REPORTS FROM MAJOR BROKERAGES FOR THE DAY

AnagramEnergy&MetalUpdate30072008


Anagrams Daily Call 31072008


Asia Economics Flash


Ciba India Investment Idea 300708


Daily Trading Spices


Emkay GIPCL


Emkay HCC


Emkay ICICI 28 July


Emkay Mphasis Ltd


Emkay Ambuja Cements


Emkay Sail update


Emkay SBI update


Emkay Shobha Developers


EQUITY MORNING by SMC


EQUITY MORNING by SMC2


Equity Reports


Futura Polyesters Ltd


GAIL CITI Report


Global Economic Perspective


Honda Seil Power Investment Idea


Hotel Leela VentureTI


IDFC SSKI


India Automobiles Industry


Morningnotes31072008


Omaxe 2008 CITI Report


ONGC results update


PUNJ LLOYD Update


Oriental bank CITI


Reliance Infra results update


Reliance Money Morning notes


Seamec Q2 08 Results Update


Sandur Maganese Management Meet Update


Sterlite Industries results update


Top Mid Cap Ideas July08 EDELWEISS


Spices Daily 31072008

STOCKS TO WATCH OUT FOR TODAY

Equities are expected to see a positive opening Wednesday after global cues turned for the better as oil prices slid below $122. After the carnage on Dalal Street on Tuesday in reaction to Reserve Bank of India's interest rate hike, a technical pullback is likely ahead of the July series derivatives contracts expiry due on Thursday.

US crude oil futures eased more than $2 ahead of a weekly US report on energy stockpiles expected to reinforce worries over slackening demand. New York's main contract, light sweet crude for September delivery, was 42 cents lower at $121.77 a barrel after slumping 2.54 dollars to 122.19 Tuesday on the New York Mercantile Exchange.

Back home, the drop in oil prices is likely to cheer oil marketing firms like IOC, HPCL and BPCL. Higher oil prices dent the profit of these state-run firms as they are forced to sell petrol and diesel at government-mandated prices.

Interest rate sensitive sectors like auto, realty and banking & financial services are likely to remain subdued after the central bank's rate hike. On Wednesday, the BSE Bankex shed 8.31 per cent, BSE Realty fell 5.54 per cent and BSE Auto declined 4.04 per cent.

Among stocks, Moser Baer Entertainment is looking at raising funds for expansion in the movie space and is learnt to be in talks with private equity firms including ChrysCapital and Warburg Pincus. According to media reports, it is likely to raise close to $50 million in equity and debt. Shares of Moser Baer, which ended 3.6 per cent lower at Rs 95 on Tuesday, are expected to see an upside on the news.

Future Capital Holdings will enter the hospitality sector and is close to signing two separate deals with property owners in Kolkata and Thiruvananthapuram. The company's shares, which ended 6.74 per cent lower on Tuesday, may see some action on the news.

Shares of Carborundum Universal could see an upside on news that it has chalked out a Rs 100 crore capex plan for its two units in Tamil Nadu and Kerala. The company's shares ended 0.93 per cent lower at Rs 122.70.

RESULTS TODAY:

Alok Industries, Ansal Infrastructure, Asahi India, Aurobindo Pharma, ITC, Yes Bank, Merck, HCL Technologies, Mahindra & Mahindra, Tata Motors, Punjab National Bank, Tata Communications, Power Grid Corporation, Suzlon Energy, IVRCL, Indian Oil Corporation among others.

Sharekhan puts 'buy' on Genus Power Infra

Sharekhan has maintained ‘buy’ on Genus Power Infrastructure for a revised target price of Rs 502.

The April-June 2008-09 results of the company are in line with the brokerage expectations on both revenue growth and profitability fronts.

The revenues grew by 20 per cent to Rs 100.2 crore against Sharekhan’s estimate of Rs 95.9 crore. The revenue growth was higher because the performance of both the businesses, meters and projects, was stable during the period.

The operating profit of the company grew by 23.9 per cent to Rs 16.4 crore, implying an operating profit margin of 16.4 per cent.

The operating profit margin improved by 52 basis points on account of a decline in the other expenses. The employee cost as a percentage of sales increased by 263 basis points to 73.3 per cent.

The other income increased by 40.9 per cent while the interest cost rose by 32.6 per cent to Rs 5.5 crore. Consequently, the net profit of the company grew by 23.4 per cent to Rs 8.5 crore vis-à-vis Sharekhan’s estimate of Rs 8 crore.

Currently, the executed order book of the company stands at Rs 645 crore.

Sharkhan has revised their earning estimates for 2008-09 and 2009-10 downwards by 5.8 per cent and 6.4 per cent to Rs 45.6 and Rs 59.8 , respectively. It has have been revised to factor in the increase in the input cost that is expected to exert pressure on the company’s operating profit margin going forward.

Genus Power Infrastructure is a leading manufacturer of electronic energy meters. In Sharekhan’s view, the company is well poised to benefit from the government's plan to spend on the country's power transmission and distribution sector.

At the current market price the stock trades at 6.2x and 4.7x its FY2009E and FY2010E earnings respectively.

Sharekhan advises to book out of Ceat

Sharekhan has advised investors to book out of Ceat at current levels. Ceat's April-June 2008-09 results are lower than the brokerage expectations due to declining profitability during the quarter. Sales for the quarter grew by 20.8 per cent led by a volume growth of 13 per cent year on year and price increases. The replacement sales grew by 29 per cent during the quarter. The company has reported an operating loss for the quarter due to the rise in its raw material cost during the period. The raw material cost per kilogram increased by a whopping 21.5 per cent in April-June 2008-09 to Rs 104. The other expenses such as power and fuel cost, publicity cost, employee cost and transportation cost also increased during the period. As a result, the operating loss for the quarter stood at Rs 4 lakh. The company suffered an operating loss in April-June 2008-09 for several reasons. For one, the price increases undertaken by it in April and June 2008 in the tyre segment were not available for the full quarter. Also, there was no sufficient inventory of raw material with the company at the beginning of the quarter. Consequently, its margin saw a higher decline compared with the industry. Its publicity expenditure was also higher in April-June 2008-09 due to the launch of its new company logo. A higher other income helped cap the company’s reported net loss at Rs 10.7 crore in Apr-Jun 2008-09. The raw material cost remains a cause for concern and is expected to increase further in the second and third quarters. The price hikes effected may not be adequate to offset the increase in the raw material cost. Hence, the going is expected to be tough for the company in the next two quarters. Ceat is expected to make an operating profit in the next quarter as the price increase undertaken in Apr-Jun 2008-09 will be available for the full second quarter and the company has effected another price hike of 6.5 per cent with effect from July 2008. Going ahead, the management plans to focus on cost reduction measures, says Sharekhan. However, the outlook for the next two quarters appears gloomy. In view of the Apr-Jun 2008-09 performances, Sharekhan has revised their earnings estimate for 2008-09 and expect a decline of 54 per cent in the company’s adjusted net profit to Rs 31.4 crore in this fiscal. At the current market price of Rs 72, the stock is trading at 6.2x its FY2010E earnings and an enterprise value /earnings before interest, depreciation, tax and amortization of 3.2x.

