Prices levered up!
Hindustan Unilever Ltd (HUL) has hiked the prices of select products (stock-keeping units [SKU]) across categories, effective from October-end to the beginning of November 2008. The price increase has been implemented primarily in shampoo, detergent and toothpaste categories. In the quarter gone by (July-September 2008) HUL’s operating margins contracted by 154 basis points year on year (yoy), as the raw material cost as percentage to the sales increased by 112 basis points. This is despite the fact that the company has been continuously effecting steep price hikes across product categories, particularly from July 2008 (July-September 2008 quarter had a 12.9% year-on-year average increase in the prices). The steep increase in the prices of key raw materials such as palm oil, LAB, caustic soda, soda ash, raw tea, coffee and crude oil derivatives has led the company to implement these price increases to protect its margins.
Hindustan Unilever
Cluster: Apple Green
Recommendation: Buy
Price target: Rs280
Current market price: Rs234
-From Share Khan investor note.
Share Khan on Hindustan Unilever
November 21st, 2008 by | No Comments | Filed in Research, UpdatesValue Demand For Gold In India Reaches An All Time Record
November 20th, 2008 by | No Comments | Filed in Commodities-Study by World Gold Council
Demand for gold in India reached an all time quarterly record of Rs. 30,600cr in Q3 2008, a 66% increase vs Q3 2007 as investors sought a safe haven and jewellery buyers returned to the market to take advantage of softer gold prices. In tonnage terms demand increased to 250 tonnes in Q3 2008 from 190 tonnes in Q3 2007 which is a 31% increase.
According to Gold Demand Trends, launched today by World Gold Council (WGC), demand for gold jewellery in India reached 178 tonnes, a rise of 29% in tonnage over the same period in 2007, despite a deteriorating economic situation creating a greater squeeze on consumer spending. In currency terms this equated to a rise of 78%, from Rs.12,300 Cr to Rs.21,900 Cr.
After a sluggish start to the quarter, gold jewellery demand surged driven by rural economic boom, urban consumers wanting to safeguard their investments. Much of India experienced a good monsoon rainfall, which resulted in a ‘feel good’ factor boosting rural spending on gold during the festive season.
The data, compiled independently for WGC by GFMS Limited, shows investment demand for gold was similarly boosted by the pullback in the gold price during the third quarter. Purchases of gold bars and coins by retail investors amounted to 71.0 tonnes, the second highest quarter on record and equivalent to a rise of 36% over the 52.3 tonnes consumed in the third quarter of 2007. At Rs. 8,700Cr the growth in value is 72% vs prior year of Rs. 5,073 crs. In certain areas, supply of small bars for retail customers reportedly dried up in the face of such unprecedented demand.
Ajay Mitra, Managing Director, World Gold Council, commented:
“It has been an outstanding quarter for demand in India, the world’s largest consumer of gold.
I am encouraged by the fact that both investment demand in bars and coins and jewellery demand have surged against global credit crunch impacts our nation. Gold’s universal role as a store of value has shone through during this quarter helping attract investors and consumers to all forms of gold ownership.
“Looking forward, we believe the uncertainties in the financial markets will continue, therefore driving investors towards gold and its safe haven and insurance policy characteristics.”
Gold has held its value over the long term and is resilient to the effects of inflation. This cannot be said for many other consumer goods, which tend to lose their value and/or deteriorate over time.
Retailers nationally have taken initiatives to increase consumption by offering consumers gold accumulation plans (EMI) and developing new modern designs to cater to the evolving consumer tastes, introduce gold to other retain formats like shop-in shop, kiosks etc.
Globally, identifiable investment demand, which incorporates demand for gold through exchange traded funds (ETFs) and bars and coins, was the biggest contributor to overall demand during the quarter, up to US$10.7bn (382 tonnes), double year earlier levels.
Q3 saw a record US$18bn of consumer demand for gold jewellery around the world, with buyers returning to the market on lower price points, around and below US$800, demonstrating the underlying positive sentiment towards gold and its recognition as a store of value. The biggest contributor to the positive trend was India which witnessed a rise of 65% in US$ value or 40 tonnes relative to previous year levels, with the Middle East, Indonesia and China all enjoying rises of more than 40% in value or 10% in tonnage. There were however, strong declines in Western markets with the US down 9% in value and 29% in tonnes, and the UK down 5% in value and 26% in tonnes due to the overall decline in the retail market.
Industrial and dental demand declined to 104 tonnes during the quarter 11% down on year-earlier levels. Electronics, the largest component of industrial demand, was hampered by the downturn in the global economy and a lack of confidence within world markets.
Gold supply was down 9.7% on year-earlier levels, largely driven by a significant reduction in central bank sales. Sales under the Central Bank Gold Agreement (CBGA) totalled a provisional 357 tonnes in the CBGA year ending September 26, the lowest annual figure since the first Agreement was signed in 1999.
