Friday, October 21, 2005

The Week Ahead: Next batch of Q2 results to dictate the trend


The next week marks a host of major events like RBI’s credit policy on
Tuesday (25 October), expiry of October 2005 derivatives contracts on
Thursday (27 October) and a number of key Q2 results.

Volatility may remain high ahead of expiry of October derivatives contracts.

Market men expect RBI to raise the short-term reverse repo rate -- the
benchmark for short-term money market rates -- by 25 basis points to 5.25%.

Tata Motors and HDFC unveil Q2 results on 25 October. The major results for
26 October are ONGC, IPCL, Grasim, Tata Steel, M&M.

Reliance Industries reveals Q2 results on 27 October 2005. On the same day,
companies such as State Bank of India, NTPC, Gail, Cipla, Sail will release
their Q2 numbers. The next day i.e. on 28 October 2005 companies like Bhel,
ITC, National Aluminium, HPCL, L&T, Tata Tea, Indian Oil Corporation, BPCL,
are scheduled to report Q2 results.

The Q2 results announced so far have been a mixed bag. Software majors
Infosys, Satyam Computer and TCS have been impressive. Wipro’s results were
in line with market expectation. Bajaj Auto, Hero Honda, ICICI Bank, and
HDFC Bank have come up with strong performances.

The results of cement firms, ACC and Gujarat Ambuja Cements, were in
striking contrast (dismal) to the others. Ranbaxy reported a sharp fall in
Q3 September 2005 net profit.

Some of the other Q2 results due next week are LIC Housing Finance, Canara
Bank, Dabur India, VSNL, ABB, HCL Technologies, Tata Chemicals, Nirma,
Andhra Bank, Gokaldas Exports, Indo Gulf Fertilizers, Birla Corp, Whirlpool
India, Rajesh Exports, Zodiac Clothing, Natco Pharma, Simplex Casting, Guj.
Mineral Dev, Vijaya Bank, CEAT, United Phosp, Birla Kennametal, J B Chem &
Pharma, PTC India, ICI (India), Century Textiles.

