Monthly Call

Andhra Bank

CMP: 92
Target 1: 111
Target 2: 116

Current Quote of Andhra Bank

Andhra Bank is a mid-sized PSU bank with strong presence in southern India and a network of 1,930 distribution channels giving it an asset size of Rs 49,000 crore. The bank reported net interest margin (NIM) of 3.47% for Q1FY08, a slight decline due to pressure on cost of funds. The bank continues to sustain strong credit growth at 26% for the March 07 quarter and 27% for the June 08 quarter, and is expected to grow at 25% in FY08 with margins expected to be maintained. Its Q1FY08 net profit grew 21% y-o-y to Rs 141 crore on account of lower provision expenses. The bank's cost-to-income ratio has improved from 55% in FY06 to 50% in FY07. With net NPAs at 0.17% and robust credit growth, we believe the stock is available at attractive valuation of 1.2x its FY09E ABV and 7.1x its FY09E EPS.

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Monthly Call

Omaxe Limited

CMP: 333
Target 1: 358
Target 2: 370

Current Quote of Omaxe Limited

The company was originally set up as Omaxe Builders Private limited in 1989, promoted by Shri. Rohtas Goel , the founder, to undertake construction & contracting business. The company further changed its constitution to a limited company known as Omaxe Construction Ltd., in 1999. The name of the company has now changed to OMAXE LTD from 2006. The company began life as a civil construction and contracting company, has Successfully executed more than 120 prestigious Industrial, Institutional, Commercial, Residential and Hospital construction projects.

The company entered the Real Estate Development business in 2001 and in now amongst the large Real Estate Development companies in India

The company has executed construction contracts for a number of prestigious Indian private, public sector and Multinational's clients.

Omaxe was founded by Shri. Rohtas Goel , a first generation entrepreneur, a civil engineer by qualification and a visionary having more than two decades of experience in Construction and Real Estate Development. Mr. Goel, as the Chairman & Managing Director of Omaxe has been at the forefront, a man with a mission of building globally comparable quality Residential & Commercial projects, his moto "Turning Dreams Into Realty "
Omaxe has received a number of awards from the industry, recognition of its continued efforts towards achieving excellence and quality. The company became the first Construction Company of northern India to receive an ISO 9001:2000 Certification.

The company which was founded as a civil construction and contracting organization in1989 and subsequently diversified its business to focus on Real Estate Development from the year 2001, to capture the opportunity offered by the growing Real Estate markets in India , is today among the large Real Estate Development companies in India.

The company in a short span of 5 years has completed and delivered 10 projects consisting of 8 residential and 2 commercial covering approx 5.13 million sq. ft of area, with all "on time deliveries". The company currently has 52 projects under development. These include 21 group housing projects,16 integrated townships,14 shopping malls and commercial complexes and 1 hotel. The company is at present developing over 140 million sq ft of saleable area across 30 towns in 9 states in Northern and Central India..

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Monthly Call

Parsvnath Developers

CMP: 341
Target 1: 390
Target 2: 430

Current Quote of Parsvnath Developers

For the real estate sector per se only those investors who have higher risk appetite and a long-term horizon should enter this sector because there are lot of good prospects and side by side there are lot of problems also with the sector with the interest rates going up, the land bank valuation going here and there. So unless and until you have a higher risk appetite and a long-term horizon you should not enter this sector."

Parsvnath Developers is in strong footing with presence in both residential and commercial sector. They have the contracts with DMRC (Delhi Metro Development) of the stations, malls, they are coming up with multiplexes, they are into SEZ at Gurgoan, now they have announced a roll out license for mobile telephony. All these speak well for Parsvnath and if the investor has a long-term view, one can certainly enter into this stock.

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Monthly Call

Ultratech Cement

CMP: 971
Target 1: 1023
Target 2: 1035

Current Quote of Ultratech Cement

Ultra Tech Cement is a subsidiary of Grasim Industries, the flagship of the Aditya Birla Group. Its basket of products includes ordinary Portland cement, Portland blast furnace slag cement, Portland Pozzolana cement and Grey Portland cement. The company reported a 16% growth in revenue to Rs 1365.27 crore for the June 2007 quarter. While domestic sales volumes registered a 5% growth to 3.67 million tonnes, exports were curtailed to cater to the growing domestic demand. OPM has increased marginally by 10 basis points to 31.8%. Due to surge in other income and decline in interest expenses, net profits were up 23% to Rs 259.38 crore. The capacity expansion at the plant in Andhra Pradesh together with setting up a split grinding unit and captive power plant is progressing on schedule. Considering the growing demand in the southern markets and the availability of slag, the company has decided to augment its capacity to 4.9 million tonnes per annum instead of 4 million tonnes per annum as had been decided earlier. The split grinding unit is being set up at Ginigera in Karnataka. The company has earmarked an Rs 3,300 capex for next three years for its expansion projects and de-bottlenecking.

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Monthly Call

Zee Entertainment Enterprise

CMP: 306
Target 1: 331
Target 2: 342

Current Quote of Zee Entertainment enterprise

Zee TV, with 234 gross rating points (GRPs) in Q1FY08, is now closer to the genre leader Star Plus. Zee TV's market share was 25% during the quarter, up from 23% in Q1FY07; Star Plus 38%; Sony 13%; Sahara One 9% and Star One 8%. Zee TV had a market share of 29% and Star Plus 32% in the week ending July 14, 2007 .

Zee Entertainment Enterprises reported an impressive performance as consolidated operating revenue grew by 35% to Rs 391.60 crore backed by an expansion in advertising revenue by 47% y-o-y to Rs 204.37 crore for the quarter ending June 30, 2007, while subscriptions grew by 27% to Rs 168.09 crore, and other sales and services were up by 9% to Rs 19.11 crore. Operating profit margin improved 770 basis points (bps) to 30.6% and the resultant net profit grew 47% to Rs 77.10 crore.

