Capita Telepholio recommends buy call

BUY:  Balmer Lawrie & Company at Rs 416
BSE Code:  523319
NSE Symbol:  BALMLAWRIE
Market Lot:  1
 
This PSU company targets to quadruple profits in four years,
capitalising on growth in logistics, travel, industrial packaging and lube
businesses.

Actual consolidated EPS for March 2005   : Rs 25.6
Actual consolidated EPS for March  2006  : Rs 42.0
Projected consolidated EPS for March 2007: Rs 53.8

Ashok Leyland weathers the storm - surged 4% to Rs 46.20, on renewed buying

The stock had rallied from early-September to early-October, when the rally came to an abrupt halt. From Rs 50 on 9 October, it slipped to Rs 43.40 on 3 November 2006. It had recovered a bit to Rs 44.30 by 7 November 2006.

Recently, a brokerage revised the target price for the scrip to Rs 50 from Rs 44, while revising upwards its FY-2007 and FY-2008 earnings estimates. At current Rs 46.20, the scrip discounts its projected FY 2007 EPS of Rs 3.10, by a PE multiple of 14.90. It discounts its projected FY 2008 EPS of Rs 4.10, by a PE multiple of 11.2.

Ashok Leyland (ALL) on Tuesday reported a surge in sales for the month just gone by. It reported a growth of 69.50% in its October 2006 sales figure to 7,255 units, from 4,281 units a year earlier. Domestic sales rose 73% to 6,798 units, from 3,921 units a year earlier, while exports rose to 457 units from 360 during the same month in the previous year. Truck sales in October were characterised by the doubling of sales of the higher-margin, multi-axle vehicles, to about 3,300 units.

The company sold 44,158 vehicles in April-October, against 32,496 in the corresponding period last year. Indian truck sales have surged over the past few months following a Supreme Court ruling in February 2006, prohibiting overloading of trucks.

ALL will set up a manufacturing unit in Uttranchal with a capital expenditure of Rs 1,000 crore, and a capacity of 25,000 units. It also plans to set up assembly units in UAE and South Africa, to tap the growing Middle East, South and Central African markets.

Ashok Leyland's net profit rose 27% to Rs 95.36 crore in Q2 September 2006 on 34% growth in sales to Rs 1,675.72 crore.

i-flex solutions lost 0.5% to Rs 1, 527, after Oracle said it has not revised upwards its open offer price

The scrip had shed 2.5% on Tuesday (7 November) to Rs 1,535.60. A day before that, on 6 November, the stock had risen 2.7% to Rs 1,576.15. The surge in the stock on Monday, was sparked by expectations that Oracle will raise the offer price for acquiring additional 20% stake in the company. Expectations regarding an increase in open offer price were due to a delay in commencement of the open offer, which was to begin from that day (6 November).

While pointing out about the delay in the commencement of the open offer, Oracle after trading hours on Tuesday clarified that the offer price of Rs 1,475 per share remained unchanged. It said, a revised timing of the open offer will be announced separately.

In September, Oracle had offered to buy 16.629 million shares of i-flex solution, or 20%, at Rs 1,475 a share. The mandatory open offer was announced after i-flex had approved a preferential issue to Oracle at Rs 1,307.50 per share.

Early last month, i-flex Solutions announced the completion of acquisition of Mantas, a provider of regulatory compliance, loss prevention and revenue generation solutions, headquartered in Herndon, Virginia, US, for an all-cash transaction of $122.6 million. Mantas is now a wholly-owned subsidiary of i-flex.

Last month, IBM, Oracle and i-flex - announced a collaborated effort to provide banks with infrastructure, services, and support for enterprise applications, core banking, and risk management. The combination of hardware from IBM, applications from Oracle and core banking solutions from i-flex, will be offered to banks soon, the three had said at that time.

i-flex Solutions posted a topline growth of 43% with revenue (consolidated Indian GAAP) for the quarter ended 30 September standing at Rs 499 crore, compared with Rs 350 crore for the corresponding quarter of the previous year. The company's net income for the quarter stood at Rs 93.5 crore, representing 144% growth compared with the figures of Rs 38.4 crore during the corresponding quarter in the previous year.

KPIT Cummins Infosystems gains as board approves bonus, stock split

KPIT Cummins rose 0.55% to Rs 602 on getting its board's approval for bonus issue and stock split. The counter clocked a volume of 52,458 shares on the BSE. The stock witnessed a solid spurt in the past few trading sessions, on announcement of stock split and bonus issue. From Rs 450.45 on 20 October 2006, the stock surged to Rs 621.30 by 2 November 2006. From this level, it had slipped to Rs 598.70 by 7 November 2006.

At the current market price of Rs 602, KPIT Cummins is trading at 22.37 times its Q2 September 2006 annualized EPS of Rs 26.90 (based on consolidated earnings).

KPIT Cummins Infosystems' board has approved the issue of bonus shares in the ratio of 1:1, i.e. one bonus equity share for each equity share held in the company. Further, the board has also approved to split the existing par value of Rs 5 per equity share into Rs 2 per equity share.

Recently, KPIT Cummins has set up a dedicated offshore development centre to offer design and development services for Japanese semi-conductor systems solutions firm, Renesas Technology. Renesas, a joint venture of Hitachi and Mitsubishi Electric, is an existing top-five client of KPIT Infosystems and accounts for a little less than 10% of the latter's revenues.

KPIT Cummins Infosystems is a global IT consulting and engineering company with major presence in IT for manufacturing, advanced technology solutions and diversified financial services verticals.

In Q2 September 2006, KPIT incorporated a wholly owned subsidiary in Poland with an initial investment of about $250,000 and it also setup a branch office in Singapore.

For Q2 September 2006, the company reported 13% growth in net profit to Rs 7.02 crore (Rs 6.21 crore). Net sales rose 13.70% to Rs 73.29 crore (Rs 64.47 crore).