14 December 2011

FII DERIVATIVES STATISTICS FOR 14-Dec-2011

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FII DERIVATIVES STATISTICS FOR 14-Dec-2011 
 BUYSELLOPEN INTEREST AT THE END OF THE DAY 
 No. of contractsAmt in CroresNo. of contractsAmt in CroresNo. of contractsAmt in Crores 
INDEX FUTURES669681583.25803771894.0051847812118.21-310.75
INDEX OPTIONS80309019188.5279424919061.38203859648546.31127.14
STOCK FUTURES649081499.53670491522.64113618524783.98-23.10
STOCK OPTIONS24465551.7724015535.1441454920.2316.63
      Total-190.08

 


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Category-W​ise Turnover 14-Dec-11

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Trade DateCategoryBuy Value in Rs.CroresSell Value in Rs.Crores
14-Dec-11Mutual Funds71.4122.1049.31
14-Dec-11Proprietory Trades57946.1758740.42-794.25
14-Dec-11Others48523.0347588.01935.02
Notes :
1.  Buy / Sell value at the end of day:
     Options Value (Buy/Sell) = Strike price * Qty
     Futures Value (Buy/Sell) = Traded Price * Qty
2. Others exclude FIIs, Mutual Funds, Proprietory Trades


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Asian Paints: The past may not be a reflection of the future ::Kotak Sec

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Infosys revenue outlook—upper end is aggressive
A quick recap of guidance: Infosys guided for 17-19% US$ revenue growth for FY2012E. Revenue
growth guidance is 3.2-5.4% for 3QFY12 and the implied guidance range is 3.3-5.6% for 4QFY12.
This surprised us, as it did the rest of the Street, given the seasonally weak 2H for IT business,
Infosys’ own execution challenges and deteriorating macro outlook. As a result, we and Street
modeled revenue growth below the upper end of Infosys’ guidance, a deviation from the past
trend.
Infosys reiterated its 3QFY12 and FY2012E guidance range after Dow Jones reports suggested that
the company may miss the upper end of the revenue outlook. However, the company did indicate
that decision making has slowed down further from the date of issuance of the last outlook. We
believe there could be further fine-tuning at the upper end; there could be a minor miss as well
but this is manageable as long as Rupee remains at the current levels.
What could have prompted aggressive guidance in the first place?
Macro headwinds were sufficient for Infosys to take a conservative view of it outlook. We can
think of the following factors that could have prompted the aggressive guidance (1) strong
contract wins which may ramp up in 3QFY12 and may spill over to 4QFY12; (2) A weak 1H,
setting a low base to work on for 2H growth; (3) A new normal where ‘within-range guidance
delivery’ is acceptable and (4) Guidance as a tool for setting a high bar internally. Please refer to
our noted dated 13th October titled “More thoughts on Infosys’ FY2012E guidance”
Some deterioration built in our estimates though not a freeze in decision making
We do not rule out further deterioration in the demand environment but this is already in the
numbers; our FY2013E revenue growth of 15% is already building in some amount of caution.
However, our estimates do not capture the possibility of a freeze in decision making, the
probability of which has increased from continued policy paralysis in the Eurozone. At the EPS level,
a miss on revenue growth can be mitigated if Re/US$ rate sustains above our assumption of 49.75

