MOIL, Claris, SCI, RPP:: Gray market premium price: Nov 28th, 2010

Visit http://indiaer.blogspot.com/ for complete details �� ��

Company Name	Offer Price	Premium
	(Rs.)	(Rs.)
RPP Infra Projects	75	2 to 3
Manganese Ore (MOIL)	340-375  (+ 5% retail discount)	205 to 215
Claris Life	228-235	14 to 16
Shipping Corp FPO	135- 140 (+ 5% retail discount)	2 to 4

Note: RPP Infra Projects IPO price set at Rs 75

• Claris Lifesciences revises IPO price band to Rs 228-235/sh
• 
  
• Shipping Corporation of India share sale band at Rs135-140 per share

Mphasis -Margin drag to hit bottom-line: Macquarie Research

Visit http://indiaer.blogspot.com/ for complete details �� ��


Mphasis
Margin drag to hit bottom-line
Event
 We attended the Mphasis Analyst Meet held in Mumbai and interacted with Mr
Ganesh Ayyar, CEO, and Mr. Ganesh Murthy, CFO. We are modestly revising
our TP to Rs510 (vs. Rs500) but retain our UP rating as we expect a muted
growth profile could weigh on stock price performance.

Cadila Healthcare: Management Meet Update: ICICI Sec

Visit http://indiaer.blogspot.com/ for complete details �� ��


Strong business model…
We met the management of Cadila Healthcare (CHL) to get an insight
into their business model and growth plans. CHL is an integrated large
size pharmaceutical company with a strong foothold in domestic
formulations and global generics. It also has a presence in APIs,
consumer healthcare, CRAMS, animal healthcare and biologics. CHL is
the first Indian company to manufacture vaccine for swine flu. Global
pharma major Abbott signed an agreement with the company to market
24 products of CHL in 15 high growth emerging markets. It has recently
commissioned an API manufacturing facility under the Nycomed JV. In
the last four years, the company did five acquisition outside India and
two in India.

Rollover report Nov-Dec 2010: Angel Broking

Visit http://indiaer.blogspot.com/ for complete details �� ��


Nifty Rollover (75.04%) has been on the higher side in percentage terms; however, absolute
open interest was almost the same. Build up has been observed mainly in the second half of
November series, along with correction in the market, which indicates shorting has taken
place in Nifty futures. Banknifty (75.40%) has seen healthy rollover in percentage terms, but a
decline in open interest is indicating more of long unwinding in this space.

Observations throughout the month indicate that FIIs, who were forming put hedge in the last
month, changed their strategy and are now forming shorts in Index futures along with selling
in the cash market. Further, they are buying Index call options to hedge their short positions.

Unlike October series, where long formations were witnessed, unwinding has been observed
in most of the stock futures in November series.

Construction - 'Road' to recovery; sector update by Edelweiss

Visit http://indiaer.blogspot.com/ for complete details �� ��

Executive Summary

We travelled more than 8,500 km by road, air, and railway and visited various road projects across North, South, East, and West India. We met developers, contractors and sub-contractors executing projects at a cumulative cost of ~INR 65 bn. Our mission was to find answers to the following pertinent questions:

·         What are the ground level issues in road project execution?

·         Do land acquisition issues continue to hamper the pace of project development?

·         What are the impediments in the land acquisition process?

·         How smooth is the process of getting regulatory approvals in forest / environment / utility shifting?

·         What is the likelihood of reducing cost/time overrun in future projects?

·         Are there constraints in manpower/equipment/raw material availability?

PVR - improving prospects; visit note; Buy:: Edelweiss

Visit http://indiaer.blogspot.com/ for complete details �� ��

PVR (PVRL IN, INR 148, Buy)

We recently met the PVR management to understand their business strategy going ahead. Following are the key takeaways of our interaction:

n  Positive on exhibition business fundamentals

PVR’s share in the Indian box office is 12-13% and 22-23% in the multiplex industry. Multiplexes account for 10% of the 10,000 screens in India and ~45-50% of box-office collections. The company believes the number of multiplex screens will increase from 1,000 to 2,500-3,000 over the next three-four years and account for 65-70% of box-office collections. It posted an ATP of INR 160 in Q2FY11 (against INR 125 for the multiplex industry) and the company expects it to grow at ~7% annually. PVR also charges a premium of ~INR 50 for 3D movies in terms of ticket prices. ~65% of PVR’s screens are digital and more cost efficient. India accounts for 5% share of sales from hollywood movies and the company’s share is ~20-25%. Although, a few movies such as Guzaarish, A Flat, and Shahrukh Bola Khoobsurat Hai Tu have been lackluster, hollywood movies such as Harry Potter are enjoying good occupancies.

