Buy Hcl Technologies CMP Rs 304 for a Target of Rs 365
Focus on large deals paying off …
HCL Technologies’ results for the quarter ending Sept 30, 2007, (Q1FY07) were lower than our expectations. It
recorded a 6% growth in top line to Rs 1,709 crore compared to our estimates of Rs 1,750 crore (9% growth).
However, the company continued to benefit from its focus on large deals. During the quarter, it bagged two
large deals – one a $250 million contract. The traction in large deals coupled with strong traction across
business lines like engineering and R&D, and infrastructure services is comforting. The company recorded its
highest-ever quarterly head count addition for IT services with 2,831 net additions. We believe the growth
momentum should pick up going forward. We reiterate our performer rating on the stock with a price target of
Rs 365.
Margin decline marginal despite wage hikes
The company recorded EBIDTA margins of 21.3% for the quarter registering only a 24bps (100bps = 1%) decline
despite wage hikes. This was partly aided by a 43bps decline in SG&A and a 1.4% growth in realizations. The
company continues to see a 3%-5% increase in billing rates for renewals and a 5%-8% increase for new deals.
Management aludes to a robust demand environment
The management reiterated the view expressed by Infosys and TCS that there is no visible slowdown in the
demand environment. The company indicated that the deal pipeline was stronger than it had ever seen before.
Valuation
We believe HCL Technologies would continue to benefit from its strategy of focusing on large deals and
uncontested markets. We reiterate our performer rating on the stock with a price target of Rs 365.
Tuesday, October 23, 2007
Monday, October 22, 2007
Today the sensex gave some hope to Investors
The bse sensex closed 54 points above & Nifty just 31.30 points below the previous day closing.
17613.99 54.01
Nifty : 5184.00 -31.30 
There were nine FIIs present at the conference call with the market regulator SEBI, reports CNBC-TV18. SEBI came up with some clarifications on its P-Note proposals today, though the final decision will be taken on October 25. But you have to wait until tomorrow to see what the market makes out of these clarifications.
SEBI to FIIs: No upper limit on sub accounts registering as FIIs; 3000+ exist now.
SEBI to FIIs: Revisiting category of entities that seek FII status. No need to wait till October 25 to apply for FII registrations. Multiple registrations from single FII group likely.
SEBI to FIIs: P-Note exercise not aimed at curbing capital flows. It is necessary to differentiate between corporate and FII sub accounts.
17613.99 54.01
Nifty : 5184.00 -31.30 There were nine FIIs present at the conference call with the market regulator SEBI, reports CNBC-TV18. SEBI came up with some clarifications on its P-Note proposals today, though the final decision will be taken on October 25. But you have to wait until tomorrow to see what the market makes out of these clarifications.
SEBI to FIIs: No upper limit on sub accounts registering as FIIs; 3000+ exist now.
SEBI to FIIs: Revisiting category of entities that seek FII status. No need to wait till October 25 to apply for FII registrations. Multiple registrations from single FII group likely.
SEBI to FIIs: P-Note exercise not aimed at curbing capital flows. It is necessary to differentiate between corporate and FII sub accounts.
Reliance enertgy stock are worst hit by the stock market crash
Reliance energy stock are currently trading at a price of Rs 1270 to Rs 1320 Nearly 30% down
When the Bse sensex was at 19000 points it was trading at Rs 1900 to rs 1950
This stock has fell more sharply than any other stock.
Top 5 gainers
Top 5 Losers
When the Bse sensex was at 19000 points it was trading at Rs 1900 to rs 1950
This stock has fell more sharply than any other stock.
Top 5 gainers
| Company | Price (Rs) | % Change |
| + Ambuja Cements Ltd. | 145.70 | +4.37 |
| + Indo Rama Synth. | 60.00 | +4.08 |
| + Dredging Corpora | 606.20 | +3.00 |
| + GNFC | 136.75 | +2.55 |
| + Ingersoll Rand | 300.00 | +2.27 |
Top 5 Losers
| Company | Price (Rs) | % Change |
| + Guj. Mineral Dev | 2,112.55 | -5.00 |
| + Bharti Airtel | 927.75 | -4.20 |
| + Nicholas Piramal | 269.00 | -4.01 |
| + HMT Ltd. | 53.20 | -3.97 |
| + Punj Lloyd | 331.05 | -3.89 |
Stock market will recover after the confirmation that Nuclear Deal is off
The Indo-US nuclear deal is dead and that's the reality Prime Minister Manmohan Singh may have to face on Monday when the Left-UPA nuclear panel meets for what could be the final meet.
