Wednesday, May 7, 2008

Stock Ideas: 3i Infotech, Allahabad Bank, Bank of India

Sharekhan has maintained its buy rating on 3i Infotech with price target of Rs 180 in its May 2, 2008 research report. "3i Infotech's consolidated revenues grew by 10.3% quarter on quarter (qoq) and 66.5% year on year (yoy) to Rs 349.9 crore in Q4FY2008. While, the organic revenue growth was 7.1% sequentially, acquisitions contributed 3.2% to the sequential growth in the top line during the quarter. The operating profit margin (OPM) was flat at 24.8% in Q4FY2008. The operating profit grew 9.9% qoq to Rs 86.7 crore during the quarter. The company's net profit grew by 0.6% to Rs48.8 crore, which was below our expectation of Rs 53.7 crore."
"To fine tune our earning estimates, we have revised up the earning estimates for FY2009 by 3.4% and have introduced FY2010 earning estimates. Our earning estimates does not incorporate Regulus acquisition since the regulatory approval for the same is yet to be obtained. At the current market price, the stock is trading at 9.8x FY2009 and 8.4x FY2010 earning estimates. We maintain our Buy recommendation on the stock with price target of Rs 180, says Sharekhan's research report.
Allahabad Bank:
One of the most profitable banks and oldest banks of India, it has once again not disappointed. As usual, the financial performance for the year ended 31st March 2007 has been very good.

On a sequential basis, its total income rose by 36% of which the biggest contribution came from interest earned, which constituted 88% of the total income earned. Operating profit went up to Rs.1,479.51 crore, up by 34.51%. Net profit shot up by 29.94% to Rs. 974.74 crore. EPS increased to Rs.21.82 from Rs.16.79 during last year. Book Value per share improved to Rs.117.47 from Rs.100.22 during this period. YoY, the business of the Bank was at Rs.1,21,928 crore, up 20.18%. Total Deposits of the Bank increased to Rs.71,616 crore, recording a rise of 20.27% during the period. Market Share in aggregate deposits and gross advances stood at 2.22% and 2.14% respectively as at March, 2008. Capital Adequacy Ratio stood at 12.04% computed as per Basel II prescription of RBI. As per Basel I method of calculation, it is 12.23%.

During the year, Gross NPA declined to 2.00% as on 31.3.2008 from 2.61% as on 31.3.2007. Net NPA ratio decreased from 1.07% as at 31.3.2007 to 0.80% as on 31.3.2008.

The Bank has 2154 branches (excluding 1 Foreign Branch) as on 31.3.2008 (2060 as on 31.3.2007) of which 983 (46%) are in Rural, 405 (19%) in Semi-Urban, 452 (20%) in Urban and 314 (15%) in Metropolitan areas. The bank opened its first overseas branch in the busy economic centre of Hong Kong and has its representative office in Shenzhen, China. It has a subsidiary ALLBank Finance. The Bank plans to buy stake in a small bank in Africa to establish presence in the growing market.
Best to stay invested and one can even consider buying into this very profitable bank for long term gains.
Bank of India:
The Bank of India has posted encouraging results for the year ended 31st March 2008.

YoY, the total income of the bank rose 35% at Rs.14472.15 crore. PBT rose by a very healthy 54% at Rs.3701.21 crore. Net profit rose by a whopping 79% at Rs.2009.40 crore. On an equity of Rs.525.91 crore, it posted an EPS of Rs.40.83 as against Rs.23.04 in FY07. For the year 2007-08, cost of funds increased to 5.07% and yield on advances touched 9.34%. Its Capital Adequacy Ratio was at 12.95% as against 11.78% in FY07.

The Government of India has a 64.47% stake in the bank, which has come down marginally from 69.47% in FY07. This is mainly because the bank, during the quarter ended March 31, 2008 had issued and allotted 3,77,72,600 fresh equity shares of the face value of Rs.10 each at a premium of Rs.350 per share through Qualified Institutions Placements.

The Bank had marked-to-market losses on account of currency derivatives transactions of about Rs.125 crore. The bank has made a provision of $5 million in Q4 for its exposure to overseas credit derivatives instruments. It has 34 customers who trade regularly in currency derivatives and has transacted some 74 deals. The Bank does not see any default on these accounts as these 34 are corporate customers. The bank is now concentrating on increasing its presence overseas and in this fiscal, is planning to acquire a bank either in Africa or West Asia.
Currently quoted at Rs.350, hold on.
Source: Internet

