Sensex shoots up 200 points
Even though the Sensex spurted over 200 points, cement stocks continued to crack on Budget woes. At 14:29 IST the BSE Sensex was up 176.44 points, at 13,119.20. It had also surged to a high of 13,139.03, on short-covering. Shares from the cement sector, which are facing market wrath of late, fared badly despite news reports that producers had raised cement prices.While Gujarat Ambuja Cements dropped 6% to Rs 108.40, Grasim lost 4.4% to Rs 2114 and ACC shed 3.7% to Rs 866.70.
IFCI advances on Budget's higher non-plan allocation
State-run IFCI rose 8.38% to Rs 29.75, since non-plan allocation in the Union Budget has been hiked substantially.The amount for non-plan allocations has risen from Rs 225 crore in 2006/07 to Rs 1300 crore in 2007/08. The Budget document said the support will help in meeting restructuring liabilities.An unusually high 3.91 crore shares got traded in the counter on BSE.
The IFCI stock has rallied sharply on huge volumes of late. It more than doubled in value, advancing a solid 114.34% in January 2007, from Rs 13.06 on 5 January to Rs 30.20 by 6 February 2007. Thereafter, the IFCI scrip fluctuated between Rs 26 - Rs 32, and settled at Rs 27.45 by 28 February 2007.
At the current market price of Rs 29.75, IFCI trades at 3.67 times its Q3 December 2006 annualized EPS of Rs 8.10.
The rally in IFCI began after the company sold 7% stake in the National Stock Exchange (NSE), out of an aggregate 12.44% it holds in the bourse. The company raked in about $161 million from the sale. IFCI still has another 5% holding in NSE, which it has kept in the larder for rainy days.
Fortunately for IFCI, all its investments in the past were in land intensive sectors like power and steel. The land sale of Malvika Steel, at Sultanpur, will also rake in the moolah for the company.
IFCI has 21.6% stake in ICRA, a rating agency floated in 1991, and plans to sell its holding through an offer for sale.
IFCI was the first development financial institution in the country, established in 1948 to cater to financial needs of industries. As its cheaper line of credit began to dry up, IFCI had to resort to expensive funding, aggravating the situation.
IFCI had the rare distinction of posting a loss of Rs 3,230 crore on a turnover of Rs 1,109 crore in the year 2003-04. Losses dipped to Rs 324 crore in 2004-05 and further to Rs 74 crore in 2005-06.
In the June 2006 quarter this fiscal, IFCI posted a loss of Rs 15.60 crore but turned the corner in September 2006 with a profit of Rs 116 crore. But this was largely technical, and it has not paid interest on its borrowings.
In the December 2006 quarter, IFCI posted a net profit of Rs 129.37 crore compared with a net loss of Rs 17.37 crore in Q3 December 2005. Operating income during the December 2006 quarter rose to Rs 367.54 crore from Rs 279.91 crore in the year ago quarter.
Patel Engg sinks on sop withdrawal
Patel Engineering plunged 10% to Rs 312.80, after the finance minister withdrew the 10-year tax exemption on firms engaged in civil construction.Construction companies are exempt from paying tax for 10 years. However, the finance minister chose to revoke this benefit for companies engaged only in civil construction.
The Patel Engineering stock had tumbled nearly 10% to Rs 347.55 on Wednesday following a clarification in this regard in the Budget. As many as 84,582 shares changed hands in the counter on BSE.
Even before the Budget, this stock had corrected substantially. From Rs 471.10 on 2 February 2007, Patel Engineering declined to Rs 385.25 by 27 February 2007.
Tax benefit under section 80 IA will not be available for companies engaged only in civil construction work. This amendment will come into effect in retrospect from 1 April 2000, and for subsequent years. This will result in increased tax burden for construction firms, which will in turn impact their bottom lines.
Brokerages have cut their estimated earnings of some of the construction firms following the tax changes in the Budget. Emkay Share & Stock Brokers has slashed Patel Engineering’s estimated EPS for FY-2008 from Rs 27.50 to Rs 21.20 even as the brokerage put 'hold' on the stock.
On the flip side, increased focus on infrastructure will benefit all construction companies in the form of higher order inflows.
Patel Engineering’s revenue stream is derived predominantly from hydro power projects, followed by irrigation and micro tunneling. It has recently forayed into annuity road projects.
In early-January 2007, Patel Engineering bagged orders for constructing a tunnel worth Rs 143.59 crore from Brihanmumbai Municipal Corporation Greater Mumbai (BMC).
Patel Engineering’s net profit rose 16.4% in the December 2006 quarter to Rs 29.17 crore (Rs 25.06 crore). Net sales for the December 2006 quarter rose 26.5% to Rs 218.36 crore (Rs 172.55 crore).