While Singh may have not given up hope, his Left counterparts have already sounded the death knell.
"One has to live with certain disappointments. We are not a one-issue Government. The deal not coming through is not the end of life," the Prime Minister had said while inaugurating the Hindustan Times Leadership Summit in New Delhi.
“We are trying to reconcile the divergent points of view. I have not given up hope,” he had said further.
Meanwhile, the Left encourages no dilly-dallying and wants a categorical answer from the Government on the nuke deal.
So, on Monday, at the Left-UPA meet, the deal will, most naturally, be at the top of the agenda of the Left parties.
“We want a categorical assurance that the deal is dead,” said CPI-M General Secretary A B Bardhan.
The Left could even push further and demand a public statement explicitly stating an early demise of the deal.
The Prime Minister’s telephonic conversation with the US president during his recent foreign trip could come up for discussions too.
"It’s premature to say what will happen,” said AICC Secretary Tom Vadakkan.
The Congress leadership is expecting these questions from the Left so just before the Left-UPA meet, top party leaders are likely to meet to chalk out their strategy and response to these queries.
With the deal more or less dead, the task ahead for the Congress campaign managers in the days ahead would be to find a safe landing.
Stock Market Opened with panic Down 400 points
But soon recovered 200 points
Market is volatile & still in a swing mode
17,000-17,500 on the Sensex is a good opportunity to get in. Investors should wait for a day or two for the volatility to subside before buying.”
Market is volatile & still in a swing mode
17,000-17,500 on the Sensex is a good opportunity to get in. Investors should wait for a day or two for the volatility to subside before buying.”
Sunday, October 21, 2007
Buy Biocon CMP 511 Target 620 in 6 months or early.
Company Background
Biocon is a research-driven, global healthcare company with a strong matrix of capabilities along the gene-to-patient
continuum. It manufactures and markets biotech-based pharmaceutical products. Its subsidiaries, Syngene and Clinigene,
provide contract research and clinical research services to global pharma majors. The company's bio-pharmaceutical
products comprise anti-diabetic agents, anti-hypertensive agents, anti-inflammatory agents, anti-oxidants, cardiovascular
agents, digestive aid enzymes, haemostatic agents, hepatoprotective agents, immunosuppressants and nutraceuticals.
The company recently divested its enzymes business to Novozymes A/S for US$115 million. This will enable Biocon to focus
on its core bio-pharmaceuticals business. Its subsidiary Syngene provides custom research services in the areas of synthetic
chemistry and molecular biology. In Sept 2006, Biocon launched BIOMAB EGFR, a monoclonal antibody for head and neck
cancer. In addition, the company offers renal therapy products to treat kidney disorders. Its innovative R&D has few products in
pipeline in various phases of clinical trials.
Changing product mix to boost core business
We believe Biocon's exposure to the vagaries of statin business is declining with its changing product mix and rapid growth in
the newly added products such as insulin. Moreover, with launch of BIOMAB and INSUGEN, we believe that the company is
gradually moving up in the value chain by shifting its focus towards formulations. It already has a formidable presence in Indian
biosimilar space and the niche therapeutic segments of nephrology and oncology. We see good future prospects in its
discovery focused R&D, where it has two monoclonal antibodies related to oncology and rheumatoid arthritis along with the
oral insulin. We believe revenue from the biosimilars and formulations would grow at a CAGR of around 20% over FY07-09E.
Customs & clinical research to add more value
We believe Biocon's custom research outsourcing would grow at a CAGR of over 40% during FY07-09E. As per Frost and
Sullivan estimates, Asian contract research outsourcing (CRO) market will grow at a CAGR of over 13.50% to $2 billion in 2010
from $1.2 billion in 2006 indicating a strong growth momentum. Biocon's presence in CRO business is through two companies
- Syngene and Clinigene. Syngene provides contract research while Clinigene focuses on Clinical research.
