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Date: Thursday, 24 Aug 2006 06:38
Crompton Greaves thrives on block deal
Crompton Greaves rose 1% to Rs 208 following a block deal of 3.75 lakh shares on BSE at Rs 205 per share by 10:55 hours.The counter clocked a cumulative volume of 4.24 lakh shares on BSE, compared to the two-week average volume of 77,891 shares.The stock has witnessed high volatility in the past couple of trading sessions. From Rs 191.67 on 28 July 2006, it surged to Rs 222 as buying continued. Here, it slipped to Rs 205.20 by 23 August 2006, on profit-booking.

Recently, Crompton Greaves concluded an arrangement for the acquisition of transformers, gas insulated switchgear, rotating machines and contracting businesses of Ganz Transelektro Villamossagi Zrt, together with the business of Transverticum kft, which is engaged in supporting areas of design, erection, commissioning and commercial activity; both in Hungary, for Euro 35 million.

The company also proposed a new unit in Madhya Pradesh. The company, which already has two units for power transformer manufacturing in Madhya Pradesh, will set up the unit in Malanpur (near Gwalior) in Bhind for an investment of Rs 5 crore.

Earlier in June, Crompton Greaves announced its plan to invest up to Rs 16.03 crore in the share capital of Malanpur Captive Power (MCPPL) comprising 59% of MCPPL's share capital. As a result, MCPPL will become a subsidiary of the company. Further, MCPPL plans to develop, finance, construct and operate a 25.5 Mw gas-based group captive power plant in Malanpur, Madhya Pradesh.

Earlier in May, the company’s transformer division chalked out a capex of Rs 32 crore in its existing Mandideep (near Bhopal) plant. The new investment will be for technology upgradation. Crompton Greaves will make 800 kvA capacity transformers to become the first company in India to make the product. This capex will be completed by September. The company will make 7,000 transformers each year in this capacity.

Crompton Greaves offers a wide-range of products such as power & industrial transformers, HT circuit breakers, LT & HT motors, DC motors, traction motors, alternators/ generators, railway signaling equipment, lighting products, fans, pumps and public switching, transmission and access products. In addition, the company undertakes turnkey projects from concept to commissioning. It supplies the products to power and industrial sectors like power utilities, process industries, railways, mines, electricity boards and industries in domestic as well as world markets.

Crompton Greaves is the biggest Indian exporter of power transformers. Its products are exported in more than 40 countries worldwide.

Crompton Greaves registered a net profit rise of 16.38% to Rs 36.37 crore for Q1 June 2006 compared to Rs 31.25 crore in Q1 June 2005. Total income during the same period under consideration has increased from Rs 527.51 crore to Rs 745.55 crore.

ACC darts ahead as monsoon looks to make an exit
Associated Cement Companies rose 1.99% to Rs 912 on continued buying interest due to expectation of pick up in demand as the southwest monsoon nears its end.As many as 3.12 lakh shares were traded on the BSE.The stock has advanced sharply since late-July 2006. From Rs 788.45 on 21 July, the stock appreciated 13.41% to Rs 894.20 on 23 August 2006 on strong Q2 and dispatch figures.

At the current market price of Rs 912, Associated Cement Companies (ACC) trades at 14 times its Q2 June 2006 annualized EPS of Rs 64.70 based on consolidated earnings.

ACC despatch for July 2006 rose 10.9% to 1.42 million tonnes as against 1.28 million tonnes for the same period last year. The cumulative cement despatches increased 7.57% to 11.08 million tonnes as against 10.30 million tones for the same period last year.

With the continued emphasis on infrastructure and housing sectors, the demand for cement is expected to remain strong.ACC is expanding its Bargarh cement works from 0.96 million tonnes per annual to 2.14 million tones. It is also setting up a 30 Mw captive power plant. The total outlay for this expansion project is Rs 537 crore.Last year, Holcim acquired a controlling stake in ACC.

ACC had registered a consolidated net profit growth of 176% to Rs 411.79 crore (Rs 148.95 crore) for Q1 June 2006. Net sales rose 22% to Rs 1,440.07 crore (Rs 1180.97 crore).
Author: "saylee (noreply@blogger.com)"
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Date: Thursday, 24 Aug 2006 06:33
Tata Tea stronger on buying stake in US co
Tata Tea surged 2.19%, to Rs 846 on acquiring 30% stake in Energy Brand, US, for $ 677 million.As many as 86,830 shares were traded on the BSE.At the current market rate of Rs 846, Tata Tea trades at 14 times its Q1 June 2006 annualized consolidated EPS of Rs 60.30.

Tata Tea and Tata Sons will together invest $ 677 million to buy 30% stake in US-based Energy Brands (EBI). Commonly known as Glaceau, EBI is engaged in the high growth business of enhanced water and markets vitaminwater, smartwater and fruitwater.

