Morning Notes - April 12th, 07

Gujarat Ambuja Cements Ltd’s March shipments fell 4.5% to 1.48 million tonnes from 1.55 million tonnes a year earlier. Production fell to 1.43 million tonnes from 1.53 million tonnes a
year earlier. –ET
Elecon Engineering Company has been awarded a contract worth Rs 229.09 crore for supply and installation of coal handling plant package for National Capital Termal Power Project from
state-run NTPC. –ET
Domestic car sales in the financial year ended Mar’07 rose 22% from the year before to 1,076,408 from 882,208 in 05/06-ET
iGate Global Solutions posted over four fold jump in net profit at Rs 21.42 cr for the qtr ended March 31, as compared to Rs 5.25 cr for the same quarter last year. Total income of the company increased 29.91% to Rs 196.05 cr for the 4th qtr ended March 31, from Rs 150.91 crore a year ago. –ET
Mastek reported a 132% increase in consolidated net profit at Rs 40.23 cr for the 3rd qtr ended March 31, 2007 compared with Rs 17.31 cr in Q3FY06. –BS
Larsen & Toubro plans to set up a major state-of-the-art ship building yard at a cost of Rs 1,500 crore. The new greenfield ship building yard would come up on a 1,000-acre area and have capability to make all types of ships, including high tech designs like CNG, LNG carriers and containers upto 3 lakh dead weight tonnes. –BS
The final hearing by the arbitration panel on the Jet-Air Sahara merger has been postponed till 12 April 07. –BS
Around 14 funds and institutions, including eight from overseas, have shown interest in buying a strategic stake in India’s oldest term lending institution, IFCI Ltd, with a few even ready to pick up 51 per cent equity. –BL
Tanla Solutions Ltd‘s U.K.-based subsidiary, Tanla Mobile, has expanded its operations into Ireland. –BL
Punjab National Bank has increased the Benchmark Prime Lending Rate by 75 basis points to 13 per cent. –ET
Deccan Chronicle Holdings Ltd would raise its advertisement tariff by 30% from May 2007. –BL

Morning Notes - April 11th, 07

Corporate Snippets
>Suzlon Energy has raised its takeover offer for REpower Systems AG to 150 euros a share after its subsidiary bought 7.7% in the German firm at that price. –ET
> With an aim to enhance its focus on tier-II cities, Arvind Mills plans to open nearly 100 Megamart stores in the country in the next five years. Megamart, an apparel discount chain, currently has 54 outlets in 16 cities, with footfalls in excess of 1.5 lakh consumers per month. –ET
> ABG Shipyard has bagged Rs 618 crore order from Cyprusbased Essar Shipping & Logistics Ltd, for construction of four supramax bulk carriers. –ET
> Educomp Solutions has acquired 76% stake in ThreeBrix EServices Pvt Ltd. Partnership with ThreeBricks would leverage Educomp’s large content library for providing tutoring in several ways - online, offline and through learning centers mainly focused on serving Indian students. –ET
> Uttam Galva Steels has decided to raise prices of all its products as a result of rising demand from construction companies and makers of automobiles and home appliances. –BS
> The board of directors of Strides Arcolab has given its in-principle approval to acquire the entire shareholding of Grandix Pharmaceuticals, Chennai. –BS
> Subhash Projects & Marketing Ltd has secured orders worth Rs 309 crore for execution of various power projects in Karnataka state. –BL
> Jet Sahara in a fresh deal.New agreement sets Air Sahara’s enterprise value Rs 250 Crs lower at Rs 2050 Crs. - ET.
> NTPC Ltd is open to sourcing equipment from Chinese vendors in an effort to keep project costs down for its new power stations. The Rs 30,000-crore utility is also looking at the possibility of tying-up with Chinese suppliers for the 4,000-MW Ultra Mega projects in the pipeline. - BL

Macro Economic & Geo-Political News
> Industrial output in February is expected to have risen 10.9% from a year earlier, the median forecast in a Reuters poll shows. That would be the same as in January, but down from 12.5% in December. –ET
> The Bank of Japan have voted unanimously to keep interest rates unchanged. –BS


Amtek Auto Ltd
(Rs. 365, FY08E - P/E 13x, BUY with a Target Price of Rs. 510)

Monthly Recommendations

Paradyne Infotech Ltd.
(Rs 92, FY08E - P/E 4x, BUY, Target Price Rs 150, Earlier
recommended at Rs 68)
PIL has come a long way to capture the booming Indian IT sector, with a modest beginning as a System Integrator to a provider of varied range of services and offering.
PIL has chalked out a well-defined path for growth, which comprises of both the organic and inorganic initiatives to garner the incremental IT spending in both the domestic and global market, and PIL’s recent acquisitions of LGI is synergetic to leverage the latter’s global presence and derisk the geographical risk.

Tata Elxsi Ltd.
(Rs 274, FY08E - P/E 11x, BUY, Target Price Rs 368, Earlier
recommended at Rs 242)
Riding on strong fundamentals:
Tata Elxsi continues to show strong financials and operational performance, with incremental clients accounts ramp up and increasing value added services in the portfolio. For the Q3FY07, TEL has demonstrated a strong set of number, with
impressive margin expansion, which reflected in 17% QoQ growth and 83% in net profit to Rs 139 mn, which was the highest growth achieved by the company in the last ten sequential quarter.

Ratnamani Metals & Tubes Limited
(Rs. 652, FY08E - P/E 6x, BUY with a revised Target Price of Rs.
944) (Initially Recommended at Rs. 358 on 19th Sept. 2006)
The RMTL stock currently trades at 9x FY07E and 6x FY08E which we believe is attractive. We had recommended a BUY on 19th September 2006 at Rs385 and from there the stock has moved up by 55%. We continue to remain positive on the stock and believe RMTL stock still has good potential upside from this level and so we maintain a positive bias on the RMTL stock and re-iterate a BUY with revised target price of Rs 944 based on DCF approach, which will give an upside of 58% from current level. At our target price the stock would trade at a P/E multiple of 9x on FY08E earnings.