Buy Persistent System :Centrum

Persistent is a global company specializing in software product and technology innovation. For more than two decades, the company has partnered closely with pioneering start-ups, innovative enterprises and the world’s largest technology brands. The company has utilized fine-tuned product engineering processes to develop best-in-class solutions for customers in technology, telecommunication, life science, healthcare, banking, and consumer products sectors across North America, Europe, and Asia.
After the recent acquisition of Patni by iGate, we believe that there can be further consolidation in the mid and small sized IT companies as a strategy for growth. This would lead to a shift in valuations of mid and small sized IT firms from their current PE multiple of 7-8x to around a PE multiple of at least 10-12x
In FY2012, PSL’s revenues crossed Rs.1,000 crore mark, with operating income growing by 29%. Operating profit grew by 34% to Rs.258 crore, while PAT grew by just 1.5% to Rs.142 crore on the backdrop of rise in tax rate from 8% to 28% and increase in deprecation on the back of significant rise in gross block to Rs.604 crore (from Rs.454 crore). The positive impact of expansion would be felt going forward. The cash and liquid investments in the books at the end of FY2012, is around Rs.90/share, which is around 24% of the CMP. PSL is confident of achieving revenue growth bettering NASSCOM’s FY2013 estimates of 11-14% growth for the industry. PSL is also confident of maintaining or improving its EBIDTA margins for FY2013
During Q1FY12, the company registered 34.4% YoY growth (11.1% YoY) in revenue to Rs.300.7 crore and net profit grew by 50.8% YoY (0.9% QoQ) to Rs.41.6 crore.
For more than two decades, Persistent has been an innovation partner for the world’s largest technology brands, leading enterprises and pioneering start-ups. With a global team of 6,600+ employees, Persistent has 350+ customers spread across North America, Europe, and Asia. The company enjoys a zero debt status and has a strong focus on its IP led business by making key investments in technology areas like cloud computing, BI & analytics, mobility and collaboration
The new initiatives have contributed almost 40% of the revenues for the company during FY2012. Management has aggressive focus on improving productivity and employee efficiency and controlling administrative cost
At the CMP of Rs.340. PSL trades at 7.7x P/E its FY2014E EPS of Rs.44. We expect PSL to improve revenues and margins going forward. Also, with the likely consolidation in mid and small sized IT companies, we expect the stock to trade around at least 10x its FY2014E EPS of 44. Hence, we recommend investors to consider accumulating PSL for a target of Rs.440, which is an upside of 28% from its current price.

Howard Marks - Latest Memo on Uncertain Times: Oak tree capital

Excellent read once again

http://www.oaktreecapital.com/MemoTree/On%20Uncertain%20Ground%2009_11_12.pdf 

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Regards

LKP LIKES : PETRONET LNG (Buy, Target Rs.185)

PETRONET LNG (Buy, Target Rs.185)

·         PLNG has undertaken a brownfield expansion at Dahej and plans to increase its capacity to 18mntpa by FY14 and 20mntpa by FY16 by commissioning the second LNG berth. It is setting up a greenfield 5mntpa terminal at Kochi, commissioning of which is expected in Q3FY13 and has finalized the location of its proposed third 5mntpa LNG terminal at Gangavaram in Andhra Pradesh.

·         The Kochi terminal will give access to PLNG in the virgin markets in South. Demand for Kochi LNG is expected from the BPCL refinery at Kochi and MRPL, both of which are undergoing capacity expansion to 15mmt. The fertilizer plants in Kochi and Mangalore (FACT and MCF) would also benefit replacing costly fuel with LNG from PLNG’s Kochi terminal. We expect Kochi terminal’s tariff at Rs50/mmbtu to achieve 16% IRR.

·         PLNG has entered into a long term contract with Rasgas for 7.5mntpa for its Dahej terminal while for its Kochi terminal, PLNG has entered into a long-term contract with ExxonMobil to source 1.44mntpa of LNG from its Gorgon fields (Australia) and with Gazprom (Russia) for 2.5mnnpta. PLNG has entered into long term contracts with its key customers for off-take of LNG (7.5mntpa), thus relieving itself of finding customers for its long term gas supplies. BUY PLNG trading at 10x estimated one-year forward earnings with a price target of Rs185

Management Interaction Update/Estimates Revision GMDC Buy Target Price: Rs236 :Centrum

