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  • 8/10/2019 Market Wire

    1/19

    Marketwire

    Selling cheapValuations seem to have reached a low of 2008-09 once again andconsidering the current levels of the market, its quite astonishing

    By Research Desk | Sep 6, 2013

    The Indian stock market crrently seems to !e nder"aled, e"en more than the !ad

    times o# 200$%0&' The BS(%)00 inde*, +hich represents more than &0 per cent o# the

    Indian stock market, is trading at a price to !ook "ale o# 2'2 +hich is st 1) per cent

    a!o"e the lo+ o# 1'& dring the crisis o# 200$%0&' -t o# the )00 companies on the

    inde*, 1&. are trading !elo+ their !ook "ale' This is signi#icantly higher considering the

    crrent le"el o# the market +hich is the highest nm!er at this le"el o# the inde* /as

    Stock Analyst Choice

    strong !ackingIndraprastha as will !enefit from competitive prices, wide distri!ution

    network and e"pertise from its parent companies

    By arn ha!!a | Sep 6, 2013

    Incorporated in 1&&$ throgh a oint "entre !et+eenI4, Bharat 5etrolem and the

    Delhi o"ernment, Indraprastha as 4imited /I4 is engaged in retail gas distri!tion

    !siness #or spply o# 7 to transport sector and 57 to domestic, indstrial andcommercial sectors in Delhi and 7ational apital Region' It is also engaged in the

    man#actre o# 7' rrently, I4 has 2&0 7 stations, o"er 3,&0,000 residential

    cstomers, &22 commercial cstomers and 801 indstrial cstomers'

    Strengths

    gas prchase agreement +ith its promoter, I4, ensres a constant spply o# gas at

    http://www.valueresearchonline.com/story/archive.asp?sec=53http://www.valueresearchonline.com/story/archive.asp?sec=76http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=525http://www.valueresearchonline.com/stocks/snapshot.asp?code=15728http://www.valueresearchonline.com/story/archive.asp?sec=53http://www.valueresearchonline.com/story/archive.asp?sec=76http://www.valueresearchonline.com/stocks/snapshot.asp?code=1263http://www.valueresearchonline.com/stocks/snapshot.asp?code=525http://www.valueresearchonline.com/stocks/snapshot.asp?code=15728
  • 8/10/2019 Market Wire

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    competiti"e prices that is essential #or the gro+th o# the company' This agreement also

    ensres priority spply o# gas in case o# any disrption in spply'

    *9irm allocation o# gas #or the region allo+s I4 to sell 7 at one o# the lo+est retail

    price in the contry and still protect its margins

    *The company does not ha"e any competition and enoys a premim position in the

    region it operates in' It is the sole spplier o# 7 and 57 in Delhi, 7oida, reater

    7oida and ha:ia!ad, and plans to promote +ider sage o# gas #or "arios applications

    throgh co%generation, gas geysers, gensets, etc'

    *The price di##erence !et+een 7 and petrol +ill contine to dri"e the large scale

    con"ersion o# petrol%dri"en "ehicles to 7 mode' s o# no+, 7 o##ers arond 11%1)

    per cent sa"ings o"er other #els, ths making it a pre#erred choice

    *9rther, more and more atomo!ile companies are introdcing 7 "ariants +ith

    pre%#itted kits to tap the gro+th opportnity +hich is !ond to increase the demand #or

    7

    *57 is emerging as a key sorce o# energy #or commercial and indstrial sage' ;ith

    increasing prices o# 45 and restrictions on the nm!er o# cylinders, more and more

    hoseholds are no+ keen to shi#t on to 57' This pro"ides ample opportnity #or I4 in

    #tre

    Growth drivers

    I4 has a ro!st in#rastrctre o# 7 stations and pipeline net+orks that ensres easy

    a"aila!ility to its cstomers' The company has already sho+n its e*pertise in de"elopingand rolling ot city gas distri!tion net+orks in 7R and this gi"es it an edge to tap any

    #rther gro+th opportnities in ne+er areas'

    *I4 has a long%term gas sale contract +ith its largest cstomer Delhi Transport

    orporation, +hich acconts #or nearly 20 per cent o# I4

  • 8/10/2019 Market Wire

    3/19

    commercial segment #or #rther e*panding its 57 net+ork

    *R47 prices are at its peak' ny #rther correction in the prices or crrency

    appreciation +ill make 57 competiti"e as compared to #rnace oil

    Financials

    7 is the maor component that contri!tes to I4

  • 8/10/2019 Market Wire

    4/19

    e"ident #rom the graph

    !elo+ and the highlighted

    line representing the

    crrent le"el'

