Investment Idea: Alembic Pharma

More than 100 year’s old, it is an integrated pharmaceutical company, recognized more popularly as the “Glycodin” company. It has over 90 brands covering antibiotics, antibacterials, cardiovasculars, cough/cold and antihistamines.

For the third quarter ended 31st December 2007, YoY, the net sales was up 40% at Rs.260.62 crore. Of this domestic sales comprised of Rs.173.63 crore and exports were at Rs.91.63 crore. Total expenditure rose by almost 50%. What is noteworthy is that the company spends substantially on R&D. Its R&D bill rose from Rs.6.80 crore last Q3 to Rs.11.20 crore in the current Q3. Its interest bill burgeoned by a whopping 176% at Rs.8.38 crore. Due to this, its PBT actually took a beating; it fell 19% at Rs.19.87 crore.

But then came its knight in the shinning armour! It sold off its surplus land and earned a decent one-time gain of Rs.22.55 crore. And thanks to the land deal, the company managed to show a bumper net profit, which was up 1.67 times at Rs.42.02 crore, which otherwise would have been down by over 20%. There is no doubt that the company needs to work on getting its overall expenditure down or else, there wont be too much surplus land left every time, to bail it out.

The company is now utilizing Rs.29.17 crore from share premium account and Rs.102.58 crore from its general reserve account, against debit to Profit and Loss Account of the balances in the Intangible Assets Account of the company to the tune of Rs.176.83 crore after making due adjustment for Deferred Tax. The effect of the same will now appear in the annual accounts for the year ending on March 31, 2008. This intangible asset mainly represents amount paid for acquiring 24 brands pf non-oncology formulation business of Dabur Pharma.

The company has acquired the API manufacturing facility of Nirayu, located on the outskirts of Vadodara, for a consideration of Rs.17.50 crore and will be used by the company to increase its API business and regulatory filings. It is a USFDA approvable facility. USFDA also successfully inspected the company’s formulation facility at Panvel.

The company is very sound and hopefully, the reduction in the excise duty announced in the Budget 2008-09 would benefit the company to post better results in the coming months. Currently quoted at Rs.46, stay invested.