source: capitalmarket

The Last Week in Stock Market: Sensex sheds 133 points; volatility to the fore


The market lost ground in volatile trade last week due to alternate bouts ofbuying and selling.
The Sensex ended flat on Monday (17 October 2005) amid divergent trends inSensex constituents. On Tuesday (18 October), the Sensex lost 80 pointsafter swinging 249 points in intra-day trade. The barometer index plunged151 points on Wednesday (19 October) tracking weakness across globalemerging markets caused by fears of a hike in US interest rates. On Thursday(20 October), the Sensex lost 36 points after swinging nearly 300 points inintra-day trade.
On Friday (21 October), the market staged a rebound boosted by thegovernment’s reform-friendly measure on Thursday to increase FDI ceiling inthe telecom sector to 74% from 49%. Market sentiment turned upbeat afterFinance Minister P Chidambaram said on Friday that the government wascommitted to maintaining moderate tax rates to propel growth. The Indianrupee is still strong despite its recent fall against the dollar, and theeconomy will continue to attract robust foreign institutional investment,Chidambaram added. The market was also boosted on Friday by news thatforeign direct investment into India rose 20 percent in the April-Augustperiod.
For the week ended 21 October 2005, the Sensex lost 132.78 points or 1.6% tosettle at 8,068.95. The S&P CNX Nifty shed 40.65 points or 1.6% to 2,443.75.
FIIs have resorted to profit taking on the bourses. In the month of October2005, FIIs have sold shares worth a net Rs 1,427.20 crore (till 19 October2005).
Meanwhile, inflation concerns in the United States have cast uncertaintyover global emerging markets including India. Higher US interest rates meanless foreign capital enters high-yielding but riskier emerging markets.
The Q2 results announced so far have been a mixed bag. Software majorsInfosys, Satyam Computer and TCS have been impressive. Wipro’s results werein line with market expectation. Bajaj Auto, Hero Honda, ICICI Bank, andHDFC Bank have come up with strong performances.
The results of cement firms, ACC and Gujarat Ambuja Cements, were instriking contrast (dismal) to the others. Ranbaxy reported a sharp fall inQ3 September 2005 net profit.
Volatility may characterise trading in the near term ahead of the expiry ofOctober 2005 derivatives contracts on 27 October 2005.
Suzlon Energy sizzled on its debut on 19 October 2005. The stock settled atRs 690.50 on that day - attracting 35.3% premium over the IPO price of Rs510.
Gujarat Ambuja Cements (GACL) recovered from the lower level even as thecompany reported dismal Q1 September 2005 results. GACL has reported a 16.7%fall in Q1 September 2005 net profit to Rs 75.28 crore from Rs 90.46 crorein Q1 September 2004. Net sales rose 9.2% to Rs 654.88 crore (Rs 599.38crore). The core operating profit margin declined to 26% from 27.9% in Q1September 2004.
Hero Honda bounced back after the company reported strong Q2 results. HeroHonda's net profit spiraled up 23% in Q2 September 2005 to Rs 238 crore (Rs194 crore). Total turnover (net of excise) rose 22.8% to Rs 2209.36 crorefrom Rs 1798.23 crore, on the back of strong volume growth.
Satyam Computer rebounded after the company reported strong Q2 results andrevised upwards its FY 2006 EPS and revenue guidance.
Satyam’s consolidated net profit as per Indian GAAP jumped 34% to Rs 237.33crore from Rs 176.86 crore in Q2 September 2004. Net sales rose 33.9% to Rs1,154.96 crore from Rs 862.08 crore. The rise in net profit was partly dueto a surge in other income by 31.6% to Rs 31.55 crore from Rs 23.97 crore.Both net profit and sales have beaten market expectations.
Satyam Computer expects EPS for FY 2006 at between Rs 29.12 and Rs 29.23,implying a growth rate of 30.0% to 30.5%. At the time of announcing Q1 June2005 results, Satyam had forecast an EPS of Rs 27.22 and Rs 27.44 for FY2006, which indicates a growth rate of 21.5%-22.5%.
The company expects revenue as per consolidated Indian GAAP financials to bebetween Rs 4,700 crore and Rs 4,718 crore. This implies a growth rate of33.5% to 34.0%. At the time of announcing Q1 June 2005 results, Satyam hadforecast FY 2006 revenue at between Rs 4,536 and Rs 4,569 crore, which pegsannual growth rate at 29%-30%.
Wipro’s consolidated net profit as per Indian GAAP rose 16% to Rs 478 crore(Rs 411.70 crore). Net profit growth was in line with market expectation.Wipro’s revenue from the global IT services & products business rose 26% toRs 1,894.80 crore (Rs 1,502 crore). The growth in revenue of the global ITservices & products business beat market expectations.
Wipro expects revenue of global IT services business at $ 463 million for Q3December 2005 – a sequential growth of 7.4% compared to a revenue of $430.7million in Q2 September 2005.
Ranbaxy’s net profit plunged 91% in Q3 September 2005 to Rs 18.40 crore (Rs200 crore). Its revenue fell 3% to Rs 1304 crore.
source:capitalmarket
    

Rallis India jumped 17% to Rs 341.45 after the company reported a surge in Q2 September 2005 net profit


Rallis India’s net profit jumped 100% to Rs 28.17 crore in Q2 September 2005
compared to Rs 14.08 crore in Q2 September 2004. The sharp surge in net
profit was due to a surge in other income to Rs 13.56 crore from Rs 5.28
crore. Net sales growth was a decent 22% to Rs 207.90 crore (Rs 170.31
crore).

The other income of Rs 13.56 crore in Q2 September 2005 included Rs 10.66
crore on profit on sale of business, the company said.

The company said it has set aside Rs 6 crore as provision for contingency
for possible reduction in value of the current assets pending reviewal of
the realizable value of its current assets. The provision will be adjusted
on completion of this exercise, it said.

Rallis India is one of the leading agrochemicals manufacturers.

Market firms up; Tata Power spurts


The market firmed up in mid-afternoon trade. Tata Power, VSNL and Gail India
surged. Ranbaxy recovered from the lower level. Car major Maruti Udyog
firmed up. ONGC gained on reports that the company is chasing new
opportunities to acquire petroleum assets in Kazakhstan after failing in its
bid to buy PetroKazakh assets.

State Bank of India moved higher on reports that it has approved a proposal
to raise Rs 3,300 crore through domestic and international bonds.

Select side counters surged with some of the stocks getting a boost from
strong Q2 numbers.

