Sobha Developers-- Q4 Operational Update - Strong performance continues :: Prabhudas Lilladher,

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Sobha Developers                        Accumulate             

Company Update - Q4 Operational Update - Strong performance continues

n  Q4 sales volumes strong, in-line with expectations: As per Sobha’s operational update released today, the company has recorded strong sales for the quarter at 0.86m sq.ft, fuelled by two Chennai launches and one Bengaluru launch in Whitefield, totalling to 1.83m sq.ft. For FY12, the company ended the year with total sales of 3.28m sq.ft valued at Rs17bn as against 2.78m sq.ft valued at Rs11.3bn in FY11. Average realizations too increased sharply by 27% from Rs4,082 in FY11 to Rs5,181, led by the high-value NCR launch.

Launches during the fiscal saw a strong pick up to 10.45m sq.ft as against 4.3m sq.ft launched in FY11. Besides, Sobha entered three new geographies in FY12, NCR, Chennai and Mysore, all of which have performed fairly well.

n  Sales momentum to remain strong, Cash flow generation to accelerate: With Sobha’s strategy of releasing additional area at the existing launches as well as with new launches lined up, we expect sales growth of 28% to 4.2m sq.ft in FY13. The company has a near-term pipeline of over 5m sq.ft of launches.

New launches and monetization of old sales is likely to lead to positive cash generation for the company on account of which we expect a steady decline in the company’s debt levels. The company’s DER is likely to reduce from 0.67 in FY11 to 0.59 by FY13.

n  Valuations: Sobha’s gross asset value stands at Rs50bn. From this, we deduct its net debt of Rs11.7bn to give us a net asset value of Rs38.2bn which translates to Rs390/share. To arrive at our target price, we have factored in a 20% discount to the company’s real estate NAV which gives us a value of Rs312. To this, we are adding the value of the contract business which translates to a target price of Rs348. We maintain ‘Accumulate’ on the stock.

Is India´s Slowdown Permanent? :Deepak Parekh, Chairman of the Housing Development Finance Corporation for Credit Suisse

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:

Deepak Parekh, Chairman of the Housing Development Finance Corporation, on what triggered India’s slowdown, the actions required to combat this and why it is worthwhile for investors to build exposure to the country now.

See the full video and Article at 

https://infocus.credit-suisse.com/app/article/index.cfm?fuseaction=OpenArticle&aoid=344791&lang=EN&WT.mc_id=Feed_Credit%20Suisse%20-%20In%20Focus

Cushla Sherlock: Not long ago India was hoping to help lead the world in growth, what went wrong? Is the slowdown permanent?

Deepak Parekh: The slowdown is definitely evident, but I’m confident that it is temporary. In the last decade, India grew at over 9 percent for three consecutive years and the aspiration was that we would achieve double digit growth. Unfortunately global GDP slowed, and as a result, so did we. Compared to the last couple of years, where we experienced a GDP growth rate of over 8 percent, this year we are in a bad shape and will come down to 6.9 or 7 percent. That indicates that the slowdown is definitely there, but I don’t think it’s permanent for a number of reasons. 

What are the reasons?

We’ve had policy paralysis in the government. Various decisions have not been taken by the present ruling government because the coalition partners are not gelling and the opposition is not playing ball. As a result the government is unable to take reforms forward. 

Some steps have already been taken, are these going in the right direction?

The government has accelerated some decision-making particularly with respect to fuel supply, whether coal or any other raw material needed for power, because without adequate power for industry you cannot achieve a larger GDP growth. These reforms in the power sector indicate that government is well aware of the slowdown need for action. 

Is it worthwhile for investors to build exposure to India now?

Yes. I think some shares and equities have been battered down, not because the intrinsic values are not there, but because they are not able to get adequate raw materials, which are government controlled. We had a couple of major scandals last year and that also slowed down the government’s decision-making, but I think this is behind us: inflation is now under check, interest rates have peaked and they will only come down during the course of 2012. I expect that things will improve in the last six months of this year. 

