Vornado, RIL team up for shopping centres
August 15, 2008,
The US-based real estate investment trust Vornado Realty Trust has announced an equal joint venture with the Mukesh Ambani-led Reliance Industries to acquire, develop and operate shopping malls in India. Both partners will invest $250 million (nearly Rs 1,000 crore) each in the JV.
“The shopping centers, spread over 5,00,000 to 10 lakh square feet or more, will be anchored by a hypermarket owned and operated by Reliance,” Vornado said.
The JV is expected to boost the expansion plans of RIL’s retail venture Reliance Retail, which operates 700 multiple-format stores across 60 cities, encompassing 3.5 million sqft.
Reliance Retail has announced ambitious plans to the tune of Rs 25,000 crore. The retailer runs neighbourhood store Reliance Fresh, consumer durable chain Reliance Digital, hypermarket chain Reliance Mart, apparel chain Reliance Trends and footwear chain Reliance Footprint.
The New York Stock Exchange-listed Vornado already has an exposure to the Indian realty market. The company has an aggregate investment nearing $91 million and capital commitments of $92 million in joint ventures across the country. Vornado Realty Fund, an integrated real estate investment trust, owns over 100 million sq ft of office, retail and other properties in the US.
Retail rentals have doubled in most premium locations across Mumbai, Delhi and Bangalore in the last three years. Retailers have been hit hard due to the soaring realty prices, delays in getting properties and reduction in footfalls.
In a bid to counter this, most retailers have floated their own funds that invest in shopping malls or formed JVs to invest in real estate.
Future Group, which houses India’s largest retailer Pantaloons, has floated Kshitij realty fund that invests in the group’s shopping malls. Tata’s retail arm Trent has tied up with private equity firm The Xander Group to float a retail real estate fund, while Aditya Birla Retail, formed by AV Birla group, has plans to float a retail real estate fund.
The domestic retail market that is currently valued at $511 billion, is projected to grow to $833 billion in the next five years. Organised retail is expected to grow by 40 per cent every year to $107 billion by 2013, according to retail consultancy AT Kearney.
Property consultancy CB Richard Ellis sees a likelihood of nearly 100 million sq ft retail property being developed. Some of the biggest shopping centre developers and investors have started their operations in the country. South Africa’s Old Mutual Property Investments, the UK’s Liberty International, Israel’s Plaza Centres and Metro Junction have announced plans in the country.
Analysts are however concerned about an impending oversupply of space in the retail sector. “Over-supply and saturation may result in correction of rentals in certain pockets and micro-markets in the short to medium-term,’’ said a report from property consultancy CB Richard Ellis.
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Friday, August 15, 2008
Saturday, August 9, 2008
JP Associates
AnandRathi puts 'buy' on JP Associates; target Rs 232
6 Aug, 2008,
AnandRathi has advised buying Jaiprakash Associates at around the current price for a target of Rs 232 and a stop loss of Rs 168.
JP Associates, after a descent consolidation exhibits a trend reversal, rise in RSI from over sold zone indicates a medium term buy.
Based on the chart pattern developed to date, the stock is likely to get support around Rs.170.
The brokerage suggests accumulating more if the stock comes close to the support level. If it moves above Rs 232 level then it can even touch Rs 254 levels.
6 Aug, 2008,
AnandRathi has advised buying Jaiprakash Associates at around the current price for a target of Rs 232 and a stop loss of Rs 168.
JP Associates, after a descent consolidation exhibits a trend reversal, rise in RSI from over sold zone indicates a medium term buy.
Based on the chart pattern developed to date, the stock is likely to get support around Rs.170.
The brokerage suggests accumulating more if the stock comes close to the support level. If it moves above Rs 232 level then it can even touch Rs 254 levels.
Wednesday, August 6, 2008
HPCL
ICICI Securities maintains a 'buy' on HPCL
6 Aug, 2008
CMP: Rs 234.20
Target price: NA
ICICI Securities has maintained a ‘buy’ rating on HPCL even after the company reported a recurring loss of Rs 880 crore in the first quarter of the current financial year due to lower than expected subsidy support from the government and upstream companies.
The brokerage expects subsidy support to increase over the year as the government has not yet accounted for the Rs 40,000 crore unallocated burden. “Though we continue to believe that the stock may remain subdued in the short term till the government decides the final subsidy burden-sharing formula, the company is trading at a significant discount to the replacement value of its asset,” says the report.
The brokerage also highlights the fact that risks of further increase in interest costs along with expectations of a fall in refining margins could potentially impact earnings. Positive surprise, however, on higher subsidy sharing by upstream companies and oil bonds could be a boost to stock prices, it adds.
Positive news on the E&P front and implementation of subsidy reforms recommended by the Rangarajan Committee could trigger re-rating in the stock, says the report.
6 Aug, 2008
CMP: Rs 234.20
Target price: NA
ICICI Securities has maintained a ‘buy’ rating on HPCL even after the company reported a recurring loss of Rs 880 crore in the first quarter of the current financial year due to lower than expected subsidy support from the government and upstream companies.
