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Intraday calls for 30-01-09

Markets likely to open weak.Short sell: DLF at 164, target: 157, stoploss: 166 If markets show recovery later during the day, buy: Jaiprakash Associates.

Wall Street employees’ bonus dips 40%

Deepening financial crisis has hit hard the employees of Wall Street, whose yearly bonuses were down 44 per cent in 2008, and that in turn hit the New York state, which would lose USD one billion in tax revenues. A report issued by State Comptroller Thomas DiNapoli on Wednesday showed that New York City employees' bonuses last year were USD 18.4 billion, down from USD 33 billion in 2007. The decline will cost New York City USD 275 million, he said. Besides, media reports have said several restaurants, which catered to Wall Street, too are feeling the pinch and even high-end ones are reducing their prices, cutting items and offering special to entice customers. "The securities industry has already lost tens of thousands of jobs, and the industry is still continuing to write off toxic assets," DiNapoli said, projecting another painful year for the industry. The decline, analysts say, is the largest percentage decline in more than 30 years. Some analysts say that the companies cannot simply do away with bonuses if they are to retain talent but others do not agree, arguing that the employees would have nowhere else to go as the job market is already very tight. The New York State used to get 20 per cent of its revenue from income tax collected from Wall Street and the city 20 per cent before the market meltdown.

Maruti Q3 profit down 54.3 per cent

Maruti Suzuki India Ltd, the country's largest car maker, said quarterly profit fell 54.3 per cent, lagging forecasts due high raw material costs, lower volumes and adverse impact of currency changes. New Delhi-based Maruti said on Thursday net profit fell to 2.14 billion rupees ($43.8 million) in its fiscal third quarter ended December. Net sales fell 2.8 per cent to 46.26 billion rupees, it said. That compared with a net profit forecast of 2.48 billion rupees on net sales of 43.22 billion in a Reuters poll. Maruti, 54.2 per cent owned by Japan's Suzuki Motor Corp, holds almost half the Indian car market with models such as the best-selling Alto and Swift hatchbacks. Shares in Maruti, valued at $3.2 billion, fell 24.3 per cent in the December quarter in line with the main index.

Inflation at 5.64 pct, up for second week

Rising prices of food items, jet fuel and alcohol pushed up inflation marginally for the second consecutive week, to 5.64 per cent. Inflation for the week ended January 17 inched up by 0.04 per cent from 5.6 per cent a week ago, even as beer and alcohol became dearer by 25 per cent. It was 4.45 per cent a year ago. Some of the food items that became expensive during the week due to the eight-day truckers' strike include maize, bajra, jowar, rice, sugar and gur. The truckers' strike, which began on January 5, restricted the movement of goods, leading to shortage and price rise. Among manufactured items, prices of caustic soda, zinc and sacking bags became expensive during the week. In the fuel goods category, jet fuel and furnace oil became dearer by 4 per cent and one per cent, respectively. While the prices of fruit and vegetables remained unchanged during the week, those of cement and iron and steel declined marginally. Inflation, which declined for ten consecutive weeks, rose marginally for the week ended January 10 to 5.6 per cent. Inflation for the week ended November 22 was revised downwards to 8.26 per cent from 8.40 per cent in the provisional estimates.

Intraday Calls 29/01/09

Buy Great Offhsore at 256, target: 266. Stoploss: 252. Buy Power Finance Corporation at 133.10, target: 137. Stoploss: 131 Buy ORIENTAL BANK OF COMMERCE. at Rs. 125-130. SL-120. TRGT 140-150. Buy MTNL at Rs.68-70. SL-65. TRGT 75-80. Buy KOTAK BANK at Rs.270-275. SL-260. TRGT 300-320. Buy JAIPRAKASH ASSOCIATE(J.P) at Rs.63-66. SL-61.TRGT 75-80. Buy G.E.SHIPPING at Rs.160-165. SL-150.TRGT 180-190. Buy BAJAJ AUTO at Rs.225-230.SL-215. TRGT 250-260.

