The Old Fox of Dalal Street has been on a dream run since the past couple of weeks. On Friday, most stocks that he had been steadily building up positions in figured among key gainers of the day. State Bank of India shares hit a new peak of Rs 2,879.95, before closing at Rs 2,849.40, up 2.35% over the previous close.

SpiceJet hit a 52-week high of Rs 68.45 before closing at Rs 66.05, up 8% over the previous close. Bombay Dyeing hit a 52-week high of Rs 684.85 before closing at Rs 661.55, up 12% over its previous close. Godrej Properties rose 3% to close at Rs 776.40. It remains to be seen, if the Fox will make a quiet exit when the going is good, or hang in there for bigger profits.

Shares of Cipla inched up on heavy volumes on Friday, after the company’s first quarter earnings beat the consensus estimate. On the BSE, the stock closed at Rs 315.45, up 0.5% over its previous close, with 2.84 lakh shares — twice the 2-week average daily volume —being traded. Dealers tracking the stock said the ‘Big Daddy’ of insurance companies was a key buyer. However, traders who had built up positions in anticipation of good quarterly numbers, chose to book profits, thus restricting gains in the stock.

MUMBAI: Lovable Lingerie is the third-best performing stock among companies listed this year, with it doubling in value, as traders bet it could repeat the performance of Page Industries, sellers of Jockey innerwear.

It gained a third in about a week. But the small float and low delivery volumes is an alert against wagering on it for some who fear it may have risen beyond its fundamentals when many other newly-listed companies are trading below their sale price.

“The rally in Lovable Lingerie is more a momentum play with hardly any genuine interest,” says Sharad Rathi, associate director at Almondz Global Securities.

“The valuations seem to be a bit out of whack.” Lovable that sold shares at Rs 205 apiece, has risen 109% to Rs 428.5 on Friday after touching a high of Rs 462.50. Some of the top shareholders include HDFC Mutual Fund, SBI Funds, UTI Asset management and Fidelity, filings show.

Total outstanding shares of the firm is at 1.68 crore and public holding is about 50 lakh shares. The Sensex was down 2.6% during the period and the BSE IPO index was up 1.6%. Fineotex Chemical and C Mahendra Exports are the two companies that have returned more than Lovable, among this years’ IPOs.

The stock trades at 31 times forecast earnings for fiscal 2012, compared with Page Industries’ 27 times its earnings. Although the stock had been among the top traded in the last few days, gaining to limit on some days, the number of shares that changed had remained negligible. The quantity of shares actually changing hands — was in single digit for many days.
The delivery ratio was 2% to 9% between June 10 and 17 when the stock moved up 33% on BSE, exchange data show. This follows the performance of Page Industries which has gained 396% since its IPO in March 2007. Shares that were sold at Rs 396 apiece are trading at Rs 1,784. “Rising disposable incomes and growing awareness about personal hygiene are boosting growth of the innerwear market in India,” said Anand Rathi Secutities in a recent report. “Also enhancing this growth is the rising modern trade malls, shopping complexes etc,” said the brokerage which has a target price of Rs 430.

The Mumbai-based company’s Rs 93-crore IPO drew good response with it getting subscribed 21.8 times the institutional portion, 98.5 times among wealthy individuals and 20.5 times in the retail category. Rise in raw material prices and intensifying competition are the two risks for earnings growth, the report said.

Shares of cigarette companies have rallied over the past one month, with the three leading cigarette makers ITC, Godfrey Philips and VST Industries hitting record highs. All the three stocks have posted robust returns in the past one year, significantly outperforming the benchmark Sensex, helped by favourable taxation and increase in cost of competing tobacco products.

Unlike previous years, the central government has not increased excise duty on cigarettes in the budget for this fiscal, though states have varyingly raised value added tax (VAT). While northern states such as Rajasthan have significantly raised VAT on cigarettes, all the southern states have spared the sector from a major increase. In contrast, competing tobacco products such as ‘pan masala’ and chewing tobacco have witnessed cost increases in the form of higher taxation and a rise in raw material cost.

Also, prices of tobacco have remained benign compared with higher prices of ‘tendu’ leaves that are used for manufacturing ‘beedis’. The cigarette industry has cashed in on the rise in beedi prices by competitively pricing low-end and micro filter cigarettes to lure ‘beedi’ smokers to cheaper cigarettes. Also, contrary to its earlier plans the government decided to issue less gory pictorial warnings on cigarette packets, which has aided sentiment in the stocks.
In the quarter ended June, VST Industries reported a 90% year-on-year jump in net profit. ITC, which is yet to declare its first quarter earnings, is expected to have witnessed a pick-up in cigarette volumes despite price increases in some of its products. Going forward, the rally in cigarette companies is likely to continue as all factors seem to be positive for the sector.
Analysts expect cigarette companies to report strong earnings growth driven by higher volumes, price increases and lower expenses.

NEW DELHI: The poor financial health of state electricity boards could pose significant business risks for power traders in the country, says rating agency Fitch.

In a report released today, Fitch Ratings said the credit risk of power traders has become “riskier” due to profitability and liquidity constraints faced by state power utilities.