Religare assigns 'buy' to HDIL; target Rs 976

Religare Research has reiterated ‘buy’ on HDIL while reducing the target price to Rs 976 from Rs 1,334, an upside of 112 per cent.

HDIL's April-June 2008-09 revenues increased 29 per cent year on year to Rs 570 crore, in line with the brokerage’s estimate, as the company booked sales on projects covering 0.5million square feet and on land development rights of 5.5 million square feet.

A dominant share of commercial and SRS projects saw the EBITDA margin surging above Religare’s estimate to 85 per cent in Apr-Jun 2008-09 from 54 per cent in the same year-ago quarter. The strong operational performance enabled profit after tax to increase 57 per cent year on year to Rs 320 crore, ahead of the brokerage estimate of Rs 210 crore, despite a sharp rise in interest costs.

Work on the Mumbai airport SRS project has begun during the quarter, with 53 acres of land acquired from IL&FS for rehabilitation of existing occupants. In the first phase, HDIL will develop 6-8 million square feet of rehabilitation area with simultaneous construction of five million square feet of saleable area. The first phase is expected to be completed in 18-24 months with a dedicated labour workforce of over 3,000 personnel, 10 contractors and over 100 engineers.

In light of higher interest costs during the quarter, Religare has moderated their earnings estimates for FY09E and FY10E. They have also reduced their valuation for the airport project to Rs 306 from Rs 436 to account for the rising cost of debt and increased market risk. Similarly, these macro concerns see them cutting back their valuation for the core construction business from Rs 898 to Rs 670.

Buy Tata Tea for target Rs 970: Sharekhan

Sharekhan has maintained ‘buy’ on Tata Tea for a target of Rs 970. The company’s Apr-Jun 2008-09 results were below expectations. Though the top line growth was more than expectations, a significant dip in the margins dented the growth at operating level. The consolidated sales were up by 12.3 per cent year on year to Rs 1,134.7 crore. However, the operating profitability was affected by the increase in the commodity prices and other input costs. The raw material cost as percentage to sales increased by 270 basis points impacting the operating profit margin, which was down by 233 basis points. Thus, the operating profit was down by 4.2 per cent to Rs 153.8 crore. The interest cost fell by 88.1 per cent to Rs 10.9 crore on account of the repayment of the loans taken for acquisitions. This led the adjusted net profit grow by 101 per cent to Rs 74.8 crore. The stand-alone sales (domestic operations) were up 12.2 per cent to Rs 315 crore. The operating profit margin declined by 256 basis points to 17 per cent consequent to a 371-basis point increase in the raw material cost as percentage to sales. Thus, the operating profit was down by 2.5 per cent to Rs 53.4 crore. Consequently, the adjusted profit after tax was down 5.3 per cent to Rs 38.4 crore. Tata Tea has felt the pinch of the rise in the auction tea prices and the input cost inflation during the quarter. Going forward, if auction tea prices continue to rise, it will impact the growth at operating levels. The company has already undertaken price hike in its product basket and it would be difficult to implement another price hike in near term, as it would impact the volume of the branded tea segment. However, if the company does take another price hike in the coming quarters, it will help it combat the rising input cost to some extent, says Sharekhan. Sharekhan believes that the company’s focus on new geographies and new initiatives (such as green and herbal tea and water) augurs well for the company. The huge pile of cash together with the management’s intention to look for strategic acquisitions in the domestic as well as global beverage market will ensure inorganic growth for the company. The brokerage expects Tata Tea’s earnings to grow at a compounded annual growth rate of 13.5 per cent from 2007-08 to 2009-10, which is line with the growth for the other fast moving consumer goods majors. Considering this fact and possibility of inorganic growth through acquisitions, the valuations look inexpensive. At the market price of Rs 756, the stock trades at 12.2x FY2009 and 10.7x FY2010 earning estimates.

Sensex slips; ITC, Tata Motors drag

The market opened slightly higher on Thursday, but slipped into the red within minutes, on the back of select bank, FMCG and auto shares.

At 10:15 am, the Bombay Stock Exchange’s Sensex was down 100 points or 0.7 per cent at 14,187.15, making a low of 14,187.15. the high, so far, was 14,360.21.

The National Stock Exchange’s Nifty was down 8 points or 0.19 per cent at 4305.25. The index touched a low of 4297.10 and high of 4334.95, in trade so far.

Global cues were mixed and the crude prices were back on the trot. Volatility is on the radar, according to dealers, as the current month derivatives contracts expire.

“International cues hardly matter on the settlement day, when local punters orchestrate the moves to suit their plan. The reduction of open interest in the 4300 Call for the current month and addition to 4300 strike Nifty Puts for July indicates an ending higher than 4300. The ADAG stocks, the best plays for a post trust vote scenario, are set to reap good harvest this settlement. Take your profits here. We will look at building fresh positions after we see how the market fairs today,” Anagram Stock Broking said in a note.

Nifty July futures were trading at 4325.95.

Major gainers were Sterlite Industries (1.69%), Wipro (1.31%), Tata Steel (0.94%), Mahindra & Mahindra (0.88%) and Reliance Infrastructure (0.75%).

Losers comprised ITC (-3.62%), Tata Motors (-2.95%), Ranbaxy Laboratories (-1.57%), State Bank of India (-0.78%) and ACC (-0.66%).

Market breadth on BSE showed 445 advances and 272 declines.

The price of crude oil rose more than $4 a barrel on Wednesday after US data showed an unexpected drop in gasoline stocks as suppliers facing weak consumer demand cut production and imports. On the New York Mercantile Exchange, September crude settled up $4.58, or 3.75 per cent, at $126.77 a barrel.

Asian markets were mixed Thursday. Japanese stocks had reversed earlier gains, pulling the benchmark Nikkei 225 down 0.43 per cent. But in Hong Kong, the Hang Seng was up 0.33 per cent and in Singapore the Straits Times was up 0.26 per cent, extending gains from the US rally overnight.

US stocks ended a volatile session higher on Wednesday as optimism over unexpected growth in a private-sector jobs report helped offset a surge in crude-oil prices. The Dow Jones Industrial Average rose 1.63 per cent, the Standard & Poor's 500 Index advanced 1.67 per cent and the Nasdaq Composite Index gained 0.44 per cent.