Management Interaction Update/Estimates Revision

GMDC

Buy

Target Price: Rs236

CMP: Rs190

Upside: 24%

Pricing and volumes to stay robust, reiterate buy

We interacted with the management of GMDC to get better clarity on recent developments. We remain positive on the stock on account of i) recent approval of pending price increase in regulated Panandharo mine, ii) strong possibility of price increase in merchant mines in H2FY13E (our exp: 4% hike), iii) strong volume growth of 12%/10.2% in FY13E/14E, iv) turnaround in power plant operations and its consequent outsourcing and v) successful implementation of lignite beneficiation project in FY14E. Factoring in higher prices, we revise our EBITDA estimates for FY13E/14E upwards by 6.6%/6%. We believe valuations are at an unwarranted discount to coal peers. Maintain buy with a target price of Rs236.

m  Price increase at Panandharo approved, hikes in merchant prices expected in H2FY13E: Management has guided for price increase in merchant mines soon after monsoons. We expect price hike of ~4% for merchant mines of GMDC in H2FY13E and have factored in overall merchant price increase of 2%/4% for FY13E/14E. GMDC also recently obtained the pending approval for increase in price (from Rs532/tonne to Rs635/tonne applicable from FY12 onwards with a 4% YoY increase hereafter) at its regulated mine (Panandharo) and also received Rs300mn payment from SEBs. As a result, we expect lignite blended realizations to increase by 8.9%/5.2% in FY13E/14E. We observe 18-20% lower landed cost of lignite as compared to CIL coal in Gujarat which strengthens the argument of price increase.
m  Strong volume traction in lignite continues: We expect strong traction in lignite sales volumes to continue and maintain our lignite volumes estimates at 12.7/14 MT (growth of 12%/10.2%) for FY13E/14E. Higher industrialization led growth in Gujarat and diversified customer base of GMDC provide strong volume visibility.  Approvals for increase in EC limits of merchant mines are still awaited and Panandharo (north block) is expected to replace existing Panandharo as the regulated price lignite mine in 3-4 years time.
m  Lignite beneficiation could be a potential game changer: We see setting up of beneficiation plant of 1.5 mtpa at Bhavnagar (scalable if model is successful) as a potential game changer for the company. MoEF approval has been obtained and the project is expected to start operations within 6 months after obtaining pollution control board approval. We see net per tonne value addition of ~Rs200/tonne on account of beneficiated lignite sales and expect 1 MT of beneficiated volumes in FY14E resulting in net value addition of ~Rs200mn. 
m  Lignite power plant shows operational improvement, outsourcing remains the key: 250 MW lignite power plant at Nani Chher has shown operational improvements with average PLF of ~65% in Q2FY13E till date and is expected to reduce its EBIT losses significantly. GMDC is looking to outsource the operations to a third party vendor which remains the key to its sustainable and profitable operations in our view.
m  Bauxite and other divisions remain largely subdued: Company expects bauxite volumes of ~1 MT in FY13E notwithstanding the upcoming closure of VAL’s refinery and subdued domestic demand. Other divisions of fluorspar and manganese ore also remain largely subdued as of now. We see less than 5% revenue contribution of bauxite and other divisions combined for GMDC in FY13E/14E.
m  Valuations – Attractive: We continue to find the valuations highly attractive with the stock trading at 4.7x FY14E EV/EBITDA, which implies a steep unwarranted discount to both global coal miners’ average as well as CIL’s current valuation of 6.4x. The current valuations also remain well below GMDC’s 3 year and 5 year average historic multiples on both P/E and EV/EBITDA basis. We value the stock at 6x FY14E EV/EBITDA to arrive at a target price of Rs236. Maintain buy.

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IPCA Laboratories - Entering in the next league; initiating coverage; Buy: Edelweiss

IPCA Laboratories (IPCA IN, INR 446, Buy)
Our earnings are 12%-16% ahead of Street on account of: a) strong ramp-up in the US business, b) higher traction in domestic business and c) 30% CAGR in Institutional Anti-Malaria (IAM). We expect earnings CAGR of 29% (Street estimates at 19%), driven by 19% revenue CAGR and 250bps margin expansion over FY12-14E. With a profit of INR5bn by FY14, IPCA will enter the big league that would potentially re-rate the stock. We initiate with ‘BUY/SO’ rating and TP of INR582/share (14x FY14E EPS).

