Scientists are rediscovering the uncharted terrain of Mercury, including ridges that run hundreds of miles and a unique feature made up of more than 100 troughs radiating in all directions, while studying new data and images of the planet.
The new images were captured by the National Aeronautics and Space Administration's Maryland-built Messenger spacecraft that zipped past the solar system's smallest and closest planet to the Sun.
''This flyby allowed us to see a part of the planet never before viewed by spacecraft, and our little craft has returned a gold mine of exciting data,'' Messenger's chief investigator from the Carnegie Institution of Washington, Sean Solomon, said.
''From the perspectives of spacecraft performance and manoeuvre accuracy, this encounter was near-perfect, and we are delighted that all of the science data are now on the ground,'' the New York Times quoted him as saying.
Investigators found Mercury a very dynamic planet, with active volcanos and magnetosphere. The craft discovered an odd feature that scientists dubbed as 'the spider'-- more than 100 narrow, flat-floored troughs radiating from a complex central region never before seen on either Mercury or the moon. The crust of the planet appears to have been pushed upward and cracked from a central point, like a pane of glass.
It is, however, not clear whether that crater was related to the original formation or came later. About 55 per cent of the planet's surface, half of which is always facing the sun, is unknown.
The images and data provided a topographic profile of craters and other geological features on Mercury's dark side, NASA said!
Thursday, January 31, 2008
PowerGrid results out!!
Power Grid Q3 net profit at Rs 384.3 cr
Power Grid has declared its third quarter results. Its net sales were at Rs 1085.8 crore versus Rs 1034.4 crore, YoY.
Its net profit was at Rs 384.3 crore versus Rs 371.2 crore, YoY.
Result (Rs cr) Dec-07 Sep-07
Net Sales / Interest Earned / Operating Income 1086 1034
Other Income 108 74
Total Income 1194 1108
Expenditure -198 -177
Interest -279 -261
Profit Before Depreciation and Tax 718 670
Depreciation -250 -230
Profit before Tax 468 441
Tax -84 -69
Net Profit 384 371
Equity Capital 4209 4209
Power Grid has declared its third quarter results. Its net sales were at Rs 1085.8 crore versus Rs 1034.4 crore, YoY.
Its net profit was at Rs 384.3 crore versus Rs 371.2 crore, YoY.
Result (Rs cr) Dec-07 Sep-07
Net Sales / Interest Earned / Operating Income 1086 1034
Other Income 108 74
Total Income 1194 1108
Expenditure -198 -177
Interest -279 -261
Profit Before Depreciation and Tax 718 670
Depreciation -250 -230
Profit before Tax 468 441
Tax -84 -69
Net Profit 384 371
Equity Capital 4209 4209
Unitech results out!!
Unitech Q3 net up 39.2% at Rs 525.8 cr
Unitech has announced its third quarter numbers. It has posted consolidated Q3 net profit of Rs 525.8 crore as against Rs 377.8 crore, a growth of 39.2%
Net sales increased by 18.7% at Rs 1142.1 crore versus Rs 962.3 crore. OPM stood at 64.3% versus 64.6%. Tax declined to Rs 131 crore from Rs 209 crore.
According to CNBC-TV18 estimates, it was expected to post net sales of Rs 1,179.4 crore and net profit of Rs 448 crore.
Unitech has announced its third quarter numbers. It has posted consolidated Q3 net profit of Rs 525.8 crore as against Rs 377.8 crore, a growth of 39.2%
Net sales increased by 18.7% at Rs 1142.1 crore versus Rs 962.3 crore. OPM stood at 64.3% versus 64.6%. Tax declined to Rs 131 crore from Rs 209 crore.
According to CNBC-TV18 estimates, it was expected to post net sales of Rs 1,179.4 crore and net profit of Rs 448 crore.
Results Calendar
Results Calender
ABB 19-Feb-08
ABB 31-Mar-08
Advent Computer 05-Feb-08
Ambuja Cements 01-Feb-08
AstraZeneca 25-Feb-08
Castrol 31-Mar-08
Dwarikesh Sugar 01-Feb-08
Esab India 31-Mar-08
FAG Bearings 14-Feb-08
Federal-Mogul 31-Mar-08
Lanxess ABS 19-Feb-08
MICO 06-Mar-08
Patni Computer 06-Feb-08
Plethico Pharma 31-Mar-08
Power Finance 06-Feb-08
Shri Lakshmi Co 01-Feb-08
Swasti Vinayaka 31-Mar-08
Timken 22-Feb-08
TVS Srichakra 30-Jun-08
ABB 19-Feb-08
ABB 31-Mar-08
Advent Computer 05-Feb-08
Ambuja Cements 01-Feb-08
AstraZeneca 25-Feb-08
Castrol 31-Mar-08
Dwarikesh Sugar 01-Feb-08
Esab India 31-Mar-08
FAG Bearings 14-Feb-08
Federal-Mogul 31-Mar-08
Lanxess ABS 19-Feb-08
MICO 06-Mar-08
Patni Computer 06-Feb-08
Plethico Pharma 31-Mar-08
Power Finance 06-Feb-08
Shri Lakshmi Co 01-Feb-08
Swasti Vinayaka 31-Mar-08
Timken 22-Feb-08
TVS Srichakra 30-Jun-08
RCOM results today..
Reliance Communication (RCOM) is to come out with its Q3 FY078 result. According to CNBC-TV18 estimates, the company in Q3 FY08 is expected to post net profit of Rs 1335.6 cr versus Rs 1304 cr, up 2.42% on QoQ basis. During the same quarters, its net revenues were at Rs 4975.21 cr versus Rs 4579 cr, up 8.65% on QoQ basis.
RCOM: Q3 expectations
* Wireless revenues expected to grow 11% QoQ ; Broadband to grow 11% QoQ, Global services by 2%
* ARPUs expected to decline by 2%; MOU expected flat
* Expect EBIDTA margins to remain flat
RCOM: Q3 expectations
* Wireless revenues expected to grow 11% QoQ ; Broadband to grow 11% QoQ, Global services by 2%
* ARPUs expected to decline by 2%; MOU expected flat
* Expect EBIDTA margins to remain flat
Wednesday, January 30, 2008
Outlook looks encouraging for Bharti Airtel
Bharti Airtel has declared its third quarter results. Its Q3 net profit was up at Rs 1,722 crore versus Rs 1,614 crore, QoQ. Its Q3 net sales stood at Rs 6,964 crore versus Rs 6,337 crore. Its OPM was at 42.6%.
Speaking to CNBC-TV18, the management said that the scale of GSM network will grow substantially over the next couple of years.
Bharti is not at a disadvantage to Reliance Communications with respect to spectrum allotment. They hope to reach an amicable solution on the spectrum issue. Bharti expects to be a major beneficiary in Indus Tower revenue plans.
Indus Tower will start delivering revenues from February 1.
Bharti's mobility is at 80% of revenues and margins at 42%. They will focus on affordability play across the country as a strategy. There is continued elasticity and demand in the market, they said.
Current margins are at 42.6% and they will look at sustaining margins at profit before tax. They expect to sustain current revenues and margin growth.
They expect some movement forward on the spectrum issue; Bharti needs more spectrum to ease pressure on growth and that interim spectrum allocation will support growth plans, they said.
Bharti Airtel, Akhil Gupta (Jt MD), Manoj Kohli (President & CEO), Sarvjit Dhillon (CFO, Dir-Strategy), Sanjay Kapoor (Pres - Mobile Services), Atul Bindal (President-Telemedia Services), David Nishball (President -Enterprise Services), speak to CNBC-TV18.
Excerpts from an exclusive interview with the management:
Q: 42.6% EBITDA margins what does work? Is it non-mobility, which has kicked in like last quarter?
Gupta: I think all segments are kicking in mobility as well as non-mobility and I have always maintained that this is a business where one can see scale benefit and we are clearly seeing that. So I think 42.6% pretty healthy.
Q: Record additions in this quarter and 64 lakh subscribers; strong momentum still continuing with net additions?
Kohli: We believe it’s been an outstanding quarter for us and market is sustaining high growth; market grew by 24 million customers, we grew by 6.4 million, overall the network growth has been dramatic. We have crossed 3,20,000 villages, 4,900 towns, our MOU (minutes of usage) has grown by 5 minutes, which means the elasticity of demand from customers has been very gratifying to our affordability strategy. So excellent market growth.
Q: Can you break-up the margin picture between mobility and non-mobility?
Dhillon: All of our businesses are growing as mentioned and mobility saw 80% of business, so we are seeing in excess of 42% margins and really driven by the growth and the market is growing and elasticity of demand is there. So mobility is leading it. Broadband and telephony we have exceeded 42% and now its 43%. So, all of our businesses are growing in that respect.
Q: Minutes of usage have gone up in this quarter, though ARPUs have slipped a bit. Do you see more divergence between the two and they are moving in the opposite directions, even going forward?
Gupta: I think this is likely to continue; this is a business where one must increase traffic. The recent massive cuts, which we initiated in the market in the outgoing rates are showing that the elasticity is there. There is more traffic and even though the rate per minute and the ARPUs do come down, we have always maintained that doesn’t have too much significance in our business.
Q: The market has been stirred up quite a bit with the Rs 1 plan that you have unleashed; first take us through the rationale of unleashing such a plan. Why did you have to do it?
Kohli: We believe as we go into rural India, which has a 700 million population, we need to bring affordability. As a brand leader in the country, I think we will lead the affordability platform; in this case, not only are we making it more affordable, we are also simplifying the proposition for the customer. Rs 1 local call across the board has been received very well within the last 4-6 weeks, we have seen traffic grow very well and customers have responded well especially in the rural parts of the country.
I have personally been in the villages and I have seen customers being delighted about this change, so I think we are touching the hearts of the customers.
Q: What implications does this kind of a plan have on your operating margins in the foreseeable future?
Dhillion: Our business is based on volumes. This quarter, we have crossed 87 billion minutes on our networks, 10 billion minutes higher than last quarter and YoY 50 billion has gone to 87 billion. So clearly, the elasticity is coming through, as we go wider and deeper, we have an established fixed-cost base-price. That combination by itself is sustaining margins very well and we hope to see that continuing in the future. In the last quarter itself, we added about 15,000 sites. Our financials are observing all of this today and 42.6% margins is a very healthy situation, I think.
Q: You believe that even going forward, you can maintain this kind of a margin profile with the aggressive plans that you are launching?
Gupta: First of all, one needs to define what a margin is. To my mind, EBITDA margin has been misused and taken for too long, because I look at margins as a profit before tax margin, that’s how this business should be looking at. For instance, from the next quarter, we would be converting as far as Bharti Airtel is concerned, a lot of capex into opex with the formation of Indus Towers and Bharti Infratel, so the passive infrastructure is going out. So I do believe that the profit before tax, which is the real margin we will track, I think that should be sustainable for sure.
Q: You think so?
Kohli: I am sure it will, I agree with Akhil Gupta that now it is the issue of revenue and net profit before tax and I think our margins on net profit before tax should show a positive trend, because our economies of scale, efficiencies are improving, our cost structure definitely is getting linear, so we should see that improvement.
Q: What is happening on the spectrum front, market is very worried between one-month back and now has the situation changed at all?
Gupta: I have to be a bit constrained about what we say on spectrum since the matter is subjudiced. I think the big debate is out in the open, a lot has been said and written, so I do not think individual players should start commenting, but all I would say is that there is some movement forward with the TRAI norms. We are getting spectrum in ten circles, we should get entitled to a few more circles within the next couple of months. I think things are moving forward and we always maintained that every time there are controversies like this, at the end of the day, you do come to a solution, which is amicable and fair to all concerns.
Q: What is your expectation, when will you get more spectrum for a market like West Bengal, for example?
Kohli: We have been entitled with spectrum in ten markets including West Bengal. So our capacities will improve, our quality of networks will further improve and I think this will set us up well for next year’s growth.
Q: What about key markets like Delhi, Maharashtra, Tamil Nadu, Rajasthan?
Kohli: Many of these key markets have been covered in the ten entitlements we have.
Q: Adequate spectrum?
Kohli: Yes.
Gupta: Adequate is always a bit dicey; I think you can always do with more. We do believe that we should be getting more, but I think there is improvement, we are getting some that would ease the pressure in terms of the growth, which we have.
Q: What is the problem it raises, the metros where you need more spectrum or the non-metros?
Gupta: Namely, it is the major cities where there is more density, those are always more spectrum constrained.
Q: You are okay with the non-metros in terms of spectrum or is there a problem or availability issue that arise?
Kohli: They are CBD areas where we have intensity of traffic and that is where the problem is - in smaller towns. Villages, I think the situation is fine.
In the CBD area, we are investing more money in terms of more sites, more indoor solutions etc. which is helping.
Q: Let me put the question differently. You cannot answer what you will get, that’s for the regulators to decide, but on current reckoning, can you deliver this kind of growth for the next four quarters on current available spectrum or if you don’t get additional spectrum, this kind of growth will be throughout?
Kohli: We believe that interim allocation as per the TRAI norms will definitely support our growth plans.
Gupta: There is a relief as I said with the ten circles getting some more spectrum. There is a definite relief; whether this is ideal? Perhaps, no.
But we will find our way around and all I can assure is, we will not let this growth suffer whatever it takes.
Q: What outlook for margins do you have for the next three-four quarters, given the capex that you have planned?
Dhillon: Guidance is not something that we give. Having said that, our track records shows that with the growth that we are seeing and what was heartening in this quarter is that we grew revenues at 10% and a lot of that has flown through the bottomline obviously.
We do anticipate that we will continue with this kind of growth level. So without giving any guidance on that we hope that we will sustain at least where we are today.
Q: Do you think mobility margins can be held above 40%?
Dhillon: They have been tracking above 40% now for quite a well. Broadband and telephony also has crossed 40%, which is a tele media business. So on current going rate, we are anticipating that that should continue especially with the current volumes at over the next few years. India is very under penetrated, we are only at 27% penetration rates, so we have a long way to go.
Gupta: One thing to notice that from this quarter in fact from February 1, we will be moving on to the payment of passive infrastructure as a revenue item. This percentage on the EBITDA margin will obviously be affected; it will come down but as I said the profit before tax would improve, because Indus and Infratel will provide a massive advantage of cost not only to us but all the operators.
Q: Can you update us what’s happening with the tower business?
Gupta: The company has already being formed and we have got the demerger from the Delhi High Court. Indus Towers, which is a joint venture with Vodafone and Idea, is up and running. The revenue starts kicking into the company from February 1. So it’s absolutely on schedule. They are stepping up the deployment and we expect that we will be the major beneficiaries, because we will be able to penetrate deep down into India now.
