Share Trading Tips

DLF

lndia’ largest real estate developer by market capitalisation along with its joint venture partner Hubtown sold 100% of their respective shareholding in DLF Ackruti Info Parks in Pune for an aggregate consideration of Rs 810 crore to an entity controlled by real estate fund affiliated with the Blackstone Group. BRfllMauritius Investment II. after obtaining all necessary approvals. Prior to the sale of their respective shareholding. DLF and Hubtown held 67% and 33% equity shares in DLF Ackruti. DLF Ackruti owns a notified IT/ITES special economic zone (SEZ) in Pune, Mahantshtra. The sale of stake in the SEZ is in line with DLF’s objective of divesting its non-strategic assets.

Oracle Financial Software

The Mumbai-based IT firm fell after dismal results from its US-based parent Oracle Corp, the world’s third biggest software maker. Oracle Corp reported 17% growth in its net income to USS 2.19 billion for the second quarter ended 30 November 2011 on account of higher sales of new software licences.Its total revenues rose by 2% to US$ 8.8 billion in the second quarter of the current fiscal. Oracle’s earnings fell short of market expectations for the first time in a decade due to slower demand for databases, applications and computer servers.

Buy PTC India at Rs 47.5-48.4, Stop loss at Rs 46.8, Target at Rs 50-52.6

Buy Adani Power at Rs 83.8-86.5, Stop loss at Rs 82.3, Target at Rs 90.7-97.6

Buy Gitanjali Gems at Rs 303.55, Stop loss at Rs 301, Target at Rs 310

Buy Piramal Healthcare at Rs 416.45, Stop loss at Rs 412, Target at Rs 424

HCL Technologies Ltd

Higher than expected growth in Core Software offset one-off decline in IMS

In case of IT services volume grew by 4.9% QoQ in Q2FY12 better than our expectation and higher than peer sets -for instance TCS and Infosys registered volume growth of 3.2% and 3.1%, respectively, on QoQ basis in December quarter. Whereas, Infrastructure services (IMS) registered 0.7% QoQ decline in constant currency basis primarily due to temporary stoppage of work in System Integration business in India (the same is reflected in decline in India’s share in total revenue from around 5% in Q1FY12 to around 3.5% in Q2FY12) because of significant depreciation in INR against the major global currencies leading to significant losses to the company .In the above mentioned contracts, the company is currently in re-negotiation process with both vendors and customers and expects the same to complete in Q3FY12.

EBITDA margin improved by 141 bps QoQ to 18.5% (in INR terms) in Q2FY12 against our expectation of improvement in margins by 166 bps QoQ primarily led by higher than projected losses in BPO segment. The improvement in EBITDA margin was primarily led by INR depreciation against the major global currencies which supported margins by 260 bps QoQ; whereas annual salary increment, SG&A investment and milestone based bonus payment adversely impacted margin by 104 bps QoQ in Q2FY12.

The company reported forex losses of Rs.76 crore in Q2FY12 against our projection of Rs.9 crore. Higher than estimated forex loss led lower than expected net profit of Rs.573 crore in Q2FY12 against our forecast of Rs.630 crore

Mphasis Ltd.

CMP – Rs. 314

Mphasis’s revenue (adjusted for reversal of credit note of Rs.66.5 crore in Q3FY11 and deferment of revenue booking of Rs.34.6 crore due to incomplete documentation in the previous quarter) declined by 2.8% on QoQ basis to USD272.1 million (excluding revenue of USD4.1 million from Wyde- company acquired w.e.f. Sept 2011). Dip in revenue was led by weakness in HP channel which declined by 7.6% (adjusted for reversal of credit note and deferment of revenue in Q3FY11) to USD170.2 million in Q4FY11. Whereas, revenue from direct channel increased by 8.2% QoQ to USD101.8 million in Q4FY11 (excluding revenue from Wyde acquisition).