Neyveli Lignite upbeat on Budget largesse
State-run Neyveli Lignite climbed 6.88% to Rs 57.50, after the budget raised total outlay for the company to Rs 2007 crore from Rs 945 crore in 2006/07.The Neyveli Lignite counter clocked 4.91 lakh shares on BSE.The Neyveli Lignite scrip had slipped gradually from Rs 70.75 on 5 October 2006, to Rs 55.35 by 21 December 2006, only to appreciate to Rs 63.85 by 8 February 2007. Here, the scrip dropped sharply to Rs 53.80 by 28 February 2007.
At the current market price of Rs 57.50, Neyveli Lignite trades at 11.73 times its FY-2006 EPS of Rs 4.90.
In September 2006, Neyveli Lignite planned to borrow Euro 60 million overseas to add capacity at the Tamil Nadu unit, and to develop a greenfield unit in Rajasthan.
Neyveli Lignite is building a 250-Mw lignite-fired power station, linking it with a 2.1 million tonne per year lignite mine along the country’s western border with Pakistan, for an estimated Rs 1,400 crore. The project is expected to start generating electricity by 2010.
Neyveli Lignite also plans to expand its thermal power station-II and associated mining capacity in Tamil Nadu for an estimated Rs 4200 crore. The project involves adding 500 Mw to the 1,470-Mw station, and raising the mining capacity by 4.5 million tonnes.
Further, Neyveli Lignite picked up 15% stake in a joint venture to mine coal in Orissa. The project is being copromoted by Mahanadi Coalfields and Hindalco Industries, in addition to itself with the other two holding 70% and 15%, respectively.
Neyveli Lignite Corporation and the Government of Gujarat have signed a memorandum of understanding for establishing an integrated lignite mine of 8 million tonnes per annum, linked to a power project of 1,000 Mega watt in South Gujarat in the first phase, which will be enhanced to 1,500 Mega watt in the second phase with a linked mine capacity of 12 million tonnes per annum. The entire project will cost Rs 7,500 crore and will be implemented in five years.
Neyveli Lignite will have 74 - 89% shareholding in the joint venture company, the balance being held by the Gujarat Government . The project will be financed in a debt-equity ratio of 70:30.
Neyveli Lignite is one of the largest lignite-based power-generating companies in the country with a capacity of over 2,400 Mw. It has three main customers: the state electricity boards (SEBs) of Tamil Nadu, Karnataka and Andhra Pradesh.
Neyveli Lignite registered a growth of 12% to Rs 152.66 crore (Rs 136.45 crore) in Q3 December 2006 net profit. Net sales for the December 2006 quarter declined 10% to Rs 510.24 crore (Rs 569.87 crore).
IFCI advances on Budget's higher non-plan allocation
State-run IFCI rose 8.38% to Rs 29.75, since non-plan allocation in the Union Budget has been hiked substantially.The amount for non-plan allocations has risen from Rs 225 crore in 2006/07 to Rs 1300 crore in 2007/08. The Budget document said the support will help in meeting restructuring liabilities.An unusually high 3.91 crore shares got traded in the counter on BSE.
The IFCI stock has rallied sharply on huge volumes of late. It more than doubled in value, advancing a solid 114.34% in January 2007, from Rs 13.06 on 5 January to Rs 30.20 by 6 February 2007. Thereafter, the IFCI scrip fluctuated between Rs 26 - Rs 32, and settled at Rs 27.45 by 28 February 2007.
At the current market price of Rs 29.75, IFCI trades at 3.67 times its Q3 December 2006 annualized EPS of Rs 8.10.
The rally in IFCI began after the company sold 7% stake in the National Stock Exchange (NSE), out of an aggregate 12.44% it holds in the bourse. The company raked in about $161 million from the sale. IFCI still has another 5% holding in NSE, which it has kept in the larder for rainy days.
Fortunately for IFCI, all its investments in the past were in land intensive sectors like power and steel. The land sale of Malvika Steel, at Sultanpur, will also rake in the moolah for the company.
IFCI has 21.6% stake in ICRA, a rating agency floated in 1991, and plans to sell its holding through an offer for sale.
IFCI was the first development financial institution in the country, established in 1948 to cater to financial needs of industries. As its cheaper line of credit began to dry up, IFCI had to resort to expensive funding, aggravating the situation.
IFCI had the rare distinction of posting a loss of Rs 3,230 crore on a turnover of Rs 1,109 crore in the year 2003-04. Losses dipped to Rs 324 crore in 2004-05 and further to Rs 74 crore in 2005-06.
In the June 2006 quarter this fiscal, IFCI posted a loss of Rs 15.60 crore but turned the corner in September 2006 with a profit of Rs 116 crore. But this was largely technical, and it has not paid interest on its borrowings.
