Tuesday, January 30, 2007

FINANCIAL TECH


FINANCIAL TECH consolidating after a recent move buy near 1760-70 sl below 1740 first target near 1860
cheers
rish

There's no stopping the Indian IT juggernaut

IT software and services sector firms continue to be on a roll. Just when the market was expecting the December 2006 quarterly results to be a tame affair - primarily due to an appreciating rupee, rising attrition and wages and fewer billing days - IT majors, mid- and small-caps beat market expectations in many cases to post more-than-satisfactory results.

IT bellwether Infosys Technologies set the ball rolling, weathering a rupee appreciation of 3.8 per cent to register a net profit of Rs 983 crore (Rs 9.83) - a sequential growth of 5.8 per cent in net profit and a 5.9 per cent sequential increase in its top line.

The sequential growth prompted the company to once again revise its guidance for the full year. It now expects to cross the $3 billion level (it has provided guidance of Rs 13,910-13,919 crore) for 2006-07.

Given the projected growth rate, its net profit alone will be around Rs 3,700 crore (Rs 37 billion) in FY07 (in FY03, its consolidated revenue was Rs 3,640 crore). A feather in its cap, Infosys was added to the Nasdaq-100 Index on December 18.

The largest Indian IT firm Tata Consultancy Services, on the other hand, beat market expectations to become the first Indian IT company to clock $1 billion in revenues in a single quarter as it posted a net profit of Rs 1,105 crore (Rs 11.05 billion) for the quarter.

The IT behemoth thus crossed the $3 billion revenue mark in the first three quarters, registering an 8.4 per cent sequential increase in its total revenues and 11.4 per cent q-o-q increase in net profit for Q3 FY07.

TCS executives attributed the company's performance to a good business mix and continued better pricing. The company is on its way to become a $4 billion entity this financial year.

Wipro's global IT business, which includes IT and BPO services, grew 6.2 per cent q-o-q in Q3 FY07 with a net profit increase of nearly 7 per cent. HCL Technologies too reported a sequential top line growth of 6.2 per cent growth and a net profit growth of 18.7 per cent.

Satyam, on the other hand, was more disappointing with revenues rising 3.7 per cent q-o-q and a 5.45 per cent net profit growth. The rupee appreciation impacted all software companies, but that is not a matter of concern. Software companies are on a strong wicket and should keep clocking improvements going forward.

Success ingredients

Most of the recommendations of analysts, so far, remain in the "hold" or "buy" category.

What's working for all IT services firms (small or big) is their global delivery models and global delivery centres which helps them de-risk their businesses by expanding geographically, acquiring companies in their domain areas (be it major companies like Wipro or mid-caps like 3i Infotech, Subex Azure, i-flex, Four Soft or Tech Mahindra), winning larger deals (for instance, HCL Technologies, Tech Mahindra, TCS and Infosys have all struck multi-million dollar deals this quarter) and negotiating new contracts at billing rates that have increased 3-5 per cent and more.

For TCS, there was a 90 basis points expansion in EBITDA (earnings before tax, interest and depreciation) margins to 28.3 per cent in the third quarter. Over the last six months, the IT major has been able to expand margins by over 400 basis points.

According to ICICI Securities, the reasons include higher pricing, productivity improvements and an offshore shift (41.6 per cent of revenues in Q3 FY07, as against 41 per cent last quarter).

On the volume front, the management has ten deals ranging in size from $50-100 million. It is looking at strong growth in the Chinese and Latin American markets.

The number of clients contributing revenues of over $1 million in the case of Infosys has increased from 206 a year ago to 256, while the number of clients contributing revenues over $5 million has risen from 78 to 108 over the past 12 months. The company has 11 clients contributing over $50 million, against seven clients a year ago.

It also has two clients contributing greater than $100 million. Its billing rate for the quarter continued its upward trend with onsite rates increasing by 1.9 per cent q-o-q and offshore rates up by 1.7 per cent.

Infosys' billing rates have now seen upward movement for four consecutive quarters, which is particularly impressive, says Edelweiss Securities.

Satyam too has seen an offshore shift and lower employee costs powered margins despite the weakness in top line growth. It reported a strong 205 basis point expansion last quarter.

Employee costs reduced to 58.2 per cent of revenues from 61.3 per cent in Q2, as the impact of the Restricted Stock Units was largely factored in. The contribution of offshore business improved by 130o basis points, which helped in better margins, according to Angel Broking.Moreover, the Indian economy is booming. No doubt, there is pressure from the Democrats in the US on outsourcing, but it is not likely to make much of a dent on the top lines or bottom lines of Indian IT services companies, infer experts.