Let’s continue looking forward, what will the engines of growth be in India this year?

The service sector is the engine of growth in India. Growth in this sector is about 10 percent and it constitutes almost 60 percent of GDP - the service sector is booming. Agriculture and industry contributes the balance amount and have been hit badly by industry this year. However, with decisions from the government and the fast-forwarding of some reforms, I’m very confident that the industrial growth will come back to 7 or 8 percent. 

9 April: Edelweiss Technical Reflection (ETR)

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 Edelweiss Technical Reflection (ETR)

The short-term weakness persisted for the third day in a row as the Nifty ended ~1% lower, snapping the seven week advance. On the weekly charts a ‘dark cloud cover’ candlestick

Indices ended lower on the back of profit taking ahead of a long weekend for the Indian markets. Nifty opened with a minor gap down and dipped towards the 5300 mark before a recovery in the second half to close 0.66% lower at 5322. For the day Nifty has formed a ‘doji’ candlestick pattern on the back of low volumes and balanced breadth indicative of the lackluster nature. Earlier in the week Nifty made a top at the trend line joining previous tow tops at 5380 resulting in the down move. However in the coming sessions the index needs to break above the trend line to gain short-term bullish strength along with sustenance of trade above the 5300 mark.Momentum oscillators have turned bullish on the daily charts with MACD giving a buy crossover, however the sell signal on hourly charts means Nifty could undergo some sideways consolidation before the ST rally resumes.Weekly charts on the other hand continue to remains constructive. Important supports are pegged at 5300 and 5260 i.e. the 21 and 50 day EMAs, whereas 5380 remains the critical resistance.

Barring the minor gain in Power index (+0.42%), all other sectoral indices ended the day in the red. Among the top losers of the day were Realty (-1.35%), Metals (-1.02%) and Banking (-0.75%) indexes. A mixed trend was seen in the broader markets with Mid-cap index losing 0.03% and the Small-cap index gaining 0.40%.

Bullish Setups: BHARTI, ADE, NTPC, RIL, CNXBANK, LT, RBXY

Bearish Setups: DLF, ACC

   

9 April: Stocks in News :Edeweiss

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Stocks in News

Reliance, BP set to kick off imported LNG marketing, In talks with shell, Petronet LNG to book capacity  (BS)

Unitech wireless, Sistema slam Trai  for ruling out exit policy (ET)

Hindustan copper plans to raise $250 m through ECBs (ET)

Coal India readies INR 50 bn for corp bonds (ET)

Govt mulls on listing of profitable PSU subsidiaries (ET)

FMCG majors Dabur, Marico mull price hike (ET)

Tribunal upholds Merc’s order on Tata Power (ET)

CCI approves merger of Siemens with subsidiary (ET)

Coal India may sign fuel pact with 50 firms (MINT)

9/4/12: Categories Turnover (BSE) (Rs. crore) Clients NRI Proprietary Trade Data

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Categories Turnover (BSE)

(Rs. crore)
	Clients			NRI			Proprietary
Trade Date	Buy	Sales	Net	Buy	Sales	Net	Buy	Sales	Net
9/4/12	1,245.29	1,165.53	79.76	0.27	0.30	-0.02	393.22	448.93	-55.71
4/4/12	1,464.90	1,514.92	-50.02	1.22	0.34	0.88	447.13	448.03	-0.90
3/4/12	1,468.62	1,488.50	-19.87	2.41	0.47	1.94	517.51	515.65	1.85
Apr , 12	5,448.21	5,440.23	7.98	9.44	1.35	8.08	1,855.31	1,884.48	-29.17
Since 1/1/12	124,322.00	126,166.38	-1,844.38	85.54	83.52	2.02	44,332.27	43,123.98	1,208.29

Disclaimer: DII and FII turnover is consolidated information of BSE and NSE. BSE data is compiled on the basis of marking of 'client type' while executing orders on BOLT-TWS in equity segment. NSE Data has been compiled on the basis of trading codes entered by the trading members at the time of order entry and corresponding client category classification provided by the trading members as part of unique client code details upload. NRI - Non Resident Indians FII - Foreign Institutional Investors DII -Domestic Institutional Investors (Includes Bank, DFIs, Insurance, New Pension Scheme and MF).

