Tuesday, April 28, 2009


CIPLA has broken out of its big consolidation and it may even challenge it’s All Time High at Rs 305 in near future.

BUY CMP Rs 244 FOR TARGET Rs 285-288/305 STOP LOSS Rs 220

Cipla Can Supply Generic Tamiflu - http://online.wsj.com/article/SB124081957359658695.html?mod=googlenews_wsj

Swine flu is the last thing the fragile global economy needs - http://www.business-standard.com/india/news/swine-flu-islast-thingfragile-global-economy-needs/356432/
World Braces Amid Swine Flu Fears
THE EVENT: The World Health Organization raised its swine flu pandemic alert level from 3 to 4 late Monday, saying the virus was now widespread and was being transmitted in a sustained way between people.

THE IMPACT SO FAR: The death toll in Mexico's influenza outbreak has risen to 149, with 20 being confirmed as swine flu, of about 2,000 possible cases. The virus has sickened victims from the U.S. to New Zealand, with New York City Mayor Michael Bloomberg saying more than 100 students at a parochial school in Queens contracted an illness that was probably swine flu.

The WHO and Centers for Disease Control and Prevention now say 40 Americans are confirmed to have had the swine flu, double the number of confirmed cases a day earlier.

Canadian officials have confirmed six cases. Spain has confirmed one case and is looking at 16 others. France, Belgium and Ireland also are looking into suspicious cases.

POSSIBILITIES OF PANDEMIC: U.N Secretary-General Ban Ki-moon warned the virus could unleash a new global pandemic. The Red Cross and Red Crescent said its national societies around the world were on full alert to tackle the outbreak. U.S President Barack Obama said the outbreak is cause for "concern" but not "alarm."

The WHO also said that a pandemic wasn't inevitable and didn't recommend that countries try to control travel or close their borders.

U.S. GOVERNMENT REACTION: U.S. health officials warned the public Monday to brace for more cases of swine flu and even possible deaths. The U.S. has declared a health emergency and is expected to warn against taking "nonessential" trips to Mexico.

TAKING MEDICAL STEPS: The European Commission is in contact with the vaccine industry to ready supplies of vaccine for any outbreak there. The Association of Southeast Asian Nations has distributed 500,000 doses of flu drugs to 10 member states. China and Russia made plans to quarantine anyone with symptoms. Meanwhile, the U.S. Food and Drug Adminstration has authorized certain emergency uses of antiviral desks and tests in a bid to hasten possible remedies.

BANNING PORK IMPORTS. The WHO said there is no sign the flu spreads by contact with meat. However, China and Thailand have banned hog and pork product imports from Mexico and the U.S., while Russia banned meat imports from those countries and Indonesia banned all pork imports.

MARKETS: The outbreak triggered anxiety in financial markets. U.S. stocks fell as the scare weighed on the transportation and hospitality sectors and major meat producers. The Dow Jones Industrial Average lost 0.64%, the S&P 500 declined 1%, and the Nasdaq Composite lost 0.88%. Treasurys ended higher in volatile trade.

Mexico's stocks and peso fell sharply, with the stock market's IPC index of 35 most-traded issues closing down 3.3%. Other Latin American currencies also sold off sharply. European markets rallied late to close higher. Most Asian markets ended lower.

Commodity prices were down sharply across the board, pressured by concerns over the swine-flu virus. Hog prices have been most affected by the concerns, while cattle markets were down less dramatically. Grain and oilseed futures were also lower.

The following are key stories so far on the outbreak:

-WSJ: WHO Raises Swine Flu Pandemic Alert Level One Notch To 4

-WSJ: Flu Fears Give Drug Makers Shot In Arm

-WSJ: FDA Authorizes Emergency Use Of Drugs In Swine-Flu Outbreak

-Mexico Health Min: Mexico Influenza Death Toll Rises To 149

-UN's Ban Warns That Swine Flu Could Bring World Pandemic

-Mexico's Stocks, Peso Suffer From Flu Worries; IPC -3.3%

-Agencies See No Swine Flu Rating Impact On Mexico Yet

-WSJ: NY Mayor: 100 Students In Queens May Have Swine Flu

-Influenza Epidemic Likely To Add To Mexico's Economic Woes

-Swine Flu Threat Undercuts Rationale For $50-A-Barrel Oil

-S&P: Swine Flu Outbreak Could Have SARS Effect On Airlines

-Obama: Swine Flu A Cause For Concern, Not Alarm

-Asean Distributes 500,000 Courses Of Flu Antivirals To Members

-Argentina Free Of Swine Flu; Monitoring Travelers

-Manila Mayor: Would Be 'Overreaction' To Bar Mexico Travelers

-Nasdaq OMX Cancels Mexico Travel As Exchanges Trigger Contingency Plans

-WSJ:3M Boosts Production Of N95 Masks In Response To Swine Flu

-USDA's Vilsack Tells Trading Partners Not To Ban US Pork

-Belgium Investigating 6 Possible Cases Of Swine Flu

-Ireland Tests Four Suspected Cases Of Swine Flu

-Chile Pres Says Country Prepared To Deal With Swine Flu

-Brazil's President Downplays Swine Flu, But Govt Vigilant

-BIG PICTURE: Swine Flu Should Not Worsen Economy's Problems

-HEARD ON THE STREET: Weakened Economy Vulnerable To Flu

-US Congress Applauds Early Response To Swine Flu

-EU Sets Thursday Swine Flu Emergency Meeting

-Canada Expects More Swine Flu Cases,Possible Deaths

-Canada Unlikely To Impose Controls On US, Mexico Hog Imports

-More Cases Of Potential Swine Flu Detected In Spain, One Confirmed

-French Health Ministry: 4 Potential Swine Flu Cases Suspected

-No Signs That Pigs In US Have Swine Flu

-EU Official: Swine Flu Not Affecting Food Chain, Pigs Not Carriers

-Lebanon Bans Pork Imports Over Swine Flu Fears

-EU Health Chief Recommends Travelers Avoid Swine Flu Regions

-Airlines, Agencies Step Up Swine Flu Vigilance

-Indian Government Says Free of Swine Flu, Warns Travelers

-Novartis In Talks With WHO To Develop Swine Flu Vaccine
(Source: DJ)

Thursday, April 23, 2009

Indian IT sector to grow to $225 billion by 2020 news
(Source: Domain-b) (Highlights of the report posted below this article)
Although the Indian IT industry has grown from $2 billion in export revenues in 1998 to $47 billion today, it has the potential to generate revenues of $ 225 billion in 2020 if the industry.

Releasing it s Perspective 2020: Transform Business, Transform India yesterday, based on extensive research conducted over a year by McKinsey & Company, the IT and ITeS trade body said that the next decade will be fundamentally different from the last one, owing to a radically restructured global economy, rapidly evolving customer needs, services and business models.

The IT trade body suggested, that if the industry and the government should take specific measures over the next 12 years to realise these opportunities.

Nasscom says that most incremental revenue growth by 2020 will be driven by opportunities outside of the current core markets, verticals and customer segments, and the industry needs to redefine its value proposition to capture these.

The report defines new verticals such as the public sector, healthcare, media and utilities while the new customer segment as small and medium businesses (SMBs) and the market for these are the BRIC, GCC, Japan and Rest of the World.

If the Indian IT industry can tap these segments in the international market, the export revenues can grow from $47 billion today to $175 billion by 2020 while the revenues from the domestic market can be increased four-fold, from $12 billion in 2008 to $50 billion by 2020.

The report says that the evolved landscape of 2020 will present transformational opportunities for the Indian technology and business services industry, where India will emerge as a top three global innovation hub with a focus on clinical research, mobile applications and energy efficiency/climate change solutions.

Som Mittal, president, NASSCOM, said, ''The Indian IT industry is in the midst of unprecedented times because of the current economic environment. We expect the next few quarters to be extremely challenging with companies doing everything required to effectively overcome the challenges. As we continue to address the present situation, we also need stay focused on the opportunities being created by the megatrends underway. India's value proposition remains strong for sustained long term growth.''

Although predicting a rosy picture for the future of the Indian IT industry, the report says that four major challenges of employability, infrastructure, favourable policies and competition from other low cost countries still exists.

The major bottleneck for IT growth in India is that the country has only 10-15 per cent employable graduates in business services and 26 per cent employable engineers in technology services.

