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

Stock Ideas: RCOM, Dena Bank

Angel Broking has maintained its buy rating on Reliance Communications with a 12-month target price of Rs 763 in its May 2, 2008 research report. "Reliance Communications (RCOM) recorded a strong 35.5% yoy and an impressive 9.9% qoq Top-line growth in 4QFY2008. This was driven yet again by the company’s Wireless Business unit, which recorded an impressive 40% yoy and 5% qoq growth in Gross Revenues. RCOM recorded a strong 184bp yoy expansion in EBITDA Margins on account of operating leverage, and lower Access Charges and Licence Fees as a percentage of Revenues. Sequentially also, there was a 90bp rise in Margins, due again to lower Access Charges and Licence Fees."
"At the CMP, the stock is trading at 14.2x FY2010E EPS, FY2010E EV/EBITDA of 10.2x and an EV/subscriber of USD 381.6 on our FY2010E mobile subscriber base. We expect RCOM to continue to record strong growth. A host of value-unlocking initiatives such as the potential listing of the towerco, Reliance Infratel and the global business, Reliance Globalcom, as also the full-fledged GSM roll-out, apart from newer initiatives like DTH and IPTV are likely to sustain stock price movements going forward. We maintain a Buy on the stock, with a 12-month Target Price of Rs 763, including Rs 91 per share as the value of the towerco, Reliance Infratel," says Angel's research report.

Karvy Stock Broking has maintained its buy rating on Dena Bank with a revised price target of Rs 90 in its May 6, 2008 research report. "Dena Bank reported strong 4QFY2008 with net profit yoy growth of 153% to Rs 1.1 billion which was 85% higher than our estimate of Rs 602 million. The main feature of the results was significantly higher provisions as the bank concentrated on cleaning up its balance sheet and a substantial tax write-back on account of bad debt write-offs."
"We are increasing FY2009 EPS by 10% to Rs 15 and FY2010 EPS by 9% to Rs 18.8 to factor lower bad debt provisions. We are upgrading our price target by 6% to Rs 90 at 1.6x FY2009 ABV," says Karvy's research report."