Stocks in News :: 13 Sept: Edelweiss

 Stocks in News

Real estate’s big fish under CCI scanner; commission probing 70 builders across India for allegedly colluding to arm twist consumers (ET)
Coal field award to Jindal Company under scanner (ET)
Jaiprakash Associates redeems $523.5mn FCCBs (ET)
Cabinet set to ok state sell in 5 PSUs (ET)
CBI chargesheet against telcos in Oct (BS)
ICICI Bank, HDFC Bank and Axis Bank cut interest rates on retail term deposits (BS)
Aurobindo gets USFDA nod for anti depressant drug (BS)

Edelweiss Technical Reflection (ETR) :: 13 Sept: Edelweiss

Edelweiss Technical Reflection (ETR)

Nifty scaled above two-week high today on the back of a smart rally in the second half of the session, piercing above the 5400 mark and nearly tested the August high of 5448. The index opened with a small bullish gap and after trading in a choppy range, took-off in the afternoon on the back of German Constitutional court ratifying the bailout fund that cheered risk assets globally. Yesterday's bullish advance came on the back of strong volumes and a strong A/D ratio. It seems the up move has legs to go further despite overbought hourly charts, as the daily momentum is in fine fettle. Once the swing high of 5448 is taken out, the bulls are likely press on the accelerator eyeing 5500 and 5630. On the downside, the support has moved higher from 5300 to 5350.

Barring the weakness in Power (-0.98%) and Healthcare (-0.43%) indices, all other sectoral indices ended the session in green. The top gaining sectors of the day were Metals (+2.14%), Autos (+1.26%) and Cap Goods (+1.20%). Mid-cap and Small-cap indices underperformed their frontline benchmark with gains of 0.41% and 0.46% respectively.

Bullish Setups: TCS, RIL, COAL, TTMT, SAIL, CNXBANK

Bearish Setups: IRB, SOBHA, UNSP

  

Sales Traders Commentary :: 13 Sept: Edelweiss

Sales Traders Commentary

The Indian equity markets surpassed the 18000 level quite smartly in late trade on Wednesday, for the first time since Feb 23, 2012, on the back of positive global cues. Both Sensex and Nifty gained 0.70% each. Metal, auto, capital goods, IT and realty stocks were gainers.
The Sensex closed at 18000, up 147 points while the Nifty jumped 41 points up to end the day at 5431.
Major gainers were Tata Motors (5.29%), Jindal Steel & Power (3.79%), Coal India (2.91%), Larsen & Toubro (2.84%), Tata Steel (2.68%), and Wipro (2.48%).
Major losers were Cipla (2.73%), NTPC (2.18%), GAIL (India) (1.66%), Bharat Heavy Electricals (1.64%), Hero Motocorp (0.92%), and Sun Pharmaceutical Industries (0.31%)
The Metal index gained 2.14%. Major gainers were Jindal Steel & Power (3.79%), Coal India (2.91%), Hindustan Zinc (2.84%), Bhushan Steel (0.53%) and Hindalco Industries (0.18%).
The Auto index was up by 1.26%. Major gainers were Tata Motors (5.29%), Ashok Leyland (3.37%), Bharat Forge (0.89%), Maruti Suzuki India (0.41%) and Bajaj Auto (0.26%).
The Capital Goods index was up by 1.20%. Major gainers were Punj Lloyd (2.92%), Larsen & Toubro (2.84%), S K F India (2.75%), Jindal Saw (1.51%) and Pipavav Defence and Offshore Engineering Company (0.07%).
The Power index was down by 0.98%. Major losers were Crompton Greaves (2.42%), Bharat Heavy Electricals (1.64%), Reliance Infrastructure (1.29%), Adani Power (1.05%) and A B B (0.45%).
Major gainers in the mid – cap space were Apollo Tyres (6.36%), Apollo Hospitals Enterprise (1.79%), Amtek India (0.92%), Allcargo Logistics (0.62%) and CORE Education and Technologies (0.46%).
Major gainers among small - cap were Advanta India (5.63%), A B G Infralogistics (3.26%), Styrolution ABS (India) (0.76%), Adhunik Metaliks (0.35%) and Trident (0.11%).
Globally, Asia ended on a higher note while European indices were trading in the green

13 Sept: Morning News (click on link to read article) : IFCI Financial Services Limited

Morning News (click on link to read article)

