Bajaj Auto stretches on robust monthly sales

Bajaj Auto advanced 2.81% to Rs 2,773.25 after its vehicle sales for August rose 11%, to 208,163 units from 186,802 units a year earlier.

The company said sales of motorcycles rose 21%, to 1,80,570 units from 1,49,415 and sales of all two-wheelers grew 11%, to 1,82,013 units against 1,64,020 units a year earlier.

Sales of three-wheelers climbed 15%, to 26,150 units from 22,782 units a year earlier. The company said exports jumped 36%, to 32,283 units from 23,752 units a year earlier.

The counter clocked a volume of 38,016 shares on BSE.

The stock has been on a steady up-trend on sustained buying interest. From Rs 2,459.65 on 21 July, it advanced to Rs 2,750.70 by 25 August 2006, as buying continued. Here, it began slipping till Rs 2,697.50 by 31 August 2006 on profit-booking.

The monthly sales are expected to pick-up on account of festival season in coming months.

The current price of Rs 2,773.25 discounts its Q1 June 2006 annualised EPS of Rs 107.90, by a PE multiple of 25.70.

Recently, Bajaj Auto signed an agreement with the Maharahstra Government for a greenfield project at Chakan, Pune, to manufacture a new range of three wheelers and four wheelers.

The commercial production at this plant is expected to commence by early 2009. The plant is being set up with a capacity of 5 lakh vehicles per annum.

The project will be the fifth plant of the company. It already has three plants in Pune, Aurangabad and Chakan in Maharashtra and is currently establishing its fourth plant at Pantnagar in Uttaranchal.

Analysts expect the Indian motorcycle sector to show strong growth in the coming years. The focus on the rural economy in the budget is positive for two wheeler companies, as 45%-50% of their sales are from the rural segment. Availability of finance, improved road infrastructure, rising incomes and favourable demographics will lead to higher penetration of motorcycles, analysts say. Meanwhile, replacement demand is also emerging as a strong growth driver.

Bajaj Auto reported 27.9% growth in Q1 June 2006 net profit to Rs 266.01 crore from Rs 207.95 crore. Sales rose 34.7% to Rs 2,202.66 crore (Rs 1,634.15 crore).

DCW wings up on mega capex plan

DCW spurted 14%, to Rs 13.80 after it lined up Rs 525 crore for expanding capacities and on plans for using by-products to augment the bottomline.

These are expected to be implemented by March 2008 in stages, beginning September 2007.

DCW plans to change its mercury cells into membrane cells which will increase the production from 60,000 to 1,00,000 of caustic soda per annum. It will also reduce consumption of electricity by over 30%, thus increasing the profitability substantially.

The company also plans to increase its synthetic rutile production from 30,000 tonnes to 60,000 tonnes.

A new iron oxide plant to produce yellow, red and black grades is being put up. This will be done either in-house or in joint venture (JV) with a foreign company. The capex for this project will cost Rs 125 crore.

The company's capital expenditure plan includes a Rs 150 crore FCCB offering over the next 18 months.

DCW plans to double soda ash capacity from 1 lakh to 2 lakh tonnes at an investment of Rs 200 crore. This plant shall become operational by end 2008.

The company derives majority of revenues from PVC resins while various chemicals including soda ash and caustic soda make up the balance.

source: capitalmarket

Foreign interest aids Crest Animation Studios

Crest Animation Studios advanced 2.10%, to Rs 126.90 after the firm said it will raise $ 8.7 million through an issue of shares to US-based DE Shaw, and another $ 15.75 million by selling 26% stake in a subsidiary.

As many as 2.64 lakh shares were traded in the counter on BSE.

The stock witnessed a solid surge in the past few trading sessions on strong buying. From Rs 91.75 on 21 August 2006, it surged to Rs 124.30 on 31 August, ahead of the announcement. The scrip surged 35.48% in just 8 trading sessions during this period.

Crest Animation Studios has agreed to an investment by the DE Shaw group. The proposed investment entails several distinct transactions representing an aggregate infusion of up to $40 million. The D E Shaw group will hold 14.99% of the company and up to 26% of Rich Crest Holdings Inc, the company's subsidiary.

In addition, the agreement sanctions O% coupon finance for production of animated feature films. This financing will help the company to emerge as one of the few 3-D CGI studios globally that is active in co-production of feature films with a major motion picture distributor.

RichCrest Animation Inc., located in Burbank, California, has entered into an agreement to co-produce three full-length 3-D animated feature films in joint venture with Lions Gate Inc., a leading movie distribution company in the US. The first of three feature films, titled "Sylvester and the Magic Pebble" has a planned release in 2008. The second movie project, titled "Alpha & Omega", is currently in the development stage, and is planned for release in 2009.

Specifically, the investment in the company is proposed to fund the ongoing expansion and upgradation of the company's 3-D animation facilities, and to meet the long term working capital requirements of the business. The investment in the subsidiary is to fund the requirements of RichCrest Animation Inc., which is actively involved in the 3D animated movies business.

The proposed investment will enable Crest and its subsidiaries to build a strong presence in the 3-D animation business worldwide, across television, DVD and feature films.

Crest Animations provides post-production services like film-to-tape transfer, electronic video editing, computer generated graphics, audio mixing. It provides special effects for Indian/Hollywood motion picture houses.

