Indian Auto Ancilleries Industries Report

Indian Auto Ancilleries Industries Report

HIND DORR OLIVER

HIND DORR OLIVER

Projected price – Rs.225 plus

Hindustan Dorr Oliver (HDO) is an EPC company primarily focussed on providing engineered solutions, technologies, and EPC installations in liquid-solid separation applications. HDO has, over decades, positioned itself as a dynamic component engineering company, with superior technologies to emerge among leading process equipment and plant engineering companies in India. With engineering skills across the entire spectrum of services, HDO is engaged in research and development of new products, processes and technologies to design, construct, install, erect, and commission systems on complete EPC basis.

Its expertise lies in providing turnkey solutions and Engineering Procurement and Construction (EPC) services in liquid solid separation applications in industries such as mineral processing, fertilizer and chemical and environmental management.

The strong brand equity enjoyed by the parent company (IVRCL) in terms of its track record and presence across infrastructure segments has helped HDOL tap its esteemed client base. The enhanced financial strength has helped HDOL to bid for big ticket size projects which have better yields.

The company has in-house engineering strength and construction division supported by the manufacturing facility at Vatva, Ahmedabad for proprietory equipments. The facility is capable of manufacturing all types of industrial filters for pulp and paper industry, sugar industry, chemical industry and minerals industry. It also fabricates equipments like pressure vessels, heat exchangers etc. for petrochemical refineries and process industries.

The company is currently setting up a manufacturing facility in Chennai for which it has identified land. It is also looking at several other opportunities in coal washeries, iron ore beneficiation, pelletisation plants and nuclear power.

HDOL made a major breakthrough by winning an order worth Rs.441 crore from the Uranium Corporation of India (UCI) for a processing plant in FY’09. It recently received board approval to execute projects relating to nuclear power plants and allied activities. This segment, together with new areas such as equipment for material handling and components for oil and gas space, could be the new driver of revenue going forward.

The current order book of over Rs 1,600 crore can be expected to be executed over the next 18-24 months and around 70% of the orders are from government. This order book is 3x FY’09 revenues of Rs. 513 crore.

BUYING IS ADVISED FOR MEDIUM TERM. LONG TERM INVESTORS WITH 18-24 MONTHS TIME FRAME CAN EXPECT A 100% RETURN.

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Iran offers 40 pct stake to Indian cos in gas

Iran offers 40 pct stake to Indian cos in gas

NEW DELHI - Iran has offered Indian firms a 40 percent interest in the development phase of its largest gas field in return for six million tonnes of liquefied natural gas (LNG), the managing director of National Iranian Oil Co said on Tuesday.

With Western firms wary of investing in the Islamic state due to its nuclear row with the United States, Tehran has increasingly been looking towards energy-hungry Asian countries for investment to help exploit its vast gas and oil reserves.

State-run Oil and Natural Gas Corp and Hinduja Group would own 20 percent interest each in South Pars Phase 12 project, Seifollah Jashnsaz told reporters after a second day of talks with Indian companies on investments in Iran.

South Pars, the world's largest reservoir of gas, is shared by Iran and Qatar. The Iranian part is divided into 24 phases.

Jashnsaz said ONGC, Hinduja Group and India's Petronet LNG would buy a stake in Iran LNG Co.

The investment in both South Pars development and Iran LNG would allow India to receive up to 6 million tonnes of LNG every year, Jashnsaz said, adding development of South Pars Phase 12 would cost $7.5 billion.

The deal has to be cleared by their respective governments.

SANCTIONS

Iran has the world's second largest gas reserves, almost 16 percent of the world's total, but currently has no major net exports partly because U.S. and U.N. sanctions have deterred investment by Western firms with expertise and technology.

Analysts say it lacks the technology to develop LNG terminals.

ONGC chairman R. S. Sharma said NIOC subsidiary NAFTIRAN

Intertrade Co will deposit funds with Indian banks that could serve us collateral and help Indian firms raise money for investment in Iranian assets.

"Another option is that payments to be made by Indian refiners for crude purchases can also be used as collateral.. Details have to be firmed up," he said, adding India imported 23 million tonnes of crude in the last financial year from Iran.

He said the deals will be finalised after obtaining government approvals by both countries.

Jashnsaz also said that Iran has agreed to give development rights for Farsi offshore block to Indian firms - ONGC, Indian Oil Corp and Oil India Ltd.

He said next round of talks between India, Pakistan and Iran on transnational pipeline will be held this month in New Delhi.

"Next week India will specify the date of negotiation and we will restart negotiation in New Delhi. It will be three-angle meeting with India, Pakistan and Iran," he said

World Bank loans to India seen at $7 billion this year

World Bank loans to India seen at $7 billion this year

NEW DELHI - The World Bank has committed to increase its lending to India to about $7 billion this year from an average $2.3 billion in the previous four years, the finance ministry said in a statement.

India has also sought early completion of the process of voice and quota reforms at the World Bank to increase the representation of emerging and developing countries, the ministry said.

World Bank President Robert Zoellick met Finance Minister Pranab Mukherjee in the Indian capital on Wednesday.

In September, the World Bank approved $4.3 billion in loans for India to help finance infrastructure building and to shore up the capital of some state-run banks as the economy recovers from the global financial crisis.

The loans are part of the bank's $14 billion lending for Asia's third-largest economy over three years through 2012.

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Oct exports down 6.6 pct

Oct exports down 6.6 pct

NEW DELHI - India's exports fell an annual 6.6 percent in October to $13.19 billion, their 13th straight monthly fall, the government said on Tuesday.

Imports dropped 15 percent from a year earlier to $22 billion.

The trade deficit shrunk to $8.8 billion in October from $11.74 billion a year earlier.

Exports for April-October, the first seven months of the 2009/10 fiscal year, were down 26 percent at $91.05 billion from the same period in the previous year.

India oks $984 mln of foreign investment plans

India oks $984 mln of foreign investment plans

NEW DELHI – The government said on Tuesday it approved 17 foreign direct investment proposals worth 45.51 billion rupees ($984 million), but rejected a tie-up between Europe's EADS and India's top engineering firm Larsen & Toubro.

The statement issued by the Foreign Investment Promotion Board (FIPB), the nodal agency that clears foreign investment proposals, gave no reason for the rejection to set up a manufacturing joint venture for defence equipment by the firms.

The government approved plans by the local telecoms arm of Russia's Sistema to receive 30.51 billion rupees as foreign investment, the statement said.

The agency has sought the cabinet committee approval for Alstrom's proposal to set up a joint-venture company with a foreign investment of 4.9 billion rupees, as the project cost exceeded a regulatory limit of 6 billion rupees.

Pepsico Inc's plans to infuse 9.28 billion rupees of foreign equity to its India arm was also referred to the cabinet committee, the statement added.

Inflation due to food items shortage

Inflation due to food items shortage



NEW DELHI - The current trend in inflation in India is a result of a shortage of food items and not due to a demand-push factor, Finance Minister Pranab Mukherjee told parliament on Tuesday.

The food articles index rose an annual 15.6 percent as at Nov. 14, up from the previous week's 14.6 percent rise. The weakest monsoon since 1972 and then floods in parts of the country have hurt farm output and pushed up food prices.