GMR INFRASTRUCTURE Operating leverage to kick in:: Edelweiss

Visit http://indiaer.blogspot.com/ for complete details �� ��


􀂃 Adjusted Q2FY11 PAT lower than expectations
Against our PAT estimates of INR 843 mn, GMR Infrastructure (GMR) reported
PAT of INR 711 mn, which included prior period expenses write-back of INR 1.4
bn. The resultant operating loss is largely due to higher operating expenses at
Delhi airport, post commissioning of T3 terminal and below expected revenues
from Kakinada power plant.

Nestle - valuations expensive but long term story intact; visit note;Edelweiss

Visit http://indiaer.blogspot.com/ for complete details �� ��

Nestle (NEST IN, INR 3,562, Hold)

n  All segments continue to perform well

Nestle’s millionaire brands (Maggi, Nescafe, Kitkat, Nan, Cerelac, Everyday, Eclairs, Munch, Sunrise, Lactogen, Milkmaid) continue their high growth trajectory. However, milk’s growth suffered. This can be attributed primarily to Nestle’s strategy of phasing out non-strategic channels to optimally utilise its stretched capacity and also improve margins. Its volume growth in milk would have been ~11% instead of ~7%, had it not done this planned phase out.

MOIL, Claris, SCI, RPP:: Grey market premium price: Nov 28th, 2010

Visit http://indiaer.blogspot.com/ for complete details �� ��

Company Name	Offer Price	Premium
	(Rs.)	(Rs.)
RPP Infra Projects	75	2 to 3
Manganese Ore (MOIL)	340-375  (+ 5% retail discount)	205 to 215
Claris Life	228-235	14 to 16
Shipping Corp FPO	135- 140 (+ 5% retail discount)	2 to 4

Note: RPP Infra Projects IPO price set at Rs 75

IVRCL -Q2FY11: Conference call highlights:: UBS

Visit http://indiaer.blogspot.com/ for complete details �� ��


IVRCL (Buy, Price: Rs132.50; PT: Rs200)
Q2FY11: Conference call highlights
􀂄 Revenue guidance revised down to ~Rs65bn from ~Rs68bn earlier
IVRCL now expects revenues of ~Rs65bn in FY11 compared to ~Rs68bn
previously (UBS-e ~Rs67bn). Revenue-booking during Q2 was impacted by the
extended monsoon period and it believes the same is not recoverable in the
balance of the year. Though it expects a significant pick-up in execution activity
in H2 led by the transport and building segments. Order book is ~Rs228bn, L1
orders are ~Rs12bn and AP order backlog is ~Rs35bn (with direct orders to
IVRCL being ~Rs10bn). BOT projects contribute Rs50-55bn to this backlog.

BGR Energy-Mgmt. conf. call takeaways – Goldman Sachs

Visit http://indiaer.blogspot.com/ for complete details �� ��


BGR Energy (BGRE.BO) Rs570.55
Equity Research
Mgmt. conf. call takeaways – reiterates strong operational outlook
News
Management of BGR hosted a conference call today (Nov 26) to address
concerns on the company’s possible links to the current investigation in the
banking space in India (refer to “CBI arrests CEO of LIC Housing Finance,
and officials at BOI, PNB”, Tabassum Inamdar, dated 25 Nov ’10). The stock
is down 18% vs BSE Sensex down 2% over the past 2 days.

Analysis
Key takeaways:

The Shipping Corporation of India – FPO: Invest: Business Line,

Visit http://indiaer.blogspot.com/ for complete details �� ��

Investors with a long-term perspective of at least two-three years can consider applying at cut off in the follow-on public offer (FPO) of The Shipping Corporation of India (SCI), the country's largest shipper (35 per cent share) in terms of Indian flagged tonnage.