‘We should double the number of Internet users by 2016' ::Business Line

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As more entrepreneurs get funded, targeting the Indian market, you will have more risk-taking that will eventually become self-sustaining. SUDHEER KUPPAM, MD, ASIA PACIFIC REGION AT INTEL CAPITAL
Venture capital funds are among the significant sources of financing for entrepreneurs in early stages. Mr Sudheer Kuppam, Managing Director of Asia Pacific region at Intel Capital, talked to Business Line on the opportunities for start-ups in India and various aspects of the venture capital industry.
Excerpts form the interview:
What is the key factor that fosters innovation in any country?
The most important factor is the human resource pool. You need the entrepreneurs who are willing to step up, take the risk and go with their idea to create something new. It need not be innovation aimed at the entire world; local innovation will also suffice for the entrepreneur to be successful and to grow a reasonable business.
We don't think that regulatory policies or the government matters. At the end of the day we think Indian entrepreneurs know how to work with existing policies. Eventually, even the government will pick a lesson or two on the regulatory side from developed markets. They can clearly see how the venture eco-system has benefitted the economies there.
In India, we are seeing a lot more deal activity of late. The increased activity is good for the Indian economy because it is viral. As more people see entrepreneurs targeting Indian market getting funded, you will have more and more risk-taking that will eventually become self-sustaining.
What is the average holding period for investments in your portfolio?
In general, for Intel Capital world-wide it is five to seven years and it is the same for India. The period varies with the stage we invest in. We do all the way from early stage to late stage to PIPEs. If we do a late stage investment, the average holding period is three years, whereas the period could be seven years or more for an early stage investment. We invested real early in Persistent Software, a Pune-based company, back in 1999-2000 and exited last year. NIIT was a PIPE that we invested in 2005 and exited in 2007.
Is it true that only 40 per cent of the investments in a venture fund make money and the success stories make up for the losses?
If you look at some of the published historical data, in general, 20-30 per cent of your portfolio will give 3x returns. 10 per cent of the portfolio will give home-runs which are greater than 10x returns.
The rest of it is either mediocre or you lose money. But given the wide breadth of the return, the portfolio will overall give good returns. Venture capital is a high-risk asset class. Mutual funds or hedge funds have a diversified investment philosophy, wherein typically 3-5 per cent is invested in high-risk assets, that is venture capital and private equity.
What is done with companies that are hard to exit, that go down-hill?
Obviously, our resources are finite. We do not have the band-width to continue to nurture companies that are doing badly. So what we do is to cut our losses, early on. We either make a secondary sale or sell the stake back to the owners. It is often seen that the founders might want to do something else, that they started with a particular strategic intent that did not pan out and the company now wants to make a right-hand turn, do something else, that might not be strategic for us. It is also possible that sometimes we make the exit with loss.
Would you recommend a venture capital fund as an investment option for individuals?
It depends on the individual's preferences. In Silicon Valley, high net worth individuals are limited partners in some big venture funds.
These high net worth individuals could be having a very influential rolodex (contacts) that the venture partnership might want to tap. Since the HNI is a partner, he will be committed to help out the venture fund and the portfolio companies. But I haven't seen similar relations in India.
Having numerous individuals investing small sums in a venture fund can be a problem. The venture fund is answerable to all its partners. If I have a $100-million (Rs 500 crore) fund with 40 angel investors putting in Rs 1 crore each, I will not be going to them every quarter telling them how things are etc. It is a headache.
Stepping back, if some people are throwing money at some of these funds, they are free to do so. But in more professional funds, unless the fund sees value in the angel, they do not take them on. For instance, our CEO, Paul Otellini is a limited partner in few funds. You can see why there is value in taking Paul as a partner.
Within the technology sector in India, which segments do you see as potential growth drivers?
It is definitely broadband. Ever since 3G was allowed in India, you can clearly see an uptick in broadband penetration. And we believe this is an inflexion point. Right now the spread of 3G is spotty. But as they set up the infrastructure, Reliance is planning 4G that they plan to roll out next year; once all of this happens, broadband penetration will clearly go up, which will increase PC and mobile phone penetration that, in turn, will increase all technology-related businesses that are feeding off those trends.
You can see how China has morphed. They are the number one technology market, even for Intel. We sell more CPUs, more silicon to China than to the US. The demographics help because they have 450 million Internet users, whereas the US population is 330 million. India will also get there.
We believe that in the next five years our conservative forecast is that we should double the number of Internet users that is currently 100 million. With support from smart phones and tablets, it could even accelerate.
Would you agree that venture funds act as a herd and converge on the sector in vogue despite opportunities in other sectors?
If you look at our previous two press releases, we started out this year investing in Policybazaar, that is in consumer Internet; then we invested in a robotic surgery company that is now offering surgery using robots in Delhi called SSI Robotics, very soon it will expand to Mumbai. Then, in September, we invested in TestingCzars which do mobile apps.
Later, we invested in WhatsOnIndia which is electronic programming guide. If you subscribe to Tata Sky or Airtel, the menu that you get is from this company. We have invested in MCX in 2009, that is an electronic exchange for commodities and commodities derivatives. Our investments have been quite diversified.
Can you share some details of your financial performance?
Intel Capital does not share details of financial return details. We benchmark ourselves every quarter to Cambridge Associates' venture capital data on how returns are for venture funds. And Intel Capital is in the top quartile of top performing funds. Within Intel Capital, India is a strong performer in terms of returns. Most Indian exits have been awesome — Sasken, Persistent Software, NIIT, Sharekhan, Rediff and so on.

Why feeling good is important for economics ::Business Line

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Classical economics suggests that consumer spending can improve economic growth. Now, you and I will spend only if we earn more.
But economists may well argue that to earn more, we need to spend more! So, what does it take to break the circular argument? Behavioural psychology shows that spending habits can change with the state of mind! How?
Suppose a neighbourhood restaurant charges Rs 30 for a cup of coffee while a coffee bar charges Rs 65. Which would you choose?
You will most likely say that the choice would depend on whether you can afford the costlier coffee. While that is generally true, another factor kicks-in when you spend money. And that is your state of mind.
Suppose you just stepped out of a successful business meeting. You will most likely choose the costlier coffee, as you feel good. Remember, you wealth is still the same; it is your state of mind that has prompted you to choose the costlier coffee.