Q: Any further plans to unlock value or ascribe a valuation, part stake sale etc. have you given it some more thought?
Gupta: We have already announced that we are raising a billion dollars, with it major investors coming in and there could be some more. But unlocking value is going to show in the business not in the valuation that’s a derivative.
Q: What do you mean by there could be some more?
Gupta: Could be some more investments.
Q: To raise a significant amount?
Gupta: Not too much.
Q: Nothing compared to a billion?
Gupta: Nothing compared to a billion.
Q: What do you make of this scepticism that you see with Bharti in the stock market? I know you cannot determine what the stock price would be, but you also sense that the stock is not outperforming the market in a significant way. What is your sense of the market’s apprehensions at this point?
Kohli: I believe the market needs to focus on data and facts and the data and facts clearly prove that the performance of the company is improving steadily. I think our topline has grown by Rs 630 crore, which is quite unprecedented, the minutes growth has been USD 10 billion higher than the last quarter, the momentum of growth has been capped in all the businesses, the broadband margins are unprecedented at 43%, enterprise business is picking up, spectrum allocations are taking place.
So in my view all these data points should be noted by stock market and I am sure they should be recognised in days to come.
Q: What is the problem, you must have noted that Reliance Communications has done much better as a stock; there is no divergence in reported numbers as such, why this divergence?
Gupta: I understand that in any sector, whenever there are some uncertainties - regulatory or otherwise - the markets are a little nervous. I think markets do like stability in terms of policies and regulation and my feeling is that as I said, we are optimistic that sooner or later there will be an amicable solution to this whole problem, which has arisen, I think that nervousness should go away. What happens to the stock market actually does not really matter too much, because it is dependent on so many other factors than your own performance.
Q: But on current reckoning, do you think the market is right in believing that R-Comm is in more advantageous position with spectrum issues than Bharti, because that is a feeling translating into stock prices?
Gupta: I definitely do not agree that we are at a disadvantage, I will not comment about any of our competitors because we have deep respect for all the competitors. But I am more confident than ever before that in the coming year definitely, we will not only sustain our leadership position, but actually improve it significantly.
Kohli: I believe that our commitment to GSM has been validated by this rush into GSM and the benefit Bharti will get will be higher than anyone else, because our scale in GSM networks is going to grow in the next couple of years. Our managing services innovation will give us great benefits.
The overall capex rates of GSM with GSM’s volumes growing in India will give us definite benefits. So I believe that the propensity to go towards GSM will benefit Bharti to some extent.
Q: You do not perceive any disadvantage in the market place competing with Reliance Communications?
Kohli: On market place, we are a strong execution machinery and I think we execute everyday, we have been in the market everyday.
Gupta: Reliance has already been there, it is not that they are new. They are already there, each one of these players and as I said we have deep respect for their abilities for all our competitors, but we are very confident that our leadership will actually widen the margins.
Q: Regardless of how this spectrum business finally pans out?
Gupta: Yes, as long as we keep doing our things right, I am sure we will keep up our leadership.
Q: I was asking Manoj Kohli about the Rs 1 plan; how is it working and what impact or penetration have you had so far?
Kapoor: If you really look at this quarter, there’s been stimulation on the new customers who have joined the bandwagon, 6.3 million is the highest we have ever done. The demand stipulated on the prepaid side of the business, where Rs 1 has done the trick with 15 million customers, who moved from almost Rs 2 plan to a Rs 1 domain and the percentage of the outgoing calls which went up. I think all three stipulated and did the magic and therefore an 11% growth that we have had, we grown 49% YoY basis and I think it’s been a stupendous quarter.
Q: What about margins on the mobility front?
Kapoor: Well sustained, we are sustaining over 40% for the last 4 quarters now and also the fact that we have grown 3.2% over the last one year is a phenomenal growth on the margins.
Q: There is a quite a bit of expectation on the DTH front, can you just give us the detail plans of the rollout?
Bindal: We are getting ready for a very impactful media launch. In the first half of the fiscal year, preferably the first quarter itself should see us get into the market with both our IPTV (Internet Protocol Television) a well as DTH offerings. We have got the license in place, we have got the 6 transponders in place, currently the plans are an effort to ensure that we have a plus one on almost all parts of the value chain, so we are excited.
Q: There are two well-entrenched players and there’s one other giant, which is getting in, what will you do to shake up the market to make your entry meaningful?
Bindal: To my mind, I think this market is just about to begun, the potential is huge, if one looks at the number of towns. For us the benchmark is what we have been able to do very successfully over the years with prepaid, which has really been underpinned by three things - the great brand, customer experience and a distribution expertise and strength. We believe that those three together should really help us in opening that market wide open. I don’t think competitive intensity is an issue at all there. I think to ensure each of these three aspects is really a plus one or plus two over everybody else that is.
Q: How are things on the enterprise front - international voice and data?
Nishball: I think on the international voice and data front, we have seen very good results in this quarter. The volume for international long distance continues to grow, so YoY we have about 50% increase in international long-distance volume.
International data actually is the thing that has grown the strongest, though we have seen a doubling of our international bandwidth for international private lines as well as internet services since the beginning of this year. A lot of that has happened in the last four months since we closed the i2i transactions where we took four ownerships of that cable asset.
Q: What about QoQ how do the numbers stack up?
Nishball: In QoQ we are seeing very good volume growth, I think about 17% on national long distance and 18% on international long distance. As I mentioned earlier, the international data business also has really hit the accelerator since their completion of the i2i acquisition.
Q: What are margins like on the enterprise front on this quarter?
Nishball: On the corporate side, we have very steady margins above 42% reported this quarter and about the same in the last quarter. So we are very steady on the carrier side, there is some market pressure as well, as I think a strategy which we are driving to increase volumes to drive unit cost and pass the benefits on to our customers, particularly since about 50% of our total carrier volumes is group traffic.
Q: Sustainable, you think a 42% margin profile?
Nishball: On corporate, yes.
Q: What’s happening on the broadband front? Can you update us?
Bindal: I think it’s been an excellent quarter in terms of the strategy flowing through to the results. We have expanded the margins nicely; we are now sitting at 43.4%, and yet another quarter where we delivered an incremental margin larger than the incremental revenue. So the revenue and the business efficiency flow is coming through. All this is coming because of the broadband penetrations very steadily moving up; we have moved that up almost by about 2% point; if one looks at our home segment and by more than 0.5% point across the entire population.
There is a huge focus on the SMBs, the small and medium size businesses have helped us to sustain the ARPUs so they have remained much the same in the same ballpark area. So it's an excellent business strategy flowing into execution where the focus is on classes and not masses; it's not that there is going to be a wide scale large expansion, but we want to niche target very specifically and sharply and then ensure that there is value being delivered to those.
Going forward, the broadband strategy is going to be delivered on the back of a technology upgrade. We've got 8 Mbps plans and others very nicely coming through. The SMB’s focus, which would become the one Airtel window where we would provide all the solutions and services to these customers and of course media as we talked about; I think that’s a future of telemedia.
Q: With the kind of aggressive plans you are rolling out now, how much do you expect to garner by way of incremental minutes of usage and how much will ARPUs take away from that growth you think, going forward?
Kapoor: If you look at our minute growth this quarter, it clearly has spelled out that there are segments in the market that are still elastic and we believe that some of the moves that we have made subsequent to the Rs 1 that we did on lifetime value is again going to touch another 15-16 million customers and one will see some impact of elasticity falling through. It will come across for sure.
Going forward, and as we go to rural India, we have sustained the minutes. Today about 24% of our base comes from rural India and incrementally about 35% of our customers come from rural India. But even going forward, I think the minutes have been sustained. So I guess that affordability story is carrying through usage increase even in rural India as we penetrate and proliferate.
Q: How much more will ARPUs comedown with these kinds of plans?
Kapoor: We have always believed that it’s not the ARPU game that we play. We believe in our three line graph and as long as that three line graph moves in the right direction, we are never worried. We believe that we are a minute factory and we concentrate both the realised price and the rate per minute that’s what matters to us.
Q: How worried are you in those markets where Reliance Communications will make its GMS foray?
Kapoor: It’s very interesting if one looks at our gap with the closest competitor today, the closest competitor is about 14 million customers away and if one looks at the same charts about two years back, the gap was much narrower. So the gap has only widened in the last few months or few quarters and I think that’s gone to our advantage and Reliance Communications has been in the GSM trade for a long time. So even in those markets, we have gained over the last many quarters.
Q: How do you see the carrier business shaping up? Did you see sustaining pressure there, which might eat away or erode your margins even more going forward?
Nishball: I think, the carrier business is really a business of scale, unit cost and coverage and really that is what we are focusing on. YoY 80% growth in terms of our national long distance volume, 50% growth on international and more than doubling of our international bandwidth for data. From a coverage stand point, we are now covering almost 70,000 km of fiber throughout the country. We have also increased a number of interconnections into the fixed line networks.
So we have grown by more than 150% this year, so as long as we are driving the volumes in unit cost and it is all flowing through to our revenue increase, even QoQ we are looking about 30% topline revenue increase, inspite of significant pricing pressure, I think we are very comfortable that we are achieving our carrier strategy.
Q: Can you give us a firm date for the DTH launch?
Bindal: Most definitely we are trying to target the first quarter of next year.
Q: That’s April to June, can you narrow it down a bit further for us?
Bindal: I’m afraid it won’t really be possible for me to go much sharper than that, but I think each and every part of that value chain is being planned and programmed right now.
Q: And it’s a big national launch?
Bindal: We would start with a focus launch, which would be national in terms of its width, in terms of numbers of cities that we choose, we would most definitely like to get it down absolutely right first and then roll it out. As one can well imagine, unlike the telecom network, you don’t have to roll that network out on a city by city basis. Once you have the transponders up in the sky, it’s really a function of the distribution chain in place and so on.
So from the capability and skill set point of view, we would be there from day one to roll it out nationally, but just purely from a rigor of strategy and ensuring that you get everything first time right. We may really have a slightly phased out approach and priorized approach.
Speaking to CNBC-TV18, the management said that the scale of GSM network will grow substantially over the next couple of years.
Bharti is not at a disadvantage to Reliance Communications with respect to spectrum allotment. They hope to reach an amicable solution on the spectrum issue. Bharti expects to be a major beneficiary in Indus Tower revenue plans.
Indus Tower will start delivering revenues from February 1.
Bharti's mobility is at 80% of revenues and margins at 42%. They will focus on affordability play across the country as a strategy. There is continued elasticity and demand in the market, they said.
Current margins are at 42.6% and they will look at sustaining margins at profit before tax. They expect to sustain current revenues and margin growth.
They expect some movement forward on the spectrum issue; Bharti needs more spectrum to ease pressure on growth and that interim spectrum allocation will support growth plans, they said.
Bharti Airtel, Akhil Gupta (Jt MD), Manoj Kohli (President & CEO), Sarvjit Dhillon (CFO, Dir-Strategy), Sanjay Kapoor (Pres - Mobile Services), Atul Bindal (President-Telemedia Services), David Nishball (President -Enterprise Services), speak to CNBC-TV18.
Excerpts from an exclusive interview with the management:
Q: 42.6% EBITDA margins what does work? Is it non-mobility, which has kicked in like last quarter?
Gupta: I think all segments are kicking in mobility as well as non-mobility and I have always maintained that this is a business where one can see scale benefit and we are clearly seeing that. So I think 42.6% pretty healthy.
Q: Record additions in this quarter and 64 lakh subscribers; strong momentum still continuing with net additions?
Kohli: We believe it’s been an outstanding quarter for us and market is sustaining high growth; market grew by 24 million customers, we grew by 6.4 million, overall the network growth has been dramatic. We have crossed 3,20,000 villages, 4,900 towns, our MOU (minutes of usage) has grown by 5 minutes, which means the elasticity of demand from customers has been very gratifying to our affordability strategy. So excellent market growth.
Q: Can you break-up the margin picture between mobility and non-mobility?
Dhillon: All of our businesses are growing as mentioned and mobility saw 80% of business, so we are seeing in excess of 42% margins and really driven by the growth and the market is growing and elasticity of demand is there. So mobility is leading it. Broadband and telephony we have exceeded 42% and now its 43%. So, all of our businesses are growing in that respect.
Q: Minutes of usage have gone up in this quarter, though ARPUs have slipped a bit. Do you see more divergence between the two and they are moving in the opposite directions, even going forward?
Gupta: I think this is likely to continue; this is a business where one must increase traffic. The recent massive cuts, which we initiated in the market in the outgoing rates are showing that the elasticity is there. There is more traffic and even though the rate per minute and the ARPUs do come down, we have always maintained that doesn’t have too much significance in our business.
Q: The market has been stirred up quite a bit with the Rs 1 plan that you have unleashed; first take us through the rationale of unleashing such a plan. Why did you have to do it?
Kohli: We believe as we go into rural India, which has a 700 million population, we need to bring affordability. As a brand leader in the country, I think we will lead the affordability platform; in this case, not only are we making it more affordable, we are also simplifying the proposition for the customer. Rs 1 local call across the board has been received very well within the last 4-6 weeks, we have seen traffic grow very well and customers have responded well especially in the rural parts of the country.
I have personally been in the villages and I have seen customers being delighted about this change, so I think we are touching the hearts of the customers.
Q: What implications does this kind of a plan have on your operating margins in the foreseeable future?
Dhillion: Our business is based on volumes. This quarter, we have crossed 87 billion minutes on our networks, 10 billion minutes higher than last quarter and YoY 50 billion has gone to 87 billion. So clearly, the elasticity is coming through, as we go wider and deeper, we have an established fixed-cost base-price. That combination by itself is sustaining margins very well and we hope to see that continuing in the future. In the last quarter itself, we added about 15,000 sites. Our financials are observing all of this today and 42.6% margins is a very healthy situation, I think.
Q: You believe that even going forward, you can maintain this kind of a margin profile with the aggressive plans that you are launching?
Gupta: First of all, one needs to define what a margin is. To my mind, EBITDA margin has been misused and taken for too long, because I look at margins as a profit before tax margin, that’s how this business should be looking at. For instance, from the next quarter, we would be converting as far as Bharti Airtel is concerned, a lot of capex into opex with the formation of Indus Towers and Bharti Infratel, so the passive infrastructure is going out. So I do believe that the profit before tax, which is the real margin we will track, I think that should be sustainable for sure.
Q: You think so?