Pfizer-Wyeth may climb to No 2 spot

The merger of Pfizer and Wyeth is expected to create the second-biggest drug maker among multinational companies in India. The world's largest drug maker Pfizer yesterday announced a $68-billion acquisition of US-based Wyeth. The combine will have sales of more than Rs 1,000 crore in India, overtaking Aventis Pharma, Abbott India and Novartis. Aventis last year reported sales of Rs 873 crore, Abbott Rs 594 crore and Novartis Rs 553 crore. More than that, the combined entity will have cash reserves of over Rs 700-900 crore, which can be potentially utilised for acquisition of brands or units in India. Pfizer alone had a net profit of Rs 331 crore last year. The Pfizer- Wyeth combine will, however, lag GlaxoSmithKline (GSK), which recorded sales of Rs 1,577 crore in 2007-08. Independently, Pfizer, the maker of erectile dysfunction drug Viagra, is ranked 27th and Wyeth 37th in 2007-08. Pfizer last year reported net sales of Rs 672 crore while Wyeth had sales of Rs 331 crore. Still, the combined entity will lag much behind its local Indian rivals and is expected to rank 19th among all the drug makers in the country. In India, Pfizer employs close to 2,000 people and Wyeth employs 860, which includes 627 sales representatives. "It is early to say whether Pfizer will trim Wyeth employees in India as India is a key geography for any drug company in the changing global pharmaceutical landscape," said Sujay Shetty, associate director, pharmaceutical and life sciences of PriceWaterhouseCoopers. Both Pfizer and Wyeth have only one manufacturing unit in India, in Mumbai and Goa, respectively. Analysts point out that the deal will bring together a wide basket of drugs, complimenting each other with synergistic benefits in the Indian market. "While Pfizer has a good portfolio of established brands in respiratory and cough syrups, Wyeth has strength in vaccines and certain key antibiotics which Pfizer is not operating in at present," said Sarabjit Kaur Nagra, vice-president, research with Angel Broking. Though Pfizer has indicated the acquisition process is targeted to be completed by mid-2009, the merger of India-listed entities require a lot of regulatory clearances from Sebi, RBI and the shareholders of both companies, experts say. Pfizer and Wyeth also have independent privately-held arms in India. While the share price of Wyeth closed at Rs 434.20 today on BSE with a marginal 0.57 per cent rise, Pfizer rose 2.11 per cent to close at Rs 525.50.

Realty, metal stocks propel Sensex

The Sensex opened 74 points higher at 9,078. The index after moving ahead, pared gains and touched a low of 9,054 in noon trades. Steady buying, thereafter, mainly in realty and metal stocks helped the index bounce back to higher levels. The Sensex touched a high of 9,271 - up 217 points from the day's low - in late trades. The index finally settled with a gain of 253 points at 9,257. The BSE Realty index soared 6.3% to 1,644, and the Metal index surged 4.4% to 4,880. The Bankex and the Oil & Gas index were up nearly 4% each at 4,790 and 6,089, respectively. The market breadth was positive - out of 2,528 stocks traded, 1,406 advanced and 1,023 declined, today.

Tata Steel declares Q3 numbers; stock up

TATASTEEL has touched an intraday high of Rs 178.80 and an intraday low of Rs 167.10. At 2:21 pm the share was quoting at Rs 175.60, up Rs 3.30, or 1.92%. The company has announced its third quarter numbers. Its Q3 standalone net profit was down by 56.37% at 466.24 crore from Rs 1068.58 crore. The company's standalone net sales also declined at Rs 4,735.68 crore from Rs 4,973.92 crore. Margins declined to 29.8% versus 40.2%, YoY. It has reported forex loss of Rs 126.8 crore versus gain of Rs 47.9 crore. Raw material cost has increased at Rs 1,611.2 crore from Rs 902.3 crore. Its sales volumes was lower than production at 1.07 million tonnes. Steel inventory increased to Rs 636 crore from Rs 61 crore, YoY. It was trading with volumes of 3,604,304 shares. Yesterday the share closed up 3.58% or Rs 5.95 at Rs 172.30. Share Price Movement During The Last 12 Months Period Price Latest Price Gain/Loss (Rs.) % Gain/Loss 3-Days 179.20 175.60 -3.60 -2.01 5-Days 195.00 175.60 -19.40 -9.95 7-Days 195.00 175.60 -19.40 -9.95 15-Days 200.30 175.60 -24.70 -12.33 1-Month 214.80 175.60 -39.20 -18.25 3-Month 168.50 175.60 7.10 4.21 6-Month 603.95 175.60 -428.35 -70.92 9-Month 777.70 175.60 -602.10 -77.42 1-Year 698.40 175.60 -522.80 -74.86 Currently -81.02% below the 52-week high of 925.00 Currently 19.99% above the 52-week low of 146.35

