Kotak Sec, Mahindra & Mahindra Financial - Business on track, reinitiate with ADD.

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Mahindra & Mahindra Financial (MMFS)
Banks/Financial Institutions
Busine ss on track, reinitiate with ADD. We expect Mahindra Finance to sustain
business growth on the back of the economic growth in rural India. A rise in
borrowings cost and liquidity pressures in the system pose risks to margins. Conversely,
limited competition on the asset side, financial flexibility and parentage of M&M
provide comfort. We reinitiate coverage on the stock with a price target of Rs800. ADD.

Buy Infrastructure Development Finance (IDFC IN); Target price: Rs190: Daiwa

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Infrastructure Development Finance (IDFC IN)
Diversified financials: India
6-mth rating: 1
Target price: Rs215.00 → Rs190.00
Share price: Rs145.20 (28 Feb)
Sound business model at attractive valuations
Market concerns appear to be overplayed
􀂃 Recent concerns in the market about an expected slowdown in the
number of new infrastructure projects, likely pressure on NIMs and
unfavourable macro conditions have taken their toll on
Infrastructure Development Finance’s (IDFC) valuations. The
share price has fallen by 32% from its peak (November 2010). As
such, its lending business is now valued at a PBR of 1.5x and a
PER of 11x on our FY12 forecasts, which we see as attractive.

Tata's venture in Taconite mine excellent investment: Analysts (Economic Times)

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An agreement by Tata Steel with Canadian iron ore miner New Millennium Capital Corp to jointly develop a taconite iron deposit in Canada is an excellent investment for Tata, analysts said. 

Tata Steel has agreed to contribute 64 per cent of the costs of the feasibility study of the New Millennium taconite project, which includes the LabMag and the KeMag ore deposits in Labrador, eastern Canada, New Millennium said in a statement. 

Kotak Sec, :: Reduce Sesa Goa - Constrained by regulatory hurdles.

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Sesa Goa (SESA)
Metals & Mining
Constrained by regulatory hurdles. Day 4 of the India field visit organized by
Vedanta comprised of a visit to Sesa Goa’s Sonshi mine followed by management
interactions. Field visit and interactions with the management lent a lot of comfort
regarding execution, pace of logistics development and potential upgrade to reserves
and resources. However, regulatory hurdles and the impending MMDR bill underpins
our Cautious stance despite seemingly inexpensive valuations. REDUCE.

RCom-Any tower sale deal would offer just value realization and not value creation::, Kotak Sec,

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Reliance Communications (RCOM)
Telecom
Any tower sale deal would offer just value realization and not value creation.
Recent press reports indicate that RCOM is in talks with three bidders for the company’s
tower assets residing in the Reliance Infratel subsidiary. We note that RITL towers have
very little external tenancy and hence headline deal valuation (or speculative news flow
on the same) would reflect the tower lease terms that RCOM agrees to in the
transaction. It’s a sale-and-lease-back transaction, essentially – a high/low tower sale
valuation would reflect the high/low lease rentals agreed upon. Reiterate SELL.

Kotak Sec, OIL & GAS INDUSTRY OVERVIEW -Key observations

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OIL & GAS INDUSTRY OVERVIEW
Key observations
As opined earlier, Brent crude oil price has surged further and has touched
as high as USD$120/bbls (currently trading at USD$114/bbls), highest in more
than two-and-a-half years due to supply concerns arising from escalating
violence and protests in Libya after Cairo, dollar depreciation and rising
demand. We are still cautious on geo-political issues which can impact the
crude oil price in the short term.
According to EIA, global oil product demand for 2010 and 2011 is revised up by 120
kbopd mainly due to higher-than-expected demand in non OECD Asia and improved
economic prospects for OECD North America. In 2010, global oil demand rose by
2.8 Mn bopd (YoY) to 87.8 Mn bopd and in 2011 it is expected to rise by 1.5 Mn
bopd (YoY) to reach 89.3 Mn bopd.
In Jan'11, OPEC crude supply increased to two-year highs at 29.85 Mn bopd with
Iraq's crude oil supply increased substantially. OPEC effective spare capacity stands
at 4.7 Mn bopd. Saudi Arabia has assured that it will fill the gap if there is any supply
disruptions from Libya.

Kotak Sec, MARCH 7, 2011-News Round-up

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Economy News
4 All government banks are reporting an increase in their bad debts on
farms loans ranging between 80% and 2000% in the first nine months of
2010-11. The total lending by all public sector banks till December 2010
stood at Rs 2,940 bn. The net NPAs of these banks in this period increased
by 70% compared to 46% in 2009-10. (ET)
4 Helped by rising demand in the US, India's apparel exports in January
grew by 19.5 per cent year-on-year -- the highest in this fiscal -- to USD
1.14 billion, according to Apparel Export Promotion Council. The exports
stood at USD 957 million in January 2009-10. The US accounts for about
40 per cent of India's total garment exports. (FE)
4 Concerned over worsening political turmoil in the Middle-East and the
impact of rising global crude prices on the domestic economy, the Finance
Ministry has suggested the Reserve Bank to focus on steps to contain
inflation. An indication to this effect was given by Finance Minister Mr
Pranab Mukherjee to the RBI, which is slated to announce its midquarterly review of the monetary policy. (BL)

