Tata Global Beverages Q3 profit down to Rs.71.93 crores

Tata Global Beverages Ltd has announced the Audited financial results for the quarter ended December 31, 2010.

The Company has posted a profit after tax of Rs 471.50 million for the quarter ended December 31, 2010 as compared to Rs 367.50 million for the quarter ended December 31, 2009. Total Income has increased from Rs 4713.50 million for the quarter ended December 31, 2009 to Rs 5272.10 million for the quarter ended December 31, 2010.

The Group has posted consolidated net profit of Rs 719.30 million for the quarter ended December 31, 2010 as compared to Rs 922.30 million for the quarter ended December 31, 2009. Total Income has increased from Rs 15543.00 million for the quarter ended December 31, 2009 to Rs 16116.10 million for the quarter ended December 31, 2010.

The stock closed the day at Rs.100, down by Rs.5.60 or 5.30%. The stock hit an intraday high of Rs.106.45 and low of Rs.98.60.

The total traded quantity was 3.97 lakhs compared to 2 week average of 2.49 lakhs.

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Investment Philosophy of Rakesh Juhunjuhunwala

Although he claims to put only a minuscule of his networth on the table for trading activity, he has often leveraged his own capital and managed to make a fortune from his calls, more often than not. His stock picking strategy is influenced by the lessons from Mr George Soros's trading strategies and Dr Marc Faber's analysis of economic history. He endorses the thumb rule of 'trend is my best friend'.

He is the poster boy of the Indian bull run but admits to have been a bear in the Harshad Mehta days and believes that a person in the market should be like a chameleon. He calls the markets as temples of capitalism and believes that they are the ultimate arbitrators.

Much like Mr Warren Buffet, he buys into the business model of a company and for judging the longevity and growth potential, he gives top priority to 'competitive ability', 'scalability' and 'management quality' of the enterprise. The 'entrepreneur', according to Jhunjhunwala is what makes an invaluable difference to his expected investment returns. According to Jhunjhunwala, believing in the vision and the beliefs of the entrepreneur and validating the risks that may not be perceived by the entrepreneur are the key success factors for an investor.

Jhunjhunwala has managed to identify numerous multi-baggers in the past decade, notable being Karur Vysya Bank, Praj Industries, Crisil, Titan, Nagarjuna, HOEL and PSUs like BEML and Bharat Electronics, among others. The typical traits to look for while identifying potential multi-baggers, according to Jhunjhunwala are - low institutional holding, under-researched and general pessimism about the stock.

A good time to sell a stock, according to Jhunjhunwala, is not based on any 'price' targets, but when the 'earnings' expectations have peaked or the business model has peaked or the valuations appear ridiculously unreasonable.

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Midvalley Entertainment ends 17% lower on debut

Media and entertainment company Midvalley Entertainment started the first session on a positive note but rally fizzled out in last one hour of trade today. The stock settled at Rs 58.05, down 17% from issue price of Rs 70 a share on Bombay Stock Exchange.

It has touched an intraday high of Rs 76.50 and low of Rs 55. Traded volume was nearly four times to 3,38,71,723 equity shares as against issue size of 85,71,429 shares.

Chairman, Datuk K Keetheswaran said the company's net profit would grow by 12-15% in FY11. "We will open 200 screens by 2012," he said.

Midvalley is a film production, distribution and exhibition company, actively engaged in the media and entertainment industry in South India. It has presence in the media and entertainment activity from concept to completion i.e. from script to screen. It produces, distribute and exhibit movies both in Indian and foreign languages.

Issue proceeds of Rs 60 crore are proposed to be utilised for entering into screening agreements with 300 cinema theatres. It will be used for renovation and up-gradation of cinema infrastructure with digital equipment and other related assets for a select 100 screens. The proceeds will also be used for acquisition of screening rights of company having similar line, range and objects of business.

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Black Money - Pranab says can’t reveal names

Finance minister Pranab Mukherjee said the tax department would launch prosecution proceedings in relevant cases from the names of account holders given by foreign banks.

Ahead of a Supreme Court hearing on a public interest litigation (PIL) on black money, finance minister Pranab Mukherjee at a press conference on Tuesday detailed the government’s strategy to deal with black money and said the tax department would launch prosecution proceedings in relevant cases from amongst names of account holders given by foreign banks.

The government has the names of account holders in Liechtenstein’s LGT Bank and information given by German banks.

Mukherjee refused to name account holders citing secrecy clauses attached to legal frameworks with different countries which are used to obtain information on Indian account holders in foreign banks.