Kohli: I am sure it will, I agree with Akhil Gupta that now it is the issue of revenue and net profit before tax and I think our margins on net profit before tax should show a positive trend, because our economies of scale, efficiencies are improving, our cost structure definitely is getting linear, so we should see that improvement.
Q: What is happening on the spectrum front, market is very worried between one-month back and now has the situation changed at all?
Gupta: I have to be a bit constrained about what we say on spectrum since the matter is subjudiced. I think the big debate is out in the open, a lot has been said and written, so I do not think individual players should start commenting, but all I would say is that there is some movement forward with the TRAI norms. We are getting spectrum in ten circles, we should get entitled to a few more circles within the next couple of months. I think things are moving forward and we always maintained that every time there are controversies like this, at the end of the day, you do come to a solution, which is amicable and fair to all concerns.
Q: What is your expectation, when will you get more spectrum for a market like West Bengal, for example?
Kohli: We have been entitled with spectrum in ten markets including West Bengal. So our capacities will improve, our quality of networks will further improve and I think this will set us up well for next year’s growth.
Q: What about key markets like Delhi, Maharashtra, Tamil Nadu, Rajasthan?
Kohli: Many of these key markets have been covered in the ten entitlements we have.
Q: Adequate spectrum?
Kohli: Yes.
Gupta: Adequate is always a bit dicey; I think you can always do with more. We do believe that we should be getting more, but I think there is improvement, we are getting some that would ease the pressure in terms of the growth, which we have.
Q: What is the problem it raises, the metros where you need more spectrum or the non-metros?
Gupta: Namely, it is the major cities where there is more density, those are always more spectrum constrained.
Q: You are okay with the non-metros in terms of spectrum or is there a problem or availability issue that arise?
Kohli: They are CBD areas where we have intensity of traffic and that is where the problem is - in smaller towns. Villages, I think the situation is fine.
In the CBD area, we are investing more money in terms of more sites, more indoor solutions etc. which is helping.
Q: Let me put the question differently. You cannot answer what you will get, that’s for the regulators to decide, but on current reckoning, can you deliver this kind of growth for the next four quarters on current available spectrum or if you don’t get additional spectrum, this kind of growth will be throughout?
Kohli: We believe that interim allocation as per the TRAI norms will definitely support our growth plans.
Gupta: There is a relief as I said with the ten circles getting some more spectrum. There is a definite relief; whether this is ideal? Perhaps, no.
But we will find our way around and all I can assure is, we will not let this growth suffer whatever it takes.
Q: What outlook for margins do you have for the next three-four quarters, given the capex that you have planned?
Dhillon: Guidance is not something that we give. Having said that, our track records shows that with the growth that we are seeing and what was heartening in this quarter is that we grew revenues at 10% and a lot of that has flown through the bottomline obviously.
We do anticipate that we will continue with this kind of growth level. So without giving any guidance on that we hope that we will sustain at least where we are today.
Q: Do you think mobility margins can be held above 40%?
Dhillon: They have been tracking above 40% now for quite a well. Broadband and telephony also has crossed 40%, which is a tele media business. So on current going rate, we are anticipating that that should continue especially with the current volumes at over the next few years. India is very under penetrated, we are only at 27% penetration rates, so we have a long way to go.
Gupta: One thing to notice that from this quarter in fact from February 1, we will be moving on to the payment of passive infrastructure as a revenue item. This percentage on the EBITDA margin will obviously be affected; it will come down but as I said the profit before tax would improve, because Indus and Infratel will provide a massive advantage of cost not only to us but all the operators.
Q: Can you update us what’s happening with the tower business?
Gupta: The company has already being formed and we have got the demerger from the Delhi High Court. Indus Towers, which is a joint venture with Vodafone and Idea, is up and running. The revenue starts kicking into the company from February 1. So it’s absolutely on schedule. They are stepping up the deployment and we expect that we will be the major beneficiaries, because we will be able to penetrate deep down into India now.
Q: Any further plans to unlock value or ascribe a valuation, part stake sale etc. have you given it some more thought?
Gupta: We have already announced that we are raising a billion dollars, with it major investors coming in and there could be some more. But unlocking value is going to show in the business not in the valuation that’s a derivative.
Q: What do you mean by there could be some more?
Gupta: Could be some more investments.
Q: To raise a significant amount?
Gupta: Not too much.
Q: Nothing compared to a billion?
Gupta: Nothing compared to a billion.
Q: What do you make of this scepticism that you see with Bharti in the stock market? I know you cannot determine what the stock price would be, but you also sense that the stock is not outperforming the market in a significant way. What is your sense of the market’s apprehensions at this point?
Kohli: I believe the market needs to focus on data and facts and the data and facts clearly prove that the performance of the company is improving steadily. I think our topline has grown by Rs 630 crore, which is quite unprecedented, the minutes growth has been USD 10 billion higher than the last quarter, the momentum of growth has been capped in all the businesses, the broadband margins are unprecedented at 43%, enterprise business is picking up, spectrum allocations are taking place.
So in my view all these data points should be noted by stock market and I am sure they should be recognised in days to come.
Q: What is the problem, you must have noted that Reliance Communications has done much better as a stock; there is no divergence in reported numbers as such, why this divergence?
Gupta: I understand that in any sector, whenever there are some uncertainties - regulatory or otherwise - the markets are a little nervous. I think markets do like stability in terms of policies and regulation and my feeling is that as I said, we are optimistic that sooner or later there will be an amicable solution to this whole problem, which has arisen, I think that nervousness should go away. What happens to the stock market actually does not really matter too much, because it is dependent on so many other factors than your own performance.
Q: But on current reckoning, do you think the market is right in believing that R-Comm is in more advantageous position with spectrum issues than Bharti, because that is a feeling translating into stock prices?
Gupta: I definitely do not agree that we are at a disadvantage, I will not comment about any of our competitors because we have deep respect for all the competitors. But I am more confident than ever before that in the coming year definitely, we will not only sustain our leadership position, but actually improve it significantly.
Kohli: I believe that our commitment to GSM has been validated by this rush into GSM and the benefit Bharti will get will be higher than anyone else, because our scale in GSM networks is going to grow in the next couple of years. Our managing services innovation will give us great benefits.
The overall capex rates of GSM with GSM’s volumes growing in India will give us definite benefits. So I believe that the propensity to go towards GSM will benefit Bharti to some extent.
Q: You do not perceive any disadvantage in the market place competing with Reliance Communications?
Kohli: On market place, we are a strong execution machinery and I think we execute everyday, we have been in the market everyday.
Gupta: Reliance has already been there, it is not that they are new. They are already there, each one of these players and as I said we have deep respect for their abilities for all our competitors, but we are very confident that our leadership will actually widen the margins.
Q: Regardless of how this spectrum business finally pans out?
Gupta: Yes, as long as we keep doing our things right, I am sure we will keep up our leadership.
Q: I was asking Manoj Kohli about the Rs 1 plan; how is it working and what impact or penetration have you had so far?
Kapoor: If you really look at this quarter, there’s been stimulation on the new customers who have joined the bandwagon, 6.3 million is the highest we have ever done. The demand stipulated on the prepaid side of the business, where Rs 1 has done the trick with 15 million customers, who moved from almost Rs 2 plan to a Rs 1 domain and the percentage of the outgoing calls which went up. I think all three stipulated and did the magic and therefore an 11% growth that we have had, we grown 49% YoY basis and I think it’s been a stupendous quarter.
Q: What about margins on the mobility front?
Kapoor: Well sustained, we are sustaining over 40% for the last 4 quarters now and also the fact that we have grown 3.2% over the last one year is a phenomenal growth on the margins.
Q: There is a quite a bit of expectation on the DTH front, can you just give us the detail plans of the rollout?
Bindal: We are getting ready for a very impactful media launch. In the first half of the fiscal year, preferably the first quarter itself should see us get into the market with both our IPTV (Internet Protocol Television) a well as DTH offerings. We have got the license in place, we have got the 6 transponders in place, currently the plans are an effort to ensure that we have a plus one on almost all parts of the value chain, so we are excited.
Q: There are two well-entrenched players and there’s one other giant, which is getting in, what will you do to shake up the market to make your entry meaningful?
Bindal: To my mind, I think this market is just about to begun, the potential is huge, if one looks at the number of towns. For us the benchmark is what we have been able to do very successfully over the years with prepaid, which has really been underpinned by three things - the great brand, customer experience and a distribution expertise and strength. We believe that those three together should really help us in opening that market wide open. I don’t think competitive intensity is an issue at all there. I think to ensure each of these three aspects is really a plus one or plus two over everybody else that is.
Q: How are things on the enterprise front - international voice and data?
Nishball: I think on the international voice and data front, we have seen very good results in this quarter. The volume for international long distance continues to grow, so YoY we have about 50% increase in international long-distance volume.
International data actually is the thing that has grown the strongest, though we have seen a doubling of our international bandwidth for international private lines as well as internet services since the beginning of this year. A lot of that has happened in the last four months since we closed the i2i transactions where we took four ownerships of that cable asset.
Q: What about QoQ how do the numbers stack up?
Nishball: In QoQ we are seeing very good volume growth, I think about 17% on national long distance and 18% on international long distance. As I mentioned earlier, the international data business also has really hit the accelerator since their completion of the i2i acquisition.
Q: What are margins like on the enterprise front on this quarter?
Nishball: On the corporate side, we have very steady margins above 42% reported this quarter and about the same in the last quarter. So we are very steady on the carrier side, there is some market pressure as well, as I think a strategy which we are driving to increase volumes to drive unit cost and pass the benefits on to our customers, particularly since about 50% of our total carrier volumes is group traffic.
Q: Sustainable, you think a 42% margin profile?
Nishball: On corporate, yes.
Q: What’s happening on the broadband front? Can you update us?
Bindal: I think it’s been an excellent quarter in terms of the strategy flowing through to the results. We have expanded the margins nicely; we are now sitting at 43.4%, and yet another quarter where we delivered an incremental margin larger than the incremental revenue. So the revenue and the business efficiency flow is coming through. All this is coming because of the broadband penetrations very steadily moving up; we have moved that up almost by about 2% point; if one looks at our home segment and by more than 0.5% point across the entire population.
There is a huge focus on the SMBs, the small and medium size businesses have helped us to sustain the ARPUs so they have remained much the same in the same ballpark area. So it's an excellent business strategy flowing into execution where the focus is on classes and not masses; it's not that there is going to be a wide scale large expansion, but we want to niche target very specifically and sharply and then ensure that there is value being delivered to those.
Going forward, the broadband strategy is going to be delivered on the back of a technology upgrade. We've got 8 Mbps plans and others very nicely coming through. The SMB’s focus, which would become the one Airtel window where we would provide all the solutions and services to these customers and of course media as we talked about; I think that’s a future of telemedia.
Q: With the kind of aggressive plans you are rolling out now, how much do you expect to garner by way of incremental minutes of usage and how much will ARPUs take away from that growth you think, going forward?
Kapoor: If you look at our minute growth this quarter, it clearly has spelled out that there are segments in the market that are still elastic and we believe that some of the moves that we have made subsequent to the Rs 1 that we did on lifetime value is again going to touch another 15-16 million customers and one will see some impact of elasticity falling through. It will come across for sure.
Going forward, and as we go to rural India, we have sustained the minutes. Today about 24% of our base comes from rural India and incrementally about 35% of our customers come from rural India. But even going forward, I think the minutes have been sustained. So I guess that affordability story is carrying through usage increase even in rural India as we penetrate and proliferate.
Q: How much more will ARPUs comedown with these kinds of plans?
Kapoor: We have always believed that it’s not the ARPU game that we play. We believe in our three line graph and as long as that three line graph moves in the right direction, we are never worried. We believe that we are a minute factory and we concentrate both the realised price and the rate per minute that’s what matters to us.
Q: How worried are you in those markets where Reliance Communications will make its GMS foray?
Kapoor: It’s very interesting if one looks at our gap with the closest competitor today, the closest competitor is about 14 million customers away and if one looks at the same charts about two years back, the gap was much narrower. So the gap has only widened in the last few months or few quarters and I think that’s gone to our advantage and Reliance Communications has been in the GSM trade for a long time. So even in those markets, we have gained over the last many quarters.
Q: How do you see the carrier business shaping up? Did you see sustaining pressure there, which might eat away or erode your margins even more going forward?
Nishball: I think, the carrier business is really a business of scale, unit cost and coverage and really that is what we are focusing on. YoY 80% growth in terms of our national long distance volume, 50% growth on international and more than doubling of our international bandwidth for data. From a coverage stand point, we are now covering almost 70,000 km of fiber throughout the country. We have also increased a number of interconnections into the fixed line networks.
So we have grown by more than 150% this year, so as long as we are driving the volumes in unit cost and it is all flowing through to our revenue increase, even QoQ we are looking about 30% topline revenue increase, inspite of significant pricing pressure, I think we are very comfortable that we are achieving our carrier strategy.
Q: Can you give us a firm date for the DTH launch?
Bindal: Most definitely we are trying to target the first quarter of next year.
Q: That’s April to June, can you narrow it down a bit further for us?
Bindal: I’m afraid it won’t really be possible for me to go much sharper than that, but I think each and every part of that value chain is being planned and programmed right now.
Q: And it’s a big national launch?
Bindal: We would start with a focus launch, which would be national in terms of its width, in terms of numbers of cities that we choose, we would most definitely like to get it down absolutely right first and then roll it out. As one can well imagine, unlike the telecom network, you don’t have to roll that network out on a city by city basis. Once you have the transponders up in the sky, it’s really a function of the distribution chain in place and so on.
So from the capability and skill set point of view, we would be there from day one to roll it out nationally, but just purely from a rigor of strategy and ensuring that you get everything first time right. We may really have a slightly phased out approach and priorized approach.
NTPC Third quarter results
NTPC Q3 net profit at Rs 1779.9 cr
NTPC has declared its third quarter results. Its net sales were at Rs 9330.8 crore versus Rs 8146.8 crore, YoY. Its net profit was at Rs 1779.9 crore versus Rs 2103.3 crore, YoY.
NTPC has declared its third quarter results. Its net sales were at Rs 9330.8 crore versus Rs 8146.8 crore, YoY. Its net profit was at Rs 1779.9 crore versus Rs 2103.3 crore, YoY.
DLF to post EPS of Rs. 60 in FY09
DLF has announced its third quarter numbers. It has posted consolidated third quarter net profit of Rs 2145 crore versus Rs 2018.6 crore, a growth of 6.3% and net sales of Rs 3,598.4 crore versus Rs 3,249.9 crore, up 10.7% (QoQ).