DII trading activity on BSE and NSE on Capital Market

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DII trading activity on BSE and NSE on Capital Market Segment.

DII trading activity on BSE and NSE on Capital Market Segment(In Rs.Crores) Category Date Buy Value Sale Value Net Value DII 9/4/12 586.69 692.51 -105.82

DII trading data across BSE and NSE collated on the basis of trades executed today by Banks, DFIs,Insurance and MFs on BSE and NSE. This trade data is provisional and subject to change, inter-alia, on account of custodial confirmation process, modifications etc.

FII trading activity on BSE and NSE on Capital Market Segment

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FII trading activity on BSE and NSE on Capital Market Segment

FII trading activity on BSE and NSE in Capital Market Segment(In Rs. Crores)
Category	Date	Buy Value	Sale Value	Net Value
FII	9/4/12	1,075.50	1,344.93	-269.43
Disclaimer: FII trading data across BSE and NSE collated on the basis of trades executed today by FIIs on BSE and NSE. This trade data is provisional and subject to change, inter-alia, on account of custodial confirmation process, modifications etc.

Derivatives Report - 09.04.2012 - Angel Broking - PDF link

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Derivatives Report

Technical Report - 09.04.2012 - Angel Broking - PDF link

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Technical Report

Market Outlook - 09.04.2012 - Angel Broking - PDF link

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Market Outlook

Market Summary - 09.04.2012 - Angel Broking - PDF link

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Market Summary

After MFI turmoil, chit funds the next big draw

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Once bitten, but hardly twice shy.

After having burnt their fingers in the microfinance sector, you might expect investors there to show restraint.

On the contrary, private equity and venture capital (PE and VC) companies are exploring newer, more risky terrain, such as the Rs 35,000-crore (Rs 350-billion) chit fund sector.

These earlier stakeholders in the MFI sector are now turning to this one.

Shriram Chits, with an annual turnover close to Rs 4,200 crore (Rs 42 billion) and one of the biggest in the country, has seen queries from a number of PE funds for investment in its business.

"We have (also) seen interest from our existing investors in the Shriram Group to invest in our chit fund business," said Y S Chakravarti, chief operating officer, Shriram City Union Finance, who is also on the board of Shriram Chits.

Enquiries, it seems, are pouring in from all quarters.

For instance, Lok Capital, a VC firm founded by IDFC's Rajiv Lall and PE veteran and former Actis head in India, Donald Peck, that was focusing on the microfinance sector, is now actively exploring options to invest in chit fund companies.

"We are clearly looking at investment opportunities that will expand financial inclusion, and chit funds is one.

"The chit fund model is unique and it has a lot of advantages, with elements of savings.

They operate on the same model as MFIs, and their commission is also capped," said Venky Natarajan, managing director of Lok Advisory Services.

To begin, Lok Capital might invest up to Rs 5 crore (Rs 50 million) in a chit fund company.

"After the crisis in the MFI sector, investment opportunities in NBFCs (non-banking finance companies) has shrunk.

"Investors are looking at alternative investment options, and chit funds is one," said Shashi Shrivastava, senior vice-president, Grameen Capital, a financial advisory firm focused on the MFI sector.

However, with the commission of chit fund companies now capped at five per cent of chit value, the returns may not be as alluring as the MFI sector.

Recently, the All India Chit Fund Association gave a charter of demands to the Union finance ministry, including allowing members to undertake sensitisation deals, issues on rating and waiver of service tax.

The estimated size of the industry is Rs 35,000 crore (Rs 350 billion), with the unregistered part estimated to be at least 100 times the registered one, according to association data.