Further, the IT software exports business is well on course to achieve the ambitious target of $60 billion by 2010 is an oft-repeated statement by Nasscom.

The latest figures add more credence to this figure. The Indian domestic IT market is expected to exceed $15.9 billion in 2006-07 recording a 21 per cent growth.

Software and services (IT-BPO) exports are expected to exceed $31 billion in fiscal 2006-07 - a 32.6 per cent growth over last year's figure of $23.6 billion. So, to reach $60 billion in 2009-10, the Indian tech sector has to grow at slightly less than 25 per cent a year, which does not seem difficult.

Innovation holds the key

On the human resources front, TCS saw an attrition rate of 10.8 per cent, which is the lowest among IT firms. Other IT firms have seen attrition rates anywhere between 13-20 per cent. This remains a matter of concern.

On the flip side, though, the dearth of IT engineers is forcing the Indian and technology companies to recruit around 40,000-50,000 non-IT professionals and science graduates in this financial year, which is the highest by any industry in the country.

This is notwithstanding the fact the over 10 lakh (1 million) IT professionals are being churned out annually by IT and management institutes.

IT majors like Infosys, TCS, Tech Mahindra and Wipro are some companies recruiting non-IT personnel for IT jobs, while other IT companies and the unorganised sector is also close behind.

Healthy competition

Global consulting firm neoIT predicts that companies based in the West will take a keen interest in onsite set-ups to stay competitive as well as explore eastern markets, which are not only cost-effective delivery locations, but also rapidly emerging markets by themselves.

India will continue to lead the supplier market and Europe will continue to show a strong growth. Internationally, neoIT's report predicts that 2007 will see Russia emerge as a strong contender in the IT outsourcing market with an expected growth of 40-45 per cent in 2007.

It is currently the third largest IT outsourcing supply market, behind India and China. Russian IT companies specialise in high-end software and embedded software product development, which acts as a differentiator from lower-priced offerings from Indian companies, it says.

On the India front, the billing rates amongst the tier-1 India IT services providers too will go up by 3-4 per cent both for existing as well as new contracts in 2007, according to neoIT.

The study has attributed the growth in the billing rates to a growing demand for skilled resources, rise in wages, and increased overheads incurred in maintaining quality.

However, despite the hike, the offshore services providers will remain competitive against the global players, says Sabyasachi Satpathy, senior director, neoIT.

The positive sign is that India will remain the fastest-growing country in the Asia-Pacific region in terms of domestic IT spending and is expected to grow at 21.5 per cent to touch Rs 75,891 crore (Rs 758.91 billion), according to IDC.

In 2007, IDC predicts System Integration partners will aim to minimise costs by breaking down activities into smaller modules. Vendors like IBM have already come to market with such offerings. TCS, Wipro and HP are expected to follow suit in 2007 and this trend is expected to gain further momentum through the year.

It's a no-brainer that the operating profit and revenue margins of IT firms will decrease as they get increasingly bigger. However, what's heartening is that with every quarter, they have found better ways of dealing with margin pressure and have become more efficient.

Further, mid- and small-cap IT firms are unfurling their potential and should soon cover up for the excellent margins that the bigwigs will gradually give up with time.
A recent Forrester report concluded that global outsourcing will become the dominant form of IT delivery by 2012. The next quarter's figures would only add muscle to this prediction.
source :- business standard

Tuesday, January 23, 2007

GALLANT


stock retraced nicely from its recent upmove can thing of longing this near cmp or on dips, sl below 10 target could be near 13 do study bit fundamentals, before getting into the trade ,technically the stock looks strong.
cheers,
rish

Monday, January 15, 2007

nifty intraday

Friday, January 12, 2007

NIFTY ANALYSIS(EAGLE EYE TRADE)

NIFTY ANALYSIS.

Check out . We clearly mentioned a breakout and blow off.. Check out this link.
http://www.eagleeyetrade.com/MarketView.html


www.EagleEyeTrade.com

BHARAT FORGE



LONG AT CURRENT MARKET PRICE OR IN DIPS SL AT 355 TARGET 380-390.
cheers
rish

Thursday, January 11, 2007

nse intra update

nifty intraday

Wednesday, January 10, 2007

Foreign flavour: Goldman, NYSE eye NSE pie

MUMBAI: A clutch of five institutional investors, including US-based global investment banking giant Goldman Sachs and the New York Stock Exchange (NYSE), are close to buying a 26% stake in National Stock Exchange (NSE), the country’s biggest bourse.