THE WEALTH EFFECT

Such spending need not stop with coffee. Consumption of comfort goods such as air-conditioners and luxury goods such as exotic holiday destinations can improve with the state of mind. The effect is nothing new.
Consumption in the US has tended to increase when the stock market trends up, as was seen in late 1990s and before the subprime crisis. It is called the wealth effect.
The term refers to individuals spending more because their perceived wealth (unrealised equity investment profits) has increased. By the same logic, when the market declines, as it has in the recent times, negative effect kicks-in. Do not be surprised, therefore, if you find noticeable reduction in consumption levels in the economy.
Classical economics argues for tax cuts, as that will place more money in the hands of people.
But tax cuts are unlikely to improve the economy, unless people spend the additional cash. And they will do so only if they have a positive mind. It is, perhaps, worth hiring psychologists to talk up the economy!

Indian Consumer Goods: Volume robust; margin to expand:: Edelweiss,

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Key trends in Q2FY12: Hard bargaining for margin
Volume spur on: Volume for 12 out of 14 companies better than or in line with expectations; positive
surprises: HUL, ITC, Marico, Colgate, GCPL.
Ad spend kept under control: Ten companies (out of 13) cut it in terms of % of sales. Three trimmed ad
spends on absolute basis (in Q1FY12, 4/11 cut on absolute basis).
Strain on gross margin extend: Gross margins of 15 companies (out of 21) have dipped significantly (save
Nestle, Agro Tech, Zydus, Britannia and most cigarette businesses).
EBIDTA margin dips: EBITDA margin of 14 (out of 21) companies declined, though much lower than gross
margin. Laggards like Soaps, detergents, biscuits improve margin.
Pricing power rises: Majority take calibrated price hikes, higher than previous quarters. Quality of sales growth
was significantly better with balanced blend of price and volume growth.
New launches at slower pace: Companies are persisting with innovations and product launches across
segments, albeit at a reduced pace.
Forex loss drags down margins: INR’s depreciation against most major currencies led to MTM forex loss for
many companies, adding to the woes of increased material costs.
International businesses continue to bloom: In most cases businesses reported healthy growth despite
global economic pressures.
Q2FY12 - Hits: HUL, ITC, Nestle, GCPL; Misses: Dabur, Asian Paints, Zydus Wellness
Top picks: HUL, GCPL, Marico, ITC.

Buy Automotive Axle; Target :Rs 400 ::ICICI Securities

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F r a i l   o p e r a t i n g   p e r f o r m a n c e ! ! !
Automotive Axle (AAL) reported a  disappointing set of numbers for
Q4SY11. The topline came in line with our expectations at | 273.9 crore
(I-direct estimate:  |  267.7 crore) reflecting a 2.6% QoQ growth. The
revenues were driven by robust sales to the tune of | 46.98 crore from
the recently purchased brake manufacturing facilities from Kalyani
Global Engineering Pvt Ltd. However, the company witnessed a
lacklustre performance on the EBITDA margin front with margins sliding
to their lowest levels since Q1SY09. The raw material as a proportion of
sales jumped ~480 bps QoQ to 74.9% as input costs continued to
remain at elevated levels. The company reported a PAT of | 11.7 crore
(I-direct estimate: | 17.4 crore), indicating a fall of 34.3% QoQ.
ƒ Key highlights of the quarter
The domestic M&HCV segment grew by a robust 14.0% in Q4SY11. The
key players in the segment like Tata Motors and Ashok Leyland registered
sequential volume growth in the M&HCV category of 10.6% and 22.3%,
respectively. The company currently  caters to ~10% and ~70% of the
respective requirements in terms of axle housings. AAL’s recently
purchased brake manufacturing facilities at Mysore from Kalyani Global
Engineering  posted steady growth of ~4% QoQ at | 46.98 crore. The
exports business continued its northward trajectory with sales of | 20.38
crore, a jump of 20.61% QoQ. However, margin maintenance remains a
major concern in the near term with commodity prices continuing to
remain an overhang.
V a l u a t i o n
The domestic commercial vehicle space sustained its positive volume
growth in Q4SY11 (up ~15% QoQ). We maintain our optimistic stance on
volume offtake  in H2FY12 as  the  interest  rate cycle peaks out. We  remain
upbeat on AAL’s business though headwinds like high input costs and
interest rates exist in near term. At the CMP of | 354, the stock is trading
at 8.1x SY12E EPS of | 43.5 and 6.2x SY13E EPS of | 57.1. We have
valued the business at 7x SY13E EPS of | 57.1 to arrive at target price of
| 400 implying a 3% upside. We maintain our BUY rating on the stock.