The brokerage expects subsidy support to increase over the year as the government has not yet accounted for the Rs 40,000 crore unallocated burden. “Though we continue to believe that the stock may remain subdued in the short term till the government decides the final subsidy burden-sharing formula, the company is trading at a significant discount to the replacement value of its asset,” says the report.
The brokerage also highlights the fact that risks of further increase in interest costs along with expectations of a fall in refining margins could potentially impact earnings. Positive surprise, however, on higher subsidy sharing by upstream companies and oil bonds could be a boost to stock prices, it adds.
Positive news on the E&P front and implementation of subsidy reforms recommended by the Rangarajan Committee could trigger re-rating in the stock, says the report.
Tuesday, July 29, 2008
RBI hiked CRR
Interest rates set to harden: BankersPosted online: Tuesday , July 29, 2008
Bankers on Tuesday said both lending and deposit rates are likely to go up by a minimum of 0.5 per cent, as a fall out of Reserve Bank announcing a hike in short-term lending rate and cash reserve requirement of banks.
"We have to assess what is the actual impact and a decision would be taken accordingly. A minimum 0.5 per cent hike in our BPLR and deposit rates cannot be ruled out," state-owned Punjab National Bank's Chairman and Managing Director K C Chakarabarty said in Mumbai.
Announcing the quarterly review of credit policy, RBI hiked CRR by 0.25 per cent to 9 per cent and Repo by 0.5 per cent to 9 per cent.
Union Bank of India's Chirman and Managing Director M V Nair said the bank's Asset Liability Committee (ALCO) would look at the liquidity condition of the bank after the hike.
The lender is likely to up its BPLR, Nair said, but did not say what would be the range of revision. "Our ALCO will meet soon to assess the impact. There is a clear pressure on the profitability of banks after the present hikes in RBI key-rates. We may revise our BPLR upwards," Nair said.
Bankers on Tuesday said both lending and deposit rates are likely to go up by a minimum of 0.5 per cent, as a fall out of Reserve Bank announcing a hike in short-term lending rate and cash reserve requirement of banks.
"We have to assess what is the actual impact and a decision would be taken accordingly. A minimum 0.5 per cent hike in our BPLR and deposit rates cannot be ruled out," state-owned Punjab National Bank's Chairman and Managing Director K C Chakarabarty said in Mumbai.
Announcing the quarterly review of credit policy, RBI hiked CRR by 0.25 per cent to 9 per cent and Repo by 0.5 per cent to 9 per cent.
Union Bank of India's Chirman and Managing Director M V Nair said the bank's Asset Liability Committee (ALCO) would look at the liquidity condition of the bank after the hike.
The lender is likely to up its BPLR, Nair said, but did not say what would be the range of revision. "Our ALCO will meet soon to assess the impact. There is a clear pressure on the profitability of banks after the present hikes in RBI key-rates. We may revise our BPLR upwards," Nair said.
Friday, July 18, 2008
Bharti Airtel
Buy Bharti Airtel for target Rs 1,150: Religare
29 Jul, 2008
MUMBAI: Religare Research has maintained ‘buy’ on Bharti Airtel for a target price of Rs 1,150. The company has released a good set of numbers in April-June 2008-09, ahead of the brokerage estimates. Strong subscriber additions in conjunction with higher mobile traffic from existing and new clients supported a revenue growth of 8.5 per cent quarter on quarter.
A decrease in STD rates and roaming charges boosted mobile traffic volumes but caused margins in the segment to decline. In a further dampener to mobile margins, the licence fee concession period in six circles expired during the quarter, elevating licence costs. However, average revenue per user in the mobile segment bettered Religare’s estimate of Rs 350, a marginal decline of 2 per cent quarter on quarter against their expectation of a 5.2 per cent decline.
Religare has revised their ARPU assumption since the gestation period for rural customers is proving to be lower than anticipated, with traffic picking up at a rapid pace. The brokerage has increased their revenue and earnings estimates for 2008-09 and 2009-10 based on strong subscriber additions and their revised ARPU assumptions.
The stock is trading at 16.8x and 13.8x expected FY09 and FY10 earnings of Rs 47.4 and Rs 57.7 respectively.
29 Jul, 2008
MUMBAI: Religare Research has maintained ‘buy’ on Bharti Airtel for a target price of Rs 1,150. The company has released a good set of numbers in April-June 2008-09, ahead of the brokerage estimates. Strong subscriber additions in conjunction with higher mobile traffic from existing and new clients supported a revenue growth of 8.5 per cent quarter on quarter.
A decrease in STD rates and roaming charges boosted mobile traffic volumes but caused margins in the segment to decline. In a further dampener to mobile margins, the licence fee concession period in six circles expired during the quarter, elevating licence costs. However, average revenue per user in the mobile segment bettered Religare’s estimate of Rs 350, a marginal decline of 2 per cent quarter on quarter against their expectation of a 5.2 per cent decline.
Religare has revised their ARPU assumption since the gestation period for rural customers is proving to be lower than anticipated, with traffic picking up at a rapid pace. The brokerage has increased their revenue and earnings estimates for 2008-09 and 2009-10 based on strong subscriber additions and their revised ARPU assumptions.
The stock is trading at 16.8x and 13.8x expected FY09 and FY10 earnings of Rs 47.4 and Rs 57.7 respectively.
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