    #lick the image to e"pand$

    Equity Student

    6 hours ago

    The +rite%p has not toched pon the DamocleAs S+ord hanging o"er the heads o# all

    listednlisted D entities in the contryC the reglatory o"erhang' rnning !attle is on

    !et+een I4 and 57RB and the Spreme ort is yet to gi"e its #inal "erdict' =y sincere

    ad"ice to all potential in"estors in this other+ise one%o#%its kind D player, +hose sccess

    +old !e di##iclt to replicate in other parts o# the contry, is to +ait #or the dgment

    !e#ore making the mo"e'

    Interview

    ood Time to In"estVina% &aharia of 'eligare Invesco shares his investment philosoph% and the

    rationale !ehind his picks

    http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528#comment-1034070475http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/archive.asp?sec=62http://www.valueresearchonline.com/story/images/fullscreen/20130906_selling%20cheap_big.pnghttp://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528#comment-1034070475http://www.valueresearchonline.com/story/h2_storyView.asp?str=23528http://www.valueresearchonline.com/story/archive.asp?sec=62
  • 8/10/2019 Market Wire

    5/19

    By arn ha!!a | g 2&, 2013

    inay 5aharia, 9nd =anager, Religare In"esco =tal 9nd, shares his in"estment

    philosophy and the rationale !ehind his picks' ?e e*plains +hy the mid% and small%cap

    space is still attracti"e and ho+ in"estors shold approach in the crrent scenario'

    Your funds Religare Invesco Mid Capand Religare Invesco Mid N Small

    Caphave performed etter than the categor!" #hich stoc$s or strateg!

    would !ou attriute to this and the rationale ehind those pic$s%

    -r strategy is consistent %% +e #ollo+ a !ottom%p in"estment approach' The retrns

    are a #nction o# the stocks +e o+n !t the identi#ication o# stocks and consistency is a

    reslt o# the in"estment process' sing or in"estment process +e identi#y companies

    +ith !etter gro+th traectory and healthy capital retrn ratios' These #orm the core o#

    the port#olio +hich has a gro+th !ias'

    #hat is !our investment philosoph!% &re there an! sectors !ou prefer

    investing in and what do !ou generall! avoid%

    ;e only in"est in companies that meet the stock selection principles as laid ot in or

    in"estment process' ;e look at !oth @alitati"e and @antitati"e #actors' key

    @antitati"e parameter +hich +e tend to #ollo+ is retrn on capital' ;e tend to !y into

    companies +hich ha"e demonstrated long%term retrn on capital signi#icantly higher

    than the cost o# capital +hich +e internally ha"e set at 1) per cent' To that e*tent, +e

    emphasise more on historical per#ormance and less on #orecasts' -# corse, +e do look

    at the #tre i# +e think that the #tre is going to !e materially di##erent than the past

    and there is potential #or change' Bt or process and e*perience emphasise on the #act

    http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=4280http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=4280http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=6675
  • 8/10/2019 Market Wire

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    that history pro"ides s "ala!le insight +hich #rther helps s a"oid or redce

    mistakes'

    Secondly, a corollary o# high retrns to capital is that the company shold ha"e less

    le"erage on its !alance sheet' This scenario is an atomatic reslt o# high retrn on

    capital' I# yo ha"e high retrns on capital, the !siness +old atomatically generate

    high cash #lo+ and as a reslt o# that yo +old ha"e lo+er le"erage'

    In case o# the @alitati"e parameters, +e tend to look at the management @ality' ;e

    also look at a company

  • 8/10/2019 Market Wire

    7/19

    in"estment argment on a #actal !asis rather than getting opinions #rom the

    management'

    #hat advice would !ou give to an investor% Should the! invest in the mid(

    and small(cap space right now%

    I +old say that #or an in"estor +ho +ants to in"est in e@ity, the in"estment in case o#

    mid%caps is al+ays a!ot asset allocation' I# yo +ere in"esting in e@ity, yo +old

    enter into the asset +ith the e*pectation that o"er a long period o# time this asset class

    shold deli"er retrns in line +ith the nominal D5 gro+th rate' 7o+ +ithin e@ity,

    depending on the in"estor

  • 8/10/2019 Market Wire

    8/19

    they isse de!it cards that yo can se to !y goods yo +ant to !y' >o may not ha"e

    realised, thogh, that yo can also sa"e money !y !anking smartly'