For the latest quarter ended 30 June 2006, the company posted net loss of Rs 3.29 crore as compared to a net profit of Rs 5.04 crore in the corresponding quarter of the previous year. Net sales declined 68.90% to Rs 1.92 crore (Rs 6.17 crore).

Venus Remedies springs on back of a block deal

Venus Remedies jumped 5.93%, to Rs 369 on a high volume, following a block deal on BSE. A deal for 1.77 lakh shares was struck in the counter on BSE at Rs 340 per share by 10:11 IST. The counter clocked a cumulative volume of 2.37 lakh shares on the BSE. The stock moved in a range of Rs 373 on the higher side and Rs 340 on the lower.

It has witnessed a steady rally in the past, on sustained buying momentum. >From Rs 290.75 on 07 August 2006, it surged to Rs 369.30 on 28 August, only to drop to Rs 348.25 by 31 August 2006 on profit-booking.

At the current market price of Rs 369, Venus Remedies trades at 12.55 times its Q1 June 2006 annualized EPS of Rs 29.39.

Recently, Venus Remedies announced that the Drug Controller General of India has granted approval to the company for launching its third R&D developed product, fixed dose combination drug Cephalosporin with an Amino-glycoside, after completion of its clinical trials. This product shall be launched for the first time in the world in India.

The company has already filed applications for worldwide protection of its patent rights.

In July, Venus Remedies had successfully filed the 5th international patent application for the latest antibiotic FDC developed by its R&D wing. The clinical trials for this product are under way and the company will be ready to launch the same in the domestic market worth approximately Rs 100 crore in 2007.

Venus Remedies in June entered into an in-licensing agreement for India and 10 Asia-Pacific countries with the University of Illinois, Chicago, US, for its patent on product for detection of tumours by imaging technology.

As per the agreement, the company has patent rights for 18 years to develop, manufacture, sell and sub-license products for diagnostic imaging technology to detect solid tumours in the human body. The product will be launched as an injectable. It makes detection of cancer, and observation of results during treatment, a relatively painless and an in-expensive procedure.

Earlier in April, Venus Remedies successfully completed the phase III clinical trials of the new formulation developed by its R&D wing. Excellent results were reported from all centres, where they were carried out. It now awaits DCGI's permission for the commercial launch of the new formulation.

Venus Remedies is a Chandigarh-based pharmaceutical company manufacturing super-specialty formulations.

Venus Remedies registered a net profit rise of 170%, to Rs 6.18 crore for Q1 June 2006 compared with Rs 2.29 crore in Q1 June 2005. Net sales during the period increased to Rs 31.86 crore from Rs 15.38 crore.

Strides Arcolab jumps on buying healthcare firm in Singapore

Strides Arcolab advanced 2.70%, to Rs 288.40 after it signed a share purchase agreement with Haw Par Healthcare, Singapore.

The agreement will help Strides Singapore Pte (an indirect wholly owned subsidiary of the company) to acquire 100% Drug Houses of Australia (Asia), Singapore (DHA), for approximately S$ 19.7 million.

As many as 31,748 shares changed hands in the counter on BSE.

The stock witnessed high volatility in the past few trading sessions. From Rs 302.70 on 14 August 2006, it slipped to Rs 281.95 by 23 August 2006 as selling continued. Here, it found some support and started moving higher and advanced to Rs 291.55 by 25 August 2006. Here, it again started declining to Rs 280.80 on 31 August 2006.

Established in 1969, DHA is the largest generics pharmaceutical manufacturer in Singapore. It is also an important pharma player in Malaysia and Hong Kong amongst other markets. For the financial year ended December 2005, DHA posted sales revenue of S$ 16.36 million and PAT of S$ 2.72 million.

DHA has a GMP certified manufacturing facility in Jurong, the industrial heartland of Singapore, with a range of pharmaceutical products. DHA is a wholly-owned subsidiary of Haw Par Healthcare (Haw Par Healthcare) and is a leading player of branded generic pharmaceutical products in Singapore with presence in Malaysia and Hong Kong. Strides Arcolab recently broadened its product supply arrangement to Europe with Australia's Mayne group. The Australian supply pact for six anti-infective products earlier covered only the US market.

According to the extended supply agreement, Strides supplies six injectable, non-cytotoxic products, which Mayne Pharma markets and distributes in the US and Europe. These products have an annual sales of over $1.1 billion.

The hospital market is only another focus area for Strides in Europe. At present, it has international tie-ups with Aspen South Africa, SORM of Japan and Akorn, USA.

Strides Arcolab is among the top five softgel capsule manufacturers with 12 plants spread across the US, Mexico, Brazil and India.

Its areas of focus are the regulated markets of US, Europe, Australia, New Zealand, South Africa and Japan.

In India, the company produces oral solid dosage forms, including tablets, soft and hard gelatin capsules and injectables with a separate facility for betalactams. The oral solids plant is rated amongst the best in the country. Strides Arcolab markets products in 50 countries.

Strides Arcolab reported a sharp 47% fall in net profit for Q2 June 2006 to Rs 4.88 crore (Rs 9.21 crore). Net sales rose 27.2% to Rs 100.14 crore (Rs 78.72 crore).

Source: Capitalmarket