Intraday calls for 28-01-09

Markets likely to remain positive today. Buy Jindal Steel & Power at 877, target: 900. Stoploss: 868 BUY BANK OF INDIA at Rs.225-230.SL-222. TRGT-240-245 BUY: DLF at Rs. 165-170. SL-155. TRGT-180-190. BUY: ACC at Rs.480-485. SL-470. TRGT 500-510

Sesa Goa Q3 net dips 22% at Rs 471 cr

Mining firm Sesa Goa today said its standalone net profit for the third quarter ended December 31, declined by 22.53 per cent to Rs 470.69 crore, as compared to Rs 607.60 crore in the same period a year ago. On a standalone basis, the income from operations rose to Rs 1,497.33 crore for the quarter under review, against Rs 1,215.43 crore for the same quarter last fiscal. However, for the nine months ended December 31, the company has posted a net profit of Rs 1,446.53 crore, against Rs 739.33 crore for the same period last year. Sesa Goa settled at Rs 72.70, up 6.5 per cent on the BSE today.

Educomp Solutions Q3 net up 61% at Rs 32 cr

Educomp Solutions today reported a 61.36 per cent jump in net profit at Rs 31.83 crore for the third quarter ended December 31, 2008, as compared to Rs 19.72 crore in the corresponding quarter a year ago. The total revenue rose two-fold to Rs 191.13 crore for the quarter under review, from Rs 88.26 crore in the same period last fiscal. On a standalone basis, Educomp reported a net profit of Rs 31.55 crore for the December quarter, up 66 per cent over the year-ago period, which was at Rs 19.01 crore. The standalone total income stood at Rs 146.96 crore during the third quarter of FY08. For the nine-month ended December 2008, Educomp reported a two-fold growth in net profit at Rs 73.71 crore and the total revenue rose two-fold at Rs 312.82 crore. Shares of Educomp closed at Rs 1,720, down 1.53 per cent on the BSE.

Oracle Financial net profit doubles at Rs 263 cr

Oracle Financial Services Software’s (formerly known as i-flex) net profit more than doubled for the third quarter ended December 31, 2008 to touch Rs 263 crore, from Rs 106.6 crore in the corresponding quarter last fiscal. Revenue for the quarter rose 29 per cent to touch Rs 801 crore against Rs 619 crore in the same quarter last year. The company had a net income of Rs 5 crore for the third quarter, which is largely due to foreign exchange hedging. Whereas the company had a Rs 4 crore loss in the corresponding quarter last year. Sequentially, the company’s net income almost tripled from Rs 93.4 crore-- and revenues grew 13 per cent from Rs 707.4 crore. Revenue from the product business was up 38 per cent on a y-o-y basis and services business contributed 20 per cent during the quarter. During the quarter, the company signed 11 new customers. “These numbers demonstrate our compelling value proposition to financial institutions in the current challenging global economic scenario. We are able to deliver operational efficiencies through technologically advanced, comprehensive transaction processing systems while at the same time being able to provide advanced risk and other analytics solutions that are important in managing bank’s risks & exposures,” said N R K Raman, managing director and CEO. “Measures to contain costs and focus on productivity improvements have resulted in GAAP operating margins increasing in this quarter from 18 per cent to 32 per cent and net margins increasing from 17 to 33 per cent over the corresponding quarter in the last financial year,” said Makarand Padalkar, chief financial officer.

