Summary
of Contents
PULSE
TRACK
-
Monsoon forecast
lowered by one percentage point
-
Current account
balance improves for Q4FY2006
STOCK UPDATE
ICI
India Cluster: Ugly
Duckling Recommendation: Buy Price target:
Rs420 Current market price: Rs297
Annual report review We have reduced our
earnings estimates for ICI India for FY2007 and FY2008 by 17% each
to take into account the divestment of the surfactant business.
Adjusted for the divested business, we expect ICI's earnings to grow
at a compounded annual growth rate of 43% over FY2006-08E. We expect
the company to have cash and cash equivalents of Rs182.5 per share
at the end of FY2008E. We reiterate our Buy recommendation on the
stock with the price target of Rs420.
SECTOR UPDATE
Automobile
Strong growth continues The growth across
the two-wheeler as well as the four-wheeler segments in June was
strong and impressive. The exports from the sector are also picking
up. The tractor segment has turned out an impressive performance for
the month.
The two-wheeler manufacturers as well as the
our-wheeler manufacturers are looking at increasing the prices due
to the increase in the prices of the raw materials and the increase
in the freight costs. The expected price increase would be in the
range of
3-5%. |