PPF - A safe investment

One of the traditional timetested and popular saving instruments has been the Public Provident Fund (PPF). PPF is a savings and tax-saving instrument. It also serves as a retirement planning tool for those who are not covered by any structured pension plan. The popularity of PPF as an investment avenue has been because of various reasons seldom found in other savings instruments - high rate of returns, compound interest, complete safety, no wealth tax, and tax-free interest.

A PPF account can be opened at a head post office or at specified branches of some nationalised banks. Subscription can be made in cash or through a crossed cheque in favour of the accounts office, at the place at which that office is situated.

Any individual may, on his own behalf or on behalf of a minor of whom he is the guardian, subscribe to PPF. The amount should not be less than Rs 100 and not more than Rs 70,000 in a year. An individual may also subscribe to the fund on behalf of a Hindu Undivided Family, an association of persons or a body of individuals.

Over the past few years, the interest rate on PPF accounts has also been reduced and has come down from 12 to eight per cent. Still, considering the other instruments available in the market, PPF is among the best options. Considering the tax advantages on the interest income, the effective rate of returns is quite high as compared to other saving instruments.

The interest rate on PPF has been following market rates. Starting from 4.8 per cent in 1968-69 , it went upto 12 per cent in 1986-87 . The 12 per cent interest remained for almost 14 years till 1999-00 . From the year 2000, then decent began, and the rate has touched the prevailing eight per cent.

An individual can open only one account. A person having a GPF, EPF, or CPF accounts can also open a PPF account. More than one account/joint accounts are not permitted . Both, the parents and the child, can contribute out of their respective incomes chargeable to tax and earn tax breaks under Section 80C. An individual may open one PPF account on behalf of each minor child of whom he is the guardian. If a guardian opens an account on behalf of a minor child, the other guardian cannot open an account on behalf of the same minor child.

The account allows a nomination facility. The contribution to the account can vary from year to year, from a minimum of Rs 100 to a maximum of Rs 70,000 in any given year. Investments in a PPF account can be made in multiples of Rs 5, either lump sum, or in instalments (not exceeding 12 in a year). The credit to the PPF account is made on the date of presentation of the cheque and not on the date of its clearance. If the subscriber fails to deposit the minimum Rs 100 in a given financial year, the account is considered as discontinued but the interest will continue to accrue and paid at the end of the term. The default can be got condoned on payment of a fee of Rs 10 for each year of default, along with the arrears of subscription of Rs 100 for each such year.

Interest at the rate notified by the Central Government will be allowed for a calendar month on the lowest balance at credit of an account between the close of the fifth day and the end of the month. It will be credited to the account at the end of each year. The present rate is eight per cent compounded annually.

The balance to the credit of a subscriber in his account is not subject to attachment. The PPF Act gives the account holder immunity from attachment. Contributions paid out of the assessee's taxable income into his PPF account, his children (minor or major) and spouse's accounts qualify for rebate under the Income Tax Act. In the case of a Hindu Undivided Family, any member of the family will qualify for rebate. The interest credited to the fund and withdrawals from the fund are exempt from income tax. The balance held in a PPF account is completely free from wealth tax.

DA correction to add to pay panel’s goodies

The Sixth Pay Commission award for government officials is likely to be sweetened with an upward revision in the dearness allowance (DA) entitlement. The committee of secretaries (CoS) looking into the recommendations made by the Sixth Pay Commission has suggested a change in the DA calculations. This could result in additional benefit of Rs 300-3,000 a month to a government employee, depending on her level.

The CoS, headed by Cabinet secretary K M Chandrashekhar, is giving finishing touches to the report that is expected to be submitted soon. The report would then go to the Cabinet for approval. Government sources said the change has been suggested in the wake of an across-the-board protest by government employees against the way DA allowance was fixed.

The Fifth Pay Commission had recommended that the 50% DA payable in April 2004 be merged with basic pay. The dearness pay was to be counted as basic pay for all practical purposes, including for retirement benefit. Thus, logically, as on January 1, 2006, the recommended date of Sixth Pay Commission award, the 24% DA payable should have been on a salary that included the 50% DA that was merged with basic pay from April 2004.

In its calculation, however, instead of compounding the two DA components — 50% as on April 1, 2004 and 24% as on January 1, 2006 — the commission added them, yielding a figure of 74% composite DA. Consequently, while shifting to the concept of grade pay, the pay commission fixed the base salary as on January 1, 2006, at the basic pay drawn along with dearness allowance at the rate of 74%, and rounded it off to next multiple of 10. The anomaly resulted in a loss of roughly 7% to government employees.

To put it simply, if an employee had a basic salary of Rs 100 on April 1, 2004, according to the Fifth Pay Commission calculation, he would have a total salary of Rs 150 (including 50% DA). A 24% DA on that would increase his salary to Rs 186 — and not Rs 174 on January 1, 2006, used as the base for calculating Sixth Pay Commission award. The committee of secretaries is understood to have proposed that the anomaly be corrected and the DA be fixed at 86% and not 74%.

So, in case of a government employee in the Rs 2,550 pre-revised payscale, the revised pay in running pay band would become Rs 4,743 (increase of 86%) against Rs 4,440 (74% increase), a gain of over Rs 300. At the director level, in the payscale of Rs 18,300, the difference because of the change would be over Rs 2,000 a month.

N-deal spin-off - 100,000 new jobs, more research opportunities for us

CHENNAI: One of the spin offs of the India-US civil nuclear deal coming through will be the creation of 100,000 new jobs for the 30-odd reactors that India hopes to set up to meet its nuclear power deadline of 20,000 MW by 2020, experts say.

Congress MP Rahul Gandhi highlighted the fillip the deal is expected to give to employment generation and the energy sector. Interacting with students of Ravindra Bharati in Hyderabad on Saturday, Gandhi said: "The nuclear deal means millions and millions of jobs, and lights in the houses of the poor in this country."

Union Minister of State for Commerce and Power Jairam Ramesh, visiting the Department of Atomic Energy (DAE)'s Kalpakkam campus in Tamil Nadu, said: "Nearly 10,000 MW of nuclear power would be generated from indigenous reactors, 8,000 MW from light water reactors and 2,000 MW from Fast Breeder Reactors (FBR)."

Thousands of engineers, technicians and scientists would be needed to run these establishments, he underlined.

"India's 17 nuclear reactors have the capacity to generate 4,120 MW, but in 2007 they could produce only 1,800 MW due to lack of fuel," Ramesh said.

By 2020, India is likely to import six light water reactors while six nuclear plants are under construction to beef up generation capacity, said Nuclear Power Corporation of India Ltd Technical Director S.A. Bhardwaj.

The total expansion is valued at nearly $300 billion.