Edelweiss, :: Yields remains steady; 11 year bond down on some profit booking

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Yields remains steady; 11 year bond down on some profit booking
Government securities
 Yields remained confined to a narrow range in trade today in the absence of any
fresh trigger. However the underlying sentiment continued to be buoyant on the
lower than expected borrowing from the central government in the next fiscal. The
8.13% 2022 bond saw some selling pressure since it is the most probable bond to
be auctioned (if GoI decides to do one in FY11) due to its relatively low
outstanding. The ten year benchmark bond closed at 7.93% while the 8.13% 2022
bond closed at 8.06%, 3bps higher than previous close.

BUY Infosys Technologies; TARGET: ` 3,600 ; Jaypee

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Takeaways from management meet We met Mr. Abraham Mathew, CFO – Infosys BPO, and Mr. Haragopal, Head – Finacle in Infosys Bangalore campus. Here are the key takeaways from our meeting:
• Vision 2020: Infosys has a vision of becoming $20 bn enterprise by 2020. BPO and Finacle, both divisions hope to contribute at least 10% to the topline.
• Accelerating growth in BPO: Infosys BPO has underperformed company growth since financial crisis, but is expected to over perform after FY12, on back of account mining and growth in realization.
• Verticalized presence: BFSI (32%), Manufacturing (39%) and CSP (16%) growing verticals.
• BPO clients expanding: The total number of clients stands at 94. Top client contributes 14.8%, top5: 35% and top10: 46%. With more services and bundling of services by Infosys, BPO is getting more clients.
• BPO climbing up the value chain: Voice based processes, which was 25% a year back, is just 15% now. The company has also built dedicated BPO platforms in areas like BPO, HRO etc, implying that the company is now working at higher end of the value chain and can revise its billing rates upwards, leading to higher realization per employee.
• Rise and Rise of Finacle: Finacle is expected to grow by 30% YoY in FY11. It is now servicing nearly all kind of banks, from large to mid cap, from urban to rural etc. It is expected to clock around $300 mn in FY11.
• Investments in R&D: Since Finacle is R&D based business, Infosys redeploys 20% of its Finacle revenues back into R&D. This is to keep updating the versions and release new modules continually.
• Success stories: Rural and Mobile Banking, since their launch 6 quarters back, have become big success stories.

FII & DII trading activity on NSE and BSE as on 07-Mar-2011

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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 07-Mar-2011. FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value FII 07-Mar-2011 1845.81 1938.05 -92.24

 

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 07-Mar-2011.

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value DII 07-Mar-2011 697.02 651.45 45.57

 

 

-- 

Roads & Highways Sector Initiation - Get On The Roads Again: SBI Cap

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Roads & Highways Sector - Overweight

GET ON THE ROADS AGAIN

Roads & Highways sector reforms carried out during the past few years has led to a greater optimism of sector performance from various stake holders. During the first half of the year, policy changes brought about desired results, leading to a large number of projects being awarded, revival of investor interest and more definite future plans. However, the second half of the year has been a complete contrast, with irregularities and inquires at National Highways Authority of India (NHAI) along with slower than expected award activity impacting the growth in the sector. This, when coupled with difficult short term macro economic conditions and forced negative policy changes by Ministry of Road Transport & Highways (MoRTH), has caused investors, contractors and operators to sit on the sidelines. We believe the lull in award activity is a temporary phenomenon and expect positive policy reforms to renew the interest of various stakeholders in the sector.

Keeping in view the huge infrastructure investment needed to sustain current growth levels as well as to accomplish the higher growth targets, we believe the sector is poised to witness heightened activity in the next one- two months, thereby benefiting the existing players in the sector. We initiate the coverage of IRB and ITNL with BUY rating which we believe will be major beneficiaries among others.

Road Sector – Opportunities galore 

Infrastructure is both a cause and a consequence of economic growth. Physical infrastructure is essential for manufacturing, services, trade and even human capital, while rising incomes and rapid urbanization drive demand for electricity, transport, telecom and housing which in turn drives demand for infrastructure investment. However, short term economic growth can be achieved by not taking all sections of society into account but envisaging a long-term economic prosperity will require a focused approach of inclusive growth. Given the growing population, income levels and rapid urbanization, the need to develop the road network of the country to match heightened economic activity is of vital importance.

Areva T&D India – 4QCY2010 Result Update -Angel Broking

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Areva T&D India – 4QCY2010 Result Update

Angel Broking maintains a Reduce on Areva T&D India with a Target Price of Rs. 243.

Areva T&D (Areva) reported better-than-expected results for 4QCY2010. Revenue

for the quarter increased by 14% yoy to `1,327cr and (est. `1,177cr) and PAT

grew by 29% yoy to `88cr (est. `75cr). Order inflow for the quarter was down by

9% yoy due to delays in customer ordering and price fall. Going forward, the

pricing scenario is expected to be grim on account of delayed ordering and

increasing competition. We maintain Reduce on the stock.