Of the $ 677 million, Tata Tea will invest $ 192 million and Tata Sons $ 58 million in the equity of Tata Tea GB through which, the transaction will be done. Tata Tea GB will raise the rest by way of debt.

Tata Group will initially nominate the chairman of the company, in addition to which, two directors from the group will attend all board meetings of the company.

The company is also planning to come out with new tea-based products for organic growth, both in the domestic and international markets. It is also open to the idea of coming out with multiple forms of tea - speciality tea, flavoured tea, strawberry tea and others.

Earlier, Tata Tea bought the UK-based Tetley for $ 407 million in 2000 and its subsidiary, Tata Coffee, bought the US-based Eight o’Clock Coffee for $ 220 million in June this year.

In May, Tata Tea’s UK-arm acquired the assets of Jemca, a tea company in Czech Republic, from food processing company, Alima Znackova Potravina, for an undisclosed amount. The Tetley group had funded the acquisition.

Jemca has 26.6% share by volume in the tea market of the Czech Republic and has a turnover of 300 million Czech Koruna (around $ 12.5 million). According to the agreement, Jemca will continue to pack tea at its production facility in Jemnice, Czech Republic, and will sell it under the Jemca brand.

Tata Tea had reported a decline of 5.53% in consolidated net profit for the Q1 June 2006 to Rs 83.45 crore (Rs 88.33). Net sales rose 11.47% to Rs 798.92 crore (Rs 716.69 crore).

HCL Infosystems up on decent earnings report
HCL Infosystems advanced 2.40%, to Rs 166.50 after it announced on Wednesday that its Q4 consolidated net profit rose 18.6%.As many as 58,164 shares were traded in the counter on BSE.A steady rally in the counters materialised in the past due to a strong appetite for it. From Rs 128.45 on 24 July 2006, it advanced to Rs 162.65 by 23 August 2006, as buying continued.

HCL Infosystems' consolidated Q4 net profit rose 18.6% to Rs 70 crore compared to Rs 59 crore during the corresponding period last year.

Riding on better sales of computers, mobile phones and office automation products, HCL's consolidated total revenue surged to Rs 3,149 crore during the quarter ended 30 June 2006, from Rs 2,198 crore in the corresponding period last year. The consolidated results include those of its wholly-owned subsidiaries, HCL Infinet and Microcomp.

On a standalone basis, HCL's net profit dipped 17% to Rs 26.88 crore during the fourth quarter compared to Rs 32.42 crore during the corresponding period last year. Total revenue rose 13.90% to Rs 601.41 crore (Rs 527.81 crore).

Revenue from the computer systems business grew 21% to Rs 2,381.4 crore against Rs 1,970.9 crore in the previous year. Revenue from the telecommunication and office automation business is Rs 9,049.8 crore (Rs 5779.3 crore), a growth of 57%.

For the full year ended 30 June, the company's consolidated net profit jumped to Rs 280 crore (Rs 228 crore). Total revenue during the year grew 46.2% to Rs 11,454 crore from Rs 7,787 crore.

Earlier in January, HCL Infosystems bagged Rs 250 crore orders in the domestic market in telecom, education and government verticals. The orders are primarily for the computer business, including system integration and hardware.
Author: "saylee (noreply@blogger.com)"
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Date: Thursday, 24 Aug 2006 01:21
A study of the daily records of closing values of the sensex since the beginning of the current bull run (April 2003) by the ET Intelligence group reveals that upticks last on an average for around 4-5 days.

Any thing else is like a six sigma event – very rare. The other interesting element of the study is that the retracements after the consecutive rise are bare minimal, barring one occasion when the market shed more than it gained. Volumes also rise during consecutive upticks indicating the bullish undertone in the market.

The study shows that there are only two occasions when the market actually went up consecutively for 10 trading sessions or more. The sensex rallied consecutively for a maximum period of 11 days between September 26, ‘03 and October 13, ‘03. It gained almost 12% during these 11 sessions, adding 466 points on the back of increasing volumes. The other spectacular consecutive rise was a 10-day rise from August 30, ‘05 to September 13, ‘05. Though the sensex added 448 points during this period, there was only 7% gain. The consecutive gains seem to be tiring down as the market touches newer highs.

The current consecutive seven day rise in the market ended on Friday (August 18) when the sensex closed 12 points lower after rising for seven consecutive trading sessions. Volumes almost doubled during these sessions indicating a very bullish undertone.

This probably pointed that the retracement may be marginal. Friday’s marginal 12-point fall and a rise on Monday concluded that fact. During these seven trading sessions, sensex gained 6% by adding 462 points.

Since the beginning of the current bull rally, the sensex closed three times consecutively for nine trading sessions. These were during July 23, ‘03 till August 4, ‘03, July 22, ‘05 till August 4, ‘05 and April 28, ‘06 till May 10, ‘06. The percentage gain during these periods was 7.9%, 6.6% and 6.4%, respectively.