IL&FS and IFCI are selling 5% each of their holdings in the exchange to Goldman Sachs and NYSE in two separate deals, which are expected to be signed soon. The two shareholders currently hold 7.1% each in the exchange. IDBI and ICICI Bank, the two other institutional promoters, are also expected to offload part of their holdings in the exchange in subsequent deals, according to sources. The valuation of the NSE is expected to be over $2 billion.

Several foreign investors are keen to buy into Indian exchanges. While such transactions are yet to take place in stock exchanges, some of the biggest global players have already taken a toehold in commodity exchanges. The first such deal happened when Fidelity bought around 9% in MCX; later, Goldman acquired over 7% in NCDEX, the other online comex.

The proposed sale of stakes comes close on the heels of guidelines issued by the RBI on foreign investment in Indian stock exchanges. The RBI has allowed foreign investment up to 49% in stock exchanges, fixing foreign direct investment (FDI) cap at 26% and FII limit at 23%. Securities and Exchange Board of India (Sebi) has stipulated investment limit for single foreign investor at 5% beyond which an FII or any other investor like foreign stock exchange will not raise its stake in stock exchanges.

In response to an email query from ET, NSE neither denied nor confirmed the sale of institutional stakes, but said the exchange will send reply only on Wednesday morning.

NSE has 21 promoters: an assorted medley of public sector banks, LIC, ICICI Bank, IL&FS and IDFC. ICICI holds 12.5% and IL&FS has 7.1%. NSE is an extremely profitable entity. In FY06, it had a net profit Rs 206 crore on a revenue of Rs 472 crore. In FY07 it is expected to report a profit of Rs 250 crore: all on the back of a fabulous bull run. It has 70% share of all stock transactions in India.

According to sources, the Bombay Stock Exchange (BSE) had valued itself between $850 million and $1 billion. Using the BSE’s valuation as a benchmark and their proportional market share, a valuation of over $2 billion has been termed ‘as only fair’ by sources close to the deal. However, if one uses the global valuation benchmarks, then NSE has valued itself quite conservatively. NYSE is currently trading at a P/E multiple of 119 and market capitalisation of $16 billion, while Nasdaq is trading at a P/E of 51 and a market capitalisation of $3.5 billion. The London Stock Exchange (LSE) has a market capitalisation of $4 billion.

A global rise in equity prices and interest in equities have made stock exchanges as sought after investments. Add to this a small fact that the stock exchange business is a monopoly — at worst a duoploy — for most exchanges and therefore has very healthy margins. As financial markets all over the world integrate, stock exchanges too have followed the cue.

Early last year, Deutshce Borse, the German exchange, tried to make a bid for the LSE at a $2.5 billion. Soon after Euronext, the holding company, that runs the Paris, Brussels and Amsterdam and Lisbon stock markets tried to bid for the LSE. And this year Nasdaq launched a $4.2-billion bid for the LSE, which again did not bear fruit.
source:-ET

Sunday, January 07, 2007

India can grow at 8 per cent this year too: CII

The CII expects India to maintain an 8 per cent growth trajectory in the coming year. R Sesahashyee, president of CII gives a detailed check on the ways to maintain this growth.

CNBC-TV18 shares with domain-b its exclusive interview with Sesahashyee:

Three weeks ago, you were quite optimistic despite despite indications that the global economy could be slowing down. Has anything changed to suggest that we could be going for a soft landing in the US?

Not really. I think we continue to see a great deal of optimism at the ground level. Most industry segments are talking about double-digit growth, about increasing capacities.

So I do not see any kind of a concern at the ground level, particularly because a lot of people are looking at expansion of the market footprint as well. So that is good news, although I must say that, in the last few days, there has been some lurking fear about interest rates hardening up and therefore the EMI is going up.

That is a bit of a difficult call whether that is going to affect customer or consumer sentiment in terms of durables.

Will it also affect industry's expansion plans since Indian industry just seems to be getting into the investment mode? Has all that money been tied up at lower rates or do you think that will affect investment plans as well?