Source: sptulsian.com

Markets Today

Buying in battered pivotals triggered solid rally on the bourses in late trade, with market closing near highest point of the day. However, the market breadth, indicating the overall health of the market remained negative. 24 shares from the 30-member Sensex pack advanced.
Most Asian markets, which opened before Indian market, were trading lower. European markets, which opened after Indian market, were in green.
As per provisional closing, the 30-share BSE Sensex surged 441.07 points or 2.87% at 15,792.42. The Sensex settled at the highest level of the day. Sensex had slipped 26 points at days low of 15,331.35 in early trade.
The broader based S&P CNX Nifty advanced 133.10 points or 2.88% at 4,756.70 As per provisional closing.
The Sensex declined 4943.36 points or 24.35% in calendar 2008 (till yesterday, 13 March 2008).
Driven by the higher prices of food items and manufactured products, annual inflation rate based on the wholesale price index increased to 5.11% for the week ended 1 March 2008 as against 5.02% in the previous week. Inflation rate stood at 6.51% for the corresponding week in the previous year.
Finance minister (FM), P Chidambaram today said he expects the economy to maintain growth levels of above 8.5% in the coming years. FM also said in parliament that the present volatility in the local stock market reflected worldwide phenomena.
Despite the rally, the market breadth remained negative: On BSE 1,473 shares declined as compared to 1202 that advanced. 62 shares remained unchanged.
The BSE Mid-Cap index was up 1.02% to 6,596.23 and the BSE Small-Cap index rose 0.20% to 8,091.46, as per provisional closing,. Both these indices underperformed the Sensex.
The total turnover amounted to Rs 5880 crore as compared to Rs 4924 crore by 15:45 IST on BSE.
Indias leading private sector power utility company in terms of sales, Reliance Energy galloped 13.01% to Rs 1353 on 12.35 lakh shares. It was the top gainer from Sensex pack. The stock is the worst performing Sensex stock, declining 47.47% in calendar 2008 (till yesterday 13 March 2008).
Real estate shares staged a comeback after recent plunge. Indias largest real estate developer DLF jumped 8.15% to Rs 656.20 on huge volumes of 28.83 lakh shares. The stock replaced GlaxoSmithkline Pharma in the S&P CNX Nifty index from today. The BSE Realty index declined 44.33% in calendar 2008 (till yesterday, 13 March 2008).
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries rose 4.40% to Rs 2340.20 on 11.84 lakh shares. It moved in a range of Rs 2225 and Rs 2316.60 so far during the day. The stock is down 21.27% in the calendar year 2008 (till yesterday 13 March 2008).
IT pivotals advanced on fresh buying. Satyam Computer Services (up 4.61% to Rs 380.85), Infosys Technologies (up 2.74% to Rs 1370), TCS (up 3.76% to Rs 807.85), and Wipro (up 0.93% to Rs 368.40), logged gains.
Frontline banking shares gained despite the latest data showing a surge in inflation. ICICI Bank (up 4.30% to Rs 873.95), HDFC Bank (up 1.23% to Rs 1,312.25) and State Bank of India (up 0.78% to Rs 1,709) edged higher.
Hindalco (up 4.78% to Rs 182), NTPC (up 4.35% to Rs 194.80), and Larsen & Toubro (up 4.10% to Rs 2920), gained from Sensex pack.
Jaiprakash Associates soared 7.80% to Rs 236. The stock replaced Bajaj Auto in the BSE 30-share Sensex pack from today.
Bajaj Holdings & Investment settled at Rs 775 in highly volatile trade after its auto and the financial services businesses were spun off effective today, 14 March 2008. As per the restructuring, Bajaj Holdings, earlier known as Bajaj Auto, has 30% in Bajaj Auto and Bajaj Finserv, both to be listed separately in due course. The stock hit a high and low of Rs 1143.80 and Rs 720 respectively.
Bharti Airtel, the countrys top listed cellular services provider lost 3.26% to Rs 753 on 6.31 lakh shares. It was the top loser from Sensex pack.
Auto stocks were subdued. Mahindra & Mahindra (down 2.57% to Rs 644) and Maruti Suzuki India (down 0.32% to Rs 837.10) slipped on profit booking.
Reliance Natural Resouces was the top traded counter on BSE with turnover of Rs 305.11 crore followed by Reliance Petroleum (Rs 274.47 crore), Reliance Industries (Rs 271.37 crore), GSS America Infotech (Rs 223.33 crore), and Bajaj Holdings & Investment (Rs 197.02 crore), in that order.
The next trigger for the market would come from the figures of advance tax payment by corporates for the fourth installment, which falls due on 15 March 2008.
Another major trigger for the market is outcome of the US Federal Reserve meeting on 18 March 2008 to review interest rates. A cut in interest rate, as expected by the street may provide some support to the markets. Fed Chairman Ben Bernanke had signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks.
European markets were higher. Key benchmark indices from United Kingdom (up 0.45% to 5,718.20), France (up 0.43% to 4,650.25), and Germany (up 0.67% to 6,543.90), gained.
Most Asian markets were trading lower. Hong Kong's Hang Seng (down 0.29% at 22,237.11), Japan's Nikkei (down 1.54% at 12,244.48), Seoul Composite (down 0.95% at 1,600.26), Taiwan Weighted (down 0.60% at 8,161.39) and Shanghai Composite (down 0.22% at 3,962.67) edged lower after early rise.
However Singapores Straits Times index rose 1.19% at 2,839.01
US markets reversed early losses on Thursday, 13 March 2008, as S&P predicted an end to subprime mortgage writedowns. The early fall came after lower than expected retail sales and reports that another hedge fund may collapse. The Dow Jones industrail average gained 35 points to 12,145. The Nasdaq rose 19 points at 2.263; while the S&P 500 gained 6 points to 1,315.
Back home, a major setback was witnessed on the bourses as share prices fell almost across the board on Thursday 13 March 2008. The 30-share BSE Sensex slumped 770.63 points or 4.78% at 15,357.35, its lowest level since early September 2007. The broader based S&P CNX Nifty was down 242.40 points or 5.10% at 4,623.60 on that day
As per provisional data, foreign institutional investors (FIIs) sold shares worth Rs 108.50 crore on Thursday, 13 March 2008. Domestic institutional investors (DIIs) were net buyers of shares worth Rs 56.44 crore on that day.
FIIs were net buyers of Rs 242.82 crore in the futures & options segment on Thursday, 13 March 2008. They were net sellers of index futures to the tune of Rs 85.43 crore and bought index options worth Rs 85.82 crore. They were net buyers of stock futures to the tune of Rs 238.73 crore and bought stock options worth Rs 3.70 crore.
US crude for April delivery fell 58 cents to $109.75 today, 14 March 2008 a barrel after hitting a record of $111. London Brent crude for April dropped 54 cents to $107
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Market Whispers

