23 September 2010

IIFL: Gujarat Gas buy target 420

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Long-term gas contract signed with BG
• Gujarat Gas (GGAS) signs 3.5-year R-LNG contract with BG. BG to
start supplying 0.5mscmd gas from October 2010.
• Deal would cut down GGAS’s reliance on spot LNG purchases, so
we view it positively.
• Undersupplied industrial markets improve GGAS’s ability to retain
margins at around Rs4/scm.
• We maintain CY09-12ii earnings CAGR estimate at 20%. BUY.
GGAS signs mid-term R-LNG contract with BG: In the first such deal
by a private gas distribution company in India, GGAS has concluded a
3.5-year agreement to source 0.5mscmd (15% of CY10ii volumes) of RLNG
from its parent BG. Gas supplies would commence from 1st October
2010. We estimate delivered price of gas at US$8-9/mmbtu. Through
CY05-09, GGAS’s gas volumes were flat at ~2.8mscmd owing to supply
constraints, so from CY10 the company had stepped up spot purchases
to grow volumes. The deal would help GGAS reduce its reliance on spot
gas from the present ~20% to ~10% in CY11.
Expect margins to be maintained: GGAS has already signed back-toback
agreements with some of its ~750 existing industrial consumers
and around 50 new consumers. Given the undersupplied market (supply
of 3.5mscmd vs demand of >5msmcd), we think GGAS is well-placed to
pass on fluctuations in gas prices and maintain its spread/unit at ~Rs4.
Management has indicated that it would continue to look for more such
deals over the next 12-24 months to increase its long-term gas portfolio
for existing as well as new circles.
In a “sweet spot”; we retain BUY: We reiterate that GGAS is in a
“sweet spot”, given undersupplied industrial markets and its wellestablished
supply network. We maintain our CY09-12ii earnings CAGR
estimate of 20%. While Gujarat Gas’s valuation, at 19x CY11ii EPS, is at
par with regional peers, we think the stock offers a thematic play on the
gas retailing business that is set for a massive take off. We retain BUY.

NSE bulk deals- Sept 23, 2010

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Security Name
Client Name
Buy/Sell
Quantity Traded
Trade Price
Atlas Cycles (Haryana) Lt
CNB FINWIZ PRIVATE LIMITED
BUY
24612
284.03
Atlas Cycles (Haryana) Lt
CROSSEAS CAPITAL SERVICES PVT. LTD.
BUY
31987
288.44
Chemfab Alkalis Limited
JAINAM INVESTMENTS
BUY
120000
65.21

BSE Bulk deals Sept 23 2010

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Company
Client Name
Deal Type *
Quantity
Price **
ABL Biotech
VAMIKA SECURITIES SERVICES
B
41040
19.77
ABL Biotech
SUNDARARAMAN GOWRI SHANKAR
B
114015
20.10
ABL Biotech
R RAGHAVAN
S
115000
20.10
Aditya Ispat
HITESH GOVINDLAL SHAH
B
40000
15.62

FII & DII trading activity on NSE and BSE as on 23-Sep-2010.

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FII trading activity on NSE and BSE on Capital Market Segment
The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 23-Sep-2010.
FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
FII23-Sep-20103034.992500.54534.45
Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment
The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 23-Sep-2010.
DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores)
CategoryDateBuy ValueSell ValueNet Value
DII23-Sep-2010872.741518.43-645.69

 

FII DERIVATIVES STATISTICS FOR 23-Sep-2010

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FII DERIVATIVES STATISTICS FOR 23-Sep-2010 
 BUYSELLOPEN INTEREST AT THE END OF THE DAY 
 No. of contractsAmt in CroresNo. of contractsAmt in CroresNo. of contractsAmt in Crores 
INDEX FUTURES575921719.19910182719.5978554823438.81-1000.40
INDEX OPTIONS1697854976.581869245358.91297056888522.74-382.33
STOCK FUTURES1075763094.421315663852.42139314141172.57-758.01
STOCK OPTIONS19032636.8619329646.33551111704.92-9.47
      Total-2150.22