Sejal Glass sets up first Indian float glass plant
November 19th, 2008 by | No Comments | Filed in NewsMumbai, November 19, 2008: Sejal Architectural Glass Ltd. (SAGL), a leading player in the architectural glass solutions, is in the process of setting up a world class 550 tonne per day capacity float glass plant at Jhagadia in the state of Gujarat. The estimated cost of the plant is Rs.500 crore spread across 150 acres of land and is expected to commence from April 2009.
Commenting on the development, Mr. Amrut Gada, Chairman and Managing Director, Sejal Architectural Glass Ltd. said, “This will be the first Indian float glass plant which is a 100 percent domestically promoted project. To part finance the project, we had tapped the capital market recently, and had an overwhelming response”.
Sejal has tied up with several big players for its supplies. The first phase of civil work under L&T is 71% completed whereas the second phase has already started. The company has tied up with Siemens and Kaypee for its electrical turnkey and Piping & mechanical turnkey respectively. The Greenfield float glass plant is expected to contribute 74-75% to the company’s total revenues after its commencement.
ValueNotes says investors are seeking value buys in current downturn
November 19th, 2008 by | No Comments | Filed in News, Research, UpdatesPune, India, 19 November 2008: ValueNotes has released the results of a poll conducted on its proprietary Indian finance portal, which captured retail investor sentiment in the current markets. The online survey evaluated if retail investors were willing to buy at current levels, given many stocks trading with single digit P/Es. Poll results indicated that 60% of the respondents were looking to buy equities in the current market environment 1.
ValueNotes research notes that the Sensex is currently hovering around the 10k mark – which it last touched in February 2006. Interestingly, the Sensex P/E currently is ~50% lower than in January 2008 and about 30% less as compared to that in February 2006 2.
While stocks across sectors have touched lower P/Es, the IT sector has seen a sharpest fall. The top four IT exporters, including TCS, Infosys, Wipro and Satyam, have witnessed a sharp decline (more than 50% fall) in their P/E values. While the earlier valuations were driven by estimates of high growth, the current P/Es have been adversely affected by a series of earnings downgrade that has resulted in a disproportionate fall in prices. The heavy engineering scrips, including L&T and BHEL, have also seen a sharp decline in their P/Es.
While a significant number of survey respondents are still shaken by the volatility, the majority (60%) opting to start buying underlines the latent strength of the domestic markets. Value investors are viewing the current market downturn as an attractive buying opportunity despite possibility of short-term growth being dampened as echoed by the RBI, IMF and GoI estimates. Adds ValueNotes analyst Ribhu Ranjan Baruah “At ValueNotes, we believe there is significant upside potential for Indian companies from current levels. Falling interest rates should prop up growth rates and while there could be more pain to come over the short-term, our long term outlook continues to remain favourable.”
Intel Launches Fastest Processor on the Planet
November 18th, 2008 by | No Comments | Filed in NewsAdds ‘Turbo Boost’ and ‘Hyper-Threading’ Technologies
INDIA, Mumbai, Nov. 18, 2008 – Intel India today introduced its most advanced desktop processor ever, the Intel® Core™ i7 processor. The Core i7 processor is the first member of a new family of Nehalem processor designs and is the most sophisticated ever built, with new technologies that boost performance on demand and maximize data throughput. The Core i7 processor speeds video editing, immersive games and other popular Internet and computer activities by up to 40 percent without increasing power consumption.
Broadly heralded by the computing industry as a technical marvel, the Intel® Core™ i7 processor holds a new world record of 117 for the SPECint_base_rate2006* benchmark test that measures the performance of a processor. This is the first time ever for any single processor to exceed a score of 100 points.
“Intel has delivered the fastest desktop processor on Earth to the most demanding users on Earth, the ones who are using their PCs for video, gaming and music,” said Prakash Bagri, Director – Marketing, Intel South Asia. “When you couple what is Intel’s biggest leap in chip design with other incredible innovations like Intel’s solid state drives, the Core i7 processor has redefined the computer of tomorrow.”
Tech Web sites have been extremely positive in their product reviews. Anandtech states that “Core i7 continues to fuel Intel’s beacon of performance.” “The Core i7 is everything they promised it would be,” says PC Perspective. “Nehalem is a masterpiece,” says the Lost Circuits Web site. The Tech Report calls it “one of the most consequential shifts in the industry.”
Intel’s unique Turbo Boost Technology accelerates performance to match a computer user’s needs and workloads. Through a sophisticated on-die power control unit and using new “power gate” transistors based on Intel’s advanced 45 nanometer, high-k metal gate manufacturing process, Turbo Boost automatically adjusts the clock speed of one or more of the four individual processing cores for single- and multi-threaded applications to boost performance, without increasing power consumption. The Core i7 also has the latest Intel power-saving technologies, allowing desktops to go into sleep states formerly reserved for Intel-based notebooks.