The lack of a supportive fiscal environment with a long-term policy framework is also leading to competition from other low-cost countries including China, Philippines and from Eastern Europe with potential erosion of the India opportunity.

Outlining the challenges ahead for the Indian IT industry, Noshir Kaka, Director, McKinsey & Company said ''While the industry has the potential to generate revenues of $225 billion in 2020, a portion of this opportunity is at risk if continuing problems are not tackled soon.''

''Since 40 per cent of previous priority initiatives, especially structural changes e.g. tertiary education reform, have not been implemented yet, employability remains low as a result. Other areas of public infrastructure and business environment also need a concerted effort to ensure that India's long-term opportunity isn't lost to other competing global destinations,'' he added.

Ranjit Tinaikar, Partner, McKinsey & Company said, ''Success for the industry requires an action plan anchored on a five-fold vision. It is imperative that all the stakeholders work in close collaboration and drive swift and sustained reforms in all critical areas.''

Wednesday, April 15, 2009

News Update 15-Apr-2009:-
India’s monsoon, critical to the nation’s $240 billion agricultural economy, is likely to be near normal this year, encouraging planting and helping to counter the slowest economic growth in six years. The state-run India Meteorological Department will probably predict average rain when it releases its annual monsoon forecast on April 17, said two government officials familiar with the situation who declined to be identified because the information isn’t yet public. The outlook is among the nation’s most widely watched indicator because its 235 million farmers represent about 20 percent of the $1.2 trillion economy.

Economic think-tank Centre for Monitoring Indian Economy (CMIE) has said that the demand for steel has improved and the trend will continue in the current fiscal. “The ongoing government funded infrastructure projects during the peak constructio n season, a slight revival in the automobile industry and a sharp 40-45 per cent correction in steel prices from the peak level of July 2008 spurred the demand for the commodity,'' the CMIE said in its monthly review of the Indian economy.

Steel Authority of India posted a 4 per cent rise in sales volume in March from a year earlier, Steel Secretary Pramod Kumar Rastogi said on Wednesday.

Hyderabad-based Natco Pharma Limited has entered into an agreement with Dr Reddy's Laboratories Limited for the development, manufacture and supply of a basket of value-added generic oncology drugs. The products selected under this collaboration include currently selling oral and injectable innovator products, which have multi-million dollar sales across the globe. One of the products is Paclitaxel, which is a generic version of Abraxane, Natco stated in a press release.

To restructure projects that failed to attract bidders, the National Highways Authority of India plans to invite fresh bids for 38 highways proposals in the next quarter. "NHAI is restructuring these 38 projects to make them lucrative for bidders in the wake of the global economic slowdown. The projects after re-designing are likely to be valued between Rs 45,000 crore and Rs 50,000 crore," an official told PTI.

Mumbai based information technology service provider 3i Infotech said that it had repurchased a part of its foreign currency convertible bonds. The company in a note to Bombay Stock Exchange said that it bought back $17 million worth of bonds out of $100 million bonds and 1 million Euro bonds out of 30 million bonds due in 2012. Both are zero coupon bonds said the company in the note.

Reliance Communications (RCom) has added around 11.3 million new subscribers in the January-March quarter, increasing its total subscriber base to 72.6 million by the March end.

Larsen & Toubro (L&T), India's largest engineering and construction company, said it had signed an agreement with Russian company Atomstroyexport (ASE) for co-operation on nuclear power reactors.

India’s largest lender State Bank of India today said that it is considering a cut in its Benchmark Prime Lending Rate (BPLR) in light of soft interest rate regime. State Bank of India had reduced its BPLR Rate by 75 basis points from 13.00 per cent to 12.25 effective from January 01, 2009. It has also launched special home loan scheme with an eight per cent interest rate which remains fixed for one year.The priority sector customers are enjoying cheaper credit so also companies who get credit at market linked rates, he added.

Software services major Infosys Technologies today said its cash and cash equivalents stood at over $2 billion at the end of last fiscal in spite of credit crisis worldwide. "The cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on March 31, 2009 were Rs 10,993 crore," a company statement said.