There are about 30,000 registered chit fund firms.

For this sector, the MFI crisis was a blessing in disguise. The southern states of Kerala, Andhra Pradesh and Tamil Nadu, where the MFI crisis got precipitated, account for a third of the chit fund industry in India.

"Not only have we seen a rise in business but also enquiries by VC firms for investment in the sector," said T S Sivaramakrishnan, proprietor of Balussery Chit Fund, and secretary of the All India Chit Fund Association.

Last year, the industry grew around 20 per cent, against a usual growth of 10-15 per cent, he said.

A chit fund is a saving-cum-borrowing instrument, with a scheme operating under a predominant value and denomination.
Each scheme admits a particular number of members, who contribute a certain sum every month to a 'pot', which is auctioned each month.

The highest bidder wins the pot.

The bid amount is also called a discount and the prized subscriber wins the sum equal to the chit value, less the discount.

The discount money is then distributed among the rest of the members.

Typically, these companies cater to middle-income group clients, due to the high cost of operations and cap on revenue.

However, with the crisis in the micro finance sector, chit fund companies are now eager to tap lower income group households.

Thus, over the past year, chit funds of lower denomination, with a higher number of participants, fuelled the growth of the industry in the southern states, said Sivaramakrishnan.

Source: 

BSE, Bulk deals, 9/4/2012

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Deal Date	Scrip Code	Company	Client Name	Deal Type *	Quantity	Price **
9/4/2012	531448	ARROW SECURI	AANIR SHARES SERVICES	B	25146	9.02
9/4/2012	590114	Arunjyoti Enterprises	DHRUV SAWHNEY	B	31420	23.82
9/4/2012	590114	Arunjyoti Enterprises	PIYUSH PUKHRAJ MEHTA	S	30000	23.84
9/4/2012	512149	Avance Tech	VORA FINANCIAL SERVICES PRIVATE LIMITED	S	7758279	0.26
9/4/2012	531270	Dazzel Conf	VORA FINANCIAL SERVICES PRIVATE LIMITED	B	875000	2.76
9/4/2012	531270	Dazzel Conf	VORA FINANCIAL SERVICES PRIVATE LIMITED	S	975001	2.75
9/4/2012	531270	Dazzel Conf	B M TRADERS	S	913635	2.76
9/4/2012	531470	EMPORIS	K RAMANLAL AND CO (PROP- SHARADBHAI JHAVERI)	B	100000	22.54
9/4/2012	531470	EMPORIS	MANISH RATILAL SHAH	S	94535	22.54
9/4/2012	509627	Hindustan Dorr	VIDYA SAGAR MAHAVIR PRASAD SAH	B	461701	51.94
9/4/2012	512129	Jayant Merc	PREETI HARI JAGTIANI	B	100000	2.10
9/4/2012	512129	Jayant Merc	HARI NANIKRAM JAGTIANI	B	100000	2.10
9/4/2012	512129	Jayant Merc	PRAVIN MOHANBHAI PATEL	B	100000	2.10
9/4/2012	512129	Jayant Merc	NILA PRAVINBHAI PATEL	B	100000	2.10