"India's Department of Atomic Energy employs about 70,000 experts today," M.R. Srinivasan, former chairperson of the Atomic Energy Commission, told the media at a function in Kalpakkam.

The new nuclear power plants on the cards are expected to create at least a 100,000 new jobs in India, experts say.

Not just in India, the nuclear deal is expected to give a fillip to the industry in the US also.

In 2007, Ron Somers, president of the US-India Business Council, supporting the Indo-US Nuclear Cooperation Agreement, said: "The deal would create 27,000 high-quality jobs a year for the next 10 years in the US nuclear industry."

To strengthen research at universities, the DAE is providing grants for projects through the Board of Research in Nuclear Sciences. The DAE Graduate Fellowship Scheme for the Indian Institutes of Technology (IITs) has been in place since 2002 to promote collaborative research through postgraduate students. IIT-Kanpur offers a course in nuclear engineering and technology, now IIT-Madras has also decided to offer a similar course from the 2009 academic session. The country's premier institute for nuclear studies and research - The Homi Bhabha National Institute - will provide the necessary guides and teaching staff. India has two hubs for advanced studies in nuclear technology - Mumbai and Kalpakkam. The Mumbai-based Bhabha Institute unifies 10 institutions, four premier centres and six autonomous institutes, each with a research-driven framework. Bhabha Institute also includes DAE's top research institute, The Bhabha Atomic Research Centre where old horses of the '80s, the Cirus and Dhruva reactors, are still kept going. DAE's other research institute is the Indira Gandhi Centre for Atomic Research (IGCAR), which was set up in 1971. "The IGCAR has an open door policy for any student keen on science," says institute director Baldev Raj. "The IGCAR has tried to strike a balance between networking with institutions with expertise and collaborating with academia for harvesting fresh thoughts," he added. According to the Nuclear Energy Institute, 30 countries worldwide are operating 439 reactors for electricity generation and 34 new nuclear plants were under construction in 14 countries.

Right time for investors to accumulate green stocks

The oilfield of the future is not 200 feet deep below the surface. It is 96 million miles above the ground . This is not an understatement. High oil prices in the 1970s ended the era of crude oil as a source of electric power and kick-started the wind energy industry in Europe and elsewhere. Will the current regime of triple-digit crude oil prices begin the era of renewable energy? Conventional sources of energy, including oil and coal, not only have to bear the brunt of higher costs, they are also under attack by the green brigade. These hydrocarbon fuels are blamed for global warming and climate change. And with climate change taking centre-stage in energy concerns across the globe, policymakers and investors are waking up to the potential of green energy — be it with wind, small-hydel, solar, bio-mass or ethanol. Renewable energy sources like geothermal, solar and wind constitute approximately 2.2% of global energy generation. Internationally, a lot of investment is taking place in green fuels which are renewable and non-polluting. The momentum is the strongest in Europe and the fever is just catching up in India. Barring wind energy and ethanol, there are few commercially operational projects in this space. This makes it difficult for equipment suppliers to establish scale and thus, bring down costs to competitive levels. With technological development being critical in the industry, these companies need huge funding in the initial years. Consequently, while many companies have forayed into the renewable space, only a handful of them have made it their main business. We feel that this is a suitable time for investors to start accumulating right stocks in this space. Given the size of the global energy market, the sky is the limit for companies which get it right. We, at ETIG, bring you a bouquet of companies in the green-energy segment. Take your pick. Wind power As pointed out earlier, wind power is the largest and most popular among renewal sources right now. Initiated by government subsidies, the growth in wind energy in India has primarily been driven by technological advancement and higher scale of operations. And as technology improves, wind energy is becoming costcompetitive vis-à-vis conventional sources. In the 1980s, a typical wind turbine generator (WTG) could produce one-tenth of a megawatt ( mw) of electricity; now 5-mw capacity WTGs are commonplace. The industry now plans to move offshore, where wind speed is higher and more consistent. Offshore WTGs can produce up to 20 mw, which will radically change the scale and economics of wind energy. The best way to gain from growth in wind energy is to invest in equipment suppliers. In India, Suzlon Energyis the only major listed company in this space. It has grown beyond the domestic market to emerge as the world’s fifth largest wind turbine supplier with over 10.5% of global market share. It is now aggressively investing in technology and manufacturing capacity to emerge as one of the top three global WTG suppliers. Its revenues have been rising steadily. But the company’s margins have come under pressure in the past six quarters due to a product recall involving one of its bigger customers in the US. In terms of valuations, Suzlon compares well with other equipment manufacturers like Bhel, which supplies equipment for coal-fired power plants. Considering its future growth potential and ambitious growth plans, investors can accumulate the stock. Small hydel Hydro power is one of the oldest sources of renewable energy. But it has lost out to thermal power due to the cost, complexity and time involved in executing large projects. These require construction of huge dams and reservoirs, damaging environment and displacing people. This has created global interest in small projects, which are simpler to construct and do not damage ecology. Small rivers, rivulets and artificially-created storage dams or other small water bodies can be tapped to generate up to 20 mw power, which can be used locally. Jyoti: This is a engineering company which manufactures small hydro-power (SHP) sets. It is the single source for hydro turbines and auxiliary equipment. This division contributes 20-25% to the company’s total revenues of over Rs 200 crore. Jyoti is in the growth stage and has achieved a turnaround from being a lossmaking company till FY05. With increasing government focus on renewable energy, Jyoti’s business in the domestic and global markets is picking up. It expects to be a Rs 500-crore company in three years and is optimistic of growth in the SHP segment. A New Dawn... Solar power According to various studies, the earth receives more solar energy in just one hour than the world consumes in one year. Unfortunately, today, solar energy contributes only 0.1% of the world’s total energy needs. The key challenge in harnessing solar energy is the efficiency of technology and equipment. The technology in the sector is still evolving and nearly half a dozen technologies are vying for supremacy. Among the emerging technologies, thin film solar panels and concentrators are best positioned to be commercialised. While solar energy costs are declining, the costs of other sources of energy, including generation and distribution costs, are rising. This indicates grid parity can be reached earlier than estimated. In the long term, companies are differentiated on the scale or manufacturing efficiencies, access to technology and level of integration along the photo voltaic (PV) value chain. Two promising companies in this sector are Moser Baer and Webel SL Energy. Moser Baer: This is India’s largest and world’s second largest optical storage media manufacturer. The company has now ventured into the less capital-intensive and high-margin business of solar photo voltaic cells (PVC). With a strategy to offer multiple PV technologies, the company is aiming at bringing down PV electricity costs to match conventional energy price points. In the long run, it plans to set up the world’s largest thin film solar fabrication unit in the country. Its PV business earned revenues of $43 million in FY08, contributing nearly 10% to the total revenues of the company. It is expanding its crystalline silicon capacity from 40 mw to 80 mw. The company’s thin film project facility is nearing completion and is on track to raise its capacity to 180 mw by FY09. Webel SL Energy: This is a leading manufacturer of solar PVC and modules in India. It is one of the fastest growing manufacturers of solar PVC in Asia (outside Japan). The company has an installed capacity of 10 mw and intends to grow to 40 mw by FY10. Rising silicon prices are pushing up its raw material costs, affecting margins. To combat this, Webel is investing in technology and forward integration into raw material production. Biomass Renewable energy can be extracted from biowaste arising from trees, crops and garbage. This energy is released either by burning biomass in a controlled environment or converting it to other usable forms of energy like methane gas, ethanol or bio-diesel. The bagasse obtained as a by-product by the sugar companies is used to generate power, which is either consumed internally or sold commercially. Most sugar mills now use molasses, another byproduct, to produce ethanol, which is an alternative transport fuel. In India, leading sugar companies like Bajaj Hindustan, Balrampur Chini and Bannari Amman are actively into co-generation of power and manufacture of ethanol. India’s largest sugar company, Bajaj Hindusthan,earns 15% of its revenues from nonsugar businesses like ethanol and power generation. It intends to earn 35-40% of its revenues from value-added and non-cyclical business. It expects exportable surplus from its co-generation units to cross 100 mw in the sugar season, which will start in November ’08. It generated around 80 mw a year ago. For Balrampur Chini, power co-generation contributes more than 15% to the company’s total revenues and is a major driver of profit growth. In view of the recent capacity expansions, the total saleable co-generation capacity stands at 126 mw. Besides the co-generation of power, sugar company Bannari Ammanhas also ventured into wind power generation while de-risking its business model. Power generation contributes more than 20% to its total revenues. Equipment suppliers like Praj Industries, Triveni Engineering and Thermax are yet another set of companies associated with bio-mass energy. They are leading suppliers of equipment to companies in this sector. Praj Industriesis one of the largest suppliers of processes and systems to companies manufacturing ethanol, biodiesel and distillery industry. The ethanol business contributes 85% of the order book of the Rs 700-crore company. Praj is involved in R&D to make breakthrough cellulosic technology for ethanol. Triveni Engineeringmanufactures steam turbines, high speed gears and water & wastewater treatment equipment. It earns 40% of its revenues from its non-seasonal high-margin yielding business of steam turbines and co-generation of power. Thermaxis a leading manufacturer of engineering equipment like boilers and heaters, absorption cooling, power and cogeneration systems and water and wastewater solutions among others. Around 80% of its revenue comes from its energy business. So,take your pick... join the ‘Go Green’ movement and save the planet.