Annual inflation rate is forecast to have turned negative for the first time in early April due to weak economic activity and last year's surge in prices, a Reuters poll showed. The median forecast of 12 analysts is for a fall of 0.18 per cent in the wholesale price index in the 12 months to April 4, down from a 0.26 per cent rise the previous week.

Reliance Communications said on Wednesday it will launch a tender offer to buyback foreign currency convertible bonds (FCCBs) at a discount, subject to central bank approval. The company said in a statement $950 million of FCCB bonds were outstanding from $1 billion issue set to mature in 2012. It said it had already repurchased $40 million of the bonds.

Recent developments in our pending buys:-
3i Infotech said that it had repurchased a part of its foreign currency convertible bonds. The company in a note to Bombay Stock Exchange said that it bought back $17 million worth of bonds out of $100 million bonds and 1 million Euro bonds out of 30 million bonds due in 2012. Both are zero coupon bonds said the company in the note. http://www.business-standard.com/india/news/3i-infotech-buysback-fccbs/58599/on
Official Announcement
Original posting on 3i Infotech:- http://tanmaygopal.blogspot.com/2009/04/3i-infotech-httpwww.html
McDowell (United Spirits):-
United Spirits Ltd has informed BSE regarding a Press Release dated April 14, 2009 titled "United Spirits Ltd sells 90 million cases in 2008-2009; Narrows the gap to the No 1 position in the global spirits market". The company has sold 90 million cases in 2008-09, a 20% volume growth over previous year.
Link for the Press Release:- http://www.4shared.com/file/98692196/3579ea95/United_Spirits_Ltd_140409.html
Original Posting on McDowell:- http://tanmaygopal.blogspot.com/2009/04/mcdowell-showing-triangle-formation.html

Tuesday, April 14, 2009

3i Infotech
3i Infotech (promoted by ICICI Bank, current stake 39%) is a global Information Technology company which provides technology solutions to over 600 customers in more than 50 countries across 5 continents, spanning a range of verticals - Banking, Insurance, Capital Market, Mutual Funds, Government, Manufacturing and Retail. 3i entered the transaction BPO area in US after acquisition of Regulus in April 2008, 10 clients from Regulus are now in top-20 clients of 3i). So the company earns revenues through products, IT services and transaction BPO also.
3i Infotech has pending order book of Rs 1419 Cr as at Dec-2008, orders mainly from South Asian market followed by USA. The revenues have become more diversified. Being a promoter, ICICI Bank was the top client of 3i in 2005 with 26% share of revenues but that share has fallen to 8% in 3rd quarter of FY09, indicating low dependence on a single client.
The company has undertaken 3 new initiatives – Kiosks (E-governance), Taxsmile and Elegon (JV in China); all expected to break-even in FY10.

Growth ahead:-
3i has grown by more than 60% in FY05 through FY08 and further towards FY10 the revenues can grow by more than 20%. Trailing twelve month EPS = Rs12. By most conservative estimates, 3i is expected to post EPS of Rs 14 in FY10, while aggressive estimates take that EPS to Rs 23. Even at Rs 14, 3i trades around 2.85 times at CMP of Rs 40.

Face value=Rs 10 Equity = Rs 130 Cr B.V= Rs 49.30 Cash = Rs 200 Cr

FCCBs a concern:-
3i has FCCB worth Euro 30mn and US $100 mn trading at discount on Singapore Exchange. Already it has bought back Euro 3mn and US$ 8.1mn worth of FCCBs i.e. around 10% of total. These bonds are due for redemption latest by July 2012. More buyback will be a fresh upside trigger for the stock.

Technical Evaluation:- CMP Rs 39.50
3i Infotech is rising in up-channel with good volumes. The stock has very good support near Rs 33-35 levels and on the upside it can reach Rs 51-53. Buy at current levels as well as accumulate in dips.

Saturday, April 11, 2009

News Update (11-Apr-2009):-
SBI, IDBI Bank cut deposit rates
The country’s largest bank, SBI, on Thursday cut deposit rates across various tenures by 25-50 basis points (100 basis points equal one per cent).
Another PSU lender IDBI Bank also announced a similar reduction in deposit rates and a 50 basis point cut in benchmark lending rates meant for its best customers.

