Tuesday, October 11, 2005

TCS Q2 net profit up 10% at Rs 693.7cr


Tata Consultancy Services, TCS, has announced its second quarter results.
The company's Q2 net profit is up 10% at Rs 693.7 crore (Rs 6.93 billion)
from Rs 630.6 crore (Rs 6.30 billion) quarter-on-quarter, QoQ.

Its revenues are up 9.6% at Rs 2,982.6 crore (Rs 29.82 billion) from Rs
2,721 crore (Rs 27.21 billion) QoQ.

Its EPS is at Rs 14.45. Its half yearly EPS is at Rs 27.60. It added 74
clients and 5596 employees. It has declared an interim dividend of Rs 3 per
share.

TCS's offshore business has contributed 37.1% vs 36.8% (QoQ), while its
onsite business contributed 62.9% vs 63.2%. The operating margins for the
company are at 30.16% vs 30.83% (QoQ).

The contribution from the company's top five clients is at 17.1% vs 18.2%
(QoQ).

The revenues generated from repeat business stood at 96.5% vs 98.5% (QoQ),
while revenues generated from new business has grown from 1.5% to 3.5%.

Market holds firm; Sensex above 8,500


The market firmed up further in mid-afternoon trade. PSU banks witnessed a
sharp surge in mid-afternoon trade. Cement major ACC rebounded on
expectation of strong Q2 results. Tisco and ICICI Bank staged a rebound.

Software major Infosys held firm on the back of strong Q2 results and upward
revision in FY 2006 earnings and revenue guidance.

Select side counters edged higher on renewed buying. Stocks like Crompton
Greaves, Suven Life Sciences, SRF, Visaka Industries, HT Media, Torrent
Cables, IDBI, Gateway Distriparks, Fag Bearings, Jet Airways, and Jaiprakash
Associates edged higher.

However, the market breadth remained weak. 1,821 stocks declined on BSE as
compared to 597 stocks that rose. 47 scrips were unchanged. Losers outpaced
gainers by a ratio of 3:1.

At 14:34 IST, the Sensex was up 42 points at 8,526.

State Bank of India jumped 3% to Rs 931. 16.1 lakh shares changed hands in
the counter on BSE. A host of other PSU banks surged. Bank of India rose 6%
to Rs 126.20, Oriental Bank of Commerce (OBC) gained 4.8% to Rs 294, Bank of
Baroda rose 3.6% to Rs 233, Punjab National Bank gained 3.5% to Rs 452,
Indian Overseas Bank gained 3.5% to Rs 94.50, Union Bank of India rose 3% to
Rs 132, Canara Bank gained 2.9% to Rs 225, and Syndicate Bank rose 2.3% to
Rs 85.60.

RBI on Monday allowed banks to treat their investment fluctuations reserve
(IFR) as tier-I capital. The RBI move will help increase the tier-I capital
base of banks to the extent of the provisions made towards IFR. In addition,
it will also help banks raise their tier-II capital base as the size of
tier-II capital can be as much as tier-I capital, which includes equity and
reserves. This will particularly benefit some of the state-run banks that
have hit a roadblock on raising capital as they cannot enter the market to
raise capital since the government’s stake in these banks has come down to
close to 51%.

ICICI Bank rose nearly 1% to Rs 537.05.

Infosys was up 2% to Rs 2,680. 7 lakh shares changed hands in the counter on
BSE. On a sequential basis, Infosys’ consolidated net profit rose 13.9% to
Rs 606 crore from Rs 531.92 crore in Q1 June 2005. Consolidated sales rose
10.7% on a sequential basis to Rs 2,294 crore from Rs 2,071.59 crore in Q1
June 2005.

TCS gained 1.2% to Rs 1,467 on the eve of announcement of Q2 results later
in the day. 3.99 lakh shares changed hands in the counter on BSE.

Bajaj Auto joined recovery in auto stocks. The scrip gained 1.7% to Rs
1,764.

Cement major ACC gained 1% to Rs 472 on expectation of strong Q2 results.