NSE, Bulk deals, 07-Mar-2011

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Symbol	Security Name	Client Name	Buy / Sell	Quantity Traded	Wght. Avg.  Price
AMBIKCO	Ambika Cotton Mills Limit	AMIT JASANI FINANCIAL SERVICES PVT. LTD.	SELL	44,990	196.50
GRAVITA	Gravita India Limited	JAY AASUMAL KESHWANI	BUY	12,837	285.12
GRAVITA	Gravita India Limited	JAY AASUMAL KESHWANI	SELL	79,766	287.03
INSECTICID	Insecticides (India) Limi	CROSSEAS CAPITAL SERVICES PVT. LTD.	BUY	2,02,150	334.08
INSECTICID	Insecticides (India) Limi	CROSSEAS CAPITAL SERVICES PVT. LTD.	SELL	2,02,150	334.49
JMTAUTOLTD	JMT Auto Limited	HI-TECH HERITAGE LIMITED	SELL	3,50,000	79.00
JMTAUTOLTD	JMT Auto Limited	RAMKRISHNA FORGINGS LIMITED	BUY	3,50,000	79.00
KIRLOSIND	Kirloskar Industries Limi	MARC FABER LIMITED (INDIA CAPITAL FUND LTD.)	BUY	1,93,606	369.85

Angel Broking, Hotel Leela to raise `950cr from sales of non-core assets

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Hotel Leela to raise `950cr from sales of non-core assets
Hotel Leela (HLVL) has decided to reduce its debt by raising `950cr from the sale of its
non-core assets and issuing equity shares. The company plans to raise funds by selling a
major portion of the commercial office space in Chennai and to enter into joint
development agreements with reputed builders on company-owned land in Hyderabad
and Bangalore for residential or commercial development. Besides, it also plans to take up
hotel management contracts in Pune and Hyderabad. Further, the company has decided to
offer up to 14.95% of its enhanced capital to prospective investors by issue of fresh equity
shares.
We believe these measures will help in debt-reduction and consequently lower interest
costs. HLVL is well placed for growth in the industry, with the number of owned rooms
likely to rise to 1,787 by FY2012-end v/s 1,195 currently. At the CMP, the stock is trading
at 17.0x its FY2012E EPS and an EV/Room of `2.5cr, factoring in most of the positives. We
remain Neutral on the stock.

FII DERIVATIVES STATISTICS FOR 07-Mar-2011

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FII DERIVATIVES STATISTICS FOR 07-Mar-2011
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	52084	1417.66	122857	3340.63	402407	11010.02	-1922.97
INDEX OPTIONS	318489	8565.55	280256	7587.95	1783859	48726.95	977.60
STOCK FUTURES	46491	1195.53	61789	1538.80	1095695	26689.04	-343.28
STOCK OPTIONS	12735	335.27	11685	310.94	33021	852.65	24.33
						Total	-1264.32

 

Buzzing Stocks - Keynote Capitals (March-7-'11)

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Buzzing Stocks

·      L&T, which is in the process of achieving financial closure for its recently bagged Hyderabad Metrorail project, is planning to raise Rs. 114bn debt from a consortium of 10 banks led by State Bank of India.

·      NTPC is in talks with German bank KfW for 15-Mw solar power plant at Anta in Rajasthan.

·      The government will infuse `4,376Cr as equity capital in Bank of Baroda and Union Bank of India as part of a recapitalisation package to shore up their equity capital.

·      NMDC plans to invest `3,309Cr on expansion projects in 2011-12, and a bulk of the amount will be spent on building the 3 million tonnes steel plant in Chhattisgarh.

·      Apollo Hospitals plans to add 2,000 beds in the next 24 months for an estimated outlay of nearly `1,200Cr.

·      Hotel Leela Venture plans to reduce the company's debt by selling its non-core assets and issuing equity shares.

Finolex Cables executes agreement to establish a JV with Corning, Inc.:: Angel Broking,

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Finolex Cables executes agreement to establish a JV with Corning, Inc.
Finolex Cables has executed an agreement with Corning, Inc., USA, to establish a 50/50
equity venture to market select telecommunications products. The venture is expected to be
incorporated later in the year. Corning is the global leader in speciality glass and
ceramics. Details of the agreement, including the size, have not been disclosed as the
company is under a confidentiality agreement. At the CMP, the stock is trading at attractive
valuations of 5.3x its FY2012E EPS and 0.9x its FY2012E BV. We maintain Buy on the stock
with a target price of `82.

BSE, Bulk deals, 7/3/2011

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Scrip Code	Company	Client Name	Deal Type *	Quantity	Price **
531591	Bampsl Sec	KAUSHALAYA GARG	B	1839248	2.59
531591	Bampsl Sec	PRAKASH CHAND GUPTA	B	892830	2.61
531591	Bampsl Sec	PRAKASH CHAND GUPTA	S	1058611	2.56
531591	Bampsl Sec	KAUSHALAYA GARG	S	1460564	2.57
506971	BB REALTY	USHA BAID	S	100000	20.90
511664	BGIL Films	ENAAM SECURITIES	B	49000	5.10