Mashtishk 2010

DAY I News Updates
Macro-Economy & Forex news: Utopia
The GDP growth forecasts envisage a 9.8% rise in current FY 2010. WPI inflation may be above 4.5% by mid- FY, comfortably exceeding the Central Bank's 3% medium term target, as higher food and fuel price inflation eventually push the headline rate up. Utopian domestic oil prices have remained unchanged since February when the oil price has jumped by nearly 60% to around USD 90. During the last 6 months UTP is up 12% against the dollar. The US fed rates have gone up and the central bank has also increased rates by 25 bps in its latest credit review. The Central Bank may raise CRR by 50bp and is unlikely to be the last increment to contain inflation. With rising global rates and strong credit momentum, central bank has been in favor of rising interest rates and tighter SEC disclosed that it is considering proposals for an OTC market for derivatives. This is an encouraging proposal and will increase the depth of Utopian markets and increase participation. The government has liberalized the rules for foreign companies to raise money from the Indian capital market by issuing Utopian Depository receipts. The government is set to bring three mass use drugs under price control, anti-inflammatory pill nimesulide, allergy medication cetrizine and anti-ulcer drug omeprazole. The government will shortly issue guidelines on application of FBT on stock options. Utopia is poised to embark on a new Capex cycle as its capacities are operating at a near full level. This infrastructure spend will have a positive feed through in many rela ted sectors. Government is conducting talks on implementing full convertibility of UTP. Utopia has further opened up the telecom sector with FDI investments limit raised to 62% Equity & 0ptions News
Cleartech Limited (CTH):
IT sector is clearly outperforming the broader index on account its growth prospects and improved operating margins. Cleartech has recently bagged an order from Genesis Bank, Germany worth $200mn for application maintenance. The only concern for Cleartech is that it continues to be volume driven with very little improvement in pricing. This is mainly due to its dependence on existing clients for new business and its pursuit of larger deals that always suppress pricing. EBITDA margins have slightly gone up to 32.3% from 30.8% 2last year which is still far superior to its peer average of 28.6%. Cleartech continues to be ahead of peers in client mining - It has revenue per client of $4.7mn compared to an average of $3.6mn for the other top 3 IT firms. Following their American counterparts, some of the bigger European consulting and IT service companies like Leos Origin, Capsignify, FlipTech are starting off global delivery centres in Utopia to capture the benefits of offshore development. This poses severe competition Dreamz Home Ltd (DHL):
Northern Expressway JV Project - This is a slum rehab project with saleable area of 18m sqft a mix of office, retail, residential and hotel space spread across 127acres. This was earlier 8m sqft spread over 97acres, the scope of which has been increased. Rehabilitation for phase I has begun, management is targeting to complete entire project in 8-10 yrs. PE Investment by VG - VG (Private Equity) is considering to invest in the Nariman More land in Dwarka - Dreamz Home Ltd's JV has options to develop 40-50 msqft in Heavy Engineering Ltd (HEL):
The sudden surge in prices of base raw materials such as steel, aluminium, cement affected the company's margin/operations, despite most contracts having a built-in price escalation clause. Some of the projects executed by HEL are running late. The company has got orders worth UTP 20bn from Dwarka Metro Rail Corporation. The company is investing around UTP 5 bn for expansion in SushantLok, taking loan from Rely bank.