9/4/2012	512129	Jayant Merc	LAXMIDEVI GOPIKUMAR SINGHANIA	S	425000	2.10
9/4/2012	523810	Kaleidoscope Films	SK KHEMKA	B	803296	33.07
9/4/2012	523810	Kaleidoscope Films	ALOK FINANCE PVT. LTD.	S	674756	32.85
9/4/2012	530165	Kanchan Intl	GANESH ANANT GHADGE	B	18500	70.95
9/4/2012	530547	KEN Fin Serv	RAMESH KRISHNA KULAYE	B	15450	54.00
9/4/2012	530547	KEN Fin Serv	VIBHA DEVI SULTANIA	B	25000	52.00
9/4/2012	530547	KEN Fin Serv	VIDYADHAR RAMNARESH DUBEY	S	25000	52.00
9/4/2012	530547	KEN Fin Serv	PRAKASH SHANKAR BHOSALE	S	30100	54.00
9/4/2012	531134	LE WATERINA	IMRAN I KIDI	B	512618	7.80
9/4/2012	531134	LE WATERINA	ARISONASSOCIATESPRIVATELIMITED	S	400000	7.81
9/4/2012	526179	Ludlow Jute	R V INVESTMENT & DEALERS LIMITED	B	535584	31.00
9/4/2012	526179	Ludlow Jute	DIBYA TRADING CO.LLP	S	536584	31.00
9/4/2012	590117	Mahaveer Infoway-$	MANGUKIYA DILIPBHAI MADHAVJIBHAI	S	49000	12.78
9/4/2012	531453	Mohit Inds-$	MEGHA MAHESH KHANDELWAL	B	126608	31.20
9/4/2012	531453	Mohit Inds-$	MEGHA MAHESH KHANDELWAL	S	126608	31.64
9/4/2012	534190	OLYMPIC	RUPAL PIYUSH AVLANI	B	100000	29.00
9/4/2012	534190	OLYMPIC	PAULOMI KETAN DOSHI	B	100000	29.05
9/4/2012	511734	Pasupati Fin	NIYATI DINESHCHANDRA LIYA	B	24500	38.78
9/4/2012	511734	Pasupati Fin	SAJAN ARVINDKUMAR JOSHI	B	31000	38.53
9/4/2012	511734	Pasupati Fin	DEVENDRA JAYANTILAL SHAH	B	35000	38.45
9/4/2012	511734	Pasupati Fin	SHAMMEI NAVINKUMAR PATEL	S	30974	38.53
9/4/2012	511734	Pasupati Fin	ROHNIL BORADIA	S	40000	38.70
9/4/2012	532841	Sahyadri Inds	MAHESH KUMAR SINGHI	B	55723	43.85
9/4/2012	532841	Sahyadri Inds	SARSWATI VINCOM LIMITED	S	56916	43.82
9/4/2012	531886	SCOPE IND	K V RAMANA REDDY	B	64500	13.95
9/4/2012	511754	Shalibhadra Fin	SANGEETA MANOJ BIYANI	B	25000	66.97
9/4/2012	511754	Shalibhadra Fin	JIGNESHKUMAR HARSHVADAN GANDHI	S	31250	66.53
9/4/2012	531695	SHREYCHEM	RAJESH RAJESH	B	54693	46.15
9/4/2012	531695	SHREYCHEM	SOMAIYA MANOJ PREMJIBHAI	B	44200	46.14
9/4/2012	531695	SHREYCHEM	PRAVIN B SINGH	B	50000	45.74
9/4/2012	531695	SHREYCHEM	RAJESH RAJESH	S	54693	46.16
9/4/2012	531638	Suraj-$	SURAJ CHEMTECH PVT LTD	B	104764	50.10
9/4/2012	531638	Suraj-$	ANITA PRAFULKUMAR CHANDAN	S	110000	50.25
9/4/2012	519228	Temptation Food	KPC SECURITIES PRIVATE LTD.	B	350000	4.06
9/4/2012	519228	Temptation Food	KESHAV KUMAR SARAF	S	350000	4.06
9/4/2012	590111	VAISHNAVI	KRISHNAVENI BEERAM	B	105888	4.05
9/4/2012	590111	VAISHNAVI	SAI NITHISHA PARVATHANENI	B	120657	3.92
9/4/2012	590111	VAISHNAVI	BADDULA RAVINDRA	B	100100	4.02
9/4/2012	590111	VAISHNAVI	D V DURGAM	S	167039	3.98
9/4/2012	530109	Vantage Corp	SACHIN SUMATILAL KARNAVAT	S	16982	7.27
* B - Buy, S - Sell
** = Weighted Average Trade Price / Trade Price