    There are se"eral types o# !ank acconts that yo can opt #or depending on yor needsE

    #or instance, a !sinessman +ill pre#er a crrent accont compared to a salaried

    indi"idal +ho +ill need a sa"ings !ank accont'

    Savings )an$ &ccount

    Sa"ings !ank acconts are meant to promote the ha!it o# sa"ing among people +hile

    allo+ing them to se their #nds +hen re@ired' The main ad"antage o# a sa"ings !ank

    accont is its high li@idity, sa#ety and a moderate interest on the sa"ings'

    Capital rotection

    The capital in a sa"ings !ank accont is not completely sa#e' Balance in the accont

    inclding interest earned, is insred p to a ma*imm o# Rs 1 lakh' This sm is insred

    !y the Deposit Insrance and redit arantee orporation /DI #or all commercial

    !anks, inclding the !ranches o# #oreign !anks #nctioning in India, local area !anks

    and regional rral !anks' In case o# co%operati"e !anks, yo +ill need to check i# it is

    co"ered nder the DI !ecase i# a !ank has not !een paying the premim #or the

    insrance scheme #or three consecti"e years, it ceases to !e insred'

    Investment +,ective and Ris$s

    The sa"ings !ank accont is the traditional home #or cash sa"ings' Today, a sa"ings !ank

    accont is a necessity and is an essential component o# an indi"idalAs #inances' The

    most important reason to open an accont is the atomatic access that it o##ers to other#inancial instrments sch as in"estments, loans and sa"ings' The sa"ings !ank accont

    o##ers se"eral other #acilities and #eatres that one shold e*plore to make optimm se

    o# cash #lo+s'

    Inflation rotection

    sa"ings !ank accont does not pro"ide protection against in#lation, +hich means

    +hene"er in#lation is a!o"e the rate that a sa"ings !ank accont earnsE the accont

    earns no real retrns'

    GuaranteesThe interest rate in a sa"ings !ank is garanteed p to the #irst Rs 1 lakh !alance in the

    accont' This rate "aries across !anks since the Reser"e Bank o# India dereglated the

    sa"ings !ank deposit interest rate on -cto!er 2), 2011' Banks are no+ #ree to determine

    the interest on the !alance in a sa"ings !ank accont, +hich has to !e ni#orm #or all

  • 8/10/2019 Market Wire

    9/19

    types o# acconts p to Rs 1 lakh in an accont !t "aries #or acconts +ith a higher

    !alance'

    -i.uidit!

    The sa"ings !ank accont is highly li@id and one can +ithdra+ cash #rom oneAs accont

    #rom the !ranch dring the !anking hors' Today, the T= allo+s 28%hor +ithdra+als

    +ithin limits in a single day +hich "aries across !anks and also depending on the

    accont type' ;hen settling payments throgh real time gross settlement /RTS

    #eatreE transactions are possi!le #rom &'00 = to 8'30 5= on +eekdays and #rom &'00

    = to 1'30 5= on Satrdays #or real time settlement'

    /0it +ption

    >o can close the !ank accont on any day +ithin the !anking hors'

    +ther Ris$s

    Balance, inclding interest in an accont a!o"e Rs 1 lakh, is e*posed to the risk o# a !ank

    #olding p' 7one o# the p!lic sector !anks ha"e #olded p in India, +hich is not the case

    #or co%operati"e !anks' =ake sre yo are choosing a !ank +hich has strong credentials

    and is sa#e'

    Credit Rating

    -pening a sa"ings !ank accont does not entail credit rating'

    1a0 Implications

    Interest earned in the sa"ings !ank accont p to Rs 10,000 per annm is ta* e*empt

    #rom 2012%13' Interest amont a!o"e this limit is treated as income and ta*edaccordingly' The interest earned is ta*a!le nder the head AIncome #rom other sorcesA'

    Going +nline

    It goes !y many names, sch asC online !anking, Internet !anking, 5 !anking, home

    !anking, and electronic !anking' =ost allo+ yo to access yor accont online +hich is

    con"enient and yo can control yor accont #rom any+here' -nline !anking permits

    yo to pay !ills online, trans#er money !et+een acconts, online shopping, and access

    accont in#ormation at any time and manage di##erent types o# acconts +ith a

    particlar !ank'-nline !anking opens a ne+ +indo+ to yor #inancesE yo can in"est in stocks, !y

    insrance, pay rene+al premims, and recharge yor mo!ile phone, pay credit card !ills

    and e"en pay ta*es depending on the #acilities o##ered !y yor !ank'