In the December 2006 quarter, IFCI posted a net profit of Rs 129.37 crore compared with a net loss of Rs 17.37 crore in Q3 December 2005. Operating income during the December 2006 quarter rose to Rs 367.54 crore from Rs 279.91 crore in the year ago quarter.
Patel Engg sinks on sop withdrawal
Patel Engineering plunged 10% to Rs 312.80, after the finance minister withdrew the 10-year tax exemption on firms engaged in civil construction.Construction companies are exempt from paying tax for 10 years. However, the finance minister chose to revoke this benefit for companies engaged only in civil construction.
The Patel Engineering stock had tumbled nearly 10% to Rs 347.55 on Wednesday following a clarification in this regard in the Budget. As many as 84,582 shares changed hands in the counter on BSE.
Even before the Budget, this stock had corrected substantially. From Rs 471.10 on 2 February 2007, Patel Engineering declined to Rs 385.25 by 27 February 2007.
Tax benefit under section 80 IA will not be available for companies engaged only in civil construction work. This amendment will come into effect in retrospect from 1 April 2000, and for subsequent years. This will result in increased tax burden for construction firms, which will in turn impact their bottom lines.
Brokerages have cut their estimated earnings of some of the construction firms following the tax changes in the Budget. Emkay Share & Stock Brokers has slashed Patel Engineering’s estimated EPS for FY-2008 from Rs 27.50 to Rs 21.20 even as the brokerage put 'hold' on the stock.
On the flip side, increased focus on infrastructure will benefit all construction companies in the form of higher order inflows.
Patel Engineering’s revenue stream is derived predominantly from hydro power projects, followed by irrigation and micro tunneling. It has recently forayed into annuity road projects.
In early-January 2007, Patel Engineering bagged orders for constructing a tunnel worth Rs 143.59 crore from Brihanmumbai Municipal Corporation Greater Mumbai (BMC).
Patel Engineering’s net profit rose 16.4% in the December 2006 quarter to Rs 29.17 crore (Rs 25.06 crore). Net sales for the December 2006 quarter rose 26.5% to Rs 218.36 crore (Rs 172.55 crore).
Neyveli Lignite upbeat on Budget largesse
State-run Neyveli Lignite climbed 6.88% to Rs 57.50, after the budget raised total outlay for the company to Rs 2007 crore from Rs 945 crore in 2006/07.The Neyveli Lignite counter clocked 4.91 lakh shares on BSE.The Neyveli Lignite scrip had slipped gradually from Rs 70.75 on 5 October 2006, to Rs 55.35 by 21 December 2006, only to appreciate to Rs 63.85 by 8 February 2007. Here, the scrip dropped sharply to Rs 53.80 by 28 February 2007.
At the current market price of Rs 57.50, Neyveli Lignite trades at 11.73 times its FY-2006 EPS of Rs 4.90.
In September 2006, Neyveli Lignite planned to borrow Euro 60 million overseas to add capacity at the Tamil Nadu unit, and to develop a greenfield unit in Rajasthan.
Neyveli Lignite is building a 250-Mw lignite-fired power station, linking it with a 2.1 million tonne per year lignite mine along the country’s western border with Pakistan, for an estimated Rs 1,400 crore. The project is expected to start generating electricity by 2010.
Neyveli Lignite also plans to expand its thermal power station-II and associated mining capacity in Tamil Nadu for an estimated Rs 4200 crore. The project involves adding 500 Mw to the 1,470-Mw station, and raising the mining capacity by 4.5 million tonnes.
Further, Neyveli Lignite picked up 15% stake in a joint venture to mine coal in Orissa. The project is being copromoted by Mahanadi Coalfields and Hindalco Industries, in addition to itself with the other two holding 70% and 15%, respectively.
Neyveli Lignite Corporation and the Government of Gujarat have signed a memorandum of understanding for establishing an integrated lignite mine of 8 million tonnes per annum, linked to a power project of 1,000 Mega watt in South Gujarat in the first phase, which will be enhanced to 1,500 Mega watt in the second phase with a linked mine capacity of 12 million tonnes per annum. The entire project will cost Rs 7,500 crore and will be implemented in five years.
Neyveli Lignite will have 74 - 89% shareholding in the joint venture company, the balance being held by the Gujarat Government . The project will be financed in a debt-equity ratio of 70:30.
Neyveli Lignite is one of the largest lignite-based power-generating companies in the country with a capacity of over 2,400 Mw. It has three main customers: the state electricity boards (SEBs) of Tamil Nadu, Karnataka and Andhra Pradesh.
Neyveli Lignite registered a growth of 12% to Rs 152.66 crore (Rs 136.45 crore) in Q3 December 2006 net profit. Net sales for the December 2006 quarter declined 10% to Rs 510.24 crore (Rs 569.87 crore).
Labels: IFCI, Neyveli Lignite, Patel Engineering
posted by SY at 3:08 PM
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