Markets Looks Positive - Quarterl Results would have bearing on the markets
Posted on April 16th, 2008 in Personal Finance) by Motilal Oswal Securities Ltd |
Today’s View: Positive bias 
Expect a positive opening. Quarterly results would have a bearing on the markets. Maintain a positive bias. Strike prices of 4800 and 4900 on the nifty have seen decent put writing yesterday suggesting support on the dowside
“HCL Tech reported revenues of Rs 19.4b in 3QFY08 (Mar 08) as against our estimate of Rs 19.1b (+23% YoY; +6.3% QoQ). US$ revenues grew 33.8% YoY and 5.2% QoQ. EBITDA was at Rs4.33b vs our estimate of Rs 4.2b (90bps margin expansion QoQ). PAT was lower than our estimates at Rs3.43b vs our estimate of Rs3.52b (up 3.2% YoY and 2.2% QoQ).
HCLT reported forex exchange loss of Rs270mn against gain of Rs418 mn in Mar-07 quarter, pulling down YoY growth rates. The forex hedges outstanding as of 31st March 08 are to the tune of US$ 2.7b, off which $2.5b pertains to US$ and rest towards GBP, Euro etc, the average rate been Rs41.56.
On business outlook, HCLT reiterated a 35% US$ growth for FY08. While this implies a muted growth in 4QFY08, the overall numbers for FY08 are still in line with the company’s guidance given in Dec-07 quarter. HCLT does not foresee any significant impact due to US Sub prime crisis at this moment and would give perspective on the implications in next quarters results (around Jul-08).
At the current price of Rs246, stock trades at 11.1x FY09E EPS of Rs 22.1. Dividend yield is 3.3%.Recommend a strong buy for investments”
” Larsen & Toubro Ltd has announced that its construction division has bagged a Rs20b order from Bombay Dyeing (BD IN; Mkt Cap USD0.6b, CMP Rs626, Buy), for developing 9msf of real estate, at its erstwhile textile plants at Worli (4msf) and Wadala (5msf). This provide clarity to investors on 1) total saleable area and 2) monetization timeline for the real estate.
- The turnkey construction project involves construction of mixed-use developments of approximately 4msf at the Textile Mills at Worli and 5msf at the Spring mills development at Wadala to be completed in the next 46 months by the end of March 2011 (total area 9msf). This is substantially higher than the ~4.3msf of developable area that we had assumed earlier. Considering L&T’s press release, BD’s total saleable area has increased from 4.3msf to 9msf, an increase of 4.75msf at the two mill properties.Recommend a strong buy”