National Energy Ltd (NEL):
Venture with Heavy Equipment Ltd (H EqL) : National Energy Ltd's JV with HEqL would
focus on engineering, procurement and construction (EPC) of power plants for National Energy Equipment shortages : NEL is finding difficulty in placing orders for key plant and
machinery (boilers, turbines and generators - BTG) due to current surge in Electricity Generation Companies which are placing orders for the equipment. It could lead to inability to implement the projects on time. NEL's gas- based power plants are not being optimally operated on account of supply side constraints and pricing issues with respect to gas and liquid fuels. Rely Bank (REB):
Utopian banks seem to be the biggest beneficiary of the domestic economic upswing which not only drives robust business growth but also ensures lower NPL levels. Later this 3 rd quarter, Global liquidity concerns and high crude oil prices impacting inflation have increased the interest rate risk. The yield curves have flattened due to which contribution from liquid assets (especially bonds) could reduce substantially for banks. Rely bank seems to be well positioned with 75%-80% of loan book being floating rate and a third of their deposits being non-interest bearing. Analyst estimates says loan growth at 22% current fiscal year compared to 32% last year for Rely bank. Gross NPL remain s at 1.7% compared to 2% for other private sector banks. Interest spread stands at 2.6% compared the private bank average of 3.2%. Reach Tele (RTL):
Reach Tele has recently diluted 5% of its stake to a Russian PE fund at UTP 700 crores to meet its capital expansion plans. The company plans to cover 1000 towns by mid 2010. The FY 09Q2 results have shown a 37% increase in revenues. Reach Tele launched its enterprise broadband services in the top 20 cities of the country. The Company continues to retain its leadership over ILD voice minutes and is adding more underwater networks to connect African countries. Telecom operators met to discuss about the possible sharing of towers to reduce redundant costs. US Telecom major Onephone has announced its desire to enter into Utopian markets in a tie-up with Khosla Group Steel Utopia Ltd (SUL):
The company is trying to buy a company much bigger than its turnover. If SUL will acquire the company through debt the leverage ratio of company will be very high. Wheel Auto (WAT):
Wheel Auto launched mini truck SAVE under the sub 1.5 tonne category in Q4 last year. The mini truck is already a running hit across the country which has taken the company's Q1 FY09 revenues soaring by 10% y-o-y outstripping the industry growth rate. Wheel Auto recently acquired a 21% stake in Hiscera Caraco, a Spanish bus and coach manufacturer which has presence across most of the EURO countries. It also entered into JV with Singapore's Mach Auto to manufacture pickup vehicles. Wheel Auto announced JV with Saupolo Co. to manufacture luxury buses and coaches for burgeoning bus markets in Utopia. The company has kicked off with its global sourcing strategy. Real Estate News
Amarnagar:
Bogged down by the infrastructure bottlenecks, ClearTech is looking beyond Amarnagar, the IT hub of the country. Chairman and chief mentor of ClearTech Pankaj Gupta stated that Sushant Lok would overtake Amar Nagar soon. Dreamz Home Ltd has bagged the tender to develop 'New Amarnagar City, at Badid 20 km away from Amarnagar Budgebal:
Exports from Budgebal crossed the $1-billion mark for the first time in FY08. The target for the current year has been fixed at $1.55 billion. Budgebal is emerging as one of the fastest growing manufacturing centers in the country. The city has also witnessed several shopping malls in vibrant locations like Ramada, Gunjatta, RP Road. Leading brand names across segments such as food and grocery, apparel, footwear, music and entertainment and cafes have their presence. ClearTech's plans of setting up its largest campus in Budgebal have hit a snag because a part of the land given to it by the government had already been allotted to another company by a predecessor regime. UTP 12 billion 120 Km 6 lane highway between Telgaon (Dwarka) and Hashiar (Near Sushant Lok) got the state nod and this will be completed in 3 years. The Northern Express Highway stretching from Budh Vihar to Hathipur will be extended to Adnagar. The SEZ proposed at Ratpur is facing problem in land acquisition, the farmers are demanding more compensation and the situation is worsening day by day. Nariman:
Nath Developers (Real Estate Company) along with Metro Rail Corporation envisages construction of eight malls along the metro rail. The SRC group (Real Estate Company) has plans to construct shopping malls in Rameshwari Garden, ShamBagh and Hyder Pass. They are perfectly located for commercial and retail prospects, a business premises parallel with international trends that meets world-class standards. The higher end housing projects have also taken off in the city. DHL has launched its most ambitious luxury housing project Land Reforms & Tenancy Act bars non-agriculturists from buying agricultural land. Only native can buy, sell or invest in Palem's real estate. However after modification outsiders can purchase commercial property up to 500 square meters in urban areas and acquire residential property on 99 years leasehold basis.
Seagarh:
State Government is planning to establish SEZ for manufacturing in Seagarh. The Tourism Association of Seagarh is opposing it. The Hotel India Limited is planning a sea resort at Seagarh which will be there third venture at Seagarh. Seichur:
The Shaitan based Lulu International Shopping Mall group is setting a mall in India at Seichur. MA Harman , managing director of the group, said the proposed mall to come up at an investment of UTP 12 billion, will be spread over 17 acres with a built-up area of 2 million sft. The mall will become operational in 3 years. Utopia- Bahmas (Country) trade is expected to grow to $10 billion by 2010 from the current level of $3.5 billion, said Gio Mbato, Secretary-General of the Utopia-Bahmas Chamber of Commerce and Industry here on Tuesday. Exports to Bahmas include spices, seafood, textiles, coffee and tea. Utopia's pioneer of low-cost carriers Hrithik Mallaya is in talks with Seichur Airport Limited Sushant Lok:
BoxWagon is considering SushantLok as a destination for their car manufacturing plant. Lodas Group is planning a Premium Residential Colony at the outskirts of SushantLok. The electricity problem at SushantLok has forced manufacturing companies to look for

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