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.

Apr-Oct fiscal deficit at $52.7 billion -

Apr-Oct fiscal deficit at $52.7 billion -

NEW DELHI - India's fiscal deficit for April to October was 2.45 trillion rupees ($52.7 billion), or 61 percent of the full-year target, the government said in a statement on Monday.

Tax receipts were 2.14 trillion rupees and total expenditure was 5.37 trillion rupees for the first seven months of 2009/10 fiscal year.

In July, the government forecast a fiscal deficit of 4 trillion rupees, or 6.8 percent of gross domestic product, for 2009/10 (April/March).

Dubai govt won't back Dubai World debts -

Dubai govt won't back Dubai World debts -
DUBAI - The Dubai government will not guarantee Dubai World's debts, and creditors will be affected in "the short term" by the conglomerate's restructuring, a top Dubai government official said on Monday.

Abdulrahman al-Saleh, director general of Dubai's department of finance, also said market reaction to Dubai World's announcement last week was exaggerated and did not match the extent of the conglomerate's woes.

"I think banks are not at a stage where they need any extra liquidity from the central bank," he said on Dubai TV.

"Creditors need to take part of the responsibility for their decision to lend to the companies. They think Dubai World is part of the goverment, which is not correct."

Conglomerate Dubai World asked creditors last week to delay repayment of billions in debt for itself and property developer Nakheel for six months as it restructured operations. The shock announcement initially sent global markets slumping.

RBI deputy: Economic recovery gaining

NEW DELHI - The recovery of the Indian economy was gaining strength but December quarter numbers could be lower than the 7.9 percent annual growth recorded in the September quarter, a Reserve Bank deputy governor said on Monday.

Subir Gokarn also said food price inflation was a matter of concern and authorities would keep a watch on capital inflows.

Government data showed on Monday the economy grew by 7.9 percent in the quarter through September from a year earlier, shattering market forecasts as stimulus measures boosted demand and manufacturing activity surged.

"While it is a recovery and it seems to be gaining strength, we should not ignore the fact that it is still being driven substantially by public spending," Gokarn told reporters.

GVK Power unit buys 12 pct in Bangalore Int

MUMBAI - GVK Power and Infrastructure Ltd said on Thursday its unit GVK Airport Developers Pvt Ltd had bought a 12 percent stake in Bangalore International Airport Ltd for 4.85 billion rupees.

The stake buy is from Flughafen Zuerich AG, it said in a statement to the exchange.

The company further said it has entered into a strategic pact with Unique Airports Worlwide AG (Zurich Airport) for new airport projects in the Indian sub-continent.

Infosys chairman's wife sells shares worth $92

BANGALORE - Infosys Technologies, India's second-largest software exporter, said on Thursday its chairman's wife sold company shares worth 4.30 billion rupees ($92 million) for setting up a venture capital fund.

Separately, Nasdaq-listed Infosys said its Chief Executive Kris Gopalakrishnan purchased 400,000 company shares from the market on Thursday for 866 million rupees, taking his total holding to 6.7 million shares.

Sudha Murthy, wife of Infosys co-founder and chief mentor N.R. Narayana Murthy, sold 2 million shares, or about 22 percent of her total holding, on the Bombay Stock Exchange on Thursday, the company said in a filing.

Last month, Narayana Murthy, who co-founded Infosys with six other software engineers including Gopalakrishnan in 1981 with $250, had sold a total of 800,000 shares worth $37 million to set up a venture capital fund which he plans to set up in India.

The company said the Murthys have confirmed they did not plan to raise further capital for the fund.

Infosys shares ended down 0.7 percent at 2,223.10 rupees in a Mumbai market that rose nearly 1 percent. The stock had fallen as much as 3.7 percent during the day on a trading volume at 2.2 million shares, nearly 13 times its 90-day average volume.

Tata Chem to commission plant in June


KOLKATA -Tata Chemicals Ltd expects its fertiliser plant at Babrala in Uttar Pradesh to start commercial production by the middle of next year, a senior official said on Thursday.

"The construction is under progress and we have placed orders for all the equipment. The plant will start commercial production by the end of June 2010," Kapil Mehan, executive director told reporters.

The total capacity of the plant will be 1,30,000 tonnes per annum, and the company has invested around 500 million rupees in the project, he said.

The company expects its total urea production to increase by 11 percent to 2 million tonnes in FY10, compared with 1.8 million tonnes a year ago, Mehan said.

Tata Chemicals expects its margins to improve in the coming quarters as demand for fertilisers is recovering, he said.

"Consumption of fertiliser in the khariff season was lower compared to last year, but we expect it to go up by 4-5 percent in the rabi season," he said.

Tata Steel India ops Oct sales up 38 pct

NEW DELHI - Tata Steel Ltd, the world's No. 8 steelmaker by output, said on Friday steel sales at its Indian operations rose 38 percent in October from a year earlier to 462,000 tonnes.

The Indian operations contribute about a quarter of the group's total annual global capacity of 30 million tonnes, which includes Corus, Europe's second-largest steelmaker.

Saleable steel production in October rose by 27 percent from a year earlier to 570,000 tonnes and crude steel production gained 22 percent to 599,000 tonnes, the company said.

Aurobindo Pharma gets US nod for seizure

MUMBAI - Aurobindo Pharma Ltd said on Friday it secured final approval from the U.S. Food and Drug Administration for Lamotrigine tablets, used in the treatment of partial and generalised seizures.

The drug is the generic equivalent of Lamictal CD tablets, a brand of GlaxoSmithkline, it said in a statement to the BSE.