A big broking house is known to be liquidating its position in Sterlite Industries. The stock could see some turbulent times and may soften from present levels of Rs.755.

JSW Steel is expected to see a sharp spurt from the current price of Rs.900, backed by positive news that it is to commission its Vijaynagar plant, ahead of schedule. Share could touch four digit mark soon.

Kirloskar Brothers is a good buy at the current rate of Rs.285, it has corrected substantially and is now perched at an attractive level.

A well-known mutual fund is accumulating Powergrid, especially in the wake of the current price fall at Rs.90.

Educomp may bounce back from the present level of Rs.3,250 by Rs.200.

DLF will see a sharp spurt from the current levels as punters are taking this opportunity of the dip in the price to shore up their holdings. Share may soon cross Rs.670 mark.

Ranbaxy is being tipped as one of the best bets in this volatile market, at Rs.460 levels.

Intraday Calls for 14th March

Today some recovery expected in Indian Stock Market as global cues are bit good. US markets closed positively yesterday.

Today's Intraday Picks:
SATYAM COMPUTER
INDIAINFO
RPL
BAJAJHIND
PRITHVI INFO
For Levels and Targets download the file by Click Here.
Keep an eye on GMR Infra Above Rs. 152 and Ansal Infra Above Rs. 155.
Good Luck

