
6,257 shares changed hands in the counter on BSE.
Ahead of the announcement, the stock lost 3.8% on Thursday (6 October 2005) in a weak market to Rs 362.65.
Earlier, the stock had witnessed a solid rally around mid-September 2005. It eased off later. From Rs 282.70 on 9 September 2005, the stock leaped up 38.4% in a brief span to Rs 391.40 on 20 September 2005.
Bajaj Auto Finance's board of directors will be meeting on 13 October 2005 to decide on the issue of raising funds through various means including a further issue of shares. The company’s board will also take up the proposal for a hike in authorised share capital.
Bajaj Auto Finance, a Bajaj group NBFC, is largely hinged on retail lending. Apart from the financing of two-wheelers and consumer durables, the company also caters to the financing of personal computers and personal loans.
For Q1 June 2005, Bajaj Auto Finance reported 27.8% growth in net profit to Rs 11.51 crore. Total income rose 44.9% to Rs 45.92 crore.

KEC International towers up on substantial order from Afghan government


KEC International is currently trading higher by 3% to Rs 243 on volumes of 41,107 shares.
Shares of the power transmission and engineering company jumped up to hit a high of Rs 248.50 after the news came in. The low for the day was Rs 239.
The stock has advanced sharply from Rs 221.10 on 23 September 2005 to Rs 247.25 on 3 October 2005, on the back of consistent order wins.
KEC International spurted after it said it has received orders worth $36 million from the Afghan government for the supply and construction of 220 KV double circuit transmission lines.
Last month, KEC International bagged a Rs 82-crore order from Power Grid Corporation of India and a Rs 102-crore order from Algerian power transmission company GRTE spa.
KEC has a healthy order book position of Rs 2,400 crore. The order size is nearly two times its annual sales of Rs 1,230.30 crore (in FY 2005).
KEC figures among the largest power transmission, engineering, procurement and construction companies in Asia, and has a presence in more than 15 countries. In the domestic market, the company is executing orders for Powergrid, Powerlinks Transmission, WBSEB, and JKSPDC among others.
For the quarter ended 30 June 2005, the company posted a net profit of Rs 11.82 crore on net sales of Rs 378.62 crore. The net sales and net profit jumped by 56.84% and 16.80% respectively.

Strong Q1 results set Petron Engineering on higher ground


Petron Engineering flared up 5% to Rs 254.50.
Volumes amounted to 9781 shares on the counter thus far. There were outstanding buy orders for 28,564 shares at the maximum level.
The stock witnessed a sell-off ever since it struck Rs 268.15 on 19 September 2005, and closed at Rs 231.60 on 30 September 2005. This was the result of profit taking emerging after a sharp rally.
The stock hit an all time high of Rs 277 on 20 September 2005.
Petron Engineering spiraled up today after it announced a 100.50% surge in net profit for the quarter ended 30 June 2005 to Rs 4.03 crore (Rs 2.01 crore). Net sales grew by a good 17.1% to Rs 67.20 crore (Rs 57.40 crore).
Petron is the beneficiary of increased infrastructure investments by industries such as refineries, petrochemicals, power and cement. Consequently, there has been an increase in order flow from these industries.
Petron Engineering is a service provider in the areas of mechanical, erection, piping, electrical, instrumentation, painting, refractory & insulation work for refineries, chemicals, petrochemicals, cement, fertilizers, metallurgical, and power plants and other industrial plants.
The latest paid-up equity share capital of the company is Rs 7.54 crore.

