Indian stock market and companies daily report (February 28, 2012, Tuesday)

Analysis on markets today

Indian markets are expected to open in the red following the negative cues from the markets worldwide. The Asian markets which saw heavy selling in yesterday’s session have opened in red this morning.
The US markets staged a significant recovery after moving notably lower in early trading on Monday, eventually ending the session flat. Renewed concerns about the financial situation in Europe contributed to the initial weakness on Wall Street, with traders reacting negatively to a statement from the G20 finance ministers and central bank governors. Economic risks of European markets were in focus again during Monday's trading session. The continued rise in oil prices, due to the increasing tensions in the nuclear dispute with Iran, has investors concerned.
Meanwhile Indian shares hit a three-and-a-half week low on Monday as concerns that rising oil prices prompted investors to unwind long positions built up over the past few weeks. Further, the concerns over the political outcome post UP Assembly election results, to be declared next week too weighed down the markets.

Markets Today
The trend deciding level for the day is 17,601 / 5,333 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,820 – 18,194 / 5,398 – 5,515 levels. However, if NIFTY trades below 17,601 / 5,333 levels for the first half-an-hour of trade then it may correct up to 17,227 – 17,007 / 5,216 – 5,151 levels.

Bharti selects Infosys as technology partner for airtel money
Bharti Airtel (Bharti) has picked up Infosys as its partner for ‘airtel money’ – a mobile wallet service by a mobile operator. Under this partnership, Infosys WallEdgeTM – the mobile commerce platform of Infosys will enable the mobile wallet service to support cashless payment and settlement needs of diverse customer segments. FinacleTM Digital Commerce is at the core of this platform. It facilitates the creation of a unique ecosystem of card issuers, merchants, and financial and retail institutions to offer customers a wide spectrum of payment options for their transactions. This platform will enable ‘airtel money’ customers to pay bills, recharge accounts, shop at over 7,000+ merchant outlets and transact online through multiple channels, including mobile phones, IVR and ATMs.
Infosys WallEdgeTM platform is delivered through private cloud; it creates a comprehensive shared services framework that allows members of the ecosystem to process payment instructions seamlessly and cost efficiently. We continue to maintain our Neutral view on Bharti and Accumulate rating on Infosys with a target price of Rs.3,047.

BHEL bags order worth Rs.774cr
BHEL has bagged order worth Rs.774cr from ONGC. The company will supply six onshore drilling rigs to ONGC. Various problems on the business front, envisaged in many of our earlier notes, are coming to the fore for BHEL – including dismal order intake, no signs of let up in competition (domestic and international) and order book growth under threat (9MFY2012 revenue exceeds 9MFY2012 order inflow) – all of which put serious concerns over the company’s long-term growth. Although we believe that on the valuation front the stock is undemanding at PE multiple of <11x its FY2013E earnings, we believe earnings would face severe strain going ahead, given the structural issues. Hence, we continue to maintain our negative stance on BHEL.

Result Review
Goodyear India Ltd- 4QCY2011 and CY2011
Goodyear India Ltd. (Goodyear) reported revenue growth of 16% yoy to Rs.395cr in 4QCY2011 against our expectation of 30% growth to Rs.441cr. The company's annual sales stood at Rs.1,516cr, 3% lower than our estimate of Rs.1,562cr for CY2011. Higher raw-material costs were offset by the decline in other expenses, resulting in EBITDA margin increasing marginally by 7bp to 8.7% in 4QCY2011 from 8.6% in 4QCY2010. For CY2011, EBITDA margin declined by 130bp yoy to 7.4% from 8.7% in CY2010 on account of higher raw-material costs and employee expenses. Net profit for 4QCY2011 stood at Rs.20cr, 10% lower yoy and 9% lower than our estimate of Rs.22cr.
As we roll over to CY2013E, we have revised our target price upwards to Rs.484, based on a target PE of 8x its CY2013E earnings with a Buy rating on the stock.

Result Preview
Bosch – 4QCY2011
Bosch is slated to announce its 4QCY2011 results. We expect the company’s revenue to post 10% yoy growth to Rs.1,930cr. On the operating front, the company is expected to post a 140bp yoy expansion in its operating margin to 17.8%. Hence, net profit is expected to register a 9% yoy increase to Rs.230cr. The stock rating is under review.

Economic and Political News
- Power Ministry moves cabinet note for duty on equipment imports
- Pvt. Firms may be allowed to bid for intra-state power transmission projects
- Govt. wont auction all 2G Band at one go

Corporate News
- Infosys not to get SEZ status: Mamata
- Investors of Sterlite, Sesa resist merger
- GVK in talks with UK’s BG to sell deep-water block stake

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