Markets Today

The key benchmark indices ended lower as investors resorted to profit booking due to lack of positive triggers in the market. Selling pressure was seen in mid-caps and small-caps counters with their barometers underperforming the Sensex.
Realty and power stocks were the worst hit, whereas FMCG and metal stocks were on the positive side. IT pivotals recovered at the fag end of the session after rupee slipped to eight-month low against the dollar.
The 30-share BSE Sensex fell 117.89 points or 0.67% at 17,373.01. The index lost 253.22 points at day’s low of 17,237.68, hit in mid-afternoon trade. Sensex gained 11.25 points at day’s high of 17,502.15, hit at the onset of trading session.
The broader based S&P CNX Nifty fell 47.6 points or 0.92% at 5144.65. Nifty May 2008 futures were at 5174.50, a premium of 29.85 points as compared to spot closing.
The market breadth was negative on BSE with 965 shares advancing as compared to 1722 stocks that declined. 68 stocks remained unchanged.
The BSE Mid-Cap index fell 0.94% to 7,230.31 and BSE Small-Cap index fell 1.09% to 8,749.24. Both the indices underperformed the Sensex.
BSE clocked a turnover of Rs 6691 crore as against Rs 6,393.68 on Monday, 5 May 2008. The NSE's futures & options (F&O) segment turnover was Rs 32856.62 crore, which was lower than Rs 32972.85 crore on Monday, 2 May 2008.
IT stocks moved up after rupee touched a 8-month low as oil refiners stepped up dollar buying after oil hit a record high, adding to concerns of a widening trade deficit and slowing capital inflows. The BSE IT index outperformed the Sensex, gaining 1.53% to 4,383.36.
Tech Mahindra (up 2.49% at Rs 943.40), Satyam Computer (up 1.96% at Rs 497.05), Infosys Technologies (up 1.84% at Rs 1,820.30), Wipro (up 1.70% at Rs 498.45) and TCS (up 1.44% at Rs 937.85), rose. The partially convertible rupee was at 40.85 per dollar, its lowest since 6 September 2007.
India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries rose 0.42% at Rs 2654.40.
India’s top listed cellular service provider by market share Bharti Airtel slipped 5.29% to Rs 846.60. Bharti Airtel has reportedly bid for 51% of South African telecommunications group MTN. According to reports, Bharti had tabled a bid for MTN at 165 rand per share and had secured $12 billion from banks to finance the deal, which would make Bharti a top player in emerging markets telecoms.
The BSE Realty index underperformed the Sensex, sliding 4.63% to 8,337.03. Unitech (down 7.21% at Rs 307.05), Housing Development & Infrastructure Corporation (down 6.15% at Rs 781.70), Omaxe (up 5.48% at Rs 232), and Indiabulls Real Estate (down 1.44% at Rs 556.35), slipped.
India's largest real estate developer by market capitalisation DLF fell 5.26% to Rs 667.95.
The BSE Power index underperformed the Sensex, falling 2.15% to 3,315.61. Reliance Infrastructure (down 4.92% at Rs 1,442.30), Tata Power (down 4.49% at Rs 1,331.75), Torrent Power (down 2.23% at Rs 135.80), NTPC (down 1.28% at Rs 195.95) and Power Grid Corporation of India (down 0.80% at Rs 105.15), tumbled.
The BSE Bankex outperformed the Sensex, falling 0.46% to 9,088.70. Bank of India (down 2.47% at Rs 353.60), Yes Bank (down 2.46% at Rs 174.45), State bank of India (down 1.29% at Rs 1,756.20), and Kotak Mahindra Bank (down 1.28% at Rs 858.30), declined from the Bankex pack.
Union Bank of India (up 2.07% at Rs 172.25), Bank of Baroda (up 1.66% at Rs 325.35), HDFC Bank (up 0.66% to Rs 1,539.90) and Axis Bank (up 0.10% at Rs 947.85), moved higher from the Bankex pack.
India's largest private sector bank by assets ICICI Bank fell 0.55% to Rs 928.05.
Oil refiner Cairn India rose 1.67% to Rs 259.10 after the Goldman Sachs Group Inc raised its estimate on the stocks by 14% to Rs 325 a share.
PVC pipes maker Finolex Industries soared 6.73% to Rs 76.95 on repors the firm has decided to sell off its plot at Chinchwad near Pune. It is close to signing a deal with a US-based developer to sell the land for between Rs 350 crore and Rs 400 crore.
Dairy products maker Anik Industries was locked at upper limit of 5% to Rs 57.75 after posting 76.4% surge in net profit to Rs 8.96 crore on 58.1% increase in total income to Rs 333.27 crore in Q4 March 2008 over Q4 March 2007.
State-run lender UCO Bank jumped 1.99% to Rs 51.20 on reports the bank would raise Rs 325 crore through an equity issue in June 2008, and convert government equity worth Rs 300 crore into preference shares. The stock touched a high of Rs 54.20 earlier in the session.
Civil construction firm Patel Engineering rose 1.88% to Rs 607 after its unit's joint venture in the United States received a dam reconstruction contract worth $280 million. The stock had earlier touched a high of Rs 632.
Textiles manufacturer Mohit Industries spurted 10% to Rs 24 after posting 180.13% surge in net profit to Rs 0.42 crore on 1.93% fall in total income to Rs 29.71 crore in Q4 March 2008 over Q4 March 2007.
Steel maker JSW Steel fell 2.12% to Rs 879.60 on reports the firm will moderate any price hike this year and raise capacity to offset pressure on margins.
Polyester filament yarn maker Century Enka plunged 5.38% to Rs 121.40 after the company reported net loss of Rs 0.89 crore in Q4 March 2008 as compared to net profit of Rs 1.38 crore in Q4 March 2007. Total income rose 31.50% to Rs 326 crore in Q4 March 2008 over Q4 March 2007.
Titagarh Wagon clocked the highest turnover of Rs 263.39 crore. Reliance Capital (Rs 236.40 crore), Reliance Natural Resources (Rs 210.91), Reliance Petroleum (Rs 204.49 crore) and Reliance Infrastructure (Rs 177.87 crore), were the other turnover toppers on BSE in that order.
Reliance Natural Resources reported the highest volume of 1.74 crore shares on BSE. IFCI (1.73 crore shares), Ispat Industries (1.50 crore shares), Tata Teleservices (Maharastra) (1.19 crore shares) and Reliance Petroleum (1.01 crore shares), were the other volume toppers on BSE in that order.
US markets declined yesterday, 5 May 2008, with financial shares facing the maximum brunt on fears of Bank of America Corp likely to abandon its deal to buy Countrywide Financial Corp. However, Bank of America said after the closing bell that it remained committed to acquiring Countrywide.
The asset base of the Indian mutual fund industry increased by 7.32% during the month of April 2008. The mutual fund industry now has Rs 5,67,601.98 crore of assets under management.
High inflation remains the biggest concern for the Indian stock market. The measures taken by the Union government to control inflation have also added to uncertainty on corporate profit. Finance Minister P Chidambaram on Tuesday, 29 April 2008, said government will impose export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. He said the measures were being taken to improve domestic supplies and to moderate prices. The government has already banned export of cement and non-basmati rice.
Given that parliamentary elections are scheduled next year (in May 2009), the government may leave no stone unturned in its attempt to rein in inflation. This is bad news for commodity scrips like cement, steel etc.
In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review. While the central bank has mentioned price stability as its key priority, the overall undertone of the policy is not as hawkish as market had feared. The RBI governor Y V Reddy expects inflation to moderate in the next 2-3 months.
Good Q4 results March 2008 results and firm global markets, triggered a solid rebound in the Indian market over the past few days. Buying by domestic institutions has supported the market. From a recent low of 14,809.49 on 17 March 2008, the Sensex climbed 2,790.63 points or 18.84% to 17,600.12 on 2 May 2008.
The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. Rating agency CRISIL in its latest outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.
Another pointer to the fact that the long term India growth story remains intact is the outcome of the latest 2008 US-India Business Council (USIBC) survey, according to which, India is, and will continue to be, a premier destination for investment by US firms, with a large number of respondents rating future economic growth in India as highly sustainable.

Intraday Calls for 6th May

Market may see consolidation with high volatility. A flat to nagetive opening and some profit booking thereafter. Again a nagetive closing expected.

Today's Intraday Trading Calls:

UNITECH
PFC
GMDC
PTC INDIA
YES BANK
ANKUR DRUG

For Levels and Targets download the file by CLICK HERE.

Others: Lok Housing (146) & Chambal Fertilizer (72).

Good Luck

Intraday Calls for 05th May

Market may open flat to positive but profit booking can be seen at higher levels and nagetive closing expected.

Today's Trading Calls:

KESORAM INDUSTRIES
GMR INFRA
ANSAL INFRA
STERLITE INDUSTRIES
CEAT Ltd.
MUNDRA PORT

For Levels and Targets download the file by CLICK HERE.

Multibagger Calls: Buy Kamanwala Housing 511131 (116) 12-18 Months Target 250+
Good Luck.