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SECTOR
UPDATE
Banking
Change in pension norms negative for
PSBs
We believe that the recent change implemented by
the Institute of Chartered Accountants of India (ICAI) in the
accounting standard 15 related to the calculation of
retirement benefits like pension liability is likely to hit
the earnings and book value of the public sector banks (PSBs)
in general and that of the State Bank of India (SBI) in
particular. The new accounting norms will come with
retrospective effect from April 1, 2006.
VIEWPOINT
Ucal Fuel
Systems
Analyst meet note
The Ucal Fuel
Systems management has guided to a compounded annual growth of
20% in sales for the next five years. The profit margins are
projected to be under pressure due to increasing raw material
costs, high overheads at Amtec and rising interest costs.
Considering all this, turning around Amtec in
the current year would be a great challenge and managing
growth while shifting to a newer product range would make the
task ahead more challenging. At the current market price of
Rs123, the stock is quoting at 13.7x its FY2006 stand-alone
earnings and enterprise value/earnings before interest,
depreciation, tax and amortisation of
0.9x. | 
