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Markets fall substantially
The Indian stock market fell substantially through the truncated week of
trading, with the Sensex and the Nifty losing 3.2% of their value each.
The highlight of the week was the monetary policy announced by the RBI, in
which the central bank increased the repo and reverse repo rates by 25bp
each in a bid to curb rising inflation. BSE mid-cap and small-cap indices
were even more hit, compared to large-cap indices during the week, falling
4.1% and 4.5%, respectively. On the sectoral front, the BSE realty was the
biggest loser, falling 8.6%, followed by the BSE HC index, down 5.3%. The
BSE IT index was relatively better than the others, losing 2.5% of its value
during the week.
Reality index underperforms the Sensex
The realty index sharply fell by 8.6%, widely underperforming the Sensex,
which was down by 3.2% for the week. The top losers in the sector were
HDIL (12.0%), DLF (11.6%), Unitech (10.8%), DB realty (9.8%) and Ackruti
City (7.8%). The underperformance can be attributed to apprehensions of
drying-up of liquidity to the sector; increased cost of raising funds post the
land scam and monetary tightening by the RBI; and low affordability hitting
demand in key metros.
Inside This Weekly
RBI Monetary Policy Review: In the 3QFY2011 Monetary Policy Review, the
RBI hiked repo and reverse repo rates by 25bp each to 6.5% and 5.5%,
respectively, in order to contain the runaway inflation. With the tight liquidity
situation in mind, the central bank kept the SLR and CRR unchanged.
Alembic - 3QFY2011 Result Update: For 3QFY2011, Alembic posted strong
21.6% yoy growth in revenue at `365cr (`300cr), higher than our estimates
of `321cr. OPM came in at 15.9%, compared to 10.3% in the comparative
quarter. Net profit stood at `30.8cr (`13.5cr), driven by better-than-expected
revenue growth and margin expansion during the quarter. Factoring in the
encouraging growth and visibility, we have revised our estimates and
recommend Buy on the stock with a revised Target Price of `92.
HDFC Bank - 3QFY2011 Result Update: For 3QFY2011, HDFC Bank
reported 19.3% qoq and 32.9% yoy growth in net profit to `1,088cr, in line
with our estimate of `1,091cr. However, operating income surpassed our
estimate, which was offset by higher provisioning expenses, which aided in
further improving the provision coverage ratio. We maintain our Buy
recommendation on the stock with a Target Price of `2,499.
ONGC - 3QFY2011 Result Update: For 3QFY2011, ONGC's bottom line
spiked by 132% yoy to `7,083cr (`3,054cr), which was substantially higher
than our estimate of `5,475cr on account of lower-than-expected DD&A
costs and gas pool receipts. We recommend Buy on the stock with an
SOTP-based Target Price of `1,400, translating into an upside of 23.3%
from current levels.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Markets fall substantially
The Indian stock market fell substantially through the truncated week of
trading, with the Sensex and the Nifty losing 3.2% of their value each.
The highlight of the week was the monetary policy announced by the RBI, in
which the central bank increased the repo and reverse repo rates by 25bp
each in a bid to curb rising inflation. BSE mid-cap and small-cap indices
were even more hit, compared to large-cap indices during the week, falling
4.1% and 4.5%, respectively. On the sectoral front, the BSE realty was the
biggest loser, falling 8.6%, followed by the BSE HC index, down 5.3%. The
BSE IT index was relatively better than the others, losing 2.5% of its value
during the week.
Reality index underperforms the Sensex
The realty index sharply fell by 8.6%, widely underperforming the Sensex,
which was down by 3.2% for the week. The top losers in the sector were
HDIL (12.0%), DLF (11.6%), Unitech (10.8%), DB realty (9.8%) and Ackruti
City (7.8%). The underperformance can be attributed to apprehensions of
drying-up of liquidity to the sector; increased cost of raising funds post the
land scam and monetary tightening by the RBI; and low affordability hitting
demand in key metros.
Inside This Weekly
RBI Monetary Policy Review: In the 3QFY2011 Monetary Policy Review, the
RBI hiked repo and reverse repo rates by 25bp each to 6.5% and 5.5%,
respectively, in order to contain the runaway inflation. With the tight liquidity
situation in mind, the central bank kept the SLR and CRR unchanged.
Alembic - 3QFY2011 Result Update: For 3QFY2011, Alembic posted strong
21.6% yoy growth in revenue at `365cr (`300cr), higher than our estimates
of `321cr. OPM came in at 15.9%, compared to 10.3% in the comparative
quarter. Net profit stood at `30.8cr (`13.5cr), driven by better-than-expected
revenue growth and margin expansion during the quarter. Factoring in the
encouraging growth and visibility, we have revised our estimates and
recommend Buy on the stock with a revised Target Price of `92.
HDFC Bank - 3QFY2011 Result Update: For 3QFY2011, HDFC Bank
reported 19.3% qoq and 32.9% yoy growth in net profit to `1,088cr, in line
with our estimate of `1,091cr. However, operating income surpassed our
estimate, which was offset by higher provisioning expenses, which aided in
further improving the provision coverage ratio. We maintain our Buy
recommendation on the stock with a Target Price of `2,499.
ONGC - 3QFY2011 Result Update: For 3QFY2011, ONGC's bottom line
spiked by 132% yoy to `7,083cr (`3,054cr), which was substantially higher
than our estimate of `5,475cr on account of lower-than-expected DD&A
costs and gas pool receipts. We recommend Buy on the stock with an
SOTP-based Target Price of `1,400, translating into an upside of 23.3%
from current levels.
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