Tisco gained 1.1% to Rs 393, on bargain hunting after a steep recent fall in
the counter. 14 lakh shares changed hands in the counter on BSE.

Punjab Tractors gained 0.6% to Rs 197 after the company said its board will
consider recommendation of special dividend in a meeting on 17 October 2005

Essel Propack gained 3% to Rs 372 after the company’s board approved
buy-back proposal. Essel Propack said on Tuesday its board had approved a
share buyback at up to Rs 390 per share, for a total value of Rs 57.50
crore.

Select pharma shares like TASC Pharma, Glenmark Pharma, Lupin, Sun Pharma
and Orchid Chemicals edged higher.

source:capitalmarket

PSU banks in the spotlight


Buying in banking, auto, IT and oil shares triggered a sharp rebound in
mid-afternoon trade.

PSU banks were in focus after RBI on Monday allowed banks to treat their
investment fluctuations reserve (IFR) as tier-I capital.

Auto shares edged higher on bargain hunting at the lower level after a
recent sharp fall whereas strong Q2 results of Infosys boosted other IT
pivotals.

Select side counters edged higher on renewed buying. Stocks like Suven Life,
Gajra Bevel, Tudor India, Crompton Greaves, Patel On-Board Courier, TASC
Pharma, United Breweries, Zicom Electronic, Rasandik Engineering, Glenmark
Pharma, Visaka Industries, Hinduja TMT, HTM, Dewan Housing Finance, SRF, and
Shetron edged higher.

The market breadth remained weak. 1,885 stocks declined on BSE as compared
to 506 stocks that rose. 51 scrips were unchanged. Losers outpaced gainers
by a ratio of 3.7:1.

At 13:49 IST, the Sensex was up 10 points at 8,493 – off sharply from the
day’s low of 8,381.96.

Bank of India spurted 4% to Rs 123.50, Bank of Baroda rose 2.5% to Rs
230.55, Indian Overseas Bank gained 3% to Rs 94, Punjab National Bank
advanced 2.3% to Rs 447, Oriental Bank of Commerce rose 1.8% to Rs 285.50,
Canara Bank gained 1.6% to Rs 222.20, Union Bank of India gained 1.2% to Rs
129.50 and State Bank of India advanced 1.4% to Rs 916.50.

RBI on Monday allowed banks to treat their investment fluctuations reserve
(IFR) as tier-I capital. The RBI move will help increase the tier-I capital
base of banks to the extent of the provisions made towards IFR. In addition,
it will also help banks raise their tier-II capital base as the size of
tier-II capital can be as much as tier-I capital, which includes equity and
reserves. This will particularly benefit some of the state-run banks that
have hit a roadblock on raising capital as they cannot enter the market to
raise capital since the government’s stake in these banks has come down to
close to 51%.

Software major Infosys rose 2% to Rs 2,675. 6.8 lakh shares changed hands in
the counter on BSE. Infosys has reported stronger than expected Q2 results
and also revised upwards FY 2006 earnings and revenue guidance. On a
sequential basis, Infosys’ consolidated net profit rose 13.9% to Rs 606
crore from Rs 531.92 crore in Q1 June 2005. Consolidated sales rose 10.7% on
a sequential basis to Rs 2,294 crore from Rs 2,071.59 crore in Q1 June 2005.

Strong Infosys results boosted other IT pivotals. HCL Technologies gained
2.5% to Rs 471.55, TCS rose 1.2% to Rs 1,467, and Satyam Computer advanced
0.6% to Rs 597.60.

Auto stocks recovered. Tata Motors gained 2.2% to Rs 551, Maruti Udyog
gained 1.1% to Rs 566, and Bajaj Auto rose 0.4% to Rs 1,741.

ONGC gained 1% to Rs 1,039.50 on expectation of strong Q2 September 2005
results. ONGC announces Q2 results on 26 October 2005.

Reliance Industries (RIL) nudged up 0.2% to Rs 785.70– off the day’s low of
Rs 773.35. 17.9 lakh shares changed hands in RIL. Market men expect strong
Q2 results from RIL.