RBI rasis repo rate by 50 basis point & CRR by 25 basis point

The Reserve Bank of India has raised repo rate by 50 basis point to 9 per cent from the existing 8.5 per cent. This short-term rate at which the RBI lends cash to banks was last raised on June 24 by 50 basis points to 8.5 per cent. The move is directed at cooling inflation that is running at nearly 12 per cent on an annual basis by containing demand.

The central bank has also raised the CRR ( percentage of banks' deposits which they must keep with the central bank) by 25 basis points from the existing 8.75 per cent. This will come into effect from August 30.

The r everse repo rate ( The short-term rate at which the central bank absorbs cash from the market) remains unchanged at 6 per cent. It has also held the Bank Rate (rates used to price long-term loans to firms and individuals) steady at 6.0 per cent.

In the Quarterly Review of the Monetary Policy, Governor YV Reddy has given high priority to price stability, anchoring inflation expectations and orderly conditions in financial markets. This while sustaining the growth momentum.

Reddy’s move could tilt the economy either ways. On one hand, the raised repo rate will reduce demand. It is expected to limit manufacturers' ability to pass on higher fuel and raw material costs to consumers. The long-term impact would be to keep inflation expectations in check which should promote growth in the long run, as otherwise higher costs of goods and services could push up wage demands and make the economy less competitive. It is also likely to cool house prices and make them more affordable.

On the other hand, it will dent consumer sentiment, dampen housing demand and demand for inputs from cement to steel could slow growth more sharply when global environment also uncertain. This could reduce pace of job creation and lead to lower tax and excise revenue, putting pressure on fiscal deficit.

According to analysts, CRR hike will reduce inflation-stoking money supply and bring down price pressures. However, this move may lead to reversal in capital flows into shares leading to cash conditions tightening drastically.

INVESTMENT IDEAS & RESULT UPDATES

Biocon update


Dr Reddy


Bharti Airtel Ltd results update SMC


Elantas Beck India Investment Idea


Edel IT Sector


Gateway Distriparks Limited


HCC RU1QFY2009


KRC nestle update


Fulford India Investment Idea


NIIT results update


OMD calls for the day


Sandur Maganese Management Meet Update


Seamec Q2 08 Results Update


Rich-dad-poor-dad - A book on investment

Fund Managers are buying which stocks?

Ever since the equity markets tanked in January, stocks from almost
all sectors have been predictably offloaded by mutual funds in huge
numbers. The carnage has spared no sector but however, amidst this
chaos, there have been a few stocks that have actually managed to lure
fund managers towards them. Interestingly, a majority of the funds’
major purchases were from the top 30 stocks. Of the 851 stocks held by
mutual funds at the end of June, the top 30 stocks accounted for 50
per cent of the assets held. 12 of these stocks did not figure in the
30-share Sensex.

Now let’s take a look at the top stocks which were stacked up by funds
in the last six months.

The biggest purchase in terms of number of shares was Bharti Airtel.
Funds had significantly increased their exposure to this large-cap
telecommunication company, purchasing shares worth Rs. 1,064 crore
between January and June. The stock was held by 131 funds at the end
of December, but this number increased to 180 at the end of June
despite the fact that during this time, the stock’s price was down by
27 per cent.

Funds also increased their exposure to major tech companies, Infosys
Technologies, Satyam Computer Services and Tata Consultancy Services.
Funds bought shares amounting to nearly Rs 894 crore in Infosys
Technologies in the last six months. The price of the stock was down
by only 2 per cent during the time. Apparently, funds saw a major
buying opportunity in the stock as it become more popular with 50
funds adding it to their portfolios by the end of June. Tata
Consultancy Services and Satyam Computer Services also attracted
attention with shares worth nearly Rs 537 crore bought in the former
and worth Rs 352 crore bought in the latter. 33 funds added Satyam
Computer Services and 28 added Tata Consultancy Services to their
portfolios. Both these stocks fell by much lesser than the market in
the last six months.

Banking and financial services stocks were also in demand. Shares of
Housing Development Finance Corporation and Axis Bank were bought in
huge amounts while ICICI Bank got a mixed response. Funds stacked up
the stock in the initial months of the year but cut down their
exposure later on, as news of Credit Derivative losses and Subprime
crisis weakened their faith in the once favourite banking stock. But
funds bought the stock with a renewed interest in June, when it was
available at the lowest price.