Markets Today

The key indices ended in the negative territory. Weakness in Asian markets and a surge in crude oil prices spoiled the investor sentiments today. IT and oil & gas stocks were the front-runners. Capital goods stocks and shares of PSU firms suffered the most.
European markets, which open after Indian markets, were trading higher. In Europe, key indices in UK, France and Germany were up 0.64% to 0.88%.
Asian markets were trading lower today, 7 May 2008. Key indices in China, Hong Kong, Japan, Singapore and South Korea were down by 0.27% to 4.13%. However, Taiwans Taiwan Weighted Index was up 0.78%.
US crude was steady at $121.79 a barrel, just off a record high at $122.73 in New York with prices doubling in the past year. Foreign brokerage house Goldman Sachs, which had predicted that oil would hit $100 a barrel now forecasts a potential spike to $200 a barrel.
As per provisional closing, the 30-share BSE Sensex fell 31.86 points or 0.18% at 17,341.15. The index lost 143.03 points at days low of 17,229.98, hit in the afternoon trade. Sensex gained 40.80 points at days high of 17,413.81, hit in the early afternooon.
The broader based S&P CNX Nifty was down 8.15 points or 0.16% at 5136.50.
The market breadth was weak on BSE with 1170 shares advancing as compared to 1522 stocks that declined. 69 stocks remained unchanged.
The BSE Mid-Cap index fell 0.27% to 7,210.89 and BSE Small-Cap index rose 0.26% to 8,726.51.
Top Sensex gainers were, TCS (up 2.63% at Rs 963.85), Mahindra & Mahindra (up 1.73% at Rs 675.50), Tata Steel (up 1.64% at Rs 829.80), Infosys Technologies (up 1.30% at Rs 1843), Hindustan Unilever (up 1.13% at Rs 251) and Jaiprakash Associates (up 1.10% at Rs 274.90).
Top Sensex losers were, Bharat Heavy Electricals (down 4.49% at Rs 4.49% at Rs 1777), Bharti Airtel (down 3.39% at Rs 817.90), DLF (down 2.39% at Rs 652), Larsen & Toubro (down 2.32% at Rs 2981.55), Satyam Computer (down 1.82% at Rs 489) and Ranbaxy Laboratories (down 1.64% at Rs 467.15).
Plastic materials maker Uflex jumped 1.60% to Rs 149.55 after posting 60.6% surge in net profit to Rs 24.84 crore on 13.9% rise in net sales to Rs 362.42 crore in Q4 March 2008 over Q4 March 2007.
Information technology firm Mastek soared 8.58% to Rs 369 on reports that the company is betting on transport and healthcare sectors for fuelling its future revenue.
Marine transportation services provider Mercator Lines vaulted 3.91% to Rs 107.75 after its wholly owned subsidiary Mercator Lines (Singapore) reported three-fold jump in net profit to $52.2 million in the year ended March 2008 over the year ended March 2007.
Ethanol maker Dollex Industries was locked at upper limit of 5% at Rs 43.45 on setting 20 May 2008 as the record date for a 2-for-1 stock split.
Apparel maker and exporter Gokaldas Exports surged 14.30% at Rs 237 on reports that major stakeholder Blackstone Group was considering delisting the company this year.
Film maker Pritish Nandy Communications was locked at upper limit of 10% at Rs 64.20 after it said on Tuesday, 6 May 2008 it has signed a three-film deal with US-based Sony Pictures.
Ethanol maker Praj Industries gained 1.69% to Rs 198.60 after the company reported 77.44% surge in net profit to Rs 153.54 crore on 20.10% increase in total income to Rs 740.31 crore in the year ended March 2008 over the year ended March 2007.
US markets rose to a four month high yesterday, 6 May 2008 as Financial and energy shares sparked the positive moves on the US indices. US largest mortgage financing company Fannie Mae surged after its officials said they were cautiously optimistic that the worst of the credit crisis had passed even after posting a $2.5 billion quarterly loss. The Dow Jones industrial average rose 51.29 points or 0.40% to 13,020.83. The Nasdaq Composite index rose 19.19 points, or 0.78%, to 2,483.31. The S&P 500 advanced 11 points to 1,418.
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Intraday Calls for 7th May

Indian Stock Market may open flat to positive and can see a small rally with very high volatility. Small & Midcap stocks can do well today. A Flat closing expected.
Today's Intraday Trading Calls:
3I INFOTECH
SATYAM COMPUTER
VIJAYA BANK
HDFC LTD.
USHA MARTIN
INDIA GLYCOLS
For Levels and Targets download the file by CLICK HERE.
Others: MRPL, RPL & Gitanjali Gems.
New Listing: Aishwarya Telecom Ltd. (35)
Good Luck

Disclaimer

The information in this publication is provided by http://www.moneybazzar.blogspot.com/ is intended for use for Readers & Traders . Every effort is made to provide accurate information, but http://www.moneybazzar.blogspot.com/ cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.



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