Zee Cinema also undertook many new programming and marketing initiatives to enhance viewer experience. The June 2007 quarter also showcased a big event – Zee Cine Awards. Zee Cinema achieved a channel share of 31%. Zee Cafe continued its lead over Star World in all-day ratings as well as prime-time ratings across five metros. Zee Cafe commissioned two new shows – Showbiz India Extreme, a variety programme that looks into the lives and times of the Indian diaspora in North America , and Top 10 countdown, listing the best and worst from various categories in fashion, lifestyle, Bollywood, music and luxury. Zee Studio introduced a unique initiative on world cinema, which included all-time great titles including Finally Sunday by Truffaut, Double Life of Veronique by Kieslowski and Twin Peaks by David Lynch. The channel premiered over 40 movies in the quarter. Revenue from the sports business was Rs 34.5 crore. It suffered a loss at EBITDA of Rs 3 crore in the June 2007 quarter.

Going forward, the company has planned to launch a general entertainment youth-based channel, ZeeNext, by January 2008 and is entering into a joint venture with a broadcasting company in the Middle East to launch a movie channel to broadcast Hindi films dubbed in Arabic. Also, Zee Sports would be entering the US market partnering with Dish Network. With growing market share and increasing realizations, expectations are that the company will give good returns going forward.

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Monthly Call

Reliance Capital

CMP: 1139
Target 1: 1210
Target 2: 1245

Current Quote of Reliance Capital

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Monthly Call

L & T

Current Market price: 2363

Target 1: 2422

Target 2: 2459

Current Quote of L & T

Larsen & Toubro Limited (L&T) has won a repeat order valued at over $70 million for construction of two ships from RollDock BV of Netherlands. The vessels will be built at the existing shipyard that is a part of the engineering complex at Hazira, Surat. RollDock, the Rotterdam-based shipping company, caters to special purpose cargo movements. Its management has expressed their desire to continue the company's association with L&T for its future vessel acquisition programme. They have also signed an agreement that includes options for more vessels of the same series to be built later this year. The vessels will be delivered by May 2010.

This news will put this stock in hot position in coming recent future.

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Monthly Call

NTPC

Current Market price: 158
Target 1: 174
Target 2: 179

Current Quote of NTPC

NTPC reported a 20% revenue growth for the quarter ended June 30, 2007 to Rs 8,969.7crore. Net profit surged by an impressive 53% to Rs 2,369.9 crore. The main driver for the sharp increase in bottom line was the fall in interest expenses on the back of Forex gain. Operational performance has also improved. Power generated increased 12% Y-o-Y to 52,019 MU. The company’s coal-based plant boasts a high PLF of 93.9% against 87.8%. In FY07, the company 3,155 MW of capacity and in the first quarter of FY08, it has further enhanced it by an additional 500 MW. Currently, the company’s total power generation capacity is 26,850 MW and under joint ventures 1,054 MW. NTPC plans to increase its power generation capacity to 50,000 MW by FY12 and 75,000 MW by FY17. Its current installed capacity of the country’s overall coal-based, gas-based and JV capacities is 82%, 14% and 4% respectively. The company also plans to increase its trading volume from 2.66 BUs to 10 BUs by 2011-12 and to 25 BUs by 2016-17. It plans to have a distribution capacity of 1,000 MW in FY12 and 2000 MW in FY17. To secure its fuel linkages, the company will have a coal mining capacity of 15 million tpa by FY12 and 47 million tpa by FY17.

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Monthly Call

Bharat Petroleum
CMP: 315.05
Target 1: 330
Target 2: 336
Current Quote of Bharat Petroleum

Bharat Petroleum Corporation Ltd (BPCL) improved its gross refining margins (GRMs) on a Y-o-Y basis during the June 2007 quarter, which helped it offset mounting under-recoveries in retail sales of auto fuels and kerosene due to surging international crude prices. Operating profit (excluding other income) was Rs 206 crore in Q1FY08 compared with an operating loss of Rs 260.9 crore the previous year, while net sales grew 5.1% to Rs 23,869.4 crore. Meanwhile, in its refining division, crude throughput amounted to 5.15 million tonnes during the June 2007 quarter compared with 4.88 million tonne a year earlier. Going forward, refining margins are expected to remain strong, in tune with the global trend. Further, BPCL, like other oil marketing companies, is expected to receive oil bonds from the central government and that should help improve its financial health. At the current price of Rs 315, the stock trades at over 7x estimated FY08 earnings.

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Monthly call

Canara Bank

Current Market price: 257

Target 1: 291

Target 2: 308

Current Quote of Canara Bank

Canara Bank is the second largest PSU bank after SBI with a business size of Rs 240,886 crore. It has a network of 2,400 branches. The bank has recorded strong and consistent growth over the past five years, with RoE in the 16-17% range. It has also maintained rapid loan growth, which has traditionally been above industry average. After SBI, it is among those best positioned to participate in relatively large capex-related funding.

Past Performance:- It reported 2.9% net interest margin (NIM) for FY07, a slight dip from 3.01% for FY06. Its FY07 loan book grew 24% y-o-y to Rs 98,505 crore and deposits grew 22% y-o-y to Rs 142,381 crore.

Future expectations:-

I expect advances to grow 20-22% in FY08 with margins expected to be maintained. FY07 PAT jumped 5.7% to Rs 1,420 crore from Rs 1,382 crore. At the current price of Rs 257.55, the stock trades at attractive pricing.

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