The Core i7 processor more than doubles the memory bandwidth of previous Intel “Extreme” platforms, speeding the transfer of computer bits and bites in and out of the processor with Intel® Quickpath Technology. Designed with Intel’s Hyper-Threading Technology, the processor also allows multiple computing threads to run simultaneously, effectively enabling it to do two things at once. As a result, the Core i7 quad-core processor delivers 8-threaded performance.
The Intel Core i7 processor also offers unrivaled performance for immersive 3-D games – over 40 percent faster than previous Intel high-performance processors on both the 3DMark Vantage CPU* physics and AI tests, popular industry computer benchmarks that measure gaming performance. The Extreme Edition uses 8 threads to run games with advanced artificial intelligence and physics to make games act and feel real.
The Intel® Core™ i7 processors and Intel® X58 Express Chipset-based Intel® Desktop Board DX58SO Extreme Series are for sale immediately from several computer manufacturers online and in retail stores, as well as a boxed retail product via channel online sales. In India, customers can buy Core i7-based systems from HCL, Wipro, Acer and Dell as well as multiple channel partners across the country.
The Core i7 processor is the first member of the Intel Nehalem microarchitecture family; server and mobile product versions will be in production later. Each Core i7 processor features an 8 MB level 3 cache and three channels of DDR3 1066 memory to deliver the best memory performance of any desktop platform. Intel’s top performance processor, the Intel® Core™ i7 Extreme Edition, also removes overspeed protection, allowing Intel’s knowledgeable customers or hobbyists to further increase the chip’s speed.
Naresh Naik to head Morgan Stanley Real Estate AMC
November 18th, 2008 by | No Comments | Filed in NewsMUMBAI: Morgan Stanley (NYSE: MS) today announced the appointment of Naresh Naik as an Executive Director and Head of Asset Management for Morgan Stanley Real Estate India. Based in Mumbai, Mr. Naik will start in his new role later this month.
Most recently, Mr. Naik was Head of Asset Management for Lehman Brothers in India, where he played a senior role in the Real Estate Private Equity Group, developing and executing Lehman’s entry into real estate investing in India. Prior to moving back to India in 2006, Mr. Naik was a portfolio manager with Trimont Real Estate Advisors, based in Atlanta, USA, where he was involved in the asset management of Lehman’s Real Estate Private Equity investments. Mr. Naik started his career as an architect and real estate consultant in Goa, India.
Axis Bank launches new online Remittance Service in alliance with Times of Money
November 18th, 2008 by | No Comments | Filed in PoliticsMumbai, November 18, 2008: Axis Bank, India’s leading private sector bank, with a substantial NRI customer base, has tied up with TimesofMoney, India’s number one non-bank e-payments service provider to launch AxisRemit, the Bank’s own branded online remittance service. With AxisRemit the Bank will provide high-speed online money transfer services for NRIs belonging to major geographies viz. USA, UK, Euro Zone (Euro Currency Area), Canada, Australia, Singapore, Hong Kong and UAE using Times-of-Money’s white-labeled state of the art remittance platform & know-how.
TimesofMoney’s white-labeled ‘hosted on demand’ solutions will provide the technology platform for AxisRemit. The back-office functions relating to remittances would also be handled by TimesofMoney. This alliance integrates Axis Bank’s core strengths in NRI Banking and service delivery with TimesofMoney’s domain knowledge and technical expertise in cross border remittances, creating a smooth and satisfying remittance experience to NRIs situated across the globe.
Speaking on the launch, Mr. Hemant Kaul, Executive Director for Retail Banking, Axis Bank said, “AxisRemit is the new online Remittance service from Axis Bank, representing a significant entry of the Bank into the fast growing remittance business. Under this service, NRI customers in USA, UK, Europe, Australia, Singapore, Hong Kong and UAE would be able to use AxisRemit to transfer money online from their local bank account to the receiver’s account anywhere in India. In recent years there has been a large-scale migration of NRIs to online remittance channels from traditional remittance routes and we intend to be a major player in this arena. The key strengths of AxisRemit will be our transparent pricing policy, superior customer service and faster Turn-Around-Time.”
Speaking on the initiative, Avijit Nanda, President, TimesofMoney, said, “We are proud to partner with Axis Bank to launch this very significant service for NRIs and be an enabler of the cross border flows that make India the world’s largest destination of inward remittances. With the extension of our white labeled solutions, our partners will be able to conduct their business with a high level of security and more convenience.”
