Indian Economy Beats Expectations - Grows almost 8%

Belying predictions, the Indian economy grew by a significant 7.9% in the second quarter (Q2FY10) of this fiscal, up from 6.1% in the previous quarter (Q1FY10), essentially due to a good showing by the industry and the services sector.
The growth compares favorably to 7.7% recorded in the July-September quarter in the previous year. Consequently, the economy rose by 7% in the first half ending September 30 (H1FY10) of the current fiscal on the back of stimulus packages and revival of domestic demand, giving hopes that final figures for the year could be much higher.

The government, including Finance Minister Pranab Mukherjee, the Reserve Bank and the Planning Commission had predicted a growth of about 6-7%, while global agencies and analysts forecast it to be even lower at rate of 6.1-6.6% in the second quarter.

The economic growth of close to 8% in the second quarter is also remarkable in the context of just 0.9% expansion in farm production due to a weak monsoon and continued contraction in exports due to slackening demand overseas.

Sector-wise Performance:

**The manufacturing sector grew by 9.2% versus 5.1% in the corresponding period of last fiscal.
**Mining and quarrying by 9.5% versus 3.7% recorded in FY09.
**Community, social and personal services expanded by double digit at 12.7% against 9%.
**Despite being affected by international slowdown, trade, hotels, transport and communication sector grew by 8.5%, which is lower than 12.1% a year ago.
**Financing, insurance, real estate, and business services rose by 7.7% against 6.4%.
**Electricity, gas and water supply was up 7.4% compared to 3.8%.
**Construction rose by 6.5%, down over 9.6% a year ago.

It was after September, that growth declined to 5.8% in the subsequent two quarters last year. So, if the trend continues, the growth rate is expected to be much higher in the second half of this fiscal. The size of the domestic economy stood at Rs.17.90 lakh Cr (Rs.17.90 trillion) in the first half of FY10.

One more fund raising plan of Unitech

India’s second-largest real estate company Unitech will raise $700 million through Foreign Currency Convertible Bonds (FCCBs). The company has sought approval from the Department of Industrial Policy and Planning (DIPP) and the Reserve Bank of India to raise the fund through convertible instruments. The company has assured the government that the fund will be used for an integrated township and not for repaying existing debts.

This is the 3rd time in 1 year span that Unitech is planning to raise funds. In March 2009, the company raised $325 million (Rs.1250 Cr) at Rs.38.50 per share. After that, it has raised $900 million (Rs.4000 Cr) through two rounds of QIPs at Rs.62 per share & Rs.82 per share. Both the times company has got good response. Now, for this round let’s wait & watch. Already there is a rumor going on about Dubai Realty fiasco, which has affected markets all over the world today.

Part of these funds have been used to repay its debts. The company had a total debt of over Rs.10,000Cr. After adjusting the debts toward telecom venture, it had a residual debt of Rs.8,600Cr before the QIP placement in March 2009. Its current debt is around Rs.6,300Cr, that means the company has repaid a debt of Rs.2,300 Cr and the balance amount was used for implementing projects.

Top 10 Fastest Growing TMT Companies In India For Last 3 Years

Deloitte, a leading accounting, consulting and professional services firm, has announced its rankings of the 50 fastest-growing companies in the technology, media and telecom space.

Despite competitive conditions all round for industry players across India, the 50 companies on the Deloitte list have managed to achieve an average revenue growth rate of 372% over the last three years.
The Deloitte Technology Fast 50 India 2009 Program ranks the technology companies based on their percentage revenue growth over the last three financial years.

1. Tanla Solutions Ltd (Listed Company)
The overall winner is Tanla Solutions Ltd with a spectacular 2,997% growth over last three financial years. The company is a provider of integrated solutions and products for telcos in the wireless telecom sector and is also making its presence felt in providing solutions for value added services.
It has an employee base of about 500 globally and was also among the top 10 companies of Deloitte Fast 50 in 2008.

2. Enzen Global Solutions Private Ltd
In the second place, with revenue growth of 1,847% is Enzen Global Solutions Private Ltd. It is a new winner of Deloitte Fast 50, primarily engaged in the business of consulting and IT services and solutions with focus on energy and utilities sectors.
This company that has made a debut in Deloitte Tech Fast 50 awards this year, offers full range of consulting, strategy formulation and design, development and implementation services, process optimisation with value addition, focused on enhancing productivity at optimised cost.

3. Latentview Analytics Private Ltd
Latentview Analytics Private Ltd with growth rate of 987%.
This company is primarily engaged in the business of analytics, offering analytics consulting, analytics modelling and decision management services for consumer lending financial services, consumer goods, insurance and contact centres.

4. Kuliza Technologies
Founded in 2006, the Bangalore-based Kuliza Technologies, with a growth rate of 890%, is a software product development and business consulting company, focused on building business solutions, using enterprise, social networking and mobile platforms.
Kuliza partners, innovates and delivers high quality solutions that add exponential value to its customers.

5. Ocimum Biosolutions (India) Ltd
The company, which registered a growth of 663%, offers a gamut of GLP compliant services such as gene and microRNA expression profiling, SNP genotyping, copy number analysis, DMET, gene sequencing, support for clinical trials and biomarker discovery.

6. Cambridge Technology Enterprises Ltd (Listed Company)
The Hyderabad-based group with a growth rate of 662% provides software development. The group provides technology solutions for commercial customers throughout the United States and India.

7. Krawler Information Systems Pvt. Ltd.

Formed in 2005, Krawler, with 554% growth, brings together the best of enterprise and consumer software technologies to deliver the next generation business process management software for small and medium-sized enterprises.

8. Yashco Systems
The company, with 552% growth, offers IT services, product development solutions and business process outsourcing solutions to mid and large-sized organisations.

9. Novatium Solutions Pvt Ltd
Novatium Solutions Private Limited, with a growth of 446 per cent, is a technology products company, designs, develops, and markets various network computers.
Its products include netPC, a network computer designed on a hardware platform without using PC or thin client components; netTV, a device for home computing and entertainment that connects to television and computer networks; and netLCD that integrates the CPU into the LCD.
The company also offers embedded development, hardware design, and server application integration and deployment services. In addition, it offers knowledge and IP on the device, and the required head-end infrastructure.
The company was founded in 2004 and is headquartered in Chennai, India.

10. One97 Communications Private Limited Software
One97, with 435% growth, is one of India's largest and most widely deployed telecom application platform company.
Every month. 200 million users perform over 2.5 billion transactions on this platform using voice, SMS and WAP applications.

BSE to roll out Websites in regional languages

Leading bourse Bombay Stock Exchange will soon roll out websites in many regional languages including Marathi, Tamil and Punjabi, a senior official said on Tuesday.
"At present we have websites in Hindi, English and Gujarati. We will create more in Marathi, Tamil, Telegu and Punjabi," the official said without wanting to be named.

Trading in mutual fund units

Trading in mutual fund units is expected to start within 10 to 15 days, Securities and Exchange Board of India Chairman CB Bhave has said.

Recently, SEBI permitted brokers to use stock exchange terminals to buy or sell MF products. The move is aimed at increase the reach of MF products. He also spoke on the efforts the regulator was making to bring further transparency in the mutual fund industry.

Once the trading starts, MF products will become more popular with public as it will avoid hassles of prcessing, it will make their investments liquid & we will see more money coming into the markets. This will help push up the stock prices due to high liquidity. So the market is now in a mode of BUY on EVERY DIPS.

Nifty can test 5300-5400 levels by year end

There is a high chance of Nifty surging towards 5300-5400 levels by year end. The downside could be limited to 4800 levels for short terms. Mostly December month sees euphoric activities in Indian stock markets as the operators get a free hand due to the absence of FIIs. So beware of those operator driven stocks & instead invest in quality stocks. Stay away from CIRCUIT Stocks.

BUY - Airline Stocks for short term

Airline stocks will be in focus today as the long pending proposal of hiking foreign direct investment (FDI) in aviation will come up for discussion by the Committee of Secretaries.

Currently, the government allows about 49% in FDI in aviation sector. It has also barred foreign airlines from holding any stake either directly or indirectly in domestic carriers. The proposal is to hike this FDI limit to about 74% and to allow foreign carriers to have stake either directly or indirectly into the domestic carriers. This will rerate the already beaten down Airline stocks. Buy them now with strict stoplosses for the short term as of now.

Jet Airways, Kingfisher Airlines, Spice Jet

RIL AGM Agenda

Reliance Industries will conduct its annual general meeting (AGM) today. The meeting would include the company's business outlook, indications of international strategy and Mukesh Ambani’s comments on the KG-D6 gas dispute.
There are three main things to watch out for.

1) One is the business outlook and his take on the refining in the petrochemical businesses. It could be a reiteration of what was mentioned in the annual report. He had said that the global economy is showing signs of revival. The structural drivers of demand, however, could continue to show a considerable change. The refining business’ profitability could be volatile. There could be periods of supply tightness or oversupply in regional markets. Demand for gasoline could even slow down from current levels. On the petrochemical side, they said, the industry is likely to witness low operating rates in the next 18-24 months. This would be the business outlook.

2) The market will be watching out for the mention of an international strategy. It could be a broad outlining of what they are planning to do on the international front.

3) On the gas tussle, it is too premature for them to go out and make the formal announcement on the acquisition. So we would not hear names on what they are probably going to acquire. However, it could be a broad outlining of what they are looking at. Hence, expectations are low that they could come out and say anything on that.

The global construction market is expected to soar to a size of $12.7 trillion by 2020

According to a report by consultancy RICS Global Construction Perspectives and economic forecasting firm Oxford Economics, the global construction market would be worth an estimated $12.7 trillion in 2020 from about $7.5 trillion at present.

"Construction in major emerging markets such as India and China will see much higher levels of growth than developed countries by 2020. Growth in construction output in India will accelerate faster than in China up to 2020, but we expect growth in GDP to be higher in China," the Global Construction 2020 report stated.

It expects construction output to grow by more than 3 times in emerging markets compared to developed ones by the next decade. "The predicted sharp rise in construction levels will be a reflection of strength of markets in emerging economies such as India, Brazil and China, who are set to double output over the next decade," RICS Chief Economist Simon Rubinsohn.

RICS, an independent professional body, leads the world when it comes to professional standards in land, property and construction.

Aban Offshore's QIP

Aban Offshore's qualified institutional placement (QIP) which opened on Friday will close today. The company is looking to raise a maximum of Rs.1,000Cr, sources indicate that an equity dilution of nearly 13% pre-issue capital is likely. Most of the capital will be used to pay off the debt.

Aban had made an announcement on Friday saying that the QIP book is open at a price of about Rs.1224.28, which is about Rs.12 discount to the Friday’s closing price of Rs.1236.

The preliminary placement document says that
- 17 of their 20 rigs are under contract as on September 30.
- The total outstanding debt as on March 31 was about Rs.16,635Cr.
- The substantial portion of the cash flow and the money raised from the issue is likely to go into a repayment of debt.
- The total contract drilling services backlog is about 2.371 billion as on Sept 30.
- The management indicates that their contracts will suffice to pay the debt.

It is oversubscribed and the company has successfully raised about USD 150 million.