Speaking to CNBC-TV18, the DLF management said that office trust listing has not been postponed in Singapore. It is hopeful of the listing in the current quarter.
The company is seeing gross margins of 35% in FY08, the management said.
The company’s promoters will forego all their interest in properties listed on the Singapore Stock Exchange. The company has earned Rs 2000 crore has from the sale of assets to DLF Assets. 50% of the company’s revenues are from DAL. The contribution of DAL to the company’s revenues will come down in subsequent quarters, the management clarified.
The DLF management including Rajiv Singh, Vice-Chairman, TC Goyal, MD, Rajeev Talwar, Group Executive Director and Ramesh Sanka, Group CFO, spoke to CNBC-TV18, in an exclusive interview:
Q: Has the Office Trust listing been postponed?
Singh: It has not been postponed. The process continues and we are hopeful of receiving the final clearances in a short period of time. Our bankers still advise us that the listing should be possible even in turbulent markets. So, I do hope we will do it in a short order of time. There is no delay as far as we are concerned.
Q: Has it been delayed or deferred because the prices have come off?
Singh: No deferment, no delay.
Q: So, will it happen in the current quarter?
Singh: We hope so, I can’t guarantee that. But we will try for that.
Q: There has been some expectation from DLF investors that if indeed DLF Assets exits some properties with the IPO, then there will be some flow through to DLF shareholders?
Singh: I would like to confirm that point for the benefit of all investors that the complete flow through would go to the benefit of DLF Ltd and all its shareholders. The promoters shall forego all their rights and interest including appreciation to the extent it takes place in the value of properties. So, there is 100% flow through to investors.
Q: Roughly speaking, what will be the magnitude of these flows?
Singh: That will depend on the pricing, which will be finally decided by our bankers, when we go for the listing.
Q: Even a ballpark?
Singh: It is difficult to say, as you know the Singapore process. We have been very cautious with any statements that we make. We can let the people know about this maybe in a few weeks time, once the bankers advise us better.
Q: Has there been any reason to re-evaluate the pricing of the IPO because of the turbulence in the market off late?
Ramesh Sanka: No, this is a product, which is stable. It is a yield-based product and won’t fluctuate with respect to the market prices.
Q: How much of the current quarter’s revenues have been from sale to DLF Assets?
Rajeev Talwar: Well I am sure he will be giving you the figures right now. I’ll let Ramesh answer that right away.
Ramesh Sanka: We have approximately a sale of Rs 2000 crore to the DAL in this quarter.
Q: Which as a percentage of revenues works out to what compared to last quarter?
Ramesh Sanka: Generally the better way is to look at the PBTs. We are at around 48% coming from the others.
Rajiv Singh: 50%+ this quarter is from DAL, and somewhat under 50% is from other operations.
Q: Is that generally the proportion you foresee for the coming quarters?
Rajiv Singh: No, I think the proportion will come down. I just like to sort of correct two statements. I think you made a statement in the beginning about the sale to Merrill Lynch not having taken place.
Q: Or has it?
Rajiv Singh: Yes, it has taken place but I think the expectations of the investment community in terms of the one-time premium earned by us were possibly overstated. The total net gain arising from all divestment transactions is about Rs 160 crore. The balance will come through profits on disproportionate basis as and when sales take place.
Q: How will it be staggered?
Rajiv Singh: In the last quarter, in fact specifically in the last two-months, we have had a tremendous launches across the country in our Homes programme and I think it vindicates our strategy completely that in times such as now, we are finding a very strong response because we have put the product in the right pricing, right sizing and right location. We are today able to sell in excess of 3,000 apartments in the last two-months across the country. This is something, which at least for DLF is a record and for everybody else, it must be a very large number. The flow through of these now will start showing up possibly little bit in this coming quarter but the big flow through will start taking place in the quarters ahead.
Q: Can you break that 3,000 up roughly between markets?
Rajiv Singh: About 2,000 odd is in Chennai and about 600 plus is in Kolkata. A couple of 100-units are in Kochi and a couple of 100 units in Indore. We expect to almost double this number within this quarter itself and therefore we should end this quarter with about 6,000 odd apartment units having been sold across the country. We also have very large launches coming up in North India - both in Panchkula as well as in New Gurgaon. So we are very hopeful, confident and our model is now tested. I would also like taking this opportunity to say that we are doing this by addressing the middle-income segment; but more importantly, the actually user. We have therefore chosen to voluntarily put some kind of restrictions on buyers. We do not sell more than one per family and we do not allow a resale for the first year.
Q: You are actively filtering out investors?
Singh: Well yes. We are not allowing at resale for one-year. We cannot filter out investors. But we have tried to filter out speculators.
Q: What is the average rate since you spoke about the mid-market?
Singh: Average rate is about Rs 3,000.
Q: In Chennai?
Singh: In Chennai.
Q: What is the state of the market in top two or three markets that you operate in? What is the state of rates in those markets, any softness visible?
Goyal: These are stable. Prices are sounding very well. There is absolutely no decline in any sector.
Q: In NCR-Gurgaon?
Goyal: Prices are very stable. There is absolutely no downward.
Q: You have had some new launches in Gurgaon as well?
Goyal: Yes, we are doing it very soon. In fact, we will be launching it, in the next 10 days, in New Gurgaon in a very big way. We will be approaching the end users directly with those very conditions.
Large corporate houses and many other corporates are approaching us for bulk supply of 100-150 flats each for their executives. That is again a tremendous response, unexpectedly coming forward.
Q: They don't qualify as investors in your eyes?
Goyal: No, they are not, because they are the actual users. They are taking it for their executives. We are in advanced stages of negotiations with them.
Q: There is some apprehension that because of the collapse in the stock markets in the last few weeks, it might filter through to some amount of demand softness. Have we seen anything like that happening in the last couple of weeks?
Talwar: The figures are totally to the contrary. There is a strong surge in the Indian economy as such. Maybe the stock markets are reflective of a phenomenon that shouldn't really take place in India. It is a very strong economy, and we do not see any softening of demand. The last quarter has been very good. This quarter promises to be even better for demand, especially for middle-class and middle-income group. We are sure that the premium and luxury segments do uphold their own values.
Q: Can you just talk about different segments-residential, office, or rental? What kind of margin profile have you seen in this quarter?
Sanka: The point is that some of the products are on a rental basis. Obviously, it will be difficult to put a percentage because this is a mix of both. We do look at the company as a whole.
If you want to look at volumes, the commercial and retail segments continue to be our focus and they are going ahead strongly. This is in addition to the volumes that we are achieving on residential in the last couple of months.
Going forward, we will still come down to the same 33% in all these three segments. Presently, the profits and sales are more towards commercial.
Q: Do you see any softness in margins, because of your revenues coming from the mid-market segment, where rates typically are a bit lower?
Sanka: No, it is a time period game because you will be entering into the mid market segment. Over a period of a few years, some portion of that segment will mature enough to go into the luxury segment or the slightly higher-end segment.
The second is that because we are doing it in a large scale, the economies of scale really play well, both on the land and construction cost. So, we don’t expect margins to fall because of this. In these products also, we see a margin of almost 40% to 50% plus.
Q: How are things progressing on the luxury end? You have got launches coming up in Goa, Kasauli, Panchkula. Are those on the higher end?
Talwar: There is a definite market building up in India and that is totally reflective of the strong fundamentals of the Indian economy. The commercial office space and retail space would see a large churn out, which will uphold the margins of the company itself.
Q: The 6,000 homes you spoke about, could you break that out - where do you expect most of those to come from?
Singh: I will say a couple of things at this juncture. As far as the middle-income homes go, we are fortunate that our margins are not as low as people may fear, despite the pricing being more competitive. That’s the strength our company brings to the table.
An important point I would like to also mention here - you raised a question about “prices dropping”, I think like in New Gurgaon, when we make our launch in the next fortnight or so, the issue is going to come out that prices have dropped, but that’s not true. We have product lines in Gurgaon where prices are rising and we have product lines in New Gurgaon where prices are going to be low - that’s by design.
Q: Where would those prices that you are talking about be?
Singh: We are going to be at least 25-30% below competition.
Q: In absolute terms, what would those rates be?
Singh: In absolute terms, I am preempting some thunder, but it will roughly be around somewhere south of Rs 3,000 or very close to Rs 2,500 square foot.
Q: With no compromise in quality?
Singh: No compromise in quality.
Q: Why are you doing that because it’s a market disruptive kind of a move?
Singh: No, it is not disruptive. We make our money on that. The question is that if we make our margins on every product - on the price and the strategy is being employed, we will make our worse margins as we have forecasted between 35-40%.
Therefore, that’s our business model. We don’t need to make more money on that product. We have huge volumes to sell and we will make our money through volumes.
So basically, people can come and say that these guys are dropping prices or the prices are dropping - I don’t thinks that’s correct. A new market segment has been entered into. It’s going to open up huge volumes and it will not come at the cost of our luxury product. While we do this, our luxury product prices will firm up and only increase because Gurgaon as a city needs to have a balance of all kinds of population. Now we are trying to bring the middle-class back into Gurgaon, which was its strong hold in the first place.
Now secondly, you asked the question about the breakup. Breakup-wise about 3000 units will be in Chennai. Kolkata will be almost finishing up at about 750-800 units, Cochin will grow to about 500-odd units and the balance will be about 2,500 units in the north; most of it in Gurgaon. We are attempting to do something in Panchkula, I don’t know if we can actually squeeze through in this quarter or not. If not now, it will be early next quarter.
Q: What are you on track for - I know you have got a target of 50 million homes by 2011? By 2009, do you think you can do between 25-30 million?
Singh: Yes, can we put this on; it is not 50 million homes. I think I don’t want to create higher expertise in our view. 50 million square feet is the development that we want to do. We expect our company’s delivery volume to hit about 25 million square feet by 2009. We expect our company’s delivery volume to cross 30 million square feet by 2010- delivery volume. We expect to reach our order intake volume of about 50 million square feet sometime next year.
Q: You are completely confident that all this can be absorbed by the market?
Singh: It’s been absorbed. This question if you recall was asked earlier - earlier we have been criticized for being too dependent on offices and we have being criticized for being too dependent on retail. Now we have gone through the middle-income housing - we again demonstrated success there. We are extremely confident and I am confident. If you would have had asked me this question three-months earlier, maybe the question was- somebody could have said show it, prove it. Now that the result is there, you have your bureaus in all parts of the country it’s interesting to find out. My information is that we are trying very hard to avoid speculators appealing to actual buyers and what we deliver to them will be of a standard where they feel they have got even a better deal than they think they have today.
Source: http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=323706
Speaking to CNBC-TV18, the DLF management said that office trust listing has not been postponed in Singapore. It is hopeful of the listing in the current quarter.
The company is seeing gross margins of 35% in FY08, the management said.
The company’s promoters will forego all their interest in properties listed on the Singapore Stock Exchange. The company has earned Rs 2000 crore has from the sale of assets to DLF Assets. 50% of the company’s revenues are from DAL. The contribution of DAL to the company’s revenues will come down in subsequent quarters, the management clarified.
The DLF management including Rajiv Singh, Vice-Chairman, TC Goyal, MD, Rajeev Talwar, Group Executive Director and Ramesh Sanka, Group CFO, spoke to CNBC-TV18, in an exclusive interview:
Q: Has the Office Trust listing been postponed?
Singh: It has not been postponed. The process continues and we are hopeful of receiving the final clearances in a short period of time. Our bankers still advise us that the listing should be possible even in turbulent markets. So, I do hope we will do it in a short order of time. There is no delay as far as we are concerned.
Q: Has it been delayed or deferred because the prices have come off?
Singh: No deferment, no delay.
Q: So, will it happen in the current quarter?
Singh: We hope so, I can’t guarantee that. But we will try for that.
Q: There has been some expectation from DLF investors that if indeed DLF Assets exits some properties with the IPO, then there will be some flow through to DLF shareholders?
Singh: I would like to confirm that point for the benefit of all investors that the complete flow through would go to the benefit of DLF Ltd and all its shareholders. The promoters shall forego all their rights and interest including appreciation to the extent it takes place in the value of properties. So, there is 100% flow through to investors.
Q: Roughly speaking, what will be the magnitude of these flows?
Singh: That will depend on the pricing, which will be finally decided by our bankers, when we go for the listing.
Q: Even a ballpark?
Singh: It is difficult to say, as you know the Singapore process. We have been very cautious with any statements that we make. We can let the people know about this maybe in a few weeks time, once the bankers advise us better.
Q: Has there been any reason to re-evaluate the pricing of the IPO because of the turbulence in the market off late?
Ramesh Sanka: No, this is a product, which is stable. It is a yield-based product and won’t fluctuate with respect to the market prices.
Q: How much of the current quarter’s revenues have been from sale to DLF Assets?
Rajeev Talwar: Well I am sure he will be giving you the figures right now. I’ll let Ramesh answer that right away.
Ramesh Sanka: We have approximately a sale of Rs 2000 crore to the DAL in this quarter.
Q: Which as a percentage of revenues works out to what compared to last quarter?
Ramesh Sanka: Generally the better way is to look at the PBTs. We are at around 48% coming from the others.
Rajiv Singh: 50%+ this quarter is from DAL, and somewhat under 50% is from other operations.
Q: Is that generally the proportion you foresee for the coming quarters?
Rajiv Singh: No, I think the proportion will come down. I just like to sort of correct two statements. I think you made a statement in the beginning about the sale to Merrill Lynch not having taken place.
Q: Or has it?
Rajiv Singh: Yes, it has taken place but I think the expectations of the investment community in terms of the one-time premium earned by us were possibly overstated. The total net gain arising from all divestment transactions is about Rs 160 crore. The balance will come through profits on disproportionate basis as and when sales take place.
Q: How will it be staggered?
Rajiv Singh: In the last quarter, in fact specifically in the last two-months, we have had a tremendous launches across the country in our Homes programme and I think it vindicates our strategy completely that in times such as now, we are finding a very strong response because we have put the product in the right pricing, right sizing and right location. We are today able to sell in excess of 3,000 apartments in the last two-months across the country. This is something, which at least for DLF is a record and for everybody else, it must be a very large number. The flow through of these now will start showing up possibly little bit in this coming quarter but the big flow through will start taking place in the quarters ahead.
Q: Can you break that 3,000 up roughly between markets?