The company's diversified fleet (bulk carriers, crude and oil product tankers, and container vessels among others) caters to a wide gamut of chartering requirements, in domestic and international markets.

Commodities Comment by MacMacquarie Research

Visit http://indiaer.blogspot.com/ for complete details �� ��


New Caledonia nickel supply on the rise, but with some challenges


Feature article
 We report on the feedback from the Fourth New Caledonia Nickel conference
held last week in Noumea. New Caledonia has a population of only 250,000
but is one of the leading nickel producers in the world with its share of global
supply likely to rise from 7.5% in 2010 to 12% by 2015.

India Sector Rotation: Watch Energy, Financials, and Healthcare: Morgan Stanley

Visit http://indiaer.blogspot.com/ for complete details �� ��



Sector Rotation Model Update: In the latest run of our sector model portfolio (page 3), ranking for the Industrials sector rose to 5th (vs. 9th in October), helped by positive earnings revisions and a less-bullish consensus. Energy lost three positions to 8th, driven by negative earnings revisions and poor share price momentum. Telecoms, Materials, and Utilities are the top three sectors – unchanged from October – whereas Financials, Consumer Discretionary, and Energy are the bottom three sectors on this model.

MOIL India — IPO: Invest at cut-off: Business Line

Visit http://indiaer.blogspot.com/ for complete details �� ��


Investors could consider applying to the IPO of Indian manganese producer MOIL India, which appears attractively priced given its quality ore reserves, low operating costs and booming domestic market. At the higher end of the offer price band with the retail discount factored in (Rs 356.25), the company would trade at an EV/EBIDTA ratio of 4.6 times and 10.5 times its trailing 12-month earnings. The enterprise valuation is at a discount to global peers such as Eramet and Eurasia Natural Resources.

State Bank of India: Buy says Business Line,

Visit http://indiaer.blogspot.com/ for complete details �� ��

State Bank of India: Buy

---

INVESTMENT FOCUS

---

Fresh investments can be considered in the State Bank of India (SBI) stock that, after a 17-per cent correction, provides a good buying opportunity. Being a market leader, SBI may continue to be a major beneficiary of the credit growth which typically picks up during the second half of the year. The bank has steadily gained market share (currently 17.03 per cent) over the last two years as advances swelled, mainly through increased focus on retail lending.

At the current price of Rs 2,858, the stock is trading at 2.45 times its estimated standalone FY11 book value and 17.8 times FY11 earnings. On a consolidated basis, the price-to-book value ratio works out to two times its FY11 book. Investments in the NSE and UTI Mutual Fund, which are valued at cost, understate book value. At this valuation SBI is trading at a justified premium to all public sector banks. SBI may tap the markets in the latter part of this fiscal to bolster its capital adequacy ratio now at 13.2 per cent.

Everest Kanto Cylinder: Buy:: Business Line

Visit http://indiaer.blogspot.com/ for complete details �� ��

Everest Kanto Cylinder: Buy

---

Everest Kanto's Dubai operations, the second largest contributor to revenues, have improved significantly.

---

Vidya Bala

Investors can consider phased exposure to the stock of Everest Kanto Cylinder, a high pressure cylinder manufacturer. At the current price of 97, the stock trades at 11 times its expected consolidated per share earnings for FY-12. The jump in volume sales in India and in its Dubai unit, lower costs of operations anticipated for new capacities and depletion of high-cost inventory augur for improvement of earnings from FY-12. Investors would need at least a two-year perspective to benefit from macro opportunities arising from CNG city gas distribution and Euro IV norms. Given the present market volatility, the stock can be accumulated in phases, on dips.

Academic abstracts monitor:: Macquarie Research

Visit http://indiaer.blogspot.com/ for complete details �� ��


Quantitative Analysis
Academic abstracts monitor
Some of this month’s interesting ideas…
 Equal weight vs. optimised portfolios – Tu and Zhou have a paper out
looking at the issue of naïve diversification (1/N) outperforming optimised
portfolios in real data sets of small sample sizes. They find that combining the
naïve and more sophisticated techniques can lead to outperformance over the
1/N rule as well as the sophisticated strategies on their own.