The information, however, has been given to the Supreme Court in a “sealed envelope,” Mukherjee, said. The names would be revealed when the tax department launches prosecution proceedings in relevant cases, he added.

The Supreme Court on 27 January resumes hearing a PIL on black money being held in European banks by Indians, initiated by senior lawyer Ram Jethmalani along with some former civil servants, who want the court to examine the issue as well as the falling standards of administration on the part of the government.

The PIL claims this is a “colossal failure to enforce the law” due to influential politicians in various parties being involved in the offences.

According to Mukherjee, the press conference had its roots in a suggestion by Prime Minister Manmohan Singh asking the finance ministry to place in public domain the strategy to deal with black money. Singh had made the suggestion during a recent cabinet meeting which discussed amendments India had signed with its tax partners to elicit information on foreign bank accounts of Indians.

During a hearing on 19 January, the Supreme Court took a tough position against the union government, asking it why it was not disclosing the names of Indian citizens who allegedly stashed away large sums of unaccounted money in European banks from 2002 to 2006.

The main pillar of the government’s strategy to deal with the problem is to amend tax treaties with different countries to allow for information on bank details to be shared.

According to Mukherjee, a change in international opinion in the wake of the 2008 financial crisis had played a positive role in amending treaties.

The G-20 countries had decided to jointly take on countries or tax jurisdictions, which were reluctant to share critical information, Mukherjee, said.

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Sensex dips below 19,000 on hike in RBI key rates; down 182 points

Trading sentiment turned bearish and the Bombay Stock Exchange benchmark Sensex fell 181.83 points to 18,969.45 on heavy selling in pivotals led by banks after the RBI increased key policy rates to a two-year high and revised upwards its inflation forecast.

Besides, investors unwound their pending positions in the derivatives segments ahead of the current month settlement expiry, and a weakening global trend.

Opening on a higher note, the gauge climbed to 19,340.99 before ending with losses as the Reserve Bank of India (RBI) raised the key lending and borrowing rates by 0.25 percentage points and forecast inflation at 7 per cent by March 31, higher than the earlier prediction of 5.5 per cent.

Similarly, the broad-based National Stock Exchange index Nifty lost 55.85 points to 5,687.40, after touching the day's high of 5,801.55, as the market remained under pressure following the seventh time hike in interest rates in a row within a year.

Barring Japan's Nikkei, Asian stock markets closed lower and a weak opening in Europe further dampened trading sentiment here.

Retail investors and funds indulged in squaring up their pending positions before the end of January settlement in the derivatives segment.

The banking sector index suffered the most by losing 2.34 per cent to 12,349.75 with most of the big lenders like State Bank of India , ICICI Bank and HDFC banks closed with losses despite their better performance in the third quarter.

Fast Moving Consumer Goods sector was the second worst performer losing 1.67 per cent to 3,487.72 as Hindustan Unilever , the largest household products maker, plunged 5.45 per cent to Rs 281.65, its steepest drop since July 2009 after its Q3 profit fell as higher input costs reduced operating margins.

With the general weakening trend, the heaviest weighted Reliance Industries dropped by Rs 12.50 to Rs 958.55 and second-heavy Infosys Technologies by Rs 24.10 to Rs 3,254.10.

A rise in stocks of Consumer Durables, Capital Goods and Power Sector, cushioned the market from a major fall.

The market will be closed tomorrow, the Republic Day.

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As expected, RBI raises repo rates by 25bps

To curb rising inflation, the RBI raised repo and reverse repo rates by 25 basic points (6.5% and 5.5% respectively) in its first monetary policy review of 2011. This move is in line with what analysts expected in the last few days. The apex bank also warned that higher food prices could become fixed if steps to improve output are not taken.

The cash reserve ratio (which is the percentage of their deposits that banks must keep with the RBI as cash) and statutory liquidity ratio (SLR) have been left unchanged. Thus, CRR and SLR continue to stand at 6% and 24%, respectively.

The Reserve Bank of India also upped its inflation forecast to 7% from the current 5.5%. This is likely to moderate in Q1FY12, RBI says. "Policy action will contain spill over to generalised inflation." It also stated that the GDP growth rate could decline in FY12.

Experts believe that the RBI will continue to raise rates going forwards. C Rangarajan, chairman of the Prime Minister's Economic Advisory Council said RBI has taken the right decision and hopes that it will continue to raise rates going forward.

The brokerage community too finds this to be a well-balanced move. When contacted, Sushil Finance said the RBI had tried to balance growth and inflation. "RBI is waiting for higher inflation." Hike of interest rate in month of April is highly possible, they say.

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