SAIL Q3 net dips 56%, declares 13% dividend

Steel Authority of India (SAIL) today reported 56 per cent decline in net profit at Rs 843.34 crore for the quarter ended December 31, 2008, as compared to Rs 1,934.66 crore in the same quarter a year ago. Total income decreased 3.78 per cent to Rs 9,475.67 crore for the quarter under review, as against Rs 9,847.64 crore. The company has informed Bombay Stock Exchange that the board has declared an interim dividend of Rs 1.30 per share, at the rate of 13 per cent, on shares face value of Rs 10. Shares of SAIL were trading at Rs 72.70, up 1.61 per cent in the late afternoon trade on the BSE.

Sensex closes above 9000 led by Sterlite, Reliance

MUMBAI: Benchmarks pulled back sharply on Tuesday to close higher as investors bought heavily in frontline stocks like Sterlite Industries, Reliance Infrastructure and Reliance Industries. Bombay Stock Exchange’s Sensex ended at 9007.26, up 332.91 points or 3.84 per cent. The index touched an intra-day high of 9021.97 and low of 8789.06. National Stock Exchange’s Nifty closed at 2770.50, up 2771.05, up 92.50 points or 3.45 per cent. The broader index hit a high of 2777.30 and low of 2685.25 in trade so far. BSE Midcap Index was up 0.68 per cent and BSE Smallcap Index edged 0.36 per cent higher. Sterlite Industries (11.90%), Reliance Infrastructure (11.22%), Ranbaxy Laboratories (7.73%), Reliance Communications (7.31%) and Reliance Industries (7.01%) were the top Sensex gainers. ONGC (-3.53%) and Larsen & Toubro (-0.60%) were the major Sensex losers.

RBI keeps key rates unchanged, revises GDP target to 7%

The Reserve Bank of India has left all key rates unchanged, the repo, the reverse repo and the CRR are held at current levels. The bank rate too is left static. The GDP target is revised downwards to 7% with a downward bias, this versus a previous target of between 7.5% to 8%. Inflation targets for the fiscal year are marked down to as low as 3%, versus an earlier target of below 7%. RBI said that the financial markets globally continue to face crisis of confidence. RBI expects CPI to fall further with decline in input prices. It has also upped bank credit target to 24% from 20% while money supply target has been upped to 19% from 16.5-17%. RBI has also extended refinance facility for MFs, NBFCs HFCs to September 30, 2009. It has also extended the refinance facility for commercial banks to September 30, 2009. It further added that there is slowdown in deposit growth and the lending rates have to come down with slowdown in deposit growth. RBI is of the view that global crisis will dent India's growth trajectory and there is a period of painful adjustment ahead. The growth will be lower due to declining exports and industry slowdown, it added. RBI said that it is uncertain about when the bottom of asset, business cycle will be seen. There is an emerging consensus that there will be no recovery till late 2009. It further stated that crisis has been spread to emerging economies contrary to decoupling expectations. RBI FY09 stance is to give comfortable liquidity to meet loan growth. It expects fiscal deficit at 5.9% of GDP vs 2.5% earlier. RBI feels that revenue surplus of states may not materialise. It sees full effect of CRR cut felt in 4-6 months time. RBI said that there is a slowdown in deposit growth in private, foreign banks. Banks' SLR rose from 25.8% in October 2008 to 28.9% in January 2009. It is of the view that lending rates have to come down. RBI said that the fall in inflation will not commensurate with sharp fall in WPI and CPI will decline with a lag effect. It said it will take into account all price indices and their components. The central bank also believes that there is distinct evidence of slowdown due to global downturn. The aggregate deposit growth target is also revised to 19% from 17%. It said that the capital flow reversals has stabilised since September, October 2008. International credit channels continue to be constrained and capital market valuations remain low, it added. RBI said that the transmission of policy rate signal to credit market is subdued and transmission of policy rate signal to G-Sec market is effective. According to RBI, there is more room for bank to cut rates in response to policy cues. It further said that the cash flow to commodity sector is down to Rs 4.85 lakh crore vs Rs 4.99 lakh crore (YoY). RBI will take caliberated monetary policy actions as necessary. "The export growth turned negative during October-November 2008. Overall business sentiment has deteriorated whereas domestic financial markets are functioning in an orderly manner." RBI stated that the response to actions over last quarter is still unfolding. Financial markets globally continue to face crisis of confidence and there are no signs of early resolution as collateral damage continues, it added. RBI believes that major global concern will forestall the worst ever recession since 1930. Monetary ammunition has exhausted in many countries and slowdown of the world trade deeper than expected. It also expects exports to advanced countries to decline further. RBI expects CPI to fall with decline in input prices. It also stated that government will lose 0.6% of GDP due to excise and customs duty cuts.