Obama sees 'glimmers of hope' in economy
US President Barack Obama said on Friday the recession-hit U.S. economy was showing "glimmers of hope" despite remaining under strain and promised further steps in coming weeks to tackle the financial crisis. "We've still got a lot of work to do," Obama told reporters after a meeting with economic and regulatory teams plus Federal Reserve Board Chairman Ben Bernanke. But he added, "We're starting to see progress."

US budget deficit nears $1 trillion: Treasury
The US budget deficit accelerated in March to hit a record nearly one trillion dollars in the first half of the current fiscal year as the government moved to bail out troubled institutions, government data showed. The deficit for the first six months of the fiscal year which began on October 1 was $956.80 billion, said the Treasury's monthly statement of receipts and outlays.

India Inc raises Rs 31k crore via rights issue in 2008
Corporate India mopped up an impressive Rs 31,069 crore via rights issue in 2008, a two-fold rise over the previous year, as fund
raising from the debt market and through IPOs dried up amid the global economic crisis. During the calendar year 2008, funds amounting to Rs 31,069 crore were raised through rights issue, up two-fold over the last year's figure of Rs 14,085 crore, as per data compiled by brokerage firm SMC Capital.

Wanbury eyes Rs 1,000cr revenue by 2011-12
Pharma company Wanbury said it has set a target of Rs 1,000 crore revenue by 2011 and 2012 and is eyeing half of it to come from contract research and manufacturing services (CRAMS) business.

Domestic insurance cos pump Rs 53,000 cr in equity markets
Domestic insurance companies’ investments in equities rose sharply during the fiscal ended March 2009; their net purchase of equity rose 70 per cent during this period. They were net buyers of equity for Rs 53,000 crore in the fiscal year ended March 31, 2009; against Rs 31,000 crore in the previous fiscal, data collated from the SEBI and BSE Web sites indicated.

Japan unveils $150 billion stimulus plan
Recession-hit Japan unveiled its largest-ever stimulus package of $150 billion to turn around the world's second largest economy. The 15.4 trillion yen package, the largest-ever size for a single extra budget, equivalent to nearly 3 per cent of Japan's GDP, is aimed to ward off further economic deterioration, protect people's livelihoods and foster future growth, Prime Minister Taro Aso said.

Suzlon to foray into South Africa, expand in South America
Wind power equipment maker Suzlon Energy said that it would start operations in South Africa and expand in South America, where the company has a presence in Brazil. "We will expand our operations to 3-4 countries... In South Africa and South America... We have just started in Brazil. We are looking at Canada as another potential country," Suzlon Energy CMD Tulsi Tanti told PTI.

Tata Steel expects 20% jump in sales this fiscal
The domestic steel market is likely to grow 4-5%, but Tata Steel expects to increase its sales by almost 20% this year due to the premium on its products and the quality of its service.

Tata Steel targets 1 bn pound in cost savings at Corus
Tata Steel is targeting £1 billion in cost savings at its UK subsidiary, Corus, during FY’10 in a bid to tide over the ongoing global recession. The company has already managed to achieve some £650 million in cost savings upto March 2009.

Tata Steel to begin production in South Africa next year
Tata Steel said it will begin production at Sedibang mine in South Africa from next year. "A small iron ore mine at Sedibang in South Africa will begin production next year. We would get two million tonnes per annum," Tata Steel managing director B Muthuraman said.

Aditya Birla in talks with 3i to sell insulators business
The diversified Aditya Birla group is in advanced negotiations with the UK-based buyout firm 3i to sell its electrical insulators business. A person close to the negotiations said the race for the acquisition of Aditya Birla Insulators, a part of Aditya Birla Nuvo, has narrowed down to one bidder, 3i, with other suitors, including Bain Capital and Carlyle, withdrawing from the fray.

Maruti plans diesel variants of SX4, Ritz
The success of diesel variants of Swift and DZire models, which have a waiting list of months, has propelled passenger car maker Maruti Suzuki India (MSI), which makes every second car sold in India, to introduce diesel engines in its other cars, a senior company official said.

Infosys fires 2,100 for poor performance
Infosys Technologies has fired 2,100 people across the country, after an annual performance appraisal exercise concluded mid-March. TV Mohandas Pai, head of the company's HR, told TOI that based on the performance, 2,100 employees had left Infosys. "The tolerance for non-performance has come down to zero," said Pai.