Wipro gains on extension of overseas partnership deal


Wipro added 1.65% to Rs 396 on volumes of 90,556 shares.
The stock hit a new 52-week high of Rs 413.80 on 5 October 2005.
From Rs 356.35 on 22 September 2005, the stock headed higher on sustained buying interest.
Wipro proved firm today after it extended its partnership with Embarcadero Technologies(R), Inc. - a leading provider of data lifecycle management solutions. Earlier, in February 2004, the company announced an initial agreement that allowed for the integration of Embarcadero's Extreme Test (TM) into Wipro's Centre of Excellence (COE). The company's latest alliance builds on that foundation to accelerate the delivery of low-cost, comprehensive solutions that reduce risk for large enterprise customers in the areas of data integration, business intelligence, and performance testing.
Also, there are issues about the Sebi order (as per printmedia reports), that Wipro will have to comply with 25% public shareholding within two years. Azim Premji (the promoter) will have to offload at least 7.37% stake in the company to enhance the public shareholding.
Wipro is a closely held company with the promoters, Azim Premji and his partners, controlling a dominant 82.37% stake of the company while the public holding is just 8.56% of the total equity share capital of Rs 282.51 crore. The figures are as on 30 June 2005.
As per reports, a mega public issue is most likely on the cards within the next couple of years. As per a top official of Sebi, since Wipro was listed before the 10% listing rules came into effect, it will now have to increase its public shareholding to 25% within the next two years.
The recently announced Sebi regulations require all listed companies to bring down their promoter holding to 75% within the next two years.
At present, there are two categories of companies - one with a minimum 25% public holding and the other with a 10% holding. IT companies such as Tata Consultancy Services fall under the minimum 10% public share holding as was required during the time of their listing. Now, these companies, too, will have to increase their public holding to the stipulated 25%, though the timeframe for this is yet to be notified.
The company reported a lower than expected 31% growth in Q1 June 2005 consolidated net income as per US GAAP to Rs 427 crore compared to Rs 325 crore in Q1 June 2004. Revenue increased by 29% over the corresponding period in the previous year to Rs 2,290 crore. The global IT services & products segment revenue was Rs 1,730 crore, representing an increase of 31% over the corresponding period in the previous year, contributed by volume growth and improvement in price realisation.
The profit margin was affected due to increase in visa costs and currency appreciation. The company expects revenue from global IT services of $ 422 million for Q2 September 2005 compared to $ 397.3 million in Q1 June 2005. The company has secured a 25-million-pound contract from UK's Northern Gas, to be implemented in one year.

Ranbaxy Laboratories figures in the thick of the action


Ranbaxy Laboratories gained for the fifth day in a row on media reports that it may win a British court ruling next week against Pfizer on patents protecting anti-cholestrol Lipitor.
The stock added on 2% to Rs 529.25 on BSE in early trade, and notched up volumes of 92,220 shares.
From a recent low of Rs 491.25 on 30 September 2005, the stock has gained 7.7% in the past 5 trading sessions to the current Rs 529.25.
A British court ruled on 12 October regarding Pfizer’s patents protecting Lipitor in the UK.
Ranbaxy is seeking to invalidate Pfizer’s UK patents on Lipitor - the anti-cholesterol medicine.
In Austria, Pfizer has already lost a similar case to Ranbaxy and, as per market talk, the former may face a setback in Britain as well. Even more important than the status of the patent in the UK, is what ruling may manifest in the US court against Pfizer's patents. Ranbaxy has challenged Pfizer’s patents on Lipitor in the US as well.
Meanwhile, Ranbaxy is looking at the acquisition of facilities and businesses in Europe and the US to expand global operations. Among Ranbaxy's immediate aims is the forging of marketing alliances with Indian companies wishing to tap the US markets. As per reports, the company is geared to buying out not just smaller companies, but also those that are as large as it is.
Recently, Ranbaxy began operations in Italy, one of the top five pharmaceutical markets in Europe. It constituted a wholly owned subsidiary, Ranbaxy Italia SPA, in the northern Italian industrial city of Milan.
For Q2 June 2005, Ranbaxy came up with a disappointment, a 49% drop in Q2 June 2005 net profit to Rs 101 crore from Rs 197 crore in Q2 June 2004. This was largely because of competition in the key US generic drugs market and higher research & development (R&D) costs. Sales moved up 7% to Rs 1,348 crore.
Pricing pressures in the United States this year have been a major deterrent for the company as far as performances go. As billions of dollars worth of drugs go off patent in the United States, competition from a new stream of generic drug makers (that are entering the market) is growing, causing prices to fall.

Jet Airways takes wings following lumpy hike in fares on domestic routes


Jet Airways and SpiceJet edged higher on reports that the two airlines have hiked fares following increase in aviation turbine fuel prices.
A sharp drop in global crude oil prices, too, aided the early upmove in the two airline stocks.
Jet Airways gained nearly 2% to Rs 1,188 and SpiceJet rose 1.9% to Rs 72.95. 1.2 lakh shares changed hands in SpiceJet and 7,314 shares changed hands in Jet Airways.
Ahead of the announcement of the fare hike, the battered Jet Airways stock rose 2% on Thursday (6 October 2005) to Rs 1,165.15 in an otherwise weak market. SpiceJet plunged 6% on Thursday to Rs 71.55.
Jet Airways India on Thursday said it has raised domestic fares on all its routes within India effective October 14, 2005 by 10%.
In addition to an increase in the normal economy and business class fares, there will be a proportionate increase in other fare levels such as promotional, excursion and check fares, Jet said in a statement.
Tickets issued on or reissued on or after October 14, 2005 will be at the revised fare irrespective of the dates of travel. Confirmed tickets issued on or before October 13, 2005 will be honoured for travel at the pre-revised fares for the ticked itinerary only within the validity of the ticket.

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