Rajiv Singh: About 2,000 odd is in Chennai and about 600 plus is in Kolkata. A couple of 100-units are in Kochi and a couple of 100 units in Indore. We expect to almost double this number within this quarter itself and therefore we should end this quarter with about 6,000 odd apartment units having been sold across the country. We also have very large launches coming up in North India - both in Panchkula as well as in New Gurgaon. So we are very hopeful, confident and our model is now tested. I would also like taking this opportunity to say that we are doing this by addressing the middle-income segment; but more importantly, the actually user. We have therefore chosen to voluntarily put some kind of restrictions on buyers. We do not sell more than one per family and we do not allow a resale for the first year.
Q: You are actively filtering out investors?
Singh: Well yes. We are not allowing at resale for one-year. We cannot filter out investors. But we have tried to filter out speculators.
Q: What is the average rate since you spoke about the mid-market?
Singh: Average rate is about Rs 3,000.
Q: In Chennai?
Singh: In Chennai.
Q: What is the state of the market in top two or three markets that you operate in? What is the state of rates in those markets, any softness visible?
Goyal: These are stable. Prices are sounding very well. There is absolutely no decline in any sector.
Q: In NCR-Gurgaon?
Goyal: Prices are very stable. There is absolutely no downward.
Q: You have had some new launches in Gurgaon as well?
Goyal: Yes, we are doing it very soon. In fact, we will be launching it, in the next 10 days, in New Gurgaon in a very big way. We will be approaching the end users directly with those very conditions.
Large corporate houses and many other corporates are approaching us for bulk supply of 100-150 flats each for their executives. That is again a tremendous response, unexpectedly coming forward.
Q: They don't qualify as investors in your eyes?
Goyal: No, they are not, because they are the actual users. They are taking it for their executives. We are in advanced stages of negotiations with them.
Q: There is some apprehension that because of the collapse in the stock markets in the last few weeks, it might filter through to some amount of demand softness. Have we seen anything like that happening in the last couple of weeks?
Talwar: The figures are totally to the contrary. There is a strong surge in the Indian economy as such. Maybe the stock markets are reflective of a phenomenon that shouldn't really take place in India. It is a very strong economy, and we do not see any softening of demand. The last quarter has been very good. This quarter promises to be even better for demand, especially for middle-class and middle-income group. We are sure that the premium and luxury segments do uphold their own values.
Q: Can you just talk about different segments-residential, office, or rental? What kind of margin profile have you seen in this quarter?
Sanka: The point is that some of the products are on a rental basis. Obviously, it will be difficult to put a percentage because this is a mix of both. We do look at the company as a whole.
If you want to look at volumes, the commercial and retail segments continue to be our focus and they are going ahead strongly. This is in addition to the volumes that we are achieving on residential in the last couple of months.
Going forward, we will still come down to the same 33% in all these three segments. Presently, the profits and sales are more towards commercial.
Q: Do you see any softness in margins, because of your revenues coming from the mid-market segment, where rates typically are a bit lower?
Sanka: No, it is a time period game because you will be entering into the mid market segment. Over a period of a few years, some portion of that segment will mature enough to go into the luxury segment or the slightly higher-end segment.
The second is that because we are doing it in a large scale, the economies of scale really play well, both on the land and construction cost. So, we don’t expect margins to fall because of this. In these products also, we see a margin of almost 40% to 50% plus.
Q: How are things progressing on the luxury end? You have got launches coming up in Goa, Kasauli, Panchkula. Are those on the higher end?
Talwar: There is a definite market building up in India and that is totally reflective of the strong fundamentals of the Indian economy. The commercial office space and retail space would see a large churn out, which will uphold the margins of the company itself.
Q: The 6,000 homes you spoke about, could you break that out - where do you expect most of those to come from?
Singh: I will say a couple of things at this juncture. As far as the middle-income homes go, we are fortunate that our margins are not as low as people may fear, despite the pricing being more competitive. That’s the strength our company brings to the table.
An important point I would like to also mention here - you raised a question about “prices dropping”, I think like in New Gurgaon, when we make our launch in the next fortnight or so, the issue is going to come out that prices have dropped, but that’s not true. We have product lines in Gurgaon where prices are rising and we have product lines in New Gurgaon where prices are going to be low - that’s by design.
Q: Where would those prices that you are talking about be?
Singh: We are going to be at least 25-30% below competition.
Q: In absolute terms, what would those rates be?
Singh: In absolute terms, I am preempting some thunder, but it will roughly be around somewhere south of Rs 3,000 or very close to Rs 2,500 square foot.
Q: With no compromise in quality?
Singh: No compromise in quality.
Q: Why are you doing that because it’s a market disruptive kind of a move?
Singh: No, it is not disruptive. We make our money on that. The question is that if we make our margins on every product - on the price and the strategy is being employed, we will make our worse margins as we have forecasted between 35-40%.
Therefore, that’s our business model. We don’t need to make more money on that product. We have huge volumes to sell and we will make our money through volumes.
So basically, people can come and say that these guys are dropping prices or the prices are dropping - I don’t thinks that’s correct. A new market segment has been entered into. It’s going to open up huge volumes and it will not come at the cost of our luxury product. While we do this, our luxury product prices will firm up and only increase because Gurgaon as a city needs to have a balance of all kinds of population. Now we are trying to bring the middle-class back into Gurgaon, which was its strong hold in the first place.
Now secondly, you asked the question about the breakup. Breakup-wise about 3000 units will be in Chennai. Kolkata will be almost finishing up at about 750-800 units, Cochin will grow to about 500-odd units and the balance will be about 2,500 units in the north; most of it in Gurgaon. We are attempting to do something in Panchkula, I don’t know if we can actually squeeze through in this quarter or not. If not now, it will be early next quarter.
Q: What are you on track for - I know you have got a target of 50 million homes by 2011? By 2009, do you think you can do between 25-30 million?
Singh: Yes, can we put this on; it is not 50 million homes. I think I don’t want to create higher expertise in our view. 50 million square feet is the development that we want to do. We expect our company’s delivery volume to hit about 25 million square feet by 2009. We expect our company’s delivery volume to cross 30 million square feet by 2010- delivery volume. We expect to reach our order intake volume of about 50 million square feet sometime next year.
Q: You are completely confident that all this can be absorbed by the market?
Singh: It’s been absorbed. This question if you recall was asked earlier - earlier we have been criticized for being too dependent on offices and we have being criticized for being too dependent on retail. Now we have gone through the middle-income housing - we again demonstrated success there. We are extremely confident and I am confident. If you would have had asked me this question three-months earlier, maybe the question was- somebody could have said show it, prove it. Now that the result is there, you have your bureaus in all parts of the country it’s interesting to find out. My information is that we are trying very hard to avoid speculators appealing to actual buyers and what we deliver to them will be of a standard where they feel they have got even a better deal than they think they have today.
Source: http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=323706
DLF results out
DLF has announced its third quarter numbers. The company has posted consolidated third quarter net profit of Rs 2145 crore versus Rs 2018.6 crore. Net sales for Q3 is at Rs 3,598.4 crore versus Rs 3,249.9 crore (QoQ). Operating profit margin stands at 69.5% versus 69.7%.
Bharti Airtel Reports strong results
Bharti Q3 net up at Rs 1,722 crore
Bharti Airtel has declared its third quarter results. Its Q3 net profit was up at Rs 1,722 crore versus Rs 1,614 crore, QoQ.
It Q3 net sales stood at Rs Rs 6,964 crore versus Rs 6,337 crore
Its OPM was at 42.6%.
Bharti Airtel has declared its third quarter results. Its Q3 net profit was up at Rs 1,722 crore versus Rs 1,614 crore, QoQ.
It Q3 net sales stood at Rs Rs 6,964 crore versus Rs 6,337 crore
Its OPM was at 42.6%.
Earnings Update - January 29, 2008
Company Actuals Estimates %Change
SAIL
Net Sales 9,553.00 9,652.90 -1.03
Net Profit 1,935.00 1,863.40 3.84
Jet Airways
Net Sales 2,520.00 2,313.00 8.95
Net Profit -91.10 -123.00 -
JSW Steel
Net Sales 2,563.10 2,657.00 -3.53
Net Profit 328.20 402.70 -18.50
Arvind Mills
Net Sales 536.80 560.90 -4.30
Net Profit 5.70 6.50 -12.31
BHEL
Net Sales 4,964.00 5,674.00 -12.51
Net Profit 772.00 876.00 -11.87
Dr Reddys Labs
Net Sales 1,232.00 1,248.00 -1.28
Net Profit -84.70 140.00 -
Ashok Leyland
Net Sales 1,800.00 1,729.00 4.11
Net Profit 120.20 80.00 50.25
TVS Motor
Net Sales 875.00 879.00 -0.46
Net Profit 5.80 7.00 -17.14
SBI
Net Interest Income 5,899.20 6,082.36 -3.01
Net Profit 2,442.31 1,889.48 29.26
Cipla
Net Sales 1,104.00 1,025.60 7.64
Net Profit 210.65 187.63 12.27
PNB
Net Interest Income 1,424.00 1,521.12 -6.38
Net Profit 541.00 518.25 4.39
Canara Bank
Net Interest Income 934.36 891.49 4.81
Net Profit 458.83 400.55 14.55
Union Bank
Net Interest Income 788.09 776.47 1.50
Net Profit 365.00 299.83 21.74
Bank of India
Net Interest Income 1,079.46 1,062.89 1.56
Net Profit 511.89 343.30 49.11
Vijaya Bank
Net Interest Income 219.09 236.63 -7.41
Net Profit 126.88 114.87 10.46
HDFC Bank
Net Interest Income 1,437.58 1,264.44 13.69
Net Profit 429.36 402.25 6.74
ONGC
Net Sales 15,120.83 14,075.40 7.43
Net Profit 4,366.54 4,801.20 -9.05
Satyam
Net Sales 2,195.56 2,031.70 8.07
Net Profit 433.63 433.80 -0.04
Idea Cellular
Net Sales 1,710.00 1,736.10 -1.50
Net Profit 236.77 261.80 -9.56
ICICI Bank
Net Interest Income 1,960.00 2,057.80 -4.75
Net Profit 1,230.00 1,170.80 5.06
Nicholas Pirama
Net Sales 732.00 764.53 -4.25
Net Profit 73.00 93.50 -21.93
HDFC
Net Interest Income 665.50 649.90 2.40
Net Profit 527.96 448.90 17.61
ITC
Net Sales 3,457.90 3,616.30 -4.38
Net Profit 830.70 815.80 1.83
Wipro
Total Revenue 5,339.60 5,232.70 2.04
Net Profit 854.00 851.40 0.31
HCL Tech
Total Revenue 1,816.60 1,807.30 0.51
Net Profit 332.90 306.70 8.54
Ranbaxy Labs
Net Sales 1,795.10 1,811.00 -0.88
Net Profit 187.80 165.00 13.82
Reliance
Net Sales 34,590.00 34,066.00 1.54
Net Profit 3,882.00 3,837.20 1.17
Biocon
Net Sales 238.48 281.75 -15.36
Net Profit 53.35 60.98 -12.51
TCS
Total Revenue 5,924.10 5,989.20 -1.09
Net Profit 1,330.80 1,313.00 1.36
Allahabad Bank
Net Interest Income 445.00 486.40 -8.51
Net Profit 365.05 291.75 25.12
India Cements
Net Sales 856.00 924.80 -7.44
Net Profit 127.00 226.50 -43.93
IDFC
Operating Income 763.39 694.70 9.89
Net Profit 217.28 209.70 3.61
Infosys
Total Revenue 4,271.00 4,340.00 -1.59
Net Profit 1,231.00 1,176.50 4.63
Mastek
Total Revenue 216.00 214.00 0.93
Net Profit 27.10 25.40 6.69
Axis Bank
Net Interest Income 747.30 640.95 16.59
Net Profit 306.83 275.00 11.57
iGATE Solutions
Total Revenue 209.30 212.30 -1.41
Net Profit 29.00 21.60 34.26
Shree Cements
Net Sales 523.60 501.00 4.51
Net Profit 35.00 107.00 -67.29
SAIL
Net Sales 9,553.00 9,652.90 -1.03
Net Profit 1,935.00 1,863.40 3.84
Jet Airways
Net Sales 2,520.00 2,313.00 8.95
Net Profit -91.10 -123.00 -
JSW Steel
Net Sales 2,563.10 2,657.00 -3.53
Net Profit 328.20 402.70 -18.50
Arvind Mills
Net Sales 536.80 560.90 -4.30
Net Profit 5.70 6.50 -12.31
BHEL
Net Sales 4,964.00 5,674.00 -12.51
Net Profit 772.00 876.00 -11.87
Dr Reddys Labs
Net Sales 1,232.00 1,248.00 -1.28
Net Profit -84.70 140.00 -
Ashok Leyland
Net Sales 1,800.00 1,729.00 4.11
Net Profit 120.20 80.00 50.25
TVS Motor
Net Sales 875.00 879.00 -0.46
Net Profit 5.80 7.00 -17.14
SBI
Net Interest Income 5,899.20 6,082.36 -3.01
Net Profit 2,442.31 1,889.48 29.26
Cipla
Net Sales 1,104.00 1,025.60 7.64
Net Profit 210.65 187.63 12.27
PNB
Net Interest Income 1,424.00 1,521.12 -6.38
Net Profit 541.00 518.25 4.39
Canara Bank
Net Interest Income 934.36 891.49 4.81
Net Profit 458.83 400.55 14.55
Union Bank
Net Interest Income 788.09 776.47 1.50
Net Profit 365.00 299.83 21.74
Bank of India
Net Interest Income 1,079.46 1,062.89 1.56
Net Profit 511.89 343.30 49.11
Vijaya Bank
Net Interest Income 219.09 236.63 -7.41
Net Profit 126.88 114.87 10.46
HDFC Bank
Net Interest Income 1,437.58 1,264.44 13.69
Net Profit 429.36 402.25 6.74
ONGC
Net Sales 15,120.83 14,075.40 7.43
Net Profit 4,366.54 4,801.20 -9.05
Satyam
Net Sales 2,195.56 2,031.70 8.07
Net Profit 433.63 433.80 -0.04
Idea Cellular
Net Sales 1,710.00 1,736.10 -1.50
Net Profit 236.77 261.80 -9.56
ICICI Bank
Net Interest Income 1,960.00 2,057.80 -4.75
Net Profit 1,230.00 1,170.80 5.06
Nicholas Pirama
Net Sales 732.00 764.53 -4.25
Net Profit 73.00 93.50 -21.93
HDFC
Net Interest Income 665.50 649.90 2.40
Net Profit 527.96 448.90 17.61
ITC
Net Sales 3,457.90 3,616.30 -4.38
Net Profit 830.70 815.80 1.83
Wipro
Total Revenue 5,339.60 5,232.70 2.04
Net Profit 854.00 851.40 0.31
HCL Tech
Total Revenue 1,816.60 1,807.30 0.51
Net Profit 332.90 306.70 8.54
Ranbaxy Labs
Net Sales 1,795.10 1,811.00 -0.88
Net Profit 187.80 165.00 13.82
Reliance
Net Sales 34,590.00 34,066.00 1.54
Net Profit 3,882.00 3,837.20 1.17
Biocon
Net Sales 238.48 281.75 -15.36
Net Profit 53.35 60.98 -12.51
TCS
Total Revenue 5,924.10 5,989.20 -1.09
Net Profit 1,330.80 1,313.00 1.36
Allahabad Bank
Net Interest Income 445.00 486.40 -8.51
Net Profit 365.05 291.75 25.12
India Cements
Net Sales 856.00 924.80 -7.44
Net Profit 127.00 226.50 -43.93
IDFC
Operating Income 763.39 694.70 9.89
Net Profit 217.28 209.70 3.61
Infosys
Total Revenue 4,271.00 4,340.00 -1.59
Net Profit 1,231.00 1,176.50 4.63
Mastek
Total Revenue 216.00 214.00 0.93
Net Profit 27.10 25.40 6.69
Axis Bank
Net Interest Income 747.30 640.95 16.59
Net Profit 306.83 275.00 11.57
iGATE Solutions
Total Revenue 209.30 212.30 -1.41
Net Profit 29.00 21.60 34.26
Shree Cements
Net Sales 523.60 501.00 4.51
Net Profit 35.00 107.00 -67.29
Wednesday, January 23, 2008
Its Shopping Time People!!!