Economic Times		Business Standard
Ø  Greece faces more strikes, no austerity deal yet Ø  L&T bags cryostat order from French nuclear project Ø  Energy tribunal issues notices to PSU oil cos Ø  Godrej Properties sells 695 flats in Gurgaon in 1 day Ø  India ranks 2nd in realty investment momentum index Ø  Credit Suisse clients may withdraw $37 bn over tax		Ø  Sensex reclaims 18,000, closes near 7-mth high Ø  MCX-SX plans 40-stock barometer index Ø  FIIs net buyers of Rs 451 cr in cash mkt today Ø  Rupee at three-week high at 55.15/dollar Ø  Gold futures rise 0.3% on global cues Ø  Total market turnover on Sep 12 at Rs 1.40 lakh crore
Business Line		Mint
Ø  Tech Mahindra sets up three 4G labs Ø  Reliance’s low-costtablets may hit 3G players: Gartner Ø  Banks may decide on Deccan Chronicle debt rejig after forensic audit Ø  Infra cos keen to sell assets, but buyers are in no hurry Ø  Commerce Ministry to hold manufacturing meet on Today		Ø  MoEF suspends green nod for Goa mines Ø  Firms losing interest in fresh investments: RBI study Ø  Advisory services to become transparent Ø  Global oil demand to slip, then steady in 2013: IEA Ø  TVS Motor hopes to cut costs by reducing platforms
Financial Express		Financial Chronicle
Ø  Infra PSUs pledge to invest, tap FM for fuel, clearances Ø  ICICI, HDFC Bank revise FD rates 0.5% Ø  Haryana industrial investment Rs 61K cr Ø  Siemens promoter entities sell 1.1% stake Ø  HSBC cuts Indian stocks to underweight		Ø  RIL plans new gas well;conversion of 2 sick oil wells into gas Ø  Govt suspends green nod for 93 Goa iron ore mines Ø  Decision likely on disinvestment in 5 PSUs on Friday Ø  DoT may not oppose Axiata raising stake in Idea Ø  Wipro Infotech inks deal with Qatar Airways

(Click on link to view article)

Thanks and Regards

IFIN: IFCI Financial Services Limited

Daring Derivatives [For September 13, 2012] Sharekhan

Daring Derivatives [For September 13, 2012] Sharekhan www.sharekhan.com  Summary of Contents   DARING DERIVATIVES Derivatives Summary Nifty (August) futures' premium has increased to 15.95 points from 15.35 points. The total open interest in the market was Rs130,938 crore and Rs4,652 crore was added in open interest. Nifty call options added 9.98 lakh shares in open interest whereas put options added 38.54 lakh shares in open interest.   Click here to read report: Daring Derivatives

BUY Polaris Financial Technology :Centrum

Polaris Financial Technology Limited (Polaris) a leading global player in Specialty Application Development for the BFSI sector. Over the years, the company has strengthened its product and services profile with the help of global acquisitions - it acquired US-based digital identity authentication services provider, IdenTrust Inc., in line with its vision of achieving market leadership in Financial Technology (FT). This helped to augment its FT Grid strategy for global markets and prepare for the next growth trajectory. Earlier in 2008, it acquired US-based insurance product and services player SEEC Inc and in 2010 it acquired ‘Laser Soft’ a Chennai based banking software products company.
Polaris has a strong base of more than 200 customers with 80 of them as strategic accounts. Its customers include 10 out of the top 15 global banks and 6 of the 10 top global insurance companies. It gets around 58% of revenues from its top 10 clients with Citigroup forming a bulk of it, with whom it has been dealing since last 15 years. Polaris has diversified geographical presence with US/North America contributing 55% to the revenues in FY2011 while Europe, Asia Pacific and India & Middle East contributing 25%, 8% and 12%, respectively to FY2011 consolidated revenues.
With recent acquisition of Patni by iGate, we believe there can be further consolidation in the mid and small sized IT companies and the average PE multiple of companies like Polaris, which are witnessing strong operating performance, should witness a vertical shift. Further there are reports of large vendors in the western world breaking up orders of over US$ 10 billion into smaller ones and placing them with mid sized IT companies in order to save on project costs. We believe that this trend is likely to continue and would be positive for Polaris.
Polaris’ management has given a guidance of 17-20% YoY revenue growth to reach around Rs.2,400 crore for FY2013. Considering net profit margin of 10%, Polaris can deliver EPS of Rs.24.20 for FY2013E. The company has been gearing up to double its revenue in next 4 years. Moreover, with changes in the global banking norms with regard to capital adequacy ratio where major banks are shifting to transaction banking and risk management, Polaris is well positioned to take advantage with its global transaction banking platform and risks offerings via service oriented architecture.
The company had cash on books of Rs.402 crore as on March 31, 2012. The net cash (after deducting debt on books) is Rs.279 crore or Rs.28 per share is 24% of the current market cap of the company. Polaris has been improving its dividend payout and had paid Rs.4.50 in FY2011. In FY2012, the company has already announced Rs.2.0 as interim dividend (up from last year’s interim dividend of Rs.1.75) and is expected to announce the final dividend in later half of July.
Polaris has corrected by 34% from its yearly high price of Rs.175 and is currently trading near its monthly low of Rs.112. At the current price of Rs.116, the stock is available at an attractive valuation of 5.2x FY2012 EPS of Rs22.2 and 4.8x its FY2013E EPS of Rs24.2.
We believe that there will be a shift in valuations of mid and small sized IT companies due to consolidation activity and the average PE multiple of mid sized IT companies like Polaris, which are witnessing strong operating performance, should witness a vertical shift. Hence, we recommend investors to accumulate Polaris for a target of Rs.145 valuing the company at 6.0x its FY12013 earnings giving an upside of 27% from current levels