Syngene: Syngene is a leading global custom research service provider and is providing services to external customers from
few years. It has over 50 clients, including 6 of the top 10 global pharma companies as its customers. It contributes almost 90%
of Biocon's CRO businesses. Syngege provides a broad range of services, which enables it to participate in drug development
process from discovery to supply of development compounds. Recently, Bristol-Myers Squibb entered into a long-term
contract with it to set up a new research facility to house more than 400 scientists. This will further improve its capabilities in
medicinal chemistry, biology, drug metabolism and pharmaceutical development. Syngene has a strong knowledge base with
over 700 scientists.
Clinigene: Clinigene started operations for external customers only couple of years back. It provides clinical research services.
With demand for outsourced research expected to grow exponentially, the company has expanded its operations into a new
60,000 sq ft facility. This facility will house a new unit for conduct of BE/BA and Phase I studies and coordinate Phase II to Phase
IV Clinical Trials for a large number of global pharma and biotech companies.
Sales proceed from enzymes business boosts cash position
With a view to become a more focused player in the biotech pharma space, the company sold its enzymes business to
Novozymes A/S for US$115 million. The company plans to utilize the cash generated from the sale of the business for
inorganic growth opportunity.
Company Background
Biocon is a research-driven, global healthcare company with a strong matrix of capabilities along the gene-to-patient
continuum. It manufactures and markets biotech-based pharmaceutical products. Its subsidiaries, Syngene and Clinigene,
provide contract research and clinical research services to global pharma majors. The company's bio-pharmaceutical
products comprise anti-diabetic agents, anti-hypertensive agents, anti-inflammatory agents, anti-oxidants, cardiovascular
agents, digestive aid enzymes, haemostatic agents, hepatoprotective agents, immunosuppressants and nutraceuticals.
The company recently divested its enzymes business to Novozymes A/S for US$115 million. This will enable Biocon to focus
on its core bio-pharmaceuticals business. Its subsidiary Syngene provides custom research services in the areas of synthetic
chemistry and molecular biology. In Sept 2006, Biocon launched BIOMAB EGFR, a monoclonal antibody for head and neck
cancer. In addition, the company offers renal therapy products to treat kidney disorders. Its innovative R&D has few products in
pipeline in various phases of clinical trials.
Changing product mix to boost core business
We believe Biocon's exposure to the vagaries of statin business is declining with its changing product mix and rapid growth in
the newly added products such as insulin. Moreover, with launch of BIOMAB and INSUGEN, we believe that the company is
gradually moving up in the value chain by shifting its focus towards formulations. It already has a formidable presence in Indian
biosimilar space and the niche therapeutic segments of nephrology and oncology. We see good future prospects in its
discovery focused R&D, where it has two monoclonal antibodies related to oncology and rheumatoid arthritis along with the
oral insulin. We believe revenue from the biosimilars and formulations would grow at a CAGR of around 20% over FY07-09E.
Customs & clinical research to add more value
We believe Biocon's custom research outsourcing would grow at a CAGR of over 40% during FY07-09E. As per Frost and
Sullivan estimates, Asian contract research outsourcing (CRO) market will grow at a CAGR of over 13.50% to $2 billion in 2010
from $1.2 billion in 2006 indicating a strong growth momentum. Biocon's presence in CRO business is through two companies
- Syngene and Clinigene. Syngene provides contract research while Clinigene focuses on Clinical research.
Syngene: Syngene is a leading global custom research service provider and is providing services to external customers from
few years. It has over 50 clients, including 6 of the top 10 global pharma companies as its customers. It contributes almost 90%
of Biocon's CRO businesses. Syngege provides a broad range of services, which enables it to participate in drug development
process from discovery to supply of development compounds. Recently, Bristol-Myers Squibb entered into a long-term
contract with it to set up a new research facility to house more than 400 scientists. This will further improve its capabilities in
medicinal chemistry, biology, drug metabolism and pharmaceutical development. Syngene has a strong knowledge base with
over 700 scientists.
Clinigene: Clinigene started operations for external customers only couple of years back. It provides clinical research services.
With demand for outsourced research expected to grow exponentially, the company has expanded its operations into a new
60,000 sq ft facility. This facility will house a new unit for conduct of BE/BA and Phase I studies and coordinate Phase II to Phase
IV Clinical Trials for a large number of global pharma and biotech companies.
Sales proceed from enzymes business boosts cash position
With a view to become a more focused player in the biotech pharma space, the company sold its enzymes business to
Novozymes A/S for US$115 million. The company plans to utilize the cash generated from the sale of the business for
inorganic growth opportunity.
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