Two-wheeler maker Kinetic Motor Company jumped 7.4% to Rs 70.50 on reports
that it had sold 14.2 lakh shares to publisher Bennett Coleman & Co. at Rs
70.52 per share.

Suven Life Sciences spurted 6.6% to Rs 90.95 after the company said it will
be starting a 12-month multi center Phase III clinical study for chronic low
back pain in India. The study is part of global study for a US based
biopharmaceutical company focused on discovery, in-licensing, development
and commercialization of novel drug candidates for central nervous system
(CNS) cardiovascular disorders and pain management.

GIPCO moves downward ahead of move to fix IPO price


Gujarat Industries Power Company (GIPCO) is trading lower by 2.05% to Rs
84.90 on volumes of 1.44 lakh shares.

The day's trading range was Rs 84.60 and Rs 87.55 on BSE so far.

The stock had moved steadily higher from Rs 80.15 on 22 September 2005 to Rs
89.55 on 05 October 2005.

Gujarat Industries Power Company (GIPCO) board will today decide on price
band for the proposed public issue . The issue will aggregate Rs 275 crore.

The committee of directors (CoD) of the company will meet today to fix the
price band for the Rs 275-crore second public issue involving a fresh issue
aggregating Rs 200 crore through book building process.

The issue will open on 13 October 2005 and will close on 19 October 2005.

Gujarat based power generating company GIPCO is promoted by Gujarat
Electricity Board (holding: 34.64%), Gujarat State Fertilizers and Chemicals
(holding: 16.87%), Gujarat Alkalies and Chemicals (holding: 12.87%) and
Petrofils Cooperative (holding: 3.79%). The company distributes and sells
the entire output of electricity to the promoters and participating units.

For the quarter ended 30 June 2005 the company posted a 23% rise in net
profit to Rs 42.31 crore (Rs 34.43 crore). Net sales slipped 5.8% to Rs
188.21 crore (Rs 199.84 crore).

Sterling Biotech gains following ADR/GDR issue approval


Sterling Biotech added 1% to Rs 141.40 on volumes of 8.91 lakh shares.

The stock has declined from Rs 169.35 on 26 September 2005 to Rs 140.30 on
06 October 2005 on profit taking.

Sterling Biotech members, at an EGM held today, have passed the resolution
for the issue of equity shares / warrants and / or any instrument
convertible into equity shares, Global Depository Receipts (GDRs) / American
Depository Receipts (ADRs) / FCCBs for an aggregate sum of US $ 50 million.

Sterling Biotech is Asia's largest pharmaceutical gelatin manufacturer. It
is a leading player in India, with a market share of around 60%. Earlier, it
acquired Rallis India's gelatin business for Rs 47 crore in an all-cash
deal.

The company’s products find usage in the making of hard and soft capsules,
vitamin encapsulation, blood plasma expander and tablet binding in the
pharmaceutical industry.

Sterling Biotech reported a 53.6% growth in net profit for Q1 ended 30 June
2005 to Rs 26.64 crore (Rs 17.34 crore). Net sales during the quarter rose
22.7% to Rs 120.03 crore (Rs 97.80 crore).

Punjab Tractors gains as it mulls special dividend


Punjab Tractors edged up slightly after the company said its board will
consider recommendation of special dividend in a meeting on 17 October 2005.

The stock gained 0.48% to Rs 196.85. 66,011 shares changed hands in the
counter on BSE by afternoon trade.

Earlier, the stock had witnessed a sharp surge in mid-September 2005 on huge
volumes. From Rs 185.75 on 13 September 2005, it had risen 14.4% in just two
trading sessions to Rs 212.65 on 15 September 2005. The stock came off the
higher level later in volatile trade.

It may be recalled that in Q1 June 2005, Punjab Tractors (PTL) made a huge
extra-ordinary profit of Rs 61.30 crore from sales of 15% stake in Swaraj
Mazda to Sumitomo Corporation, Japan, a joint venture partner in Swaraj
Mazda. This is perhaps the reason why the company intends to give special
dividend to shareholders.

PTL is a north based tractor major. But PTL has a limited presence in the
above 40 HP category, which has been among the fastest growing categories in
the tractor segment in recent years.