    Is online an$ing safe%

    -nline !anking takes secrity "ery seriosly and ses encryption technology to protect

  • 8/10/2019 Market Wire

    10/19

  • 8/10/2019 Market Wire

    11/19

    T= cm de!it card in most instances' -ne can isse mlti%city che@es at no

    additional costs'

    Sweep(in or Multiplier &ccountpro"ides the li@idity o# a sa"ings accont copled

    +ith high interest earnings o# a #i*ed deposit +hich is achie"ed throgh a #i*ed%deposit

    linked to the sa"ings accont' The !alance in this accont is ne"er idle' 9i*ed deposit/s

    #rom the srpls #nds in yor sa"ings !ank accont s!ect to a minimm !alance as

    stiplated !y a !ank is created in mltiples o# sms stiplated !y the !ank #or tenre o#

    one year or more as instrcted and pro"ides ma*imm retrns' The accont also

    pro"ides ma*imm li@idity' ll linked #i*ed deposits are ena!led #or atomatic re"erse

    s+eep in mltiples as stiplated !y the particlar !ank on a last%in%#irst%ot /4I9-

    !asis +hen the !alance in the sa"ings accont #alls !elo+ the speci#ied minimm sm'

    This +ay the amont that is re"ersed earns interest rates applica!le #or the period that

    the deposit +as held +ith the !ank' 9eatres "ary across !anks and also depend on the

    !ankAs relationship +ith the corporate client' Ser"ice ta* at 12'36 per cent is applica!le

    on #acilities o##ered +ith this accont'

    Miscellaneous &ccountscater to di##erent target grops !y !ndling #eatres likeC

    5ri"ilege !ankingC o##ers additional ser"ices #or a #ee or on maintaining higher minimm

    !alance

    hildrenAs ccontC targeted at children, they can operate this accont !ased on pre%set

    conditions !y the parent or gardian

    ccont #or ;omenC Targeted at +omen +ith special #eatres sch as pri"ilege cardsand special disconts

    Senior iti:en ccontC imed at those a!o"e 60 years, the accont o##ers access to

    special conters in the !ank !ranch !esides additional interest on deposits and lo+ or

    no minimm !alance maintenance re@irements

    'ow to open an &ccount

    -nce yo ha"e selected the !ank to open an accont yo +ill need the #ollo+ing

    docmentsC

    F n accont opening #orm +hich the !ank +ill pro"ideF T+o passport si:e photographs

    F ddress and identity proo# sch as copy o# the passport, 57 /permanent accont

    nm!er card or declaration in #orm 7o 60 or 61 as per the Income Ta* ct 1&61, dri"ing

    license, "oterAs ID or ration card

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    F arry original identity proo# #or "eri#ication at the time o# accont opening

    F These days, yo can also also open an online accont +ithot "isiting the !ank !ranch

    'ow to operate an &ccount%

    >o need a pay%in slip +ith the initial accont opening sm to !e credited into yor

    accont' >o get a sa"ing !ank pass!ook +ith yor photo a##i*ed stating the nominee'

    ?o+e"er, some !anks, especially pri"ate and #oreign !anks do not isse a pass!ook and

    instead deli"er an accont statement' The Sa"ings !ank rles can also !e read in the

    pass!ook'

    1!pes of 1ransactions

    ash, he@e, Demand dra#t, =oney trans#er and (S

    The oint accont holders can gi"e any o# the #ollo+ing mandates #or the disposal o#

    !alance, +hich can !e modi#ied !y the consent o# all the accont holders'

    F (ither or Sr"i"orC I# the accont is held !y t+o indi"idals say, and B, the #inal

    !alance along +ith applica!le interest +ill !e paid to the sr"i"or on death o# any one o#

    the accont holders'

    F nyone or Sr"i"or/sC I# the accont is held !y more than t+o indi"idals say, , B

    and , the #inal !alance along +ith interest, i# applica!le, +ill !e paid to the sr"i"or on

    death o# any t+o accont holders'

    oints to onder

    F 5enalties +hen the !alance #alls !elo+ the minimm stiplated sm

    F 5enalty +hen che@es are retrnedF ollection #acilities o##ered and applica!le charges

    Details o# charges, i# any #or isse o# che@e !ooks and limits #i*ed on nm!er o#

    +ithdra+als and cash dra+ings

    Stockwire

    Do+n, !t not ot)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le

    opportunit% for investors

    http://www.valueresearchonline.com/story/archive.asp?sec=13http://www.valueresearchonline.com/story/archive.asp?sec=13
  • 8/10/2019 Market Wire