Stocks like Rallis India, Surya Roshni, Adlabs Films, Sterling Biotech,
Torrent Power SEC, Indo Rama Synthetics, Chemplast Sanmar, Maharashtra
Seamless, McDowell, Titan Industries, Jindal SAW, Ballarpur Industries, Alok
Industries, 3M India, Godrej Consumer Products, Hinduja TMT, Ucal Fuel,
GSFC, Sona Koyo Steering, Torrent Pharma, and Motherson Sumi Systems, edged
higher.

At 14:22 IST, the Sensex was up 72 points at 8,007.

After opening on a firm note, the market soon slipped into the red in early
trade. It staged a solid rebound in mid-morning trade. By afternoon trade,
the Sensex pared gains. It recovered from the lower level in mid-afternoon
trade.

The volatility in the Sensex was to some extent due to divergent trends in
Sensex constituents as well as partly due to volatile movements in some
Sensex constituents. The Sensex moved in a range of 125.46 points between
7,901.14 and 8,026.61.

Tata Power jumped 6% to Rs 423.70 boosted by media reports that the company
plans to invest Rs 10,000 crore to Rs 15,000 crore in mainly coal-fired
power projects over the next five years. 5.2 lakh shares changed ands in the
counter on BSE.

Cellular services major Bharti Tele-Ventures (BTL) advanced 4.4% to Rs
327.50 and VSNL jumped 5.2% to Rs 313.60 after the government hiked FDI
ceiling in the telecom sector to 74% from 49%.

Wipro gained 3% to Rs 380, ITC advanced 2.8% to Rs 119.70, Maruti Udyog
gained 2.7% to Rs 549, Tisco gained 2.6% to Rs 366.70, Reliance Energy
gained 1.7% to Rs 532 and ICICI Bank rose 1.4% to Rs 504.

Ranbaxy gained 1.1% to Rs 406.90. The stock bounced back from a low of Rs
392.70. Volumes in the scrip were high at 7.4 lakh shares on BSE. Ranbaxy
unveils Q3 results today

Hero Honda advanced for the second day in a row on the back of impressive Q2
numbers. The scrip gained nearly 3% to Rs 719. Hero Honda's net profit
spiraled up 23% in Q2 September 2005 to Rs 238 crore (Rs 194 crore). Total
turnover (net of excise) rose 22.8% to Rs 2,209.36 crore from Rs 1,798.23
crore, on the back of strong volume growth.

Reliance Industries (RIL) held firm as the company’s EGM was on in Mumbai to
approve a demerger of its interests in coal, gas, telecommunications and
financial services into four companies. The stock rose 1.7% to Rs 761.50.
Volumes in the scrip were at 38.2 lakh shares on BSE.

source:capitalmarket

Range bound market


The market was range bound in early afternoon trade. Index heavyweight
Reliance Industries (RIL) recovered from the lower level, even as the
company’s EGM was on in Mumbai to approve a demerger of its interests in
coal, gas, telecommunications and financial services into four companies.

ACC and Ranbaxy weakened. State Bank of India came off the higher level.

Hero Honda held firm on the back of strong Q2 results.

The market breadth remained weak. 1,788 stocks declined on BSE as compared
to 557 stocks that rose. 45 scrips were unchanged. Losers outpaced gainers
by ratio of 3.2:1.

At 13:26 IST, the Sensex was up 25 points at 7,959.

After opening on a firm note, the market soon slipped into the red in early
trade. It staged a solid rebound in mid-morning trade. By afternoon trade,
the Sensex had pared gains. The volatility in the Sensex was to some extent
due to divergent trends in Sensex constituents as well as partly due to
volatile movements in some Sensex constituents. The Sensex moved in a range
of 125.46 points between 7,901.14 and 8,026.61.

RIL rose 1.4% to Rs 758.40. The stock had slipped to the Rs 754 level in
early afternoon trade. Volumes in the scrip were at 35.6 lakh shares on BSE.

Cellular services major Bharti Tele-Ventures (BTL) advanced 3.6% to Rs
324.95 after the government hiked FDI ceiling in the telecom sector to 74%
from 49%. International telephony major VSNL gained 2.4% to Rs 305.

Tata Power surged 4% to Rs 416 boosted by media reports that the company
plans to invest Rs 10,000 crore to Rs 15,000 crore in mainly coal-fired
power projects over the next five years. 3.2 lakh shares changed hands in
the counter on BSE.