Indian IT industry to help in US economic recovery
India's information technology industry should start hiring in the US to help in its economic recovery as the US is always going to be its biggest market, the industry association's head has suggested. The restrictions on H1B visas in the US "absolutely is a concern," Pramod Bhasin, president and chief executive of outsourcing firm Genpact and the new chairman of the National Association of Software and Services Companies (Nasscom), said in an interview with Forbes Asia.

Thursday, April 09, 2009

Buy Tata Tea CMP Rs 596. The stock can target Rs 650-660. Keep Stop Loss at Rs 570.

Wednesday, April 08, 2009

McDowell showing TRIANGLE formation. Buy at CMP Rs 666 for targets Rs 720/765/900. Keep Stops below Rs 625 as that will break down the triangle.

Tuesday, April 07, 2009

News Update 07-April-2009:-

Tata Steel sales up 45% in March

Tata Steel has recorded a 45 per cent increase in sales in March 2009 to 6,96,000 tonnes from Jamshedpur Works, as compared to 4,79,000 tonnes in March 2008.

RCom to open 82 stores in Punjab
Reliance Communications today said it will open 82 new exclusive mobile stores in Punjab as part of its expansion programme.

NMDC exceeds production target for 2008-09
State-run mining giant NMDC has surpassed the production target set by the government for 2008-09 even as its sales volumes dipped over six per cent amid reduced intake by the steel sector, a top official said. As against the MoU (memorandum of understanding) target of 28.4 million tonnes for the fiscal that just ended, the Navratna PSU produced 28.9 million tonnes of iron ore, Steel Secretary P K Rastogi told PTI.

Tata Motors to set up CV plant in Myanmar
India's largest auto maker Tata Motors today said it will set up a heavy truck manufacturing facility in Myanmar with a capacity of 1,500 units a year.

Swiss banks held securities worth $3.35 trn in 2008
At a time when crackdown on tax havens have acquired a political colour, data shows that Swiss banks held securities worth $3.35 trillion in 2008, with over half managed on behalf of foreign entities.

PowerGrid to borrow $2 bn from World Bank, ADB
Central transmission utility PowerGrid Corp today said it will borrow $2 billion (about Rs 10,000 crore) from the World Bank and Asian Development Bank to part finance Rs 55,000 crore investment plans till 2012.

V-Guard opens two new facilities
Electrical goods manufacturer, V-Guard Industries Ltd today announced the opening of two new cable factories, one each in Uttrakhand and Tamil Nadu, set up with a total investment of Rs 45 crore.

Essar Steel to start production from Minnesota plant by 2011
Ruias-led Essar Steel plans to start the first phase of production from its proposed $1.1 billion steel plant at Minnesota in the US by 2011, company sources said. http://www.business-standard.com/india/news/essar-steel-to-start-productionminnesota-plant-by-2011/58169/on

BHEL's southern power unit to double investment
Power Sector Southern Region (PSSR), a unit of state-run Bharat Heavy Electricals Ltd (BHEL), will more than double its investment in 2009-10 for purchasing high-capacity cranes and heating equipment.

Infosys to work as consultant for Rajasthan power cos
Rajasthan government-run power companies have appointed IT major Infosys as consultant for implementing centre-funded Restructured Accelerated Power Development and Reform Programme (R-APDRP) in 87 cities across the state under the 11th Five-Year Plan.

India for three-fold increase in IMF equity
India pitched for tripling the International Monetary Fund's (IMF's) equity to SDR 650 billion (about USD 975 billion) to empower the multilateral funding agency to play an effective role in pulling the global economy out of the current crisis.

Deposits with SBI zoom post Lehman collapse
The Reserve Bank of India numbers show that SBI Group's share of bank deposits jumped from 23.2% in end-September 2008 to 24.4% in end-December 2008. The enormity of the gain in market share becomes clear when viewed in context of the overall deposit base of Rs 35,69,352 crore, as on end-December.