Infinite Computer Soln :Valuation do not capture high growth momentum: Centrum

Valuation do not capture high growth momentum
Infinite Computer Solutions (India) Ltd. (ICSL) is a global provider of application management services, infrastructure management services (IMS) and intellectual property (IP) leveraged solutions. ICSL focuses on telecom, media, manufacturing, healthcare, energy & utilities and infrastructure verticals
With recent acquisition of Patni by iGate, we believe that there can be further consolidation in the mid and small sized IT companies, going forward. Since, the IT industry growth is tapering off and the big IT companies are posting poor growth, we believe that the major IT players will try and go in for consolidation. ICSL is not likely to be acquired, however, we believe that such M&A activities in mid-cap IT segment would improve the valuation of ICSL which is quoting at very low PE of mere 4.1x FY2012 EPS of Rs.28
ICSL’s management has given guidance for FY2013 of 20% YoY and 11% YoY growth in revenues and PAT, respectively in USD terms and a growth of 31% YoY to Rs.1,380 crore and 21% YoY to Rs.146 crore in revenue and PAT, respectively in INR terms. The EPS guidance for FY2013 stands at Rs.34.30 per share. ICSL expects to sign deals worth USD 30-60 million in FY2013 which are currently in the pipeline. We believe that the company will be able to grow its revenues by more than 25% in INR terms, supported by the depreciation in INR against the USD
In FY2012, the company declared an interim dividend of Rs. 4 per share in November 2011 and a further final dividend of Rs.4.50 per share, taking the total dividend to Rs.8.50 per share for FY2012. Also, in May 2012, ICSL announced a stated dividend policy of giving away 30% of net profits as dividend.
The company had cash on books of Rs.157 crore as on March 31, 2012 which works out to Rs.36 per share. At the current market price of Rs.118, the cash on books works out to 30.5% of the current market cap of the company
In FY2012, on a consolidated basis, ICSL registered revenue growth of 20% YoY to Rs.1056 crore and PAT growth of 13% YoY to Rs.120.7 crore. The EPS for FY2012 was Rs.28 per share. Further, in Q1FY13, the company reported strong growth in revenue and net profit of 19.9% QoQ to Rs.319.2 crore and 71% QoQ to Rs.35.4 crore respectively. At the current market price, the stock is available at an attractive valuation of 4.1x FY2012 earnings and 3.4x its FY2013E guided EPS of Rs.34.30. We believe that there will be a shift in valuations of mid and small sized IT companies due to consolidation activity and the average PE multiple of IT companies like ICSL, which are witnessing strong operating performance, should witness a vertical shift. Even if the PE of ICSL moves up just one notch to around 4x FY2013E earnings, we believe that there is strong appreciation potential in the stock price by about 19%. The cash in the books of the company, of Rs.43 per share provides further comfort. Hence, we recommend investors to consider accumulating.