However, during the following next eight trading sessions following the nine-day rise between the April 28, ‘06 and May 10, ‘06, the sensex shed 18%, reflecting a steep drop from a close of 12,612.38 on May 10, ‘06 to 10,481.77 on May 22, ‘06. This was the only time that the sensex retraced more than what it had gained. In earlier cases the sensex lost not more than 2.19% and even gained further in other cases.
Author: "saylee (noreply@blogger.com)"
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Date: Thursday, 24 Aug 2006 01:20
Most companies usually offer bonus issues as a strategy to add to shareholders’ value. However, this strategy appears to have gone awry in the current calendar year, with the adjusted prices of ex-bonus stocks now ruling 10%-30 % below the closing cum-bonus prices before their respective record dates.

These scrips include Cipla, Kalpataru Power, Atlas Copco, Karur Vysysa Bank, Sterlite Industries, Jayant Agro, National Peroxide, among others. This list also includes a couple of such stocks in whose case management has made twin offers of bonus as well as stock splits simultaneously.

Take the case of pharma major Cipla. The company proposed a liberal bonus issue in the ratio of three shares for every two shares held in February this year. Before its record date for bonus, the stock was quoting at Rs 660. However, since then, the stock has slipped after adjusting the bonus, and is now quoting around Rs 250. This means that by spending Rs 1,250, the investor could mop up five shares of Cipla now, which were earlier available cum-bonus, at a price of Rs 1,320 before the stock went ex-bonus . Similarly, in the case of Kalpataru Power Transmission, the company proposed a bonus of one share for each share held in the company towards the end of March.

Before the stock went ex-bonus on April 13, it was commanding a price of Rs 1,932. Since then, the stock has been beaten down, and is now quoting around Rs 770. This effectively means an erosion in stock prices by close to 20% on an adjusted basis since the time it has gone ex-bonus. The case is similar for multinational company Atlas Copco, which is in the engineering business. The stock was quoting at Rs 1,406 before going ex-bonus on June 14. After a 1:1 bonus issue, the scrip is trading around Rs 591, down 16% on an adjusted basis since going ex-bonus.

Other companies such as Karur Vysysa Bank and Jayant Agro too, have shown similar erosion in prices on an adjusted basis after going ex-bonus. This phenomenon of adjusted ex-bonus share price being less than the cum-bonus price is the result of high volatility in markets over the past three months. This trend can also be spotted in companies that went in for simultaneous stock splits and bonuses during the current year. The few stocks that have defied the trend amidst the changed scenario are the tech heavyweights such as TCS, Infosys and few others like Lupin.
Author: "saylee (noreply@blogger.com)"
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Date: Thursday, 24 Aug 2006 01:09
Tata Tea may gain on major US acquisition
Tata Tea and Glaceau(R), the maker of vitaminwater(R), on Wednesday announced that they have signed a definitive agreement whereby Tata Tea will invest $677 million in Glaceau to purchase the stake previously held by TSG Consumer Partners and provide additional growth capital. As a result of this investment, Tata will own 30% of Glaceau, based on a valuation of more than $2.2 billion.

Tata Tea’s investment in Glaceau strengthens its US presence and provides opportunities for global growth for Tata's beverage businesses. Glaceau brands include vitaminwater, which is nutrient-enhanced, smartwater(R) which is electrolyte-enhanced, and fruitwater(R), which is flavor-enhanced.

JSW Steel said on Wednesday it had signed a preliminary agreement with an entity in Mozambique, which had been allotted rights for coal exploration.

The US Food and Drug Administration has approved Glenmark Pharmaceuticals’ epilepsy drug gabapentin. The approval is for 600-milligram and 800-milligram dosage tablets.

Essar Shipping & Logistics parent of Essar Shipping said on Wednesday it had raised $200 million from a consortium of overseas banks to finance its subsidiary's ship-buying plans. The a 10-year facility was fully underwritten by De Nationale Investeringsbank N.V. Inc. and was availed at a pricing of 120 basis points over the LIBOR rate, the company said.

Auto parts maker Rane Madras said on Wednesday it would set up a manufacturing unit in northern Uttaranchal state with an initial investment of about Rs 9.30 crore. The unit would supply steering gears exclusively to Tata Motors.

PSU banks may edge higher after the Lok Sabha passed a bill on Wednesday that seeks to allow state-run banks to raise funds through private placements and preferential shares. The banking companies bill, however, restricts banks from diluting the government's holding below 51% while selling shares. Many PSU banks are planning to raise more funds to meet stringent Basel-II regulations by March 2007 and to sustain high loan growth. The bill still has to pass in Rajya Sabha and get presidential approval before it becomes law.

Zenith Infotech said the world's largest computer chip maker, Intel has agreed to use its software in motherboards on a revenue-sharing basis. Zenith said on Wednesday it had signed a software licence and distribution deal with Intel.
Author: "saylee (noreply@blogger.com)"
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