“If these utilities are having liquidity problems which are leading to delays or defaults in their obligation to power traders, then this in turn increases the business risk for power traders,” it noted.

This could lead investors in power trading companies to either seek higher return on the investments or seek alternate avenues for investment.

Leading power traders include PTC India and Tata Power Trading Company.

Going by estimates, over the past four years, the top five trading licensees have controlled over 80 per cent of the market in terms of volumes.
Some of the large loss making state power utilities come from the states for Tamil Nadu, Uttar Pradesh, Madhya Pradesh. These are also largest buyers of short-term electricity through power traders, Fitch Ratings said.”The financial health of state power utilities, the major customers of power traders, has deteriorated with aggregate annual book losses widening to Rs 295 billion (Rs 29,500 crore) in FY 10 from Rs 70 billion (Rs 7,000 crore) in FY 06, leading to an increase in counterparty risk,” the report said.

As per Planning Commission‘s estimates, electricity distribution losses totalled a whopping Rs 70,000 crore in 2010-11.

According to Fitch, the biggest short-term buyers — SPUs in Tamil Nadu and Rajasthan — face huge energy deficits with largest cash losses on a revenue and subsidy-realised basis.

“Hence, these states will remain net-buyers on short-term power markets and continue to act as major counterparties for power traders. This increases the risk for undiversified power traders significantly,” it added.

The report pointed out that traders with strong equity base and high cash balance are better placed since they have the buffer to absorb any increase in the working capital cycle in the event of delays or defaults by SPUs.

Director in Fitch’s Asia Pacific Utilities team Salil Garg said the agency expects larger traders to face low business risk due to many factors, including economies of scale and diversified customer base.

NEW DELHI: Fitch on Friday said it has withdrawn the ratings on Reliance Capital as the company has decided to stop participating in the agency’s rating process.

“The ratings have been withdrawn as Reliance Capital has chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to provide ratings or analytical coverage of Reliance Capital,” Fitch Ratings said in a statement.

A leading financial services company Reliance Capital, an Anil Ambani group firm, has interests in diverse areas including asset management, mutual funds, portfolio management services, life and general insurance.

The stocks of DB Realty and Unitech rose after top executives of these companies were granted bail in the 2G scam case. The DB Realty stock has risen 40%, while Unitech gained 4%. However, some of the intrinsic problems which plague these companies, and uncertainty over the outcome of the 2G scam case may prevent any major appreciation in the stock.

Scrapping of projects involving the government, delayed execution and difficulty in securing approvals for new projects – DB Realty has seen it all. The company did not launch any new projects in the September quarter and sold around 50-75% of its existing seven projects. Even the analyst community has washed its hands of the stock with most brokerages discontinuing their coverage on the stock.

The company’s net sales for the first half year ended September are down by 36%, while its net profit dropped by 76% during the same period. However, the company is extinguishing its debt by selling non-core assets.

At the end of the September quarter, the company managed to reduce its debt from Rs600 crore a year ago to Rs 230 crore. It is sitting on a substantial pileup of TDR (transfer of development rights), which can be realised to further boost cash flows of the company. However, the outcome of the 2G scam case on its promoters will weigh heavily on the business prospects of the company which has its projects predominantly in Mumbai.

Unitech is the second big real estate company to be impacted because of the alleged involvement of its top deck in the 2G scam. Besides the problems associated with all real estate companies, there are other challenges.

For instance, the company was at the receiving end of shareholders’ ire at its annual general meeting as they refused to approve a resolution to pay dividend on equity shares for the fiscal 2011. The company’s net sales and earnings have dropped by 17% and 45% respectively for the first half of this fiscal.
However, the business model continues to remain strong. Unitech has a presence in the affordable and mid-income housing segment which enables it to generate cash flows. It has been launching new projects, although the scale of execution is slow. Despite lower revenue recognition, it has managed to lower its debt through internal cash accruals.

It has an outstanding net debt of Rs 5,144 crore and a land bank of close to 7,000 acres with an average cost of acquisition of land of around Rs 250 per square feet. Despite strong fundamentals, the loss of credibility and uncertainty over the 2G probe will restrict any major upside in the stock. The stock continues to trade at a significant discount to its land value that analysts estimate to be at Rs 60.

MUMBAI: Alfa Laval (India), a subsidiary of Sweden-based Alfa Laval Corporate AB, today said its parent firm has raised the delisting offer price to Rs 2,850 a share.

In a filing with the BSE, Alfa Laval India said its parent company increased the delisting offer price after “considering the prevailing market conditions and with a view to reward shareholders”.

However, the company further said, “Offer price should in no way be construed as a ceiling or maximum price for the purpose of the reverse book-building process and the public shareholders are free to tender their equity shares at any price higher than the indicative offer price.”

Reacting to the news, the company’s shares surged by 14.40 per cent to close at Rs 2,710.85 a piece on the BSE. In the intra-day trade, the stock hit a 52-week high of Rs 2,742.

The entity that offers heat transfer, separation and fluid handling technologies would be delisted from the BSE and the National Stock Exchange.