Well, well, the worst seems to be over! Those of you who have managed to outlast the storm, congratulations on your endurance and patience! Now is the time to reap dividends! Those of you waiting to enter the market won't have any difficulty in timing the market at this stage! Most of the momentum stocks have taken a severe beating! Here are my picks for the next 2 months:
A) IT Stocks
1) Infosys
2) Wipro
3) TCS
B) Realty / Infrastructure
1) Parsvnath Developers
2) Ganesh Housing
3) Srei Infrastructure
4) Marg Constructions
5) DLF
C) Financial Services
1) IndiaBulls Financial Services
2) Motilal Oswal
3) Edelweiss
D) Auto
1) Maruti Suzuki
2) Tata Motors
3) Bajaj Auto
E) Pharma
1) Ranbaxy
2) Aurobindo Pharma
3) Sun Pharma
4) Jupiter Biosciences
F) Shooters
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! Expect a phoenix-like rise for these stocks in the coming days! Also, watch out for Neyveli Lignite; expect it to increase exponentially!!
G) Telecom
1) Bharti Airtel
2) RCOM
H) Aviation
1) Jet Airways
I) POWER STOCKS --- Anything with POWER behind it should be bought at the current levels! Jokes apart guys, the power stocks have taken a severe beating in the last few days and there was never a better time to get into these stocks than now! Expect strong recovery in the Power sector at least till the debut of the Reliance Power stock on the markets in the first week of Feb.. Additionally, with Reliance Power filing a request with the SEBI to expediate allottment to QIBs (Qualified Institutional Buyers, MIND IT!!), $12 billion is expected to be returned to them.. If normal sense prevails, then ideally this money should flow back into the markets, helping the markets recover from the lows of the last few days!
Disclosure: It would be prudent to assume that I own or have an interest in one or more of these stocks (not all of them, MIND IT)!! hey hey, just in case, no one takes me wrongly! Also, please understand that these are not the only stocks which will shine in the forthcoming days. There are a few more interesting companies; however, base your investment on your own research and understanding of the stock! Invest in these companies with an investment horizon of 3 years..
A) IT Stocks
1) Infosys
2) Wipro
3) TCS
B) Realty / Infrastructure
1) Parsvnath Developers
2) Ganesh Housing
3) Srei Infrastructure
4) Marg Constructions
5) DLF
C) Financial Services
1) IndiaBulls Financial Services
2) Motilal Oswal
3) Edelweiss
D) Auto
1) Maruti Suzuki
2) Tata Motors
3) Bajaj Auto
E) Pharma
1) Ranbaxy
2) Aurobindo Pharma
3) Sun Pharma
4) Jupiter Biosciences
F) Shooters
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! Expect a phoenix-like rise for these stocks in the coming days! Also, watch out for Neyveli Lignite; expect it to increase exponentially!!
G) Telecom
1) Bharti Airtel
2) RCOM
H) Aviation
1) Jet Airways
I) POWER STOCKS --- Anything with POWER behind it should be bought at the current levels! Jokes apart guys, the power stocks have taken a severe beating in the last few days and there was never a better time to get into these stocks than now! Expect strong recovery in the Power sector at least till the debut of the Reliance Power stock on the markets in the first week of Feb.. Additionally, with Reliance Power filing a request with the SEBI to expediate allottment to QIBs (Qualified Institutional Buyers, MIND IT!!), $12 billion is expected to be returned to them.. If normal sense prevails, then ideally this money should flow back into the markets, helping the markets recover from the lows of the last few days!
Disclosure: It would be prudent to assume that I own or have an interest in one or more of these stocks (not all of them, MIND IT)!! hey hey, just in case, no one takes me wrongly! Also, please understand that these are not the only stocks which will shine in the forthcoming days. There are a few more interesting companies; however, base your investment on your own research and understanding of the stock! Invest in these companies with an investment horizon of 3 years..
Tuesday, January 22, 2008
Blockbuster of the year: Saare Zameen Par @ Halal St...
Most people were of the opinion that Black Monday, January 21, 2008, was the bloodiest day in the history of the Sensex. Little did they know that the worst was saved for a Tuesday, the first Black Tuesday in the trading history when the sensex fell by over 2200 points before recouping some of its losses and closing down by 875 points! The last 2 trading sessions have collectively wiped out more than the losses incurred in the last week.. But the billion dollar question is: Is the fall over or will it resume again tomorrow?
The recovery in the European markets seem to suggest that we might be in for a short-term relief before selling pressures mount. However, the U.S. markets are still trading lower despite being off the day's low. I quite appreciate the Fed's decision to cut the federal funds rate by 75 basis points, which in turn led to a reduction of 75 bps in the PLR or the prime lending rate. The rate cut came a week ahead of the Fed's meeting on January 31 and it finally seems that the Fed is waking up to the looming danger of recession and act accordingly! It also shows that despite all that we may claim, the economies across the world remain dependent on the U.S. economy! U just need to take a look at the stock markets falls on Monday, January 21, 2008 to gauge the siituation for your self.
However, moving on to the Indian stock markets, clearly the investors have been shaken! The journey from 15k to 21k took over 3 months but the return journey took only 7 trading sessions! Many people have lost a mountain of money; saying a lot is just putting it very mildly! The Fed rate cut may give a boost to the markets tomorrow, however! Value hunting may begin again and believe me, I'm salivating here when I think of all the stocks which have bitten the dust during this bumpy ride! If they have fallen like an apple, rest assured they will go up like a rocket!
A simple trading strategy for tomorrow would be to buy a Nifty February expiry future and arm yourself by buying both a call and a put option with a similar strike price and expiry in February. This strategy is idle for a volatile market, one stands to receive a payoff if the market moves sharply, either up or down! One's cost is the combined cost for the put and the call option; your maximum loss is capped at the combined cost of the put and the call options! Try it out for any stock future and do get back to me if you find any problem with this approach. This strategy is not advisable for static markets or markets with little movement, however!
Meanwhile, the markets are going to represnt one giant see-saw, avoid any short-term trades! You may look to build positions in a few select stocks; however, stay from the mid- and small-cap till we see clear and visible signs of recovery; this advise applies for those with little or no risk appetite! The best stocks to gain at the moment will be banks followed by financial institutions!
Whatever happens, don't lose your patience, for the SenseXXXational Ride has its scares and moments of thrills!! So keep enjoying and tuning in to this space for more updates!
The recovery in the European markets seem to suggest that we might be in for a short-term relief before selling pressures mount. However, the U.S. markets are still trading lower despite being off the day's low. I quite appreciate the Fed's decision to cut the federal funds rate by 75 basis points, which in turn led to a reduction of 75 bps in the PLR or the prime lending rate. The rate cut came a week ahead of the Fed's meeting on January 31 and it finally seems that the Fed is waking up to the looming danger of recession and act accordingly! It also shows that despite all that we may claim, the economies across the world remain dependent on the U.S. economy! U just need to take a look at the stock markets falls on Monday, January 21, 2008 to gauge the siituation for your self.
However, moving on to the Indian stock markets, clearly the investors have been shaken! The journey from 15k to 21k took over 3 months but the return journey took only 7 trading sessions! Many people have lost a mountain of money; saying a lot is just putting it very mildly! The Fed rate cut may give a boost to the markets tomorrow, however! Value hunting may begin again and believe me, I'm salivating here when I think of all the stocks which have bitten the dust during this bumpy ride! If they have fallen like an apple, rest assured they will go up like a rocket!
A simple trading strategy for tomorrow would be to buy a Nifty February expiry future and arm yourself by buying both a call and a put option with a similar strike price and expiry in February. This strategy is idle for a volatile market, one stands to receive a payoff if the market moves sharply, either up or down! One's cost is the combined cost for the put and the call option; your maximum loss is capped at the combined cost of the put and the call options! Try it out for any stock future and do get back to me if you find any problem with this approach. This strategy is not advisable for static markets or markets with little movement, however!
Meanwhile, the markets are going to represnt one giant see-saw, avoid any short-term trades! You may look to build positions in a few select stocks; however, stay from the mid- and small-cap till we see clear and visible signs of recovery; this advise applies for those with little or no risk appetite! The best stocks to gain at the moment will be banks followed by financial institutions!
Whatever happens, don't lose your patience, for the SenseXXXational Ride has its scares and moments of thrills!! So keep enjoying and tuning in to this space for more updates!
Monday, January 21, 2008
A look at what made the SenseXXXational Ride so bumpy!!
Well, the markets continued their slide this morning as well.. Oh, well, I guess slide isn't a proper word for it.. I guess free-fall sounds much better, what do you think?? That is, assuming you can still think after witnessing such carnage, a carnage I've been witness to three times in the recent past! The slide today can be attributed to panic selling; everyone is selling in this market, even the brokerage houses were the culprit today! These firms had accumulated large positions and consequently large debit positions. So, due to margin calls, they had to square off their positions. This led to a bout of short-selling which quickly spread to the retail investors and wham bham wham.. Here we are, we've just begin .. (Just a few lines of Bryan Adam's Here I'm .. )
The best advise which will come in handy will be: DO NOT PANIC and SELL ANYTHING! HAVE PATIENCE.. A similar message to the one my Dad messaged me a few minutes back! Traditional advise but how so true!! Anyways, for those of you still looking to trade, why don't you indulge in some future trading? Buying a miniNIFTY Jan future (margin required only Rs. 12k) at the current levels should pay off in the next 2-3 days.. Anyways, this is only a specualtive guess at the moment..
Trading remains risky, the market may have some more bottomside left in it; so please, those with a weak heart and blood pressure problems, stay away from the markets until we see clear signs of a recovery! You may miss out on some profits but hell, giving away a bit of your gains in favor of reduced health risks is always preferred and advisable!
So, riders, do not worry!! Stay invested and continue tuning in to the SenseXXXational Ride!!
The best advise which will come in handy will be: DO NOT PANIC and SELL ANYTHING! HAVE PATIENCE.. A similar message to the one my Dad messaged me a few minutes back! Traditional advise but how so true!! Anyways, for those of you still looking to trade, why don't you indulge in some future trading? Buying a miniNIFTY Jan future (margin required only Rs. 12k) at the current levels should pay off in the next 2-3 days.. Anyways, this is only a specualtive guess at the moment..
Trading remains risky, the market may have some more bottomside left in it; so please, those with a weak heart and blood pressure problems, stay away from the markets until we see clear signs of a recovery! You may miss out on some profits but hell, giving away a bit of your gains in favor of reduced health risks is always preferred and advisable!
So, riders, do not worry!! Stay invested and continue tuning in to the SenseXXXational Ride!!
Testing times for the markets ahead!!
At 10:30 a.m., the Sensex was down another 700 points, a second such successive fall!! The markets have been bearish for the last 4-5 trading sessions; the looing recession in the U.S. hasn't helped either. However, for those of you following the blog, I'm sure you all must be wondering how see-saw is India's growth story!! Hey hey hey!!
I would like to stress that the growth factors are still intact -- The economy is in sound shape, there is a booming realty drive sweeping across the country, money is being pumped in to improve every aspect of the country's infrastructure.. However, there is a lack of liquidity in the markets. The New Fund Offerings in the monet of December cleaned out a lot of money.. If that wasn't enough, Reliance came out with yet another IPO of another fundamentally (un)sound company, Reliance Power (atleast, if you compare the valuation with that of Tata Power and NTPC, which cleaned out close to Rs. 7 trillion .. Well, the sum is so astronomically huge that I request you all to forgive me if I'm a bit off the mark with respect to the number of zeroes.. Plus, the FII have been net sellers of equity worth Rs. 4500 crores in the last 2 trading sessions itself...
So, you may say that the dream of the Sensex continuing its dream run has been nipped in the bud by the lack of liquidity.. However, it is just a short-term effect! Normalcy will be restored in the later part of this week and the first week of Feb.. I believe that the Indian AMCs have ample fund with them to drive the next phase of growth, so we need not fret if the FIIs ignore us for the time being! These are testing times for any investors; I would advise short-term investors to either stay away from the market or indulge in only intra-day trading for the time being! Long-term investors need not worry.. The correction gives another chance to the Sensex to rise from the ashes like a Phoenix!! So, keep enjoying the SenseXXXational Ride!!
I would like to stress that the growth factors are still intact -- The economy is in sound shape, there is a booming realty drive sweeping across the country, money is being pumped in to improve every aspect of the country's infrastructure.. However, there is a lack of liquidity in the markets. The New Fund Offerings in the monet of December cleaned out a lot of money.. If that wasn't enough, Reliance came out with yet another IPO of another fundamentally (un)sound company, Reliance Power (atleast, if you compare the valuation with that of Tata Power and NTPC, which cleaned out close to Rs. 7 trillion .. Well, the sum is so astronomically huge that I request you all to forgive me if I'm a bit off the mark with respect to the number of zeroes.. Plus, the FII have been net sellers of equity worth Rs. 4500 crores in the last 2 trading sessions itself...