Satyam Computer gains ground


Satyam Computer Services added 0.5% to Rs 595.65 on volumes of 11.51 lakh
shares.

The day's range is Rs 606 and Rs 588.50 so far on BSE.

The stock has jumped sharply from the close of Rs 520.65 on 23 September
2005 to close at Rs 592.95 yesterday on fresh buying.

Satyam Computer informed BSE that Iona® Technologies, a world leader in
high-performance integration solutions for mission-critical IT environments
and the company have entered into a wide-ranging technology, marketing and
sales agreement.

In the initial stages of the partnership, IONA and Satyam Computers will
engage in joint sales and marketing activities with the intent of
identifying projects where web services-based integration can be used to
bring together disparate systems and deliver powerful Service Oriented
Architecture (SOA) deployments to its customers.

Satyam Computer has identified Artix™, IONA extensible Enterprise Service
Bus (ESB), as a robust ESB foundation to support some of the SOA projects
for customers in its enterprise integration practice. The intention for both
organizations is to broaden the scope of the relationship across various
vertical markets such as banking and financial services, government,
healthcare, insurance, and in particular, telecommunications.

Moving to SOA, supported by Artix, would give Satyam’s customers an
effective means to leverage the legacy systems running mission-critical
operations in new ways to support emerging, customer-centric initiatives.

Satyam last month bagged a major deal from World Health Organisation (WHO).
Satyam concentrates on domains such as automobile, banking and financial
services, insurance and healthcare, manufacturing and
telecom-infrastructure-media-entertainment-semiconductors (TIMES). General
Electric (GE) is Satyam Computer's top client.

Satyam Computer’s consolidated net profit declined 7.7% on a sequential
basis to Rs 190.20 crore for Q1 June 2005 as compared to a net profit of Rs
206.20 crore in Q4 March 2005. On a sequential basis, consolidated net sales
rose 8.9% to Rs 1,058.71 crore from Rs 971.50 crore in Q4 March 2005.

Satyam Computer expects EPS for FY 2006 at between Rs 27.22 and Rs 27.44,
implying a growth rate of 21.5%-22.5%. The company expects revenue to be
between Rs 4,536 and Rs 4,569 crore for FY 2006, implying an annual growth
rate of 29%-30%.

New order win proves uninspiring for Subex Systems


Subex Systems fell 0.4% to Rs 586.50 on volumes of just 243 shares.

Subex Systems declined from the close of Rs 649.60 on 1 September 2005 to Rs
584.35 on 22 September 2005 on profit taking.

Subex Systems today announced that a leading African network has selected
the company's RevMax™ suite that consists of Ranger™ Fraud Management System
and Incharge™ Revenue Assurance Solution. The contract value is in excess of
US$ 1 million.

The RevMax™ suite from the company offers telecom operators an integrated
platform for revenue maximization solutions that eliminates the need to
invest piecemeal in point solutions. Strategically, a single platform
optimizing the IT infrastructure costs significantly lesser and such
integration drives informed, holistic business decisions and course
corrections. The company has made considerable success from its products in
Africa.

Ranger™ is a next generation, telecom fraud management system that combines
the benefits of rule-based alarm management techniques with artificial
intelligence (AI) and neural network technology to provide telecom operators
with multiple points of fraud combat. Ranger™ has the largest installed base
worldwide for fraud management systems. Incharge™ is an end-to-end Revenue
Assurance Solution that interfaces with a variety of support systems and
network elements to enable it to process usage information, track
discrepancies and identify potential revenue leakages across the entire OSS
chain of a telecom operator.

Subex Systems addresses the entire telecom communication segment. It
concentrates on the revenue maximisation space and has a strong client base.

Subex's global clientele includes AmericaTel, Global Crossing, Sprint and
Teleglobe in North America; Sonatel Mobiles, Sonatel Wireline, Cora, Ikatel
and Econet Wireless in Africa; Cyprus Telecommunications Authority (CYTA),
Cosmorom and MobiFon (Connex) in Europe; DTAC Thailand, JTB Brunei and MTN
Sri Lanka in the Asia Pacific, among others.