Among basic engineering stocks, funds indulged heavily in Bharat Heavy
Electricals, buying shares worth nearly Rs 819 crore. The price of the
stock was down by 46 per cent in the last six months.

Diversified company, Larsen & Toubro also maintained buying interest
in the falling market. Funds bought shares worth nearly Rs 804 crore
in the company in the last six months when its price was down by 48
per cent.

Pharma stocks, Dr. Reddy's laboratories and Divi's Laboratories were
also bought in significant numbers. Dr. Reddy’s Laboratories also
found its way into 20 funds’ portfolios while Divi’s Laboratories got
14 new takers. While Dr. Reddy’s Laboratories had curtailed its fall
to 9 per cent, Divi’s Laboratories has lost 28 per cent in the last
six months.

Energy stocks, Reliance Industries and Oil & Natural Gas Corporation
also lured funds into heavy buying. 19 funds added Oil & Natural Gas
Corporation and 23 funds added Reliance Industries to their portfolios
by the end of June. Oil & Natural Gas Corporation had lost 34 per cent
while Reliance Industries had shed 27 per cent in the market downturn.

Company Current Investment (Cr) * Shares Bought (lakhs)**
Inflow (Cr)
Bharti Airtel 3011.11 135.51 1063.89
Bharat Heavy Electricals 2421.08 43.31 810.35
Infosys Technologies 2849.00 49.28 893.67
Larsen & Toubro 2774.80 26.21 797.26
HDFC 1522.67 29.00 745.32
ICICI Bank 2927.99 63.38 744.41
Tata Consultancy Services 1370.33 55.21 536.88
Tata Steel 1971.76 61.09 447.89
Oil & Natural Gas Corpn. 2218.83 46.52 469.62
Punj Lloyd Ltd 744.39 127.55 216.43
Dr. Reddy's Laboratories 797.78 64.92 390.76
Reliance Industries 6314.26 15.86 382.79
Satyam Computer Services 1180.31 79.89 352.44
Axis Bank 1136.31 34.92 264.76
I T C 1531.32 117.23 239.97
* As on June 30, 2008
** Between Jan- Jun, 2008

Source : valueresearchonline.com

PNB to exit from PNB Gilts

PNB to exit from PNB Gilts

To invite bids in couple of days

Press Trust of India / New Delhi July 25, 2008, 19:54 IST

Public sector lender Punjab National Bank will exit from its primary
dealership subsidiary PNB Gilts Ltd by selling its entire 74 per cent
stake.

The bank will invite bids from those interested in buying the stake,
PNB sources told PTI.

"In the next two days we will invite bids through a public notice. We
at present hold 74 per cent, we are going to divest the entire stake,"
sources said.

Earlier, media reports have said the state-run bank would sell only 26
per cent stake in PNB Gilts. The sources also said the bank has
appointed Enam Securities as the merchant banker for the sale
process.

In a filing on the Bombay Stock Exchange, PNB said the bank has
initiated the process of selling its stake in PNB Gilts Ltd.

The same information was also filed by PNB Gilts on the
exchange.

PNB Gilts, a subsidiary of PNB, is a primary market dealer. It derives
its revenue from brokerage arising out of dealing in government
securities and interest income besides from trading profit in the
same.

The sources said PNB can undertake these activities through the bank
itself. As such, there is no relevance in having a subsidiary for the
purpose.

PNB Gilts shares were down 1.54 per cent at Rs 19.15 today on BSE
today.

Zen Technologies net profit rises 5.77%

Zen Technologies net profit rises 5.77% in the March 2008 quarter

Sales rise 8.29% to Rs 18.95 crore

Net profit of Zen Technologies rose 5.77% to Rs 9.71 crore in the quarter
ended March 2008 as against Rs 9.18 crore during the previous quarter ended
March 2007. Sales rose 8.29% to Rs 18.95 crore in the quarter ended March
2008 as against Rs 17.50 crore during the previous quarter ended March 2007.

For the full year, net profit rose 52.71% to Rs 10.98 crore in the year
ended March 2008 as against Rs 7.19 crore during the previous year ended
March 2007. Sales rose 18.25% to Rs 26.56 crore in the year ended March 2008
as against Rs 22.46 crore during the previous year ended March 2007
capmkt

Sandur Manganese - Updates

*The results will be out on 30th july . expecting a great results EPS will
be more than 200+ in this quarter alone . They have contracted Manganese
@38k per tonne . I am also attaching the OMDC june quarter results . If u
study it minutely u will see revenue from manganese ore is 14 crores and
profit is 12+ crores. So just imagine the profit in Sandur.*

- As interacted with the management of Sandur Manganese & Iron Ore
(SMIO), a pure mining play on iron ore and manganese ore. The company has
extractable reserves of 5mn tons of iron ore and 18mn tons of manganese ore
in Sandur area of Bellary District of Karnataka. SMIO is one of the top 5
manganese ore producers in the country. SMIO exports 50% of its output to
steel and ferro alloys producers in Japan and China.
- SMIO has extractable reserves of 5mn tons of iron ore (Fe~50%, low
grade) and 18mn tons of manganese ore (Mn-28-45%, medium grade) in Sandur
area of Bellary District of Karnataka.
- According to the management, out of the 2.2mn tons permissible mining
output, iron ore and manganese ore would respectively constitute 85% and 15% of the total.

- SMIO has recently contracted iron ore (Fe-~50%) at $80/ton while Mn ore
(45%) grade ore was contracted at Rs38,000/ton for Q2FY09. If we take into
consideration management's guidance on the production front and incorporate
current ruling prices of both the ores, then we believe management's
guidance on the financial front for FY09 can be easily surpassed.
-

Company have started the process of dematerialisation of shares and it
will take anaother 3 months and anyways 90 % stake is with promoters ( out
of which 15 % has been issued to banks after ots settlement in 2006)

*Buy sandur Manganese bse code 504918 @1260 it will touch 15000 in 2 years
...its PAT will be 600 crores on an equity base of Rs 8.75 crores ie EPS of
Rs 700 + will touch 3500 in this year only .... almost no flaoting stock
..promoters and instituitions holding is 90 % ..next year EPS will be 1100+
.... major mining story in manganese and iron ore .... major demand from
china a and indian ferro alloy companies .. extracts mangaese ore @1200 per
tonne and sells the same at Rs 15000/- per tonne imagine the profit ........
company MD in his interview to cnbc has confirmed profit of 600 in this year
..so eps of 700+ will be there ...... *
**
**
**
*Sandur Manganese eyes rev of Rs 1.2K cr if prices rise

*

**Analysts are now talking about another scarce raw materials as the next
big thing. One of the talked about minerals is manganese ore. Globally,
prices of manganese ore have risen sharply in the last 12 months.