EBTIDA margin (after adjusting for net onetime revenue of Rs.31.9 crore in Q3FY11 and reversal of provision for expenses of Rs.26.6 crore in Q3FY11) increased by 405 bps QoQ to 18.5% in Q4FY11. Increase in margin was supported by Indian Rupee depreciation against US Dollar by 7.4% QoQ and significant improvement in blended utilization rate –including trainees in BPO (by 400 bps QoQ to 70%) and ITO (by 500 bps QoQ to 80%) in Q4FY11.

Auto major Tata Motors said it plans to enter new global markets such as Thailand, Myanmar, Indonesia and Bangladesh with the ‘Nano’ within a year, as well as launch a CNG version of the car in the domestic market.

The company also said it plans to invest Rs 3,000 crore on capacity expansion and various product development activities next fiscal.

The second day was, however, marred by poor crowd management that pushed reporters to the backseat as a stream of general public visitors flooded the venue.

Another car-maker, General Motors, unveiled two new vehicles under the Chevrolet brand that will be launched later this year in the country.

Premium hatchback Chevrolet Sail and Chevrolet MPV Concept are the first two products from GM’s joint venture with Shanghai Automotive Industry Corporation (SAIC).

Meanwhile, announcing a comeback, three-wheeler manufacturer Piaggio Vehicles on Friday re-entered the scooter segment by introducing its iconic ‘Vespa’ at the 11th Auto Expo in New Delhi.

Force Motors, too, introduced another version of its Traveller passenger vehicle, priced at Rs 11.5 lakh.

It also showcased a hybrid variant of the Traveller at the auto show.

The rupee appreciated by 25 paise to 52.26 per dollar in early trade on Tuesday, as the US currency weakened against euro and other major currencies overseas.

Dealers said firm domestic equity markets also supported the local unit.

The rupee had gained 20 paise to close at nearly three- week high of 52.51/52 per dollar on Monday on the Interbank Foreign Exchange sustained selling of the US currency by exporters.

Meanwhile, the 30-share BSE Sensex rose by 151.58 points, or 0.96 per cent, to 15,966.30 in opening trade on Tuesday

Hindalco has grown its net profits at an average rate of 11% over the past five years. Over the next three years, we expect profit growth to improve at an average rate of 18

ROIC is an important tool to assess a company’s potential to be a quality investment by determining how well the management is able to allocate capital into its operations for future growth. A ROIC of above 15% is considered decent for companies that are in a growth and expansion phase. Though Hindalco’s last three years’ average ROIC has been about 17.5.

A stable dividend history inspires confidence in the management’s intentions of rewarding shareholders. Hindalco’s average payout ratio has been 10.7% over the past 5 fiscals. Thus, we have assigned a high risk rating of 2. Promoter holding: A larger share of promoter holding Read the rest of this entry »

Unichem Laboratories Ltd

BSE 506690  NSE :  UNICHEMLAB

Unichem is expanding quickly in the US market. Currently the company has ANDA filings of 22, with 11 approved & 7 launched. The management has guided revenues of ~USD 7mn & USD 15mn in FY12 & FY13 respectively. Further it expects to file ~1-2 ANDA’s per quarter. Currently huge R&D expenses (~5% of sales) are being made for identification & developing ANDA’s which has resulted into loss for the company in the US market at profitability level. But Unichem seems to be quite confident of recovering and generating profits at least by FY13

A substantial amount is expected to be generated from the contract manufacturing as the company in addition to European & Canadian companies has also tied up with some of the US players. Secondly Ghaziabad facility is running at full utilizations & would be used up for the production which was earlier running at levels of 25-30%. The management expects to earn around Rs 75-85 crs in FY12 & Rs 100-110crs in FY13 from the agreement.

Buy Tata Motors at Rs 188.4-191.5, Stop loss at Rs 186.1, Target at Rs 197-205.5

Buy Cairn India at Rs 321.4-325.7, Stop loss at Rs 318, Target at Rs 333.4-345.4