For the quarter ended 30 June 2005, Subex Systems turned out an 82.15% jump
in revenue to Rs 41.22 crore ( Rs 22.63 crore). Net profit soared 110% to Rs
8.56 crore (Rs 4.08 crore).

Small- and mid-cap stocks falter


A host of small- and mid-cap stocks slipped today.

Market breadth was extremely weak. 1,903 stocks declined on BSE as compared
to 321 stocks that rose. 38 scrips were unchanged. Losers outpaced gainers
by a ratio of 5.9:1.

Some of the major losers were Liberty Phosphates (down 7.6% to Rs 37.70),
Roto Pumps (down 7% to Rs 68), IFSL (down 7% to Rs 10.95), CMC (down 6% to
Rs 507), Sanghvi Movers (down 6% to Rs 325), Pearl Polymers (down 5.9% to Rs
23), Rajratan Gutsav (down 6% to Rs 111), Valiant Communications (down 6% to
Rs 67.55), Simple Casting (down 5.5% to Rs 42.55), Premier (down 5% to Rs
42.70), Webel SI-Energy (down 5.5% to Rs 171), Andhra Cement (down 5% to Rs
41), Dolphin Offshore (down 5% to Rs 316), Prime Securities (down 5.8% to Rs
58), and Galaxy Entertainment (down 5% to Rs 268.05). A number of stocks
were down by between 1% and 5% for the day.

In an otherwise weak market, select stocks firmed up. Among the gainers were
TASC Pharma (up 4% to Rs 258.30), Glenmark Pharma (up 3% to Rs 335),
Crompton Greaves (up 3.2% to Rs 660), Fem Care Pharma (up 2.9% to Rs 371),
and NIIT (up 1.1% to Rs 314.50).

BSE Mid-Cap Index was down 47.95 points or 1.1% to 4,113.56. BSE Small-Cap
Index was down 88.63 points or 1.5% to 5,592.21.

Small-cap and mid-cap stocks have come sharply off the higher level in the
past few days.

IFCI on firm turf on reports of a possible takeover by LIC


IFCI managed to hold its own, up 1.65% to Rs 15.70 on volumes of 11.77 lakh
shares.

The day's trading range was Rs 15.55-Rs 16.25 so far.

The BSE Sensex, at the same time, is down sharply by 89 points to 8394
points.

The stock gained strength from Rs 13.30 on 30 June 2005 to Rs 17.85 on 01
August 2005.

IFCI firmed up today after print media reports that Life Insurance
Corporation of India (LIC) is emerging as the dark horse that could give
serious challenge to IDBI in acquiring the oldest development financial
institution in the country.

LIC has been figuring prominently in official talks as the possible
candidate for acquiring IFCI. IFCI's expertise in project appraisal will
come handy for LIC for its exposure to the infrastructure sector.

The government had earlier proposed that IFCI be merged with Punjab National
Bank. The proposal seemed stuck after PNB sought huge financial assistance
of about Rs 3,000 crore from the government in compensation for taking over
the ailing institution.

Another candidate for takeover of IFCI, IDBI, had shown its lack of keenness
in acquiring IFCI on the ground that the overwhelming bad debts of IFCI
might have an adverse impact on it. IDBI also pointed out that a takeover of
IFCI might prove a logistics nightmare considering that it was already in
the process of a major restructuring exercise following its merger with
subsidiary IDBI Bank.

In any case, IFCI is likely to show considerable improvement in its results
for the first half of the current fiscal. The NPA recoveries during
April-September have been encouraging, as was seen in the previous fiscal.

The government has been seeking out a revival plan for IFCI for nearly two
years now. However, pressure from political and trade union circles have
dragged the issue and decision-making proved cumbersome.

LIC has an 8.4% stake in IFCI (as on 30 June 2005) while IDBI holds 19.01%
stake.

For the quarter ended 30 June 2005, IFCI turned out a net loss of Rs 44.83
crore on net sales of Rs 381.83 crore. Net sales jumped 17.10%.

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