Fidelity Launches Innovative Volatility Tool
November 17th, 2008 by | No Comments | Filed in UncategorizedMumbai : Global fund hous Fidelity today launched an innovative volatility tool designed to help advisers and investors put the current market uncertainty in the context of a longer term perspective. Launched at a time when investors have been unnerved by extreme volatility in the markets, Fidelity’s volatility tool demonstrates the importance of longer term investing and staying focussed on financial goals.
The interactive micro site can be accessed at www.fidelity.co.in and has timeless investing truths, up-to-date data and dynamic graphics. Its simple design is visually engaging and showcases several scenarios and themes that will help educate advisers and investors about volatility. The web site has three tools that deal with different aspects of market volatility.
Timing the market – It is impossible to predict the best days and worst days in the stock market and missing just a few days of good performance can significantly reduce your overall return. This tool helps you establish how much you could lose on a notional investment of Rs. 1 lakh if you missed the 10, 20, 30 and 40 best days in the Indian market over a ten-year period.
Unpredictable returns – Generally, the longer you remain invested, the more predictable your returns become. This tool helps you look at how volatility increases or dips as investments are held over a one-year to a ten-year period.
Market crises – No matter how severe the crisis, markets always recover. This section allows you to check out how long the market took to return to its previous level after various crises.
“At a time when markets are unpredictable and investors are nervous about investing, it is important to provide information that puts current market events in to a longer-term perspective,” said Ashu Suyash, Managing Director and Country Head – India, Fidelity International. “Our volatility web site provides tools that demonstrate why the basic principles of investing continue to make sense when investing in volatile times, especially those of investing for the long term and staying focussed on financial goals.”
Other than India, the web site also provides similar tools for other markets including Hong Kong, Singapore and Canada to give investors a view of market behaviour across geographies. Investors visiting the volatility web site can also download a free copy of Fidelity’s latest investor guide, “Making Sense of Markets”.
Jubilant Organosys acquires TrialStat Clinical Analytics
November 17th, 2008 by | No Comments | Filed in NewsNOIDA, UP,India: Jubilant Organosys Ltd. announced today that its subsidiary Clinsys Clinical Research, Inc, New Jersey, a global contract research organization (CRO), has acquired TrialStat ClinicalAnalytics from TrialStat for a purchase consideration of CAD 750,000.
TrialStat ClinicalAnalytics (TrialStat CA) is a Web-based electronic data capture (EDC) solution currently used by a wide range of pharmaceutical and CRO customers worldwide. TrialStat CA is the industry’s first EDC platform to allow all aspects of a study to be configured, deployed and managed through a browser interface, enabling customers to start their studies quickly and cost-effectively. Clinsys extensive global resources will enable TrialStat to continue its proven record of growth, customer service and product innovation. This agreement will give TrialStat’s existing CRO and biopharmaceutical customer base a broader scope of services.
The Company had identified TrialStat ClinicalAnalytics as one of the most innovative EDC solutions on the market and was determined to include it in its offerings to its customers globally.
Commenting on the acquisition, Mr. Shyam S Bhartia, Chairman & Managing Director and
Mr. Hari S Bhartia, Co-Chairman & Managing Director, Jubilant Organosys Ltd., said, “The addition of the TrialStat CA and its proven EDC offering will allow Clinsys to continue to expand its integrated solutions for pharmaceutical, biotechnology and medical device organizations. This acquisition is an excellent fit and addresses the industry’s continuously evolving requirements in EDC.”
L&T Bags Rs 937 Crore EPC Orders in Water Business
November 17th, 2008 by | No Comments | Filed in NewsMumbai: L&T has bagged three major orders aggregating to Rs. 937 Crores during September and October 2008 in Delhi and Andhra Pradesh.
An EPC water supply project of value Rs. 582 Crores was bagged by L&T from Hyderabad Metro Water Supply and Sewerage Board (HMWSSB) under prestigious Godavari Drinking Water Supply Project Phase-I. The project involves construction of trunk mains of MS pipe for 58 km to bring 735 Million Litres per Day (MLD) treated water to Hyderabad city. The contract period is of 24 months.
Two EPC projects from Delhi Jal Board valued at Rs. 355 Crores were secured by L&T. The project envisages design, providing, laying, jointing, testing and commissioning of MS twin-pipeline from Bawana to Dwaraka (Package 1A) and design & construction of 20 Million Gallons per Day (MGD) water treatment plant (WTP) at Okhla. This WTP will have clarifloculator, flash mixer, filters, pre-sedimentation tanks as major units along with the intake system. Both projects are to be completed in 21 months.
L&T’s Capability Spectrum
Larsen & Toubro Group (L&T) is $7 billion technology-driven engineering and construction organisation, and one of the largest companies in India’s private sector. It has further interests in manufacturing, services and Information Technology. A strong, customer-focused approach and the constant quest for top-class quality have enabled the Company to attain and sustain leadership in its major lines of business across seven decades.