    13/19

    By Research Desk | g 30, 2013

    =arkets, at least in the short%term, are anything !t rational' In"estors, or rather

    speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing

    or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term aslong as the #ndamentals o# a company are intact'

    ;e ha"e a #e+ sch instances +hich ha"e

    +itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to

    enter the stock'

    1ata Coffee

    The company is the largest co##ee prodcer and e*porter o# India'

    rrent priceC R&3&

    )2%+eek high priceC R1,6.))2%+eek lo+ priceC R$$0

    Discont to )%year 5( /in GC 1)

    Reasons for Fall

    *The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al

    prices

    *o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes

    in 9>12

    *India

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    14/19

    )2%+eek high priceC R313

    )2%+eek lo+ priceC R200

    Discont to )%year 5( /in GC 1.

    Reasons for Fall

    *Increase in the import dty to $ per cent

    *The changes in gold importing norms dictate that all imports +ill ha"e to !e made on a

    cash margin

    *7o credit +ill !e allo+ed #or importing gold #or domestic se' This +old increase

    costs #or importing #or the company' The changes came de to a high demand #or gold

    +hich +as ad"ersely a##ecting India

  • 8/10/2019 Market Wire

    15/19

    largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#

    prodcts in the replacements market and +old psh its prodcts in di##erent

    geographies

    *The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and

    +ith more strength in de"eloping markets

    *7o+ e"en thogh pollo Tyres +ill ha"e greater reach, there are concerns that the

    com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not

    pay o## the principal' It remains to !e seen +hether pollo Tyres can cope +ith the ne+

    si:e and take ad"antage #rom the position

    Infos!s

    The company is one o# the #irst esta!lished and the second%largest IT company in the

    contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'

    rrent priceC R3,120

    )2%+eek high priceC R3,123

    )2%+eek lo+ priceC R2,1&0

    Discont to )%year 5( /in GC 10

    Reasons for Fall

    *In#osys has !een #acing margin pressres o"er the past #e+ @arters

    *5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0

    strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not st

    so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,companies +ere more intent on sa"ing +hat they had than on #rther e*pansion

    *The company +as also adamant to not chase lo+ margin contracts +hich at a time o#

    +eak discretionary IT spends came to hit the company hard' Its ri"al, TS, thogh did

    e*actly the opposite and :oomed ahead

    *The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share

    price reacted +ith a 21 per cent crash

    Reasons to )u!

    *Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the!oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell

    as !elo+ the 5( o# its competitors sch as ?4 Technologiesand TS+hich are at

    20')) and 28')$, respecti"ely

    *In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to

    get !ack on track' 9or instance, the company hiked employee salaries recently to

    http://www.valueresearchonline.com/stocks/snapshot.asp?code=1764http://www.valueresearchonline.com/stocks/snapshot.asp?code=6105http://www.valueresearchonline.com/stocks/snapshot.asp?code=15850http://www.valueresearchonline.com/stocks/snapshot.asp?code=1764http://www.valueresearchonline.com/stocks/snapshot.asp?code=6105http://www.valueresearchonline.com/stocks/snapshot.asp?code=15850
  • 8/10/2019 Market Wire

    16/19

    impro"e morale, redce attrition and retain the !est talent

    *5ricing in#le*i!ility, +hich cased it to lose proects to companies sch as ?4 and

    TS, is planned to !e recti#ied in the #tre

    Stockwire

    Do+n, !t not ot)ew stocks have witnessed e"cessive selling !ut ma% still offer a possi!le

    opportunit% for investors

    By Research Desk | g 30, 2013

    =arkets, at least in the short%term, are anything !t rational' In"estors, or rather

    speclators, go o"er!oard on !oth sides that is, either sending the share prices rocketing

    or a!soltely crashing a stock' Bt these anomalies tend to e"en ot in the long%term as

    long as the #ndamentals o# a company are intact'

    ;e ha"e a #e+ sch instances +hich ha"e

    +itnessed e*cessi"e selling !t may still o##er a possi!le opportnity #or in"estors to

    enter the stock'

    1ata Coffee

    The company is the largest co##ee prodcer and e*porter o# India'

    rrent priceC R&3&

    )2%+eek high priceC R1,6.)