So, you may say that the dream of the Sensex continuing its dream run has been nipped in the bud by the lack of liquidity.. However, it is just a short-term effect! Normalcy will be restored in the later part of this week and the first week of Feb.. I believe that the Indian AMCs have ample fund with them to drive the next phase of growth, so we need not fret if the FIIs ignore us for the time being! These are testing times for any investors; I would advise short-term investors to either stay away from the market or indulge in only intra-day trading for the time being! Long-term investors need not worry.. The correction gives another chance to the Sensex to rise from the ashes like a Phoenix!! So, keep enjoying the SenseXXXational Ride!!
Friday, January 18, 2008
U.S. economy in dire straits!!
All speculations and theories regarding the direction which the U.S. economy is taking have been laid to rest!! Yes sir, the U.S. economy is well and truly heading for a recession.. Now the million dollar (just a million ;-) ??) question is: Will the inflow of 1% of GDP, i.e. $140 billion to $160 billion, into the U.S. economy help revive it or will it lead to a short-term dull before memories of the previous recession in '91-'92 come back to haunt the U.S. .. Where does Mr. Daruwalla disappear to when we really need his advise, his keen insight into the future?
Second interesting question, how will the outlook of the U.S. affect the economies of the world? With Big Daddy going weak in the knees, are we too supposed to follow the Boss into a recessionary period, or can we rely on our fundamentals and lead the way, not paying any heed to the negative signals emitting from the world's largest and the most developed economy?
Quite simply put, a lot of tall projections have been made about the future of India -- these projections, the so-called merry picture of stupendous growth now faces a litmus test!! Are we strong enough fundamentally to shield our economy from the fallout in the U.S. and continue growing, albeit a bit more moderately?
The times ahead are sure going to prove dicey, the path going forward ain't going to be full of roses.. The roses seem to have withered away but they have left behind their thorns, thorns which can prick us, hurt us, draw our blood out! So can we walk the path or do we choose to back off, consolidate for a while while Big Daddy tries to resolve its problems and show us the way forward??
Second interesting question, how will the outlook of the U.S. affect the economies of the world? With Big Daddy going weak in the knees, are we too supposed to follow the Boss into a recessionary period, or can we rely on our fundamentals and lead the way, not paying any heed to the negative signals emitting from the world's largest and the most developed economy?
Quite simply put, a lot of tall projections have been made about the future of India -- these projections, the so-called merry picture of stupendous growth now faces a litmus test!! Are we strong enough fundamentally to shield our economy from the fallout in the U.S. and continue growing, albeit a bit more moderately?
The times ahead are sure going to prove dicey, the path going forward ain't going to be full of roses.. The roses seem to have withered away but they have left behind their thorns, thorns which can prick us, hurt us, draw our blood out! So can we walk the path or do we choose to back off, consolidate for a while while Big Daddy tries to resolve its problems and show us the way forward??
Thursday, January 17, 2008
INDIA downside up OR upside down!!??
Hi All..so u thought I forgot all about my blog after creating and scribbling in it once??..no dear!! ;)
hey did u guyz had a look at the markets in the last couple of days, its been crashing considerably..but I think thats a short-term correction basically coz of the supersubscription of REL Power that got a trillion pulled out from the market...Our country's estimated GDP is somewhere near ~10 trillions (hey please dont sue me if I am wrong there!!) and 1/10 of these funds locked in 1 IPO could be a big deal and a fair reason for the market dip, wat say??
Well I also see some more factors affecting the ongoing correction, like the lack of expected participation from the FIIs, the Yen treading new highs against the dollar, and the other global cues. However, the forthcoming Congress meet in US, by the end of Jan, regarding Fed rate cuts should be carefully watched upon coz that could bring in some good news...hmm... lot of grey areas discussed!! but I always like to end anything on a happy note...folks while US is supposed to be heading into a phase of recession, India is striding on a growth path now with the difference in US salaries compared to India dipping 21% and healthy corporate results that are meeting our expectations etc. The business houses are venturing out to capture innovative and unexplored avenues of growth across most of the sectors, call it Realty, Financial Services, Power, Oil and Gas, Pharma etc, we are very well-diversified.....well, India is a country known for diversity in unity, is'nt it? So all in all.....I see a bright future for India, in India!! :)
Authored by: MEENAKSHI SHARMA, CFP
hey did u guyz had a look at the markets in the last couple of days, its been crashing considerably..but I think thats a short-term correction basically coz of the supersubscription of REL Power that got a trillion pulled out from the market...Our country's estimated GDP is somewhere near ~10 trillions (hey please dont sue me if I am wrong there!!) and 1/10 of these funds locked in 1 IPO could be a big deal and a fair reason for the market dip, wat say??
Well I also see some more factors affecting the ongoing correction, like the lack of expected participation from the FIIs, the Yen treading new highs against the dollar, and the other global cues. However, the forthcoming Congress meet in US, by the end of Jan, regarding Fed rate cuts should be carefully watched upon coz that could bring in some good news...hmm... lot of grey areas discussed!! but I always like to end anything on a happy note...folks while US is supposed to be heading into a phase of recession, India is striding on a growth path now with the difference in US salaries compared to India dipping 21% and healthy corporate results that are meeting our expectations etc. The business houses are venturing out to capture innovative and unexplored avenues of growth across most of the sectors, call it Realty, Financial Services, Power, Oil and Gas, Pharma etc, we are very well-diversified.....well, India is a country known for diversity in unity, is'nt it? So all in all.....I see a bright future for India, in India!! :)
Authored by: MEENAKSHI SHARMA, CFP
Wednesday, January 16, 2008
The markets today..
Lack of any FII inflow coupled with the movement of liquidity from the secondary markets to the primary one led to the Sensex falling by over 700 points in intra-day trading before the Sensex recovered almost 350 points from the day's low. This movement of liquidity is attributable to the Reliance Power IPO which mopped up over Rs. 1 trillion yesterday, with the market expecting the IPO to be oversubscribed several times over.
This fall was only a correction; the bull story of the markets remains intact until the financial budget! However, the sensex may be prey to more whimsical (volatile) moves of this sort during this period. Smart investors would do well to keep atleast 10 percent of their portfolio in cash and book their profits on every rise! Though global cues have been pretty discouraging, the Indian markets are no longer being dictated by the overseas concerns. Sure, there is some effect but the overall mood is that of optimism!
So stay invested in this bull story & enjoy the SenseXXXational Ride!!
This fall was only a correction; the bull story of the markets remains intact until the financial budget! However, the sensex may be prey to more whimsical (volatile) moves of this sort during this period. Smart investors would do well to keep atleast 10 percent of their portfolio in cash and book their profits on every rise! Though global cues have been pretty discouraging, the Indian markets are no longer being dictated by the overseas concerns. Sure, there is some effect but the overall mood is that of optimism!
So stay invested in this bull story & enjoy the SenseXXXational Ride!!
The right time to take a position in Parsvnath
With the markets declining by 500 points in the last trading session, it seems as if we are entering a short period of correction. The Sensex continues to have strong support at the 19,000-19,500 mark and I would expect the markets to bounce back after hitting this level.
Meanwhile the correction in the market has led to a steep fall in the price of Parsvnath Developers.. The stock enjoyed a great rrun in December 2007, appreciating by over 45% .. However, the share price has fallen prey to profit booking and the stock has entered a near-term period of consolidation. However, I believe that investors should look to accumulate positions in this stock at every dip. The stock closed at Rs. 431 yesterday and has a 6-month target of Rs. 700 (minimum). Another run like that in the month of December and the stock will easily scale my target price.
Do not panic because the lull in the market is only temporary. Use the decline to buy fundamentally good scripts at cheap prices; the markets are going to resemble a roller coaster ride in the months to come!
Meanwhile the correction in the market has led to a steep fall in the price of Parsvnath Developers.. The stock enjoyed a great rrun in December 2007, appreciating by over 45% .. However, the share price has fallen prey to profit booking and the stock has entered a near-term period of consolidation. However, I believe that investors should look to accumulate positions in this stock at every dip. The stock closed at Rs. 431 yesterday and has a 6-month target of Rs. 700 (minimum). Another run like that in the month of December and the stock will easily scale my target price.
Do not panic because the lull in the market is only temporary. Use the decline to buy fundamentally good scripts at cheap prices; the markets are going to resemble a roller coaster ride in the months to come!
Tuesday, January 15, 2008
Back with a follow-up on the telecom stocks..
In my post on the telecom stocks dated December 31, 2007, I'd advised investors to build positions in both RCOM and Bharti. Well, the position in RCOM sure has paid off well for those who did invest in the stock at that time. However, those of you caught on the wrong side of the bargain, do not despair - Bharti remains a fundamentally good stock to own. So, hold on to your positions, accumulate the stock on dips and exercise some patience - your patience will be rewarded..
Markets seem choppy at the moment, awaiting earning signals from the major stocks. Mid-caps and small-caps seem to have rediscovered their midas touch after a brief slump! These stocks are back in the thick of action.. Do not discount the IT stocks, these stocks are available at very cheap prices and look to build your positions in these counters.
& for those of you who need some clarification on the companies I've mentioned in my last post, kindly leave your comment with your email id!
Markets seem choppy at the moment, awaiting earning signals from the major stocks. Mid-caps and small-caps seem to have rediscovered their midas touch after a brief slump! These stocks are back in the thick of action.. Do not discount the IT stocks, these stocks are available at very cheap prices and look to build your positions in these counters.
& for those of you who need some clarification on the companies I've mentioned in my last post, kindly leave your comment with your email id!
Monday, January 14, 2008
A look at some of the stocks to invest in 2008
The stock market is highly volatile now but there are quite a few stocks that you can pick up for a discount. We take this opportunity to list a few stocks that will generate good returns in a 6-month to a year's time, nevertheless, depending as and when the targets are achieved. Here are my picks for the year 2008:
A) IT Stocks
1) Infosys (current price: 1534.5 ........target price: 2000)
2) Wipro (current price: 465.95 .........target price: 650-700)
3) TCS (current price: 965.0 ........target price: 1250-1300)
B) Realty / Infrastructure
1) Parsvnath Developers (current: 470.0 ......target: 700 minimum)
2) Ganesh Housing (current: 691.0 .......target: 1200)
3) Srei Infrastructure (current: 258.0 ........target: 400)
4) Marg Constructions (current: 492.15 .....target: 850)
C) Financial Services
1) IndiaBulls Financial Services (current: 870.0 ......target: 1000 minimum .. There are talks of a few more demergers happening in this company. .So stay invested if you are holding this stock..)
2) Motilal Oswal (current: 1919.0 .......target: 2500)
D) Auto
1) Maruti Suzuki (current: 855.0 ....target: 1300 but only if 2H08 sales are good and launch of the new model goes as planned.)
2) Tata Motors (current: 763.0 ......target: 900-1000; again I expect the company to rocket skywards in the second half of 2008.)
E) Pharma
1) Ranbaxy (current: 399.45 ......target: 500; talks of a demerger are on. The demerger, if it happens, will likely take place in the second half of 2008. We believe the demerger will help unlock the value in the company.)
2) Aurobindo Pharma (current: 477.0 .....target: 900 in 2-3 years time)
F) Dark Horses
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! All records will be broken and rewritten or so we hope! If you are invested in it, then stay invested!!
G) Telecom
1) Bharti Airtel (current: 910.5 ......target: 1200)
2) RCOM (current: 805.2 ......target: 925 in short term, 1000 within 6-8 months)
[I've listed the reasons to invest in these stocks in one of my earlier posts; please refer to the same for more clarification - Varun Parwal..]
H) Aviation
1) Jet Airways (current: 895.0 .......target: 1400-1500)
I) Oil and gas
1) ONGC (current: 1299.7 .......target: 1650, achievement of the target is dependend on the oil and gas prices set by govt.) but awesome long-term investment!!
J) 3-Year Term Outlook: Go for DLF, NTPC and PowerGrid. However, wait for correction before buying into any of these stocks. A speculative bet would be an investment in NTPC currently. The Reliance Power IPO could help this stock cross the Rs. 300 mark.
However, these are just a FEW stocks that we are primarily bullish on. There are others too that you could look forward too. As for the mutual funds, equity-based funds have greater returns, so we recommend picking up one of these funds: Franklin Templeton, Reliance, SBI Magnum or HDFC.
We hope our picks help you generate good returns going forward. Please send in your feedback and any other queries; we will try and answer as many as we can.
[Co-authored with Meenakshi Sharma, CFP]
A) IT Stocks
1) Infosys (current price: 1534.5 ........target price: 2000)
2) Wipro (current price: 465.95 .........target price: 650-700)
3) TCS (current price: 965.0 ........target price: 1250-1300)
B) Realty / Infrastructure
1) Parsvnath Developers (current: 470.0 ......target: 700 minimum)
2) Ganesh Housing (current: 691.0 .......target: 1200)
3) Srei Infrastructure (current: 258.0 ........target: 400)
4) Marg Constructions (current: 492.15 .....target: 850)
C) Financial Services
1) IndiaBulls Financial Services (current: 870.0 ......target: 1000 minimum .. There are talks of a few more demergers happening in this company. .So stay invested if you are holding this stock..)
2) Motilal Oswal (current: 1919.0 .......target: 2500)
D) Auto
1) Maruti Suzuki (current: 855.0 ....target: 1300 but only if 2H08 sales are good and launch of the new model goes as planned.)
2) Tata Motors (current: 763.0 ......target: 900-1000; again I expect the company to rocket skywards in the second half of 2008.)
E) Pharma
1) Ranbaxy (current: 399.45 ......target: 500; talks of a demerger are on. The demerger, if it happens, will likely take place in the second half of 2008. We believe the demerger will help unlock the value in the company.)
2) Aurobindo Pharma (current: 477.0 .....target: 900 in 2-3 years time)
F) Dark Horses
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! All records will be broken and rewritten or so we hope! If you are invested in it, then stay invested!!
G) Telecom
1) Bharti Airtel (current: 910.5 ......target: 1200)
2) RCOM (current: 805.2 ......target: 925 in short term, 1000 within 6-8 months)
[I've listed the reasons to invest in these stocks in one of my earlier posts; please refer to the same for more clarification - Varun Parwal..]
H) Aviation
1) Jet Airways (current: 895.0 .......target: 1400-1500)
I) Oil and gas
1) ONGC (current: 1299.7 .......target: 1650, achievement of the target is dependend on the oil and gas prices set by govt.) but awesome long-term investment!!