Markets Today

Domestic market witnessed extremely weak session with the benchmark index BSE Sensex plunging to a 6-month low. Markets across the globe suffered severe setback amid concerns about the effectiveness of the Federal Reserve's efforts to aid strained credit markets. European markets, which opened after Indian market, slipped in early trade. Asian markets, which opened before Indian market, settled weak.
28 shares among the 30-member Sensex pack finished with losses. The market breadth was extremely weak. Turnover was dull. Stocks from across the board witnessed sharp cut with those of real estate, metal and capital goods sector among worst hit.
The 30-share BSE Sensex slumped 782.04 points or 4.85% at 15,345.94, as per provisional closing. Sensex hit a low of 15,228.99 in late trade, its lowest level since early September 2007. At the days low, the Sensex lost 898.99 points.
The broader based S&P CNX Nifty was down 248.65 points or 5.06% at 4,625.35 as per provisional closing.
The market breadth was weak. On BSE 2,331 shares declined as compared to 359 that advanced. 43 shares remained unchanged.
The BSE Mid-Cap index was down 5.46% to 6,532.74 while the BSE Small-Cap index slipped 5.17% to 8,090.78. Both these indices underperformed the Sensex
The total turnover amounted to Rs 5952 crore as compared to Rs 4828 crore by 15:45 IST on BSE.
Real estate shares were hammered brutally, with the BSE Realty index tumbling 10.59% to 7,445.96. Indias largest real estate developer by market capitalisation DLF slipped 13.29% to Rs 618. It was the top loser from Sensex pack. As per reports, the firm may delay a planned initial public offering to raise $1.5 billion from a real estate investment trust in Singapore.
Unitech (down 9.62% to Rs 266.20), Parsvnath Developers (down 8.45% to Rs 207), Indiabulls Real Estate (down 10.23% to Rs 510), were the other losers from real estate sector
Indias largest private sector company in terms of market capitalisation and oil refiner Reliance Industries slumped 5.23% to Rs 2252 on 12.49 lakh shares. The stock moved in a range of Rs 2201 and Rs 2355 during the day
Metal shares slumped on profit booking. Hindalco Industries (down 9.72% to Rs 173.15), Tata Steel (down 9.06% to Rs 697), Steel Authority of India (down 11.64% to Rs 192.80), and JSW Steel (down 5.44% to Rs 888.25), slipped
IT pivotals slumped on concerns of a US recession. TCS (down 7.25% to Rs 765), Satyam Computers (down 5.10% to Rs 359.90), Wipro (down 6.75% to Rs 363.55), and Infosys (down 4.63% to Rs 1320), edged lower. Indian IT firms derive more than half of their revenue from exports to US.
Banking shares slipped on selling pressure. Indias largest private sector bank in terms of net profit ICICI Bank slipped 5.67% to Rs 830 tracking weak ADR which declined 5% on the NYSE yesterday, 12 March 2008. State Bank of India (down 6.80% to Rs 1685), and HDFC Bank (down 4.37% to Rs 1308), also slipped.
Reliance Energy (down 10.95% to Rs 1183), Reliance Communications (down 7.82% to Rs 497.50), and Bharat Heavy Electricals (down 6.52% to Rs 1885), slipped from Sensex pack.
Bajaj Auto, the countrys second largest two wheeler maker in terms of sales, gained 1.49% to Rs 2124 in volatile trade. The stock moved in a wild range of Rs 1976.05 and Rs 2175. All existing futures & options contracts on the counter expired today and new contracts will be introduced on, 14 March 2008, as a demerger scheme takes effect from tomorrow, 14 March 2008.
As per the demerger scheme, the company's various businesses including auto manufacturing and other strategic businesses such as wind energy, insurance and financial services, would be demerged into two newly incorporated subsidiaries: Bajaj Holdings and Investment (BHIL) and Bajaj Finserv (BFL).
Hindustan Unilever, the countrys largest FMCG company in terms of sales, rose 0.20% to Rs 222.20
The next trigger for the market would come from the figures of advance tax payment by corporates for the fourth installment, which falls due on 15 March 2008.
Another major trigger for the market is outcome of the US Federal Reserve meeting on 18 March 2008 to review interest rates. A cut in interest rate, as expected by the street may provide some support to the markets. Fed Chairman Ben Bernanke had signaled a readiness to cut interest rates again to prevent further damage to the weak US economy, even as he took note of rising inflation risks.
European markets were weak. Key benchmark indices from United Kingdom (down 2.12% to 5,654), Germany (down 2.55% to 6,431.88), and France (down 2.31% to 4,588.44), slipped
Asian markets settled on a weak note today, 13 March 2008. Japan's Nikkei (down 3.33% at 12,433.34), Hong Kong's Hang Seng (down 4.79% at 22,301.46), Taiwan's Taiwan Weighted (down 2.66% at 8,210.99), Chinas Shanghai Composite (down 2.43% to 3,971.27), Straits Times (down 3.85% at 2,805.55) and South Korea's Seoul Composite (down 2.60% at 1,615.92), edged lower.
US markets slipped on Wednesday, 12 March 2008, on concerns that the US Federal Reserve will fail to prevent a recession and global crude oil prices surged above $110 a barrel raising fears of further strain on corporate profits.
The Dow Jones industrial average was down 46.57 points, or 0.38%, to 12,110.24. The Standard & Poor's 500 index plunged 11.88 points, or 0.90%, to 1,308.77, and the Nasdaq Composite index declined 11.89 points, or 0.53%, to 2,243.87.
Back home, the 30-share BSE Sensex was up marginally by 4.83 points or 0.03% at 16,127.98 on Wednesday, 12 March 2008. The broader based S&P CNX Nifty rose 6.10 points or 0.13% at 4,872 on that day.
As per data released by the government yesterday, 12 March 2008, growth in index of industrial production (IIP) slipped to 5.3% in January 2008 as compared with 11.6% in January 2007, the lowest since October 2006, when it stood at 4.51%. Growth in the manufacturing sector declined to 5.9% in January 2008 as against 12.3% in January 2007.
As per provisional data, foreign institutional investors (FIIs) purchased shares worth Rs 127.94 crore on Wednesday, 12 March 2008. Domestic institutional investors (DIIs) were net sellers of shares worth Rs 528.06 crore on that day.
FIIs were net buyers of Rs 1,898.64 crore in the futures & options segment on Wednesday, 12 March 2008. They were net buyers of index futures to the tune of Rs 1,386.07 crore and bought index options worth Rs 287.57 crore. They were net buyers of stock futures to the tune of Rs 200.50 crore and bought stock options worth Rs 24.50 crore.
Crude oil hovered near Wednesday (12 March 2008)'s record high of $110.20 per barrel.
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Intraday Calls for 13th March

