Kansai Nerolac Paints
OUTPERFORMER
Current price : Rs 775 Target price : Rs 945
Potential upside : 22% Time Frame : 2 months
Kansai Nerolac Paints (KNPL), India's second largest paints company with a 21% market share, is expected to maintain its steady momentum on the back of robust economic growth and increasing demand from the user industry. We believe the company would benefit from enhanced activities in real estate and growth of the automobile industry.
Infosys Gets a Lift
By Daniel Del'Re
TheStreet.com Staff Reporter
9/27/2007 1:48 PM EDT
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SAN FRANCISCO -- Shares of India-based tech services bellwether Infosys (INFY - Cramer's Take - Stockpickr - Rating) rose Thursday on a report that it may raise profit targets.
An analyst with Macquarie Securities told Bloomberg that strong demand for outsourcing services would likely lead Infosys to lift its dollar-denominated guidance. The company is scheduled to report its second-quarter results on Oct. 11.
Shares were recently trading up $1, or more than 2%, to $48.30, off the morning's highs.
A spokesperson said the company couldn't respond to the analyst's comments because Infosys is in a "quiet period" leading up to the second-quarter financial report.
An upbeat forecast by Infosys would raise concerns that India's large IT outsourcing firms are suffering under the weight of a sharply appreciating rupee and wage inflation that are squeezing profit margins.
Infosys' first-quarter results underscored the effects these trends as the company handily beat analysts' revenue and profit expectations in dollar terms but appeared less profitable in rupee terms.
The rupee has risen about 9% this year, and broke through the 40-per-dollar level last week at which it had stabilized. At the same time, competition for network and software engineers in India has driven up wages by 12% to 15%.
Another concern dogging the Indian tech services firms is whether their revenue will suffer as problems in the credit and mortgage markets shake their clients in the financial services industry. Many of the big banks that outsource their IT functions have seen investors lose enthusiasm for the debt products they package for mortgage lenders and buyout shops.
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HCL Technologies has transformed itself from a marginal IT player to a well differentiated, full services player focused on large deals. This would sustain dollar based revenue growth at a CAGR of 32% over the next few years. However, with the twin challenges of an appreciating rupee and the phasing out of the STP tax holiday under sections 10A and 10B in FY10, earnings growth would decline.
Current price : Rs 305 Target price : Rs 365
Potential upside : 19% Time Frame : 30 DAYS
Company Background
Kamat Hotels (India) (KHIL), promoted by Mumbai based Kamat
Group in 1986, operates a 245 room five star hotel 'The Orchid near
Mumbai domestic airport and `Lotus Suites' near Mumbai
international airport.
KHIL took over Kamat Plaza, a four star hotel near the Mumbai
domestic airport. The management decided to upgrade the project
to a five-star property in 1994. Marketing being an important aspect
of the hospitality industry, the management decided to position the
property differently. Kamat Hotel pioneered the ECOTEL® drive in
the country with `The Orchid' getting certified `ECOTEL®' by HVS
Eco Services, USA. The hotel was the first in Asia to obtain the
coveted certification which defines the heightened level of
environmental responsibility in the hospitality business.
"The Orchid" has won prestigious award like the PATWA
International Award for the Best Chain Hotel for Eco Tourism, "Best
Environmentally Responsible Individual Hotel" by The British Travel
awards 2006.
The ECOTEL® hotels caters to a variety of groups, including not
only traditional eco-tourists, but also discerning business travelers
with interest in the environment, companies with advanced
environmental programs as part of their own corporate cultures,
eco-friendly vacationers, and of course business travel.
Share holding pattern
cmp 175 trag 225 shotly
Tata Steel signed agreements to buy a 5% interest in the Carborough Downs Coal Project located in Queensland, Australia. Mr. Brian MacDonald, Managing Director, AMCI Australia Pty Ltd, Dr. T Mukherjee, Dy Managing Director (Steel), Tata Steel and Mr. A. D. Baijal, Vice President (Raw Materials), Tata Steel signed the agreements, today, in Jamshedpur.
Tata Steel has ambitious plans to grow by setting up greenfield plants or acquiring capacities in India and overseas, which is in keeping with its long term vision and strategy.
The Carborough Downs coal project is majority owned and operated by a subsidiary of AMCI Holdings Australia Pty Ltd. AMCI International AG, the apex holding company of AMCI Holdings Australia Pty Ltd., is a large global producer, shipper and trader of high-grade metallurgical coal. Carborough Downs is an undeveloped underground coking coal project with production scheduled to commence in year 2006. It is located in Bowen Basin in central Queensland. The project life is currently estimated to have a life of 14 years and approximately 58 million tonnes of raw coal is expected to be mined during this period. There is a further potential resource of 100 Million tonnes of raw coal in the unexplored areas and deeper seams. The clean coal envisaged to be produced will be low-ash coking coal and PCI coal, highly suitable for steel making.
Tata Steel also signed an offtake agreement for a proportion of the production over life of the project.
Long tisco til 987 stoploss 813
Strategies for this week:
Divis lab.(Dlab)
VIEW BULLISH
BUY ABOVE 1360
TRAG1:1410
TARG 2:1567
Dr. Reddy's Lab (DRREDD)View: Bullish
Buy Above Rs 655
Target 1: Rs 673
Target 2: Rs 685
Stop-loss: Rs 648.10
Lot size: 400
Tata Chemicals (TATCHE)
OUTPERFORMER
Current price : Rs 286 Target price : Rs 374
Potential upside : 36% Time Frame : 12 months
The acquisition of Brunner Mond in Aug 2006 propelled Tata Chemicals (TCL) into the league of global soda ash majors. The Brunner Mond Group has manufacturing facilities in the UK, Netherlands and Kenya. The capacity of the Magadi plant in Kenya has been doubled from 3.5 lakh tonnes to 7 lakh tonnes. We expect the expanded capacity to operate at 38% utilization levels in FY08E and attain full utilization from next year onwards.
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