Ranbaxy lost 1.1% to Rs 397 ahead of announcement of Q3 September 2005
results. 4.3 lakh shares changed hands in the counter on BSE. Ranbaxy
unveils Q3 results today

Hero Honda advanced for the second day in a row on the back of impressive Q2
numbers. The scrip gained 1.7% to Rs 711. Hero Honda's net profit spiraled
up 23% in Q2 September 2005 to Rs 238 crore (Rs 194 crore). Total turnover
(net of excise) rose 22.8% to Rs 2,209.36 crore from Rs 1,798.23 crore, on
the back of strong volume growth.

Gujarat Ambuja Cements gained 1.9% to Rs 68, Wipro rose 1.9% to Rs 376,
Tisco gained 1.6% to Rs 364.55, and Maruti Udyog gained 1.5% to Rs 543.

source:capitalmarket

Flex Industries lost nearly 3% to Rs 75 after the company reported dismal Q2 September 2005 results


1.3 lakh shares changed hands in the counter on BSE.

Flex Industries reported a 14.5% fall in Q2 September 2005 net profit to Rs
9.01 crore compared to Rs 10.57 crore in Q2 September 2004. Net sales rose
7.7% to Rs 249.70 crore (Rs 231.66 crore).

Flex Industries manufactures flexible packaging material.

Supreme Petrochem plunged 7.6% to Rs 28.40 hit by a sharp fall in Q1 September 2005 net profit


The net profit declined sharply by 61.5% to Rs 5.02 crore in Q1 September
2005 from Rs 13.06 crore in Q1 September 2004. Net sales was flat at Rs
310.24 crore compared to Rs 309.23 crore in Q1 September 2004.

The company said the Q1 September 2005 performance was dampened due to shut
down of relevant production lines for hookup for revamped plant.

Supreme Petrochem Ltd (SPL) is the leading manufacturer of polystyrene.
Polystyrene is mainly consumed in consumer electronics, white goods and
domestic appliances, packaging, food serviceware, household wares,
stationery, toys, films for food packaging etc.

Rama Newsprint And Papers plunged 16.6% to Rs 10.28 after the company reported a net loss in Q2 September 2005


Rama Newsprint And Papers has reported a net loss of Rs 3.11 crore for Q2
September 2005 as against a net profit of Rs 10.81 crore in Q2 September
2004. Last year’s base was inflated due to a credit of Rs 16.27 crore under
the head `interest and lease rent’.

Net sales jumped 40% to Rs 92.04 crore from Rs 65.68 crore.

The company said power and fuel costs will come down in the coming years as
the government has granted the company coal linkage for power generation
from September 2005.

Meanwhile, the company’s board of directors has approved cancellation of 75%
of existing equity capital of Rs 232.63 crore to Rs 58.15 crore.

News broadcasters NDTV and TV Today Network edged higher on hopes of FII buying in the two stocks


The Union Cabinet on Thursday (20 October 2005) approved the inclusion of
foreign portfolio investment in domestic television news channels within the
existing 26 percent limit on foreign holding of companies in the sector.
Uptill now, only FDI was allowed in newsbroadcasting channels (FIIs were not
permitted to invest).

TV Today Network rose 2.5% to Rs 77.50 and New Delhi Television (NDTV)
gained nearly 2% to Rs 160.25. 35,633 shares changed hands in TV Today
Network and 94,466 shares got traded in NDTV.

For Q2 September 2005, TV Today Network reported a net profit of Rs 2.37
crore as compared to a net loss of Rs 1.12 crore in Q2 September 2004. Net
sales rose 17.4% to Rs 31.45 crore (Rs 26.77 crore).

NDTV slipped into the red in Q2 September 2005 with a net loss of Rs 6.59
crore (on a consolidated basis) compared to a net profit of Rs 2.81 crore in
Q2 September 2004. Consolidated income from operations rose 20.8% to Rs
42.20 crore from Rs 34.93 crore.

The company attributed the poor results to the Rs 7.45-crore it made towards
stock option payments. The stock option of 40.57 lakh shares are to be
amortized over a period of four years. The company also said that its
operational expenses have gone up on account of higher salary payments.

NDTV recently said it is in the process of planning for a general
entertainment channel.

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