In September 2011, the company’s board had accepted the delisting proposal and in October fixed a floor price of Rs 2,045 a share to buy out the outstanding public float.
Alfa Laval (India) had said the promoter firm would make a delisting offer to acquire up to 2,040,202 shares, accounting for 11.23 per cent stake in the domestic entity.

At present, the promoter company holds 88.77 per cent stake in Alfa Laval (India).

KOLKATA: Hundreds of worried fans of ailing Bollywood megastar Amitabh Bachchan today performed a yagna here to pray for his speedy recovery.

“We are using the auspicious occasion of Maha Shivratri to pray to Lord Shiva to help him recover painlessly from his health problems,” Sourav Banerjee of Amitabh Bachchan Fans Association of Kolkata, told.

Dressed in traditional attires, hundreds of fans carrying the actor’s posters thronged the Ekdaliya Evergreen Park in the afternoon for the hour-long yagna.

Ever since the news of Big B’s health problems broke, his admirers here, who have also built a temple for him in south Kolkata, have been a worried lot.

“We have been praying for his health and well-being ever since and are constantly monitoring media reports on his health,” Banerjee said.

Another of his fan blamed the actor’s “workaholic nature” for his medical condition.
“He has delivered hits after hits all his career and at this age of his life his body needs rest,” said 32-year-old Goutam Basak adding that they are planning a gala celebration when the superstar returns home from hospital. On February 11, 69-year-old Bachchan underwent an abdominal surgery but after he complained of acute pain, his stay at the hospital had to be extended.

Currently recuperating at the Seven Hills hospital, Big B’s health is now said to be improving.

PORTHCURNO (ENGLAND): Newly discovered documents have revealed the first telegraph messages and joy when England was linked for the first time with India on 23 June, 1870, via thousands of km of cables laid painstakingly below the seas, reducing time from months to minutes.

The sylvan Porthcurno valley in Cornwall, located on the Atlantic coast 506 km south-west of London, was the unlikely place of a revolution that enabled Britain and its former colonies to communicate with each other.

Museum officials told a visiting PTI correspondent that Porthcurno was the hub of international cable communications from 1870 to 1970, and a training college for the communications industry until 1993.

Now a museum housing rare equipment and details of the history of telegraph, Porthcurno has been granted millions of pounds in funding to develop an international education programme that includes community groups in India.

Among its rare archives discovered last week is a collection of the first telegraph messages sent from Porthcurno and Mumbai (then Bombay).

Until that landmark day, communication between England and India was unreliable, and often took months.
According to the document, the first message was dispatched on the night of 23 June, 1870, and a reply was received in 5 minutes, which was a technological feat at the time.The message was called a ‘complimentary telegram’ between the ‘Managing Director in London and the Manager in Bombay’.

The first message was from ‘Anderson to Stacey: How are you all?’, to which the reply was: ‘All well’.

The second message from Anderson was: ‘Please ask gentlemen of the press, Bombay, to send a message to gentlemen of the press, New York’.

After several messages that night, including some to the governor of Bombay, from Lady Mayo to viceroy Lord Mayo based in Shimla, and one from the Prince of Wales to the viceroy, a response was received from journalists based in Bombay.

It said: ‘From the Press of India to the Press of America: The Press of India sends salaam to the Press of America. Reply quick’.

The document notes that the viceroy of India had sent a telegraph to the president of the United States and “received a reply which reached him in 7 hours 40 minutes”.

The viceroy’s message, which was read in the American Congress the same evening, was: “The Viceroy of India for the first time speaks direct by telegraph with the President of the United States. May the completion of the long line of uninterrupted communication be the emblem of lasting union between the Eastern and Western World”.

Telegraphic communication with India was first established in 1864 by overland telegraph lines from Europe to the top of the Persian Gulf and then by an undersea cable to Karachi, but the overland section was never satisfactory, prompting efforts to lay more reliable cables below the sea.

In 1869, telegraph pioneer John Pender established the British Indian Submarine Telegraph Company, whose task was to lay undersea cables to India.

The five ships used to lay the thousands of km of cables were the Great Eastern, William Cory, Chiltern, Hawk and Hibernia.

It took six weeks to lay the cables from Suez to Bombay. This was followed by the laying of the final link from Malta to Porthcurno.

It was the first long distance cable ‘chain’, and opened to the public with much jubilation, museum records show.

After the link with India was established, Porthcurno was linked by undersea cables to several other areas across the world.

At its height, it was the world’s largest station with 14 cables in operation. Porthcurno’s telegraphic codename was ‘PK’.

During World War II, tunnels were dug by Cornish miners to house an underground building and Porthcurno’s entire telegraph operations.
The building today houses the museum and archives that started the communication revolution in the late nineteenth century.
Besides 1.44 million pounds funding received in January, the museum this week has been granted 35,000 pounds from the international telecommunications organisation SubOptic to develop an education project with community groups in India, among other countries.
Museum officials said the money will fund an international education programme that will benefit users from spring 2013.

It will include online learning resources, including video clips, animations and games that will enable users to discover the science of global cable-based telecommunications, as well as its impacts on local identity, democracy and culture.