Cos may land a windfall from FCCB buybacks
Ever since the Reserve Bank of India allowed Indian companies to buy back FCCBs in December 2008, a dozen companies have redeemed such bonds worth $340 million at deep discounts to the conversion price. As in the case of Moser Baer, these companies also will earn twin benefits from FCCB buyback. When they pay off a loan at a discount, they earn a substantial one-time gain. Also, they need not carry the mark-to-market losses for the redeemed FCCBs.


The company is in the business of construction as well as operation of major road projects. These not only include funded projects for major bodies like NHAI, MSRDC, PWD and various municipal corporations but their own BOT projects also. All in all, so far, the company has constructed & maintained (Includes EPC, O&M & BOT projects) more than 1200 km of roadways.

Projects done:-
Mumbai-Pune Expressway, Bharuch-Surat and Surat-Dahisar are the prestigious projects done by IRB. Other projects include Thane-Bhiwandi Bypass, Bhiwandi Wada, IRDP-Kolhapur, Thane-Ghodbunder, Pune-Nashik and Pune-Solapur on BOT basis. IRB has 1400 acre of land in Pune for Commercial and residential development in future. The company will enjoy toll revenue sharing as long as it has Concession Rights:- Thane-Bhiwandi Bypass 18 years, Mumbai Pune Expressway 15 years, Pune-Nasik 18 years, Pune-Solapur 16 years, Thane Ghodbunder 15 years, Bharuch-Surat 15 years, Surat-Dahisar 12 years. (Bharuch-Surat expected to become operational by July’09, Surat-Dahisar already operational this year)

IRB is the largest toll road operator in India with 650 km of toll road under its control. Toll-road operation is a more profitable business than simple construction as margins are higher in toll-collection. IRB, in its agreement with Government about toll-sharing, has provided for gradual increase in toll rates, which will keep the revenue stream secure and strong for the company.

The stimulus packages from Indian Government have started working and that is already seen by Auto sales in Jan-Feb-March 2009. With increasing vehicles on the road, toll collection looks like a very profitable phenomenon. Any new government will try to improve the road-network in India by laying more roads and having more expressways, Infrastructure is a must for Indian growth story and IRB looks very well positioned to capitalize on it.

Technical Outlook:-
CMP Rs 94 All time high- Rs 222 All time low- Rs 64
IRB Infrastructure is in a down-channel and trading high volumes. It can reach Rs 120-125 on the pullback which can happen in less than a month.
Medium-term target can be Rs 160. Short-term players can keep Stop Loss at Rs 84 levels. Investors have to accumulate this stock for handsome appreciation and they can look for Rs 210 in a year’s timeframe.
More about the company through brokers’ reports:-
IRB on road to growth: http://www.dnaindia.com/report.asp?newsid=1241570

Friday, April 03, 2009

Demand for Gold hampering:- India has not imported ANY Gold in Feb and March 2009. Weak Indian Rupee and rising price of Gold in international market has taken a toll on Indian importers in a double-whammy; it is visible through statistical evidence also. Last year, Indians imported 23 and 21 tonnes respectively in same months. Wedding season has already started and still there is no sign of revival in demand for Gold.
According to WGC (World Gold Council) statistics, demand for the yellow metal in India has slumped by nearly 50% to 102.1 tonnes in the first quarter of calendar 2008, compared to 202.2 tonnes in the corresponding quarter of 2007. Even during the peak season of December 2008-February 2009, consumers had postponed their purchases because of high prices.

Technical Outlook:-
Gold was rising nicely in an up-channel which continued from Mid-November'08 till late March'09. The yellow metal did trade above $1000 for some time but now looks like being distributed near that resistance. The up-channel has also broken down and once support at $880-885 gives away, test of $790-800 looks possible.

India Gold imports fall to "Zero" http://www.bloomberg.com/apps/news?pid=20601091&sid=akXBle8f19ek&refer=india
Wedding season demand weak for Gold http://www.business-standard.com/india/news/wedding-season-gold-demand-to-remain-weak/353643/
Previous post on Gold: http://tanmaygopal.blogspot.com/2009/03/dear-all-gold-is-showing-topping-in.html

Wednesday, April 01, 2009

AXIS BANK looks in up-channel. CMP Rs 410. The stock can reach Rs 475-480 levels. Mild resistance at Rs 445 but it should be cleared in near future. Rs 375-385 is strong support and view will be negated if trades below this zone.