Strong fundamentals with possible future consolidation in IT space -Hexaware Technologies :Centrum

Hexaware is a global provider of information technology (IT) and process outsourcing services. It focuses on three verticals: Banking, Financial Services and Insurance (BFSI); Travel, Transport, Hospitality and Logistics (TTHL), apart from other emerging verticals like life sciences and healthcare, manufacturing and professional services. The company’s technology solutions include enterprise solutions, business intelligence and analytics, quality assurance and testing services, human resource IT services, application development and management, technology consulting services and business process outsourcing services
Hexaware is now witnessing better traction in its operational performance since last 6-9 quarters with strong deal wins (close to US$600 million) and focus on top clients which gives visibility to deliver 20% revenue growth in CY2012. Hexaware reported 37.5% YoY growth in revenue to Rs.1451 crore and net profit of Rs.267 crore, a growth of 148.2% in CY2011. The growth momentum continued for Hexaware as is evident from its Q2CY2012 results, where it reported a growth of 49.7% YoY (14.1% QoQ) in revenue and 47.8% YoY (1% QoQ) in PAT.
Hexaware registered 7.2% CQGR in revenue and 22% in EBITDA over last 9 quarters. Offshore revenue share has increased from 40.8% in Q1CY2011 to 46.6% in Q2CY2012. Its attrition rate has come down significantly to 9.6% from 19.6%. The company added 51 clients in CY2011 and another 24 clients in 1HCY2012. Utilization rate at 70% including trainees offers further room to improve operating margin which has already seen improvement of ~860 bps to 22.9% over Q1CY2011 to Q2CY2012. It has a strong balance sheet with zero debt and cash & cash equivalents at Rs 429.6 crore (Rs.14.50 per share) as on June 30, 2012.
With the recent acquisition of Patni by iGate, we believe there can be further consolidation in the mid and small sized IT companies and the average PE multiple of companies like HTL. We believe that HTL could be one of the possible candidates for any further consolidation in the IT space as its promoters holding is 27.9% spread across 6 individuals.
Since the IT industry growth is tapering off and the big IT companies are posting poor growth, we believe that the major IT players will try and go in for consolidation and acquire mid-sized or small sized IT companies as a strategy for growth. In case any consolidation activity does not take place in HTL, on a purely fundamental basis, Strong client additions, visibility to achieve its revenue guidance of 20% for CY2012, one of the lowest debtor days of 66 days and high return ratio of 33% places the company ahead of mid tier IT companies and makes a strong case for re-rating at the current market price of Rs.121, It is trading at attractive valuations of 10.5x its CY2012E EPS of Rs.11.46 and at 9.3x of its CY2013E EPS of Rs.12.94. Moreover, high dividend yield of ~5% (expectation of Rs.6.0 per share in CY2012) appears attractive

Larsen & Toubro - Geared up for a long haul; visit note; Buy ::Edelweiss, PDF link

Larsen & Toubro (LT IN, INR 1,409, Buy)

We met up with L&T management recently and came back positive on its medium to long term business potential and new business initiatives.

Performance of IPPs: Muted operating performance  Motilal Oswal

Performance of IPPs: Muted operating performance
 Adani Power (APL) generation for the month stood at 1.4BUs and average PLF
stood at 41% (down 44ppt YoY). APL plant PLF has been muted since the
commissioning of Mundra Ph-III (impacted by transmission constraints). We await
further clarification from the management on the same.
 JSW Energy's generation stood at 1.4BUs and is highest ever in a month. Generation
growth is led by higher PLF at its plant, where-in Karnataka/Ratanagiri plant
operated at PLF of 91% v/s 68% YoY and 85% QoQ. 540MW Rajwest operated at PLF
of 73% v/s 45% QoQ. JSWEL has synchronized U-V & VI in June-12 and is expected
to synchronize U-VII & VIII by 2QFY13.
 Tata Power: Mundra UMPP project (1600MW) generated 394MUs during August-
12 and operated at PLF of 33%, YTDFY13 Mundra UMPP has generated 1.9BUs and
plant operated at PLF of 46%.
 Jindal Power's 1GW Tanmar project generation stood at ~707MUs (up 7% YoY) and
PLF stood at 95% (up 6ppt YoY).
 Lanco Infratech thermal projects generated 1.0BUs (down 11% MoM) for Aug 2012.
Udupi project PLF stood at 31% (v/s 84% MoM), while Kondapalli PLF stood at 39%
(v/s 46% MoM). Amarkantak project PLF stood at 66% (v/s 90% MoM) and Anpara
PLF was 27% (v/s 22% MoM).
 Sterlite Energy 2.4GW Jharsuguda plant generation stood at 750MUs and PLF at
42% (v/s 43% MoM). Since the commissioning of plant, coal scarcity has impacted
PLF of the plant.
 Reliance Power: R Power 1.2GW Rosa project generated 649MUs and operated at
PLF of 73% (v/s 51% MoM).