J) 3-Year Term Outlook: Go for DLF, NTPC and PowerGrid. However, wait for correction before buying into any of these stocks. A speculative bet would be an investment in NTPC currently. The Reliance Power IPO could help this stock cross the Rs. 300 mark.
However, these are just a FEW stocks that we are primarily bullish on. There are others too that you could look forward too. As for the mutual funds, equity-based funds have greater returns, so we recommend picking up one of these funds: Franklin Templeton, Reliance, SBI Magnum or HDFC.
We hope our picks help you generate good returns going forward. Please send in your feedback and any other queries; we will try and answer as many as we can.
[Co-authored with Meenakshi Sharma, CFP]
Saturday, January 12, 2008
IT Stocks --- Ta da di da dum...
Many of you must be wondering why I'm so so bullish on IT stocks, especially when all the other sectors are performing so well while the IT stocks continue to stoop to new lows! Well, here I take a chance to showcase you some of my reasons for being bullish on IT:
1) Decreasing dependance on U.S. economy; future growth to be driven by outsourcing work from the European and Asian countries.
2) A stabilizing money --- I suspect RBI is giving rupee a helping hand because I feel that without governmental influence, rupee will find resistance against dollar only at Rs. 35-Rs. 36 mark.. It appears as if there are certain market forces which are buying exceptionally high amounts of dollars, in $ billions, to keep the exchange rate above Rs. 39/$ ...
3) U.S. is slowly waking up to the realisation that it may be entering another period of recession. To avert such a situation, the Fed bank has hinted at another round of rate cuts. This should boost the economy while other measures, in discussion at the Congress, should serve to revive the economy further..
Oopsies.. Got to cut my post here only.. My battery is almost dead.. More on the IT space tomorrow people!! Goodnight and sweet dreams!
1) Decreasing dependance on U.S. economy; future growth to be driven by outsourcing work from the European and Asian countries.
2) A stabilizing money --- I suspect RBI is giving rupee a helping hand because I feel that without governmental influence, rupee will find resistance against dollar only at Rs. 35-Rs. 36 mark.. It appears as if there are certain market forces which are buying exceptionally high amounts of dollars, in $ billions, to keep the exchange rate above Rs. 39/$ ...
3) U.S. is slowly waking up to the realisation that it may be entering another period of recession. To avert such a situation, the Fed bank has hinted at another round of rate cuts. This should boost the economy while other measures, in discussion at the Congress, should serve to revive the economy further..
Oopsies.. Got to cut my post here only.. My battery is almost dead.. More on the IT space tomorrow people!! Goodnight and sweet dreams!
Friday, January 11, 2008
Stocks to watch in 2008
The markets have been treading choppy waters for the last couple of trading sessions; the IT pack, especially Infosys, has taken quite a beating.. However, I remain convinced that signs of U.S. economy's recovery will drive the IT pack higher! Also, the second half of 2008 could hold a lot of significance for the auto stocks.. Here are my picks for the year 2008:
A) IT Stocks
1) Infosys
2) Wipro
3) TCS
B) Realty / Infrastructure
1) Parsvnath Developers
2) Ganesh Housing
3) Srei Infrastructure
4) Marg Constructions
C) Financial Services
1) IndiaBulls Financial Services
2) Motilal Oswal
D) Auto
1) Maruti Suzuki
2) Tata Motors
E) Pharma
1) Ranbaxy
2) Aurobindo Pharma
F) Dark Horses
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! All records will be broken and rewritten or so I hope!
G) Telecom
1) Bharti Airtel
2) RCOM
H) Aviation
1) Jet Airways
Disclosure: It would be prudent to assume that I own or have an interest in one or more of tehse stocks!! hey hey, just in case, no one takes me wrongly! Also, please understand that these are not the only stocks which will shine in 2008 and beyond. There are a few more interesting companies; however, base your investment on your own research and understanding of the stock! Invest in these companies with an investment horizon of 3 years..
A) IT Stocks
1) Infosys
2) Wipro
3) TCS
B) Realty / Infrastructure
1) Parsvnath Developers
2) Ganesh Housing
3) Srei Infrastructure
4) Marg Constructions
C) Financial Services
1) IndiaBulls Financial Services
2) Motilal Oswal
D) Auto
1) Maruti Suzuki
2) Tata Motors
E) Pharma
1) Ranbaxy
2) Aurobindo Pharma
F) Dark Horses
1) Reliance, Reliance and Reliance -- From RNRL to the forthcoming Reliance Power IPO, the Reliance pack is set to shine bright even in 2008! All records will be broken and rewritten or so I hope!
G) Telecom
1) Bharti Airtel
2) RCOM
H) Aviation
1) Jet Airways
Disclosure: It would be prudent to assume that I own or have an interest in one or more of tehse stocks!! hey hey, just in case, no one takes me wrongly! Also, please understand that these are not the only stocks which will shine in 2008 and beyond. There are a few more interesting companies; however, base your investment on your own research and understanding of the stock! Invest in these companies with an investment horizon of 3 years..
Einstein in Heaven
Einstein dies and goes to heaven only to be informed that his room is not yet ready. "I hope you will not mind waiting in a dormitory. We are very sorry, but it's the best we can do and you will have to share the room with others" he is told by the doorman.
Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. "See, Here is your first room mate. He has an IQ of 180!"
"Why that's wonderful!" Says Albert. "We can discuss mathematics!"
"And here is your second room mate. His IQ is 150!"
"Why that's wonderful!" Says Albert. "We can discuss physics!"
"And here is your third room mate. His IQ is 100!"
"That Wonderful! We can discuss the latest plays at the theater!"
Just then another man moves out to capture Albert's hand and shake it. "I'm your last room mate and I'm sorry, but my IQ is only 70."
Albert smiles back at him and says, "So, where do you think the stock market is headed?
Einstein says that this is no problem at all and that there is no need to make such a great fuss. So the doorman leads him to the dorm. They enter and Albert is introduced to all of the present inhabitants. "See, Here is your first room mate. He has an IQ of 180!"
"Why that's wonderful!" Says Albert. "We can discuss mathematics!"
"And here is your second room mate. His IQ is 150!"
"Why that's wonderful!" Says Albert. "We can discuss physics!"
"And here is your third room mate. His IQ is 100!"
"That Wonderful! We can discuss the latest plays at the theater!"
Just then another man moves out to capture Albert's hand and shake it. "I'm your last room mate and I'm sorry, but my IQ is only 70."
Albert smiles back at him and says, "So, where do you think the stock market is headed?
Thursday, January 10, 2008
Auto Expo 2008
The 9th Auto Expo 2008 is going to feature the launch of the Tata's Rs. 1 lakh car! Expectations and hype surrounding this car have been steadily building up and many people would be eager to see the final product which rolls out from the Tata stable!
However, I am too sleepy here! Either I'll doze off on my seat or I'm going to fall off it! So you all keep a sharp eye on the shares of Tata motors!! A good reception to the car will provide a likely boost to the company's shares!
However, I am too sleepy here! Either I'll doze off on my seat or I'm going to fall off it! So you all keep a sharp eye on the shares of Tata motors!! A good reception to the car will provide a likely boost to the company's shares!
Tuesday, January 8, 2008
IT stocks ... Ding dong ding..
The optimism in the markets and the ongoing bull run has certainly shirked the IT stocks this time around.. The entire IT sector has underperformed in the current rally and it won't surprise me one single bit if we witness a sharp rally in the prices of the IT stocks, especially with the earnings season just round the corner..
The third quarter earnings will be kicked off by Infosys on Jan 11.. As an investor, my gut feeling is that now is the time to buy into these stocks.. All the major stocks - Infosys, Wipro, Satyam, TCS - are trading at a P/E multiple of 24-26x FY06earnings.. This is a sharp discount to the P/E ratio which these stocks were commanding six-seven months earlier.. The companies are also supposed to report strong third quarter results which should aid their recovery in the times to come.. Also, as the rupee strengthens and the economic scenario in the U.S. recovers, these stocks will improve further, giving a good return to the investors..
I would advise accumulating positions in Infosys and Wipro at the current levels.. TCS as well, and may be Zensar Technologies.. Zensar is an interesting IT firm with a market cap of around RS. 430 cr.. It is trading at a P/E of only 18x its FY06 earnings.. I currently do not have any rating assigned to this stock, will let you all know more if I find the stock worth investing into!!
'Til then, have a great time and enjoy the SenseXXXational Ride!! ;-)
The third quarter earnings will be kicked off by Infosys on Jan 11.. As an investor, my gut feeling is that now is the time to buy into these stocks.. All the major stocks - Infosys, Wipro, Satyam, TCS - are trading at a P/E multiple of 24-26x FY06earnings.. This is a sharp discount to the P/E ratio which these stocks were commanding six-seven months earlier.. The companies are also supposed to report strong third quarter results which should aid their recovery in the times to come.. Also, as the rupee strengthens and the economic scenario in the U.S. recovers, these stocks will improve further, giving a good return to the investors..
I would advise accumulating positions in Infosys and Wipro at the current levels.. TCS as well, and may be Zensar Technologies.. Zensar is an interesting IT firm with a market cap of around RS. 430 cr.. It is trading at a P/E of only 18x its FY06 earnings.. I currently do not have any rating assigned to this stock, will let you all know more if I find the stock worth investing into!!
'Til then, have a great time and enjoy the SenseXXXational Ride!! ;-)
21k - Touched but not breached!!
First month of a new year and yet another milestone has been breached! Err, I guess it would be more correct and prudent to say that upon kissing the 21k mark, the Sensex got a bit jittery in the knees.. But ladies and gentlemen, rest assured, the market has regained its senses and is again raring to touch the sky!
If the numerous reports from various qualified "gurus" are to be believed, then the Indian growth story is still intact! & what's more, we are developing an immunity to the worries in the U.S. The Sensex seems to be shrugging off the external tensions, the worries, the market crashes - It seems intent on scripting its own story, breaking free of the shackles.. no more is the sensex paying heed to global cues; may the world market be damned, the sensex has enough steam left to touch the skies!
Oh well, I guess enough eulogy and enough optimism exhibited! I'm happy to see RCOM going the way it is.. Good to see Bharti also going up. It certainly is an underpriced, highly volatile stock.. Noticed that good intra-day profits are there for the taking in Airtel as well as IndiaBulls financial services and Asian paints..
Anyways, don't have any stock tips to offer today! I'll only advise people to be on their feet, don't let your greed get the better of you.. The market is in an unchartered territory - All optimists are welcome to ride the market and as for pessimists, oh well, book your profits and go home buddies!! Let the adventurers enjoy this SenseXXXational Ride!!!!
If the numerous reports from various qualified "gurus" are to be believed, then the Indian growth story is still intact! & what's more, we are developing an immunity to the worries in the U.S. The Sensex seems to be shrugging off the external tensions, the worries, the market crashes - It seems intent on scripting its own story, breaking free of the shackles.. no more is the sensex paying heed to global cues; may the world market be damned, the sensex has enough steam left to touch the skies!
Oh well, I guess enough eulogy and enough optimism exhibited! I'm happy to see RCOM going the way it is.. Good to see Bharti also going up. It certainly is an underpriced, highly volatile stock.. Noticed that good intra-day profits are there for the taking in Airtel as well as IndiaBulls financial services and Asian paints..
Anyways, don't have any stock tips to offer today! I'll only advise people to be on their feet, don't let your greed get the better of you.. The market is in an unchartered territory - All optimists are welcome to ride the market and as for pessimists, oh well, book your profits and go home buddies!! Let the adventurers enjoy this SenseXXXational Ride!!!!
Thursday, January 3, 2008
A sense of direction in the new year!!
Welcome all to my first post of the year 2008! The start of the year has left me very happy and smiling from ear to ear! Not only has the stock market displayed some great resilience in maintaining the 20k+ levels, the market also seems ready to move up and cross the 22,500 levels..
Ok, ok, so I guess my initial estimate of the Sensex touching 21.5k levels hasn't been reached yet and here I'm, already taking a shot at the heights the sensex can achieve in the New Year! The growth in the markets this year is expected to be more moderate and one driven by earnings and newsflow! Investors will be looking to take their cues from the third-quarter earnings which will soon be announced, beginning with the IT heavyweight's, Infosys', earnings on Jan 11.
The current pricing of the IT stocks looks very attractive; I would advise building positions in Infosys, TCS and Wipro before the earning season kicks off! The IT stocks were heavily discounted in 2007 and 2008 could just be the year when these stocks will outperform the broader market. A stabilizing rupee will do their fortunes no harm either.
Also, the auto stocks did not really shine in 2007. Again, I advise investment in Maruti and Tata Motors. Both the companies have a lot to offer and 2008 could be an exciting year not just for these 2 companies but the entire range of auto stocks in general!
Power stocks remain a long-term play; look to build positions in these stocks as they will zoom to unprecedented heights by 2010! Also, with the Government mulling a cut in the duty rates for oil comapnies, shares of ONGC and the other oil companies are set to benefit and have a mini run upwards in the near term.
For those intersted in mid-caps, check out Godavari Power, Parsvnath Developers and Srei Infrastructure Finance.. More on the markets later! It's time for me to get back to my work now!! Adieuuuu!!
Ok, ok, so I guess my initial estimate of the Sensex touching 21.5k levels hasn't been reached yet and here I'm, already taking a shot at the heights the sensex can achieve in the New Year! The growth in the markets this year is expected to be more moderate and one driven by earnings and newsflow! Investors will be looking to take their cues from the third-quarter earnings which will soon be announced, beginning with the IT heavyweight's, Infosys', earnings on Jan 11.
The current pricing of the IT stocks looks very attractive; I would advise building positions in Infosys, TCS and Wipro before the earning season kicks off! The IT stocks were heavily discounted in 2007 and 2008 could just be the year when these stocks will outperform the broader market. A stabilizing rupee will do their fortunes no harm either.
Also, the auto stocks did not really shine in 2007. Again, I advise investment in Maruti and Tata Motors. Both the companies have a lot to offer and 2008 could be an exciting year not just for these 2 companies but the entire range of auto stocks in general!
Power stocks remain a long-term play; look to build positions in these stocks as they will zoom to unprecedented heights by 2010! Also, with the Government mulling a cut in the duty rates for oil comapnies, shares of ONGC and the other oil companies are set to benefit and have a mini run upwards in the near term.
For those intersted in mid-caps, check out Godavari Power, Parsvnath Developers and Srei Infrastructure Finance.. More on the markets later! It's time for me to get back to my work now!! Adieuuuu!!
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