Nazim Shiekh, Executive Director, Sandur Manganese & Iron
Ores<http://www.moneycontrol.com/india/stockpricequote/miningminerals/sand...>,
expect to make a turnover and profits of about Rs 1,200 crore and Rs 600
crore respectively in FY09, if manganese ore prices continue to rise. "Of
that, Rs 300 crore will be from manganese ore even though the production is
just 15% of the total ore production."

The company recorded a PAT of Rs 57 crore as against a similar loss in the
previous fiscal.
*

Excerpts from CNBC-TV18's exclusive interview with Nazim Shiekh:
**

Q: Is the sharp rise in manganese ore prices the single biggest reason why
you could turn from a loss making to a profit making company? Are you a
direct beneficiary of higher manganese prices?
*

A: We have experienced higher manganese ore prices only in the last couple
of months. However, iron ore saw much better performance in 2007-08.
*

Q: What about buyer industries who are the major consumers of your products?
*

A: Manganese ore is basically consumed by the ferro-alloy industry in India.
We do export maybe 60% of our production to China and Japan.
*

Q: Do you see the trend continuing and if that is the case, how much
contribution would manganese ore make to your topline and bottomline going
forward?
*

A: We do expect manganese ore to remain like this for at least this year.
Manganese ore is only about 15% of our total production. We mine about 2
million tonne of iron ore. Of this only about 3,000 tonne is of manganese
ore and 15, 00,000 to 17, 00, 000 tonne is iron ore.

But manganese ore prices have shot up. If we go by what has happened in the
last couple of months, we expect manganese ore, even with just 15%
production, to match the profitability of iron ore. For FY09, we expect to
make a turnover of about Rs 1,200 crore and expect the profitability to be
about Rs 600 crore. Of that, Rs 300 crore will be from manganese ore even
though the production is just 15% of the total ore production.
*

Q: What about the final user industry, you said ferro-alloy companies buy
manganese ore, who is the final user industries that will have to pay this
higher price?
*

A: The steel industry<http://www.moneycontrol.com/india/news/interviews/sandur-manganese-ey...>which
buys ferro-alloys.

A MINE OF PROFITS

SANDUR MANGANESE INDUSTRIES LTD.

*(Rs 842/)*

In last 1 year or so, we have been extremely bullish on mining industry
because demand for Ores of different kinds is rising rapidly whereas
availability has not increased proportionately, leading to huge surge in Ore
prices. Our earlier recommendations like FACOR Alloys, Ferro Alloys, NMDC,
GMDC etc have reported very good profits and scrips are providing decent
return to investors who bought on our advice. Ore prices have increased
further in last 2 months which means that mining companies are set to report
bumper profits in 08-09.

SMIL ,Karnataka based company engaged in mining of Iron Ores and Manganese
Ores, is being recommended now as company is poised to report unbelievably
high nos in 08-09 and onwards. Scrip is in Z group and physical mode.
However, it is likely to be Dmat in coming 3-6 months maximum. Promoters
stake is 74.8%.

SMIL has its mining spread over 1700 acres in Sandur area. These must be one
of the biggest mines in India.Earlier in 06-07, company had hardly any
operations as it was referred to BIFR with heavy carry forward losses. Last
year, company had completed the OTS and cleared its pending liabilities
towards forest department which enabled it to resume mining operations
smoothly. Simultaneously, mineral prices have zoomed. In a way, closure of
its mines temporarily have proved a blessing in disguise as now, company is
able to sell its products at much much higher prices. Market value (at
today's prices) of its mine reserves are estimated at over Rs 40,000 crs as
against current market cap of just 800 crs.

*FINANCIAL PERFORMANCE:*

*Q4 07-08*

*Q3 07-08*

*Rs Cr*

*Rs Cr*

*Sales*

112.00

88.87

*PAT*

38.39

46.76

*Equity*

8.75

8.75

In Q4, company has paid income tax of 22 crs as against NIL in Q3.

Thus, in H2 07-08, Company has achived EPS of nearly Rs 97.

*FUTURE OUTLOOK:* Since July 07, prices of Manganese ore have risen nearly
300% and Ore prices have nearly doubled. MSIL had, in 07-08, done mining
mainly of Iron Ore. Manganese Ore prices have nearly doubled in last 2-3
months. Now, company wants to do manganese ore mining also in a big way to
avail of sky-rocketing prices. Actually, 15% quantity (against 100% quantity
of Iron ore) of Manganese ore will fetch same profits to the company because
mining/digging costs are almost same whether you dig iron ore or manganese
ore but prevailing prices of manganese ore 30 grade are Rs 14000/ per tonne
as against iron ore prices of around Rs 4000-4500 per tonne. In 08-09,
company has scaled up mining activities to achieve higher production:

*08-09E*

*Sales*

1150.00 Crs

*PAT*

510.00 Crs

*Equity*

8.75 crs

*EPS Rs*

583

Yes, company is poised to report EPS of Rs 583/ in 08-09. SMIL can report
even higher profits for 09-10 onwards as mineral prices are expected to
remain firm and even rise further for next 2-3 years at least. ,Scrip is
trading at just 1.50 PE Ratio. Floating stock is very low. Actually, some
banks are holding 2 or 3 lakh shares maximum which are getting sold
everyday. Once, this finishes, scrip will be in hands of strong investors
and share price can continue to rise sharply. Once, scrip goes Dmat, scrip
will be rerated as majority of brokers(corporate brokers at least) dont
allow buying of physical shares. Even, all investors will be tempted to buy
this scrip in dmat form.

Scrip is upper freeze daily. Investors can buy even upto Rs 1100-1200/
levels as share price can reach levels of Rs 3000-4500/(depending on Sensex
levels) in less than 15 months. It can be A SOLID BUY for short term period.

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Results of Dabur India & Dewan Housing Finance

Dabur India net profit rises 25.32% in the June 2008 quarter

Sales rise 12.79% to Rs 524.17 crore

Net profit of Dabur India rose 25.32% to Rs 70.14 crore in the quarter ended June 2008 as against Rs 55.97 crore during the previous quarter ended June 2007. Sales rose 12.79% to Rs 524.17 crore in the quarter ended June 2008 as against Rs 464.73 crore during the previous quarter ended June 2007


Dewan Housing Finance Corporation net profit rises 38.53% in the June 2008
quarterSales rise 30.36% to Rs 141.51 crore

Net profit of Dewan Housing Finance Corporation rose 38.53% to Rs 19.63
crore in the quarter ended June 2008 as against Rs 14.17 crore during the
previous quarter ended June 2007. Sales rose 30.36% to Rs 141.51 crore in
the quarter ended June 2008 as against Rs 108.55 crore during the previous
quarter ended June 2007

capmkt

Larsen & Toubro net profit rises 33.33%

Larsen & Toubro net profit rises 33.33% in the June 2008 quarter

Sales rise 53.19% to Rs 6901.43 crore

Net profit of Larsen & Toubro rose 33.33% to Rs 502.44 crore in the quarter
ended June 2008 as against Rs 376.85 crore during the previous quarter ended
June 2007. Sales rose 53.19% to Rs 6901.43 crore in the quarter ended June
2008 as against Rs 4505.21 crore during the previous quarter ended June 2007

capmkt

K S Oils net profit rises 73.74%

K S Oils net profit rises 73.74% in the June 2008 quarter

Sales rise 89.10% to Rs 692.74 crore

Net profit of K S Oils rose 73.74% to Rs 41.02 crore in the quarter ended
June 2008 as against Rs 23.61 crore during the previous quarter ended June
2007. Sales rose 89.10% to Rs 692.74 crore in the quarter ended June 2008 as
against Rs 366.33 crore during the previous quarter ended June 2007

capmkt

HBL Power Systems net profit rises 409.45%

HBL Power Systems net profit rises 409.45% in the June 2008 quarter

Sales rise 127.71% to Rs 316.43 crore

Net profit of HBL Power Systems rose 409.45% to Rs 33.42 crore in the
quarter ended June 2008 as against Rs 6.56 crore during the previous quarter
ended June 2007. Sales rose 127.71% to Rs 316.43 crore in the quarter ended
June 2008 as against Rs 138.96 crore during the previous quarter ended June
2007

CAPMKT

KLG Systel net profit rises 50.35%

KLG Systel net profit rises 50.35% in the June 2008 quarter

Sales rise 33.29% to Rs 57.49 crore

Net profit of KLG Systel rose 50.35% to Rs 12.96 crore in the quarter ended
June 2008 as against Rs 8.62 crore during the previous quarter ended June
2007. Sales rose 33.29% to Rs 57.49 crore in the quarter ended June 2008 as
against Rs 43.13 crore during the previous quarter ended June 2007
CAPMKT

Six Indian cos among BusinessWeek's top 100 Infotech firms

Notwithstanding the turmoil in global economic environment, as many as six Indian firms, including Reliance Comm and Bharti Airtel, have been named among top 100 best-performing infotech companies in the world by a US magazine BusinessWeek. The BusinessWeek's latest annual list 'The Infotech 100', which ranks the firms on the basis of shareholder return, return on equity, total revenues and revenue growth, has ranked telecom major Bharti Airtel at the 21st position followed by Reddington India (55th) and RCom (66th). The list is topped by US firms --Amazon.com and Apple-- who have taken the top two spots this year. However, the magazine said in an accompanying report that "the dominance of US companies is in decline, the country has 33 companies among the IT 100 this year, down from 43 in 2007." Other Indian firms on the list, includes -- Azim Premji-led Wipro at the 74th position, Satyam at 91 rank and HCL Technologies has been ranked at the 95th position among the list of 100 firms.

South African telecom firm MTN Group, which is in exclusive talks with Anil Ambani Group flagship firm Reliance Communications, has been ranked at the 12th position in the global list even ahead of global IT giants IBM and Microsoft, which are at 13th and 23rd ranks in the list, respectively. Besides, the other fast emerging country China also has six companies among the top 100 Infotech companies in the world. The magazine has compiled the information for the list by sorting through the financial results of 30,500 publicly traded companies and has ranked the technology players on four criteria --shareholder return, return on equity, total revenues and revenue growth. The companies leading the list are those with the lowest aggregate ranking. The companies which qualified had to have revenues of at least 300 million dollar then the collection of about 800 companies was divided into eight industry categories, such as software and semiconductors. "Companies whose stock price has dropped more than 75 per cent, whose sales shrank, or where other developments raised questions about future performance were eliminated from contention. "We also dropped some phone companies whose monopoly or near-monopoly power gives them an unfair advantage over competitors," the magazine added.

Inflationary pressures to continue: RBI

The Reserve Bank of India on Monday said inflationary pressures because of oil and food prices are likely to continue, giving an indication that monetary policy could be tightened further when it comes for review on Tuesday. "As the potential inflationary pressures from international food and energy prices appear to have amplified and, by current indications, are likely to remain so for some time," the RBI said in its review of Macro and Monetary Development for the first quarter of the current fiscal. The Reserve Bank of India further said that international crude oil prices are likely to remain high in view of the relatively tight demand-supply position. The central bank said the recent increase in petroleum prices by the government was not sufficient in view of the rising global crude oil prices. "This suggests that the pass-through in case of administered petroleum products is still incomplete," it said.

Inflationary pressures may force RBI to raise policy rates

A further rate hike seems imminent with RBI saying on Monday, a day ahead of its quarterly monetary review, that inflationary pressures are likely to continue for some time. The central bank fears the situation may worsen in case of a hike in global oil prices which as such have not been fully passed on to consumers in India. Expecting that global crude prices would remain high due to tight supply conditions, RBI said in first quarterly review of Macro Economic and Monetary Developments that "the pass-through in case of administered petroleum products is still incomplete". The Government on June 5 hiked the prices of petrol, diesel and cooking gas which had catapulted inflation to double-digit mark. The increase however did not fully cover the rising prices in global markets, RBI said.

The central bank also said inflationary pressures are likely to be there for some time. "As the potential inflationary pressures from international food and energy prices appear to have amplified and, by current indications, are likely to remain so for some time," it said. In Tokyo, Finance Secretary D Subbarao also said inflation may accelerate from a 13-year high and a further interest rate increase is an "obvious solution". Global investment banker Goldman Sachs expected RBI to increase short-term lending rate (repo) and mandatory deposit rates of banks with the central bank (CRR) by 25 basis points each tomorrow as inflation is much above the RBI's comfort zone. However, chambers and bankers called for maintaining a status quo in monetary policy of the RBI since it would harm the growth prospects.
The central bank also said inflationary pressures are likely to be there for some time. "As the potential inflationary pressures from international food and energy prices appear to have amplified and, by current indications, are likely to remain so for some time," it said. In Tokyo, Finance Secretary D Subbarao also said inflation may accelerate from a 13-year high and a further interest rate increase is an "obvious solution". Global investment banker Goldman Sachs expected RBI to increase short-term lending rate (repo) and mandatory deposit rates of banks with the central bank (CRR) by 25 basis points each tomorrow as inflation is much above the RBI's comfort zone. However, chambers and bankers called for maintaining a status quo in monetary policy of the RBI since it would harm the growth prospects.