I do not think the investment plans are at any risk, but quite clearly even if they had been tied up; most of them are going to be on floating rates. So they have to ultimately reflect the cost of money as it hardens up and therefore the situation could get a bit difficult in some areas, if the viability of some of these large projects are not as robust as they should be.

And if the interest rates do harden up as we go long, then there could be some worry. But at this point of time, I would say that this is a very marginal worry.

What would be areas that you could highlight at this point in time, where we could see some pressure building?

I would say the construction industry, which has been the main driver of economic growth in the last few months, a few quarters. I hope that the hardening of interest rates and these potential plateauing of property does not have an impact in terms of construction industry growth; that is the only major issue that I would highlight.

Are commodity prices a concern? Are we seeing slight hardening there, or do you think this will be offset by demand, if interest rates do not affect demand?

Quite clearly, commodity prices is an international phenomenon in most areas and therefore, if you couple this situation of hardening commodity prices with this possible slowdown in the US market, then you may not need to worry too much because commodity prices will have to soften as well then.

So I do not think that we should worry too much about commodity prices just now on a secular basis.

So there is a possible hardening on commodity rates, but long-term, at least in the medium-term for the year, do you think we are on track for that 8 per cent growth?

I think so.

How much do you see on infrastructure because the CII has suggested the government to come back with further incentives for investment in infrastructure? Do you see that happening?

It is more than the incentive. I think the key requirement now is the sellout, where we had been talking about $320 billion or $350 billion.

Our own reckoning is that has a component of about $77 billion in terms of equity and that is not going to come easily, unless we have a shelf of projects, which have an attractive competitive kind of returns on investments.

But I do not see that and that is an issue, and how are we going to get this kind of money coming in.

So you are saying that the 8 per cent growth won't be affecting this year, but you are seeing that affecting the coming years?

Exactly, I am saying that we have some headroom for growth despite all the infrastructure problems, but sooner than later, infrastructure issues will have to catch up and we will then see impediments in growth.

Unless that is addressed, we have an issue going forward and that is where I think there is an urgent need to make a shelf of infrastructure projects available.

Here the State governments have a large role to play, as unless that is made available, I do not see money coming in or infrastructure bottlenecks getting relieved.

In your own industry, that is commercial vehicles, we have seen numbers looking quite good for December, on hopes that the economy is picking up and roads are being built. But any bottlenecks there?
At this point of time, I have never seen a market as buoyant in the last 15-20 years as we now see in the commercial vehicles, particularly in the main heavy-duty vehicles. So everything seems to be on a roll.

As we go along, there could be some impact, if the interest rates harden up again. But at this point of time, I am quite bullish about the growth rate in commercial vehicles.

Where is the demand coming from for commercial vehicles and what has led to this bullishness?
During the early part of the year, it has been driven by the restrictions on overload, which came in as a result of the court ruling and that has certainly resulted in a huge demand.

But now, I see that as abated and we really now see economic growth driving growth in the fleet size. Of course there is some acceleration I see also in replacement of vehicles and partly because the newer vehicles are giving better returns than some of our older vehicles, both in terms of the fuel as well as in terms of the overall speed and reach.

And I think that itself is creating some demand for replacement.

How much of growth are you targeting in this commercial vehicles segment?

It seems the growth rate is 33 per cent to 34 per cent now and thesend this article to a friend next quarter and I do not see that softening at least in the medium and heavy-duty vehicles range. It continues to be pretty good, although we had a base of last year, which was very high.

So you might see a bit of softening as a result of the base being high last year. I think overall we should easily be about 25 per cent to 30 per cent.
SOURCE:-domain-B

Friday, January 05, 2007

MALLU PAPER



MALLU paper consolidating in a triangle (4th wave triangle)almost brokeout a close above 42 will signify new wave up good stock to hold sl for longs will be below 35.
cheers
Rish

AGRO DUTCH


AGRO DUTCH making a new move keep sl at 24 and long it, probably 3rd wave has started
cheers
Rish

Wednesday, January 03, 2007

CAMBRIDGE


CAMBRIDGE making a fresh up move after a long consolidation period its out of down channel can keep a sl near 130 and upside target could come close to 160.
cheers
Rish

INFOSYS UPDATE


INFOSYS at last looks like have broken out of expanding triangle now minimum 2400 coming previous chart can be seen here " INFOSYS"

Monday, January 01, 2007

VAKRANSOFT


stock looks to be trading in 4th wave triangle and is looking for a breakout
with first target as 300 keep 230 as sl for longs in this case.
cheers
rish

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