Institutional Activity

* Enam Securities has a long-term buy recommendation on Hindalco at Rs 706. Though the current year earnings are expected to decline due to weak aluminium prices, the prospects in the next fiscal appear quite attractive. Price recovery, volume growth in line with capacity expansion and improved product mix, is expected to drive future earnings. For FY2003, earnings growth is expected to be at 21 per cent.

In the medium-term, however, Hindalco might underperform the sector as it has a higher exposure to the local markets where prices could suffer if import duty are lowered as per the WTO guidelines.

 

* SBI Capital markets is quite bullish on Hinduja TMT(HTMT) predicting a 12-month price target of Rs 185.5, up from the prevailing market price of Rs 97. HTMT has been able to get into high-end business processing outsourcing(BPO) business relