SKS Microfinance's Q2FY11 Results Disappointed Markets?

SKS Microfinance has reported a profit after tax of Rs.80.54 Cr in the second quarter ended 30 September 2010, a jump of 116% from the Rs.37.35 Cr in the corresponding period last year.

Revenues increased by 76% to Rs.366 Cr from Rs.207 Cr in the period a year ago.

The company had reported a net profit of Rs.67 Cr in the Q1FY11.

Incremental loan disbursements in the second quarter increased by 61% y-o-y to Rs.3,171 Cr and the loan portfolio for the half-year period was up by 69% to Rs.5,454 Cr. Earnings per share improved to Rs.11.74 at the end of September 2010 compared to Rs7.77 in the corresponding period last year.

Coal India IPO Oversubscribed by 1.57 times

The initial public offer (IPO) of India's largest coal producing company Coal India (CIL) has been fully subscribed on the 2nd day itself on the back of good response from qualified institutional investors.  

The issue has been subscribed 1.57 times, as per the NSE website.

It has received bids for 99.12 Cr equity shares as against the issue size of 63.16 Cr shares. The reserved portion of QIBs got subscribed three times.

Issue closes on 21-Oct for Non-QIBs. 

Subscribe to this issue for good listing gains.

SBI Plans Rights Issue of Rs. 20000 Cr

The country's largest lender State Bank of India on Wednesday said it is planning to mop up Rs 20,000 Cr (Rs 200 billion) through a rights issue along with another Rs 200 Cr (Rs 2 billion) from bonds this fiscal to fund business growth.

Last time, when SBI had come with Rights issue at Rs.1700, Its share price has not fallen beyond that.

HDFC Q2 Net up by 22%

Housing Development Finance Corporation (HDFC) has declared its second quarter results. T

he company's Q2 net profit was up 21.70% at Rs 808 Cr versus Rs 663.9 Cr.

Its NII was up 25.55% at Rs 1,189 Cr versus Rs 947 Cr.

Its other income was at Rs 4.7 Cr versus Rs 5.4 Cr.

Its loan growth at 18.73%.

The company's trailing 12-month (TTM) EPS was at Rs 20.23 per share. (Jun, 2010). The stock's price-to-earnings (P/E) ratio was 35.34. The latest book value of the company is Rs 104.05 per share.

At current value, the price-to-book value of the company was 6.87. The dividend yield of the company was 1.01%.

L&T Q2FY11 Results

Larsen and Toubro, L&T has announced its Q2FY11 results. 

The company's Q2 net profit was up 31% at Rs 765 Cr versus Rs 580.4 Cr.

Its net sales stood at Rs 9,261 Cr versus Rs 7,918.8 Cr.

Its other income was up at Rs 382 Cr versus Rs 212 Cr.

Other income is high on account of Satyam stake sale.

It’s operating margins at 10.8% versus 10.6%.

The company's trailing 12-month (TTM) EPS was at Rs 56.92 per share. (Jun, 2010). The stock's price-to-earnings (P/E) ratio was 34.50. The latest book value of the company is Rs 301.91 per share.

At current value, the price-to-book value of the company was 6.51. The dividend yield of the company was 0.64%.

L&T Says:

- Not seeing strong order inflow from overseas (Negative)
- Sticking to FY11 sales growth target of 20% (Positive)
- Slowdown in West Asia has impacted exports (Negative)
- OPM up 20 bps at 10.8% (Positive)
- Hopeful of maintaining EPC margins in FY11 (Positive)

Good potential in banking stocks

Indian Banking sector is going to see re-rating & there will be good demand for PSBs & one can safely assume good returns from the banking sector investments.

The Finance Ministry today said it will provide equity support of about Rs.8,700 Cr to the public sector banks, a move that will enable lenders to raise funds from the capital market without diluting the government holding to below 51%.

Next tranche of the capital infusion in the banks will be to raise government's holding in the public sector banks to certain level, So that at time when GOI is not in a position to fund them through budgetary resources they will be in position to go to the market and raise resources to beef up their Tier I position.

The government is also conscious of Basel III requirement where addition Tier I capital has been prescribed. The government will look at those banks where government's holding is at minimum at 51%.

In the first tranche the government has approved capital infusion of Rs 6,211 Cr in the five public sector banks announced in June this year.
Finance Minister Pranab Mukherjee in his budget speech this year announced that the government planned a capital support of Rs 15,000 Cr to public sector banks during the current fiscal to ensure that these entities could attain a minimum 8% tier-I capital by March 31, 2011.

As much as Rs 8,789 crore would be part of second tranche.

There are 6 public sector banks - Bank of Baroda, Oriental Bank of Commerce, Andhra Bank , Dena Bank, IDBI Bank and Vijaya Bank where the government holding is less than 55%.

The Centre's holding in these 6 PSBs:

- Bank of Baroda stands at 53.8%,

- Oriental Bank of Commerce at 51.1%

- Andhra Bank at 51.6%

- IDBI Bank at 52.7%

- Dena Bank at 51.2%

- Vijaya Bank at 53.9%.

Also it is learnt that the Government is examining State Bank of India's proposal of Rs 20,000 crore rights issue.

Analysts are Bulllish on CIL IPO

Today the sensex rose by 485 points even though the IIP data for Aug were dampener. Anlysts are of the view that the market rose due to the improvement in sentiment due to favorable pricing of Coal India Ltd.

Also snalysts said Coal India, the world's largest coal company, was the best play on India's rising coal deficit, calling it an attractive bet at the price band of Rs225 to Rs 245 a share. Many valued it at Rs 265 to Rs 324 a share.

*Domestic brokerage Motilal Oswal recommended subscribing to the issue and set a target price of Rs 325 per share, nearly 33% higher than the upper end of the price band.

*Brokerage CLSA forecast a one-year forward value of Rs309-Rs324. "We believe that Coal India deserves to trade at premium to global coal prices in supply-deficit environment," the brokerage said in a note.

*Ahead of the price band announcement on Tuesday, Religare said it had arrived at a price band of Rs.265-Rs.315 per share.

"Over the next three years, we expect Coal India to register a substantial expansion in operating margins led by improved labour efficiency, focus on beneficiated coal and technology upgrades," Religare said in a note.

Coal India, based in the eastern city of Kolkata, holds a dominant position in the fast-growing Indian market. The state monopoly produced 431 million tonnes in 2009/10 and accounts for nearly 80% of coal output in Asia's third-largest economy.

Coal powers 75% of India's electricity output, and annual demand is expected to swell at 11%. The country, which faces a peak-hour power deficit of nearly 14%, plans to triple its generation capacity over the next decade.

The long-awaited IPO opens on Monday and is scheduled to close on Thursday.

Much Awaited CIL IPO is on its way

The price band for the eagerly awaited initial public offer (IPO) of India's largest coal producing company, Coal India (CIL) has been fixed at Rs 225-245 a share & will open for subscription on October 18 and will close on October 21, 2010.

The company is offering 63.16 crore equity shares through the issue of which employees and retail investors will get 5% discount to the issue price.

The government expects to raise over Rs 15,000 Cr through the IPO, which will be largest ever amount raised by an Indian company via offering. The company will not receive any proceeds from the offer and all proceeds will go to the selling shareholder (GoI), whose stake will be 89.99% post the issue.

As per draft prospectus, CIL is the largest coal producing company in the world based on raw coal production of 431.26 million tons in fiscal 2010. It is also the largest coal reserve holder in the world based on reserve base as of April 1, 2010. (Source: CRISIL Research)

IIP Data for AUG-10

Index of Industrial Production (IIP) number for August has been released. Industrial output growth in August has come in at 5.6% as compared to 10.6% in the year-ago period.

So growth in August has scaled down when compared to July's growth of 13.6% on a month-on-month basis. The infrastructure numbers which represents around 27% of the IIP numbers is released in advance. It has achieved a poor growth of only 3.7% in August.

Disappointments:

• Aug manufacturing sector growth 5.9% vs 10.6% year ago.

• Aug electricity sector growth 1.0% vs 10.6% year ago.

• Aug basic goods growth 3.7% vs 7.7% year ago.

• Aug capital goods growth (-)2.6% vs 9.2% year ago.

• Aug consumer non-durables growth (-)1.2% vs 6.1% yr ago.

Positives:

• Aug consumer goods growth 6.9% vs 10.9% year ago.

• Aug consumer durable goods growth 26.5% vs 24.7% yr ago.

• Aug mining sector growth 7.0% vs 11.0% year ago.

• Aug intermediate goods growth 10.0% vs 14.4% year ago.

• Jul industrial growth revised to 15.2% vs 13.8% prov.

Key Takeaways:

• Industrial growth should be seen quarterly, not monthly

• Growth will be a modest 10%; not mediocre, not mercurial

• RBI will look at inflation; may hike once more

SpiceJet

The wheels of aviation industry's growth appear well-oiled for coming quarters. With softening of crude oil prices, growth in passenger numbers driven by momentum in leisure and business travel and the upcoming holiday season, the entire airline industry is set to take off.

Among the lot, SpiceJet's valuations look highly attractive. The champion of the low-cost carrier model had posted a net loss exceeding Rs 100 crore in the September 2009 quarter. A healthy profit jump in September 2010 would mean its current valuation is inexpensive.

Some analysts estimate SpiceJet's net profit for the September 2010 quarter at around Rs 65Cr, which will boost its trailing 12-month profits to Rs 256 Cr. Its current market capitalisation is just 12 times this, which appears highly attractive, considering the bright prospects ahead.

Lavasa Plans Rs 2K crore IPO by December

Infrastructure major HCC's group company Lavasa Corporation today said that buoyed by good market conditions, it may launch its Rs 2,000 crore public issue by December.

Lavasa, the subsidiary of Hindustan Construction Company , is developing a Rs 30,000 crore hill city project near Pune in Maharashtra.

"If the good market condition continues to prevail, the company hopes to launch the initial public offering (IPO) by December. It plans to offer a 10 per cent stake to raise about Rs 2,000 crore," Executive Vice President, Business Development, Lavasa Corporation Ltd, Nathan Andrews said.

HCC holds 64.99% stake in Lavasa Corporation, while other shareholders include Avantha Group, Venkateshwara Hatcheries and private investors.

The hill city, termed as country's largest such project, is being developed at Lavasa on 12,500 acres.

The first phase of the project has been completed with an investment of Rs 2,000 crore, including Rs 1,000 crore on infrastructure development.

The first phase includes educational facilities on 100 acres, residential complexes and hospitals, he said, adding that of the 1,000 hotel rooms proposed there, 250 rooms have become operational.

"We have sold 1,700 homes so far and plan to build 75,000 homes in the hill city," Andrews said. The entire project is likely to be completed by 2020.

One can BUY HCC as it might get rerating.