Gujarat State Petronet - Tariff cut in line with our expectations: EDelweiss

In its recent order, PNGRB has cut the tariff for GSPL’s high-pressure pipelines by 12.5% (INR 23.99/mmbtu from INR 27.41/mmbtu) effective November 20, 2008. GSPL was charging INR 1.02/scm as tariff for high pressure pipelines while the new tariff has been fixed at INR 0.895/scm. High pressure pipelines at 2,890 kms form major chunk of GSPL’s total pipeline. The tariff is yet to be out for the Low-pressure pipeline of 660 kms. The regulator has asked GSPL to refund the excess charges (since November 2008) to the customers. The tariff cut is in line with our estimates. We are neutral on this development as the one-time impact on profits will be negated by higher valuation multiples due to removal of overhang of tariff cuts. Maintain HOLD.

Take care of your car during monsoons :: Tata AIG General Insurance in Business Line

There is very little awareness on vehicle maintenance and the driving precautions to be taken before and during the monsoon.

Enjoying the monsoon? Good, but do make sure that your car is in good shape to handle the downpour.

According to a recent study, India accounts for about 9.5 per cent of the total 1.2 million fatal accidents in the world. About 19 per cent of these are known to occur during peak monsoon season. The primary reason is that there is very little awareness on vehicle maintenance and the driving precautions to be taken before and during the monsoon. There is even less awareness on how to mitigate the losses arising out of vehicle damage due to rains and floods.

Mid tier IT Companies – Play on Consolidation :Centrum

Preference towards Defensive sector: Indian economy is in a critical situation in terms of $ shortage – while exports started de-growing in July, FDI inflows during April-June 2012 quarter has fallen by 67% YoY. Indian Rupee (INR) is also under tremendous pressure whose exchange rate has fallen by 9.6% YoY. In this scenario, implementation of FDI into multi-brand retail and by the foreign airline companies into Indian airline industry is imperative. However, the same is getting delayed due to political impasse. Since the global rating agencies have already issued warning on possible downgrade of rating of Indian economy, there is a significant risk for the INR if status quo on FDI policies continues. We remain hopeful that these FDI policies would be implemented as there is no choice for the government. However, in case, the government fails to implement them, then the exchange rate of INR would fall significantly – in such a scenario we believe that the IT sector especially the mid-cap IT space would emerge as the defensive bet;
Large IT companies to look for consolidation to fuel growth: We believe that there is a strong case for consolidation in the mid and small sized IT companies as a growth strategy especially for tier-1 IT companies. This would lead to a shift in valuations of mid and small size IT firms. Infosys has indicated interest in acquisition and is now open for even bigger opportunity.
Deals size getting smaller and going to more number of service providers: Further there are reports of large vendors in the western world breaking up orders of over US$ 10 billion into smaller ones and placing them with several mid sized IT companies in order to save on project costs.
We remain positive on mid tier IT companies due to 1) strong operational growth which would outpace industry growth rate of 12-14% in FY2013; 2) Improvement in operating margin and RoE and 3) attractive valuation with high dividend yield
Hence, we remain positive on the mid-tier companies such as Polaris Financial Technology (Polaris), Infinite Computer Solutions (Infinite), Hexaware technologies (Hexaware) and Persistent Systems.

Fund Talk:: Business Line

I am 35. I invest in monthly SIPs in mutual funds as follows: HDFC Top 200 – Rs 5,000, HDFC Prudence - Rs 5,000, Franklin Blue Chip Rs 3,000, Quantum Long Term Equity Rs 3,000, HDFC Equity Rs 1,000, HDFC Small and Opportunities Rs 1,000, Franklin Prima Plus Rs 1,000, Franklin India Equity Income Rs 1,000, Kotak50 Rs 2,000, and Sundaram SMILE Rs 1,000. I also invest in direct equity to the tune of Rs 10,000 a month and in Gold ETF Rs 5,000 a month. I also have exposure to ULIPs (unit linked insurance plans) and money back policies.

I can invest Rs 7,000 more a month.

The present value of my MF portfolio is Rs 5 lakh and direct equity Rs 7 lakh. I need Rs 1.20 crore in 10 years (retirement corpus and son’s education).

With this investment pattern and quantum, can I reach my goal? I understand that equity investment is risky, but a good investment will not fail in the long run.

Tata Pure Equity: Invest :: Business Line