Inflation inches up to 5.6% Inflation for the week market ended January 10 edged up to 5.60 per cent, from 5.24 per cent in the previous week. The trucker’s strike and a base effect could be attributed to the sudden rise in inflation amidst a downward trend.

Bharti Airtel Q3 net up 15% Telecom major Bharti Airtel registered a net profit to Rs 1976.41 crore for the Oct-Dec quarter as against Rs 1714.66 crore in the previous Earnings Seasonquarter. This translates to a 15 per cent growth on a sequential basis. Net Sales stood at Rs 9667.37 crore for the quarter ended on Dec 31, 2008 as against Rs. 8923.57 crore in the last quarter. On a standalone basis, the company's net profit for the Oct-Dec period rose 25.7 per cent to Rs 2017.29 crore as against Rs. 1604.78 crore in the July-Sep quarter. Net sales stood at Rs 8830.11 crore for the quarter ended Dec 31, 2008 compared to Rs 8274.37 crore previous quarter. The company's shares ended at Rs 583.60, down 5.16 per cent on the BSE

Indian Bank Q3 income up 23%, net profit up 14% Indian Bank has posted a net profit of Rs 350.70 crore for the quarter ended Dec 31, 2008, up over 14 per cent compared to Rs 307.50 crore in the corresponding quarter of 2007. Total income of the bank increased to Rs 2071.37 crore for the Oct-Dec quarter of 2008 from Rs 1676.00 crore in the quarter ended Dec 31, 2007. This represents a growth of 23.6 per cent year on year. Shares of the PSU bank were up over 4 per cent at Rs 129.45 on the BSE, following the third quarter results.

Wipro Q3 net profit up 18% YoY Technology major Wipro reported 3.51 per cent rise in net profit to Rs 1,003.90 crore for the Oct-Dec quarter compared with Rs 969.80 crore in the previous quarter, while on a year-on-year basis, net profit rose 18 per cent. Net sales grew 1.75 per cent to Rs 6634.30 crore in the quarter ended Dec 31, 2008 as against Rs 6519.60 crore in the last quarter. On a standalone basis, the company's net profit stood at Rs 733 crore in the Oct-Dec period against Rs 852.50 crore sequentially. Net sales decreased to Rs 539.70 crore from Rs 540.50 crore in the Jul-Sep quarter. Results Highlights: • IT services revenue based on exchange rate as of September 30, 2008 at $1,126 million, ahead of Wipro guidance of $1,121 million • Wipro Limited Revenue increased by 25 per cent (YoY) to Rs. 6,618 crore; profit grew by 18% to Rs. 1,004 crore. • IT Services Revenue in dollar terms was $1,100 million, a sequential decline of 0.9% (growth of 3.5% in constant currency) and YoY growth of 12.4% (growth of 19.2% in constant currency). • In rupee terms, Revenue for IT Services stood at Rs. 50.79 billion (Rs. 5,079 Crores), a YoY growth of 31%. • Profit Before Interest & Tax (PBIT) for IT Services segment was Rs. 1,045 crore, a growth of 26% YoY. • IT Services business added 31 new clients during the quarter. • IT Products business recorded a 25% YoY growth in Revenues and 45% YoY growth in PBIT. • Wipro Consumer Care and Lighting business Revenue grew 21% YoY and PBIT grew 17% YoY.