Gray market premium Sept 23, 2010

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Company Name
Offer Price
Premium
(Rs.)
(Rs.)
Indosolar Ltd.
29 (Lower Band)
0.50 to 0.55(Paise)
Tirupati Inks (FPO)
43 (Upper Band)
8.5 to 9
Career PointInfosystems
295 to 310
150 to 155
Eros International
158 to 175
43 to 45
Microsec Fin
113 to 118
18 to 20
RamkyInfrastructure Ltd.
405 to 468
35 to 39
Orient Green Power
47 to 55
2 to 2.50
Electro Steel
10 to 11
1.10 to 1.20
Gallantt Ispat
50 (Fixed Price)
7 to 7.5
VA TechWabag
1230 to 1310
300 to 305
CantabilRetail
127 to 135
14 to 15
Sea TV Network
100 to 110
19 to 20
AshokBuildcon
297 to 324
11 to 13

Ramky Infrastructure Limited IPO subscription details

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RAMKY INFRASTRUCTURE LTD



Total Issue Size10947294
Total Bids Received31621464
Total Bids Received at Cut-off Price3096856
No. of times issue is subscribed2.89



Sr.No.CategoryNo.of shares offered/reservedNo. of shares bid forNo. of times of total meant for the category
1Qualified Institutional Buyers (QIBs)5712727258398424.52
1(a)Foreign Institutional Investors (FIIs)13937182
1(b)Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)9113482
1(c)Mutual Funds1602650
1(d)Others1186528
2Non Institutional Investors130864118935001.45
2(a)Corporates1650964
2(b)Individuals (Other than RIIs)242536
2(c)Others0
3Retail Individual Investors (RIIs)392592638881220.99
3(a)Cut Off3096856
3(b)Price Bids791266

Updated as on 23 September 2010 at 1830 hrs

ICICI Sec: Bank Valuations rich: Time to be selective…OBC, SBI, Yes Bank and SIB

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Valuations rich: Time to be selective…
A quarter of the weight for the BFSI segment in the Nifty has done more
than its bit to help the Nifty scale a new 32 month high. The banking index
has run up in anticipation of the positive macro outlook. Expectation of
higher credit offtake during the busy season (H2FY11), improving NIM in a
rising interest rate scenario, higher recoveries from written off assets,
receding pressure on fresh slippages and improving return ratios have
kept the sector in focus. Most of the banks have hit fresh 52 week or life
time highs in recent period. Thus, one needs to be selective about which
stocks to hold in the sector. The industry is well on track to achieve over
20% credit growth in FY11 (recorded 19.4% growth for the fortnight
ended August 27, 2010) while deposit growth is still sluggish at 14.4%
despite the recent hike in deposit rate (40 banks have raised their deposit
rate while 26 raised their lending rate) posing a big challenge ahead.
ô€‚ƒ The path ahead…
The busy season is expected to drive credit growth. Hence, we believe
liquidity in the banking system will stay tight for the rest of the year.
Hence, deposit rates will continue the uptrend. IIP growth, which bounced
back to record a 13.8% YoY jump in July after a small blip in June shows
robust growth momentum. GDP is now expected to grow at 8.5% in
FY11. However, inflation is still a dominant area of concern for the RBI.
The banking sector has been spearheading the market rally with valuation
multiples for most banks getting re-rated in the past quarter. Leaving
aside short-term aberrations in this space, we have seen that valuations
are factoring in most of the positives for FY12E for certain banks. A small
correction in PSU bank stocks on account of MTM hit on the G-Sec
investment book cannot be ruled out as yields hover near 8%.
Even though our earlier target price has been achieved for most of the
banks under our coverage, we believe that some more upside cannot be
ruled out in the near term on account of bullish sentiment and higher
weightage in the index. We believe banks like OBC, SBI, Yes Bank and SIB
would continue to see fresh upsides. We suggest profit booking in HDFC
Bank purely from a rich valuation perspective. PNB has more than trebled
in the last one year and, hence, looks stretched.