    )2%+eek lo+ priceC R$$0

    Discont to )%year 5( /in GC 1)

    Reasons for Fall

    *The company #aced slo+do+n in 9>13 de to a #all in e*ports cased !y +eak glo!al

    prices

    *o##ee e*ports o# the company +ere 8,$31 tonnes in 9>13 as compared to ),.3) tonnes

    in 9>12

    *India

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    17/19

    Reasons to )u!

    *o##ee prices are e*pected to increase in the second hal# o# the year de to short

    spply' ietnam, a maor spplier o# ro!sta co##ee, is #acing droght and prodction is

    proected to !e lo+' =oreo"er, the Roya attack on co##ee trees in the entral merican

    region +ill also hamper spply

    *Tata co##ee e*ports primarily ro!sta green !eans and instant co##ee' There is an

    increasing demand #or instant co##ee, o# +hich ro!sta !eans are a large component

    1itan Industries

    Titan is India

  • 8/10/2019 Market Wire

    18/19

    rrent priceC R62

    )2%+eek high priceC R102

    )2%+eek lo+ priceC R2,1&0

    Discont to )%year 5( /in GC 2)

    Reasons for Fall

    *The company ac@ired S !ased ooper Tyres in a H2') !illion deal

    *The large de!t taken p #or the deal cased the share price to crm!le' In"estors #elt

    that the ac@isition may not pay o## as +as in the case o# Tata Steel, +hich is still

    strggling to cope +ith the montain o# de!t it took to ac@ire ors rop !ack in

    2006

    Reasons to )u!

    *7ot only the am!itios ac@isition +old make the com!ined entity the se"enth%

    largest tyre man#actrer in the +orld, it +old also gi"e the company a +ider range o#

    prodcts in the replacements market and +old psh its prodcts in di##erent

    geographies

    *The glo!al replacement market took a dip in 2012 !t is e*pected to gro+ this year and

    +ith more strength in de"eloping markets

    *7o+ e"en thogh pollo Tyres +ill ha"e greater reach, there are concerns that the

    com!ined cash #lo+ #rom the companies +ill !e a!le to pay o## the interest costs !t not

    pay o## the principal' It remains to !e seen +hether pollo Tyres can cope +ith the ne+

    si:e and take ad"antage #rom the positionInfos!s

    The company is one o# the #irst esta!lished and the second%largest IT company in the

    contry' ItAs still !elo+ its median 5( and cold o##er opportnities #or in"estment'

    rrent priceC R3,120

    )2%+eek high priceC R3,123

    )2%+eek lo+ priceC R2,1&0

    Discont to )%year 5( /in GC 10

    Reasons for Fall*In#osys has !een #acing margin pressres o"er the past #e+ @arters

    *5ro!lems #or the company started +hen it re"amped its !siness model +ith the 3'0

    strategy +hich meant #or it to pro"ide !siness trans#ormational soltions and not st

    so#t+are ser"ices' This thogh came at the +rong time as +ith the #inancial crisis,

    companies +ere more intent on sa"ing +hat they had than on #rther e*pansion

    http://www.valueresearchonline.com/stocks/snapshot.asp?code=1764http://www.valueresearchonline.com/stocks/snapshot.asp?code=1764
  • 8/10/2019 Market Wire

    19/19

    *The company +as also adamant to not chase lo+ margin contracts +hich at a time o#

    +eak discretionary IT spends came to hit the company hard' Its ri"al, TS, thogh did

    e*actly the opposite and :oomed ahead

    *The #inal stra+ +as dra+n +hen it missed its 2013 re"ene estimates and the share

    price reacted +ith a 21 per cent crash

    Reasons to )u!

    *Thogh the stock price reco"ered slightly +ith 7arayan =rthy coming !ack on the

    !oard, it is still trading at a 1) per cent discont to its )%year median 5( o# 20'. as +ell

    as !elo+ the 5( o# its competitors sch as ?4 Technologiesand TS+hich are at

    20')) and 28')$, respecti"ely

    *In#osys has #aced pro!lems +ith its !siness model !t it seems to !e taking steps to

    get !ack on track' 9or instance, the company hiked employee salaries recently to

    impro"e morale, redce attrition and retain the !est talent

    *5ricing in#le*i!ility, +hich cased it to lose proects to companies sch as ?4 and

    TS, is planned to !e recti#ied in the #tre

    http://www.valueresearchonline.com/stocks/snapshot.asp?code=6105http://www.valueresearchonline.com/stocks/snapshot.asp?code=15850http://www.valueresearchonline.com/stocks/snapshot.asp?code=6105http://www.valueresearchonline.com/stocks/snapshot.asp?code=15850