Gap Down opening of about 2-3% expected today in Indian Stock Markets as very poor IIP data and Weak Global Cues. Remains nagetive for the day today.

Today's Intraday Picks:
Tata Steel
Bank of India
Orchid Chemical
Unitech
RCOM
For levels and targets download the file by Click Here

Keep an Eye on Videocon Industries, REC, Suven Lifescience can recovers from intraday lows.

Good Luck

Tata Teleservices Maharashtra Ltd

A part of the Tata Group of companies, it runs the brand name Tata Indicom and another Tata company,Tata Teleservices, holds a 38% stake in the company. It was formed after acquisition of the erstwhile Hughes Telecom (India), and was then renamed as Tata Teleservices (Maharashtra) and offers telecom services using CDMA technology. It is licensed to provide telecommunication services in the states of Maharashtra (including Mumbai) and Goa. It has invested about Rs.3,000 crore in state-of-the-art infrastructure in these states.
It has over 1.29 million customers in Maharashtra and Goa and offers telephony and ISP services in the cities of Mumbai and Navi Mumbai, and 137 towns across Maharashtra.
The financial performance has been consistently bad. The only saving grace being the factor of “consistency”. What is suprising is that the compnay, despite operating in such lucrative states, Maharashtra and Goa, is unable to make profits.
For the third quarter ended 31st December 2007, on a QoQ basis, the net sales of the company rose 5% at Rs.439.76 crore. Operating expenses rose 3% and the company’s EBIDTA was at Rs.128.33 crore, up by 20%. OPM improved from 25.45% to 29.18%.
The total expenditure stood at Rs.444.88 crore of which 26% was on account of depreciation, another 25% was due to interconnect and access costs. The company, in Q3 FY08, spent Rs.76.13 crore on marketing and promotional costs.
Even after the interest outgo of Rs.41.92 crore, the company managed to stay in the positive zone but it was only after this that company slipped into the red. The main culprit being the big bill of Rs.113.71 crore on account of depreciation. This ate away most of the margins and dragged the company into losses. This has always been the trend, that’s the “consistency” factor at work here. So at the end of it all, the company reported a loss before tax of Rs.27.30 crore as against a loss of Rs.49.04 crore in Q2. Net loss was at Rs.27.43 crore as against Rs.49.31 crore in Q2 and Rs.59.17 crore in Q3 FY07. So the only solace being that at least the losses are coming down!
During the nine month ended December 31, 2007, Foreign Currency Convertible Bond(FCCB) holders holding bonds of the value aggregating to $46.18 million exercised their option to convert their holding to equity thus resulting in an increase in the paid up equity share capital by Rs.83.75 crore.
The DoT had allowed telecom service providers to use alternate technology under their existing Unified Access Service Licences after obtaining DoT approval and on payment of the prescribed fee. Accordingly, the company had applied for GSM spectrum for the Telecom Circles of Maharashtra and Goa, and had paid non-refundable fee of Rs.393 crore. Since then it has received the ‘in principal approval’ from the DoT.
The stock is currently quoted at Rs.33 and this has certainly come down from a high of Rs.65 it had touched in January, which was in anticipation that the company might manage to turnaround.
The company might take some time to come out of the woods fully. Stay invested only if you have the patience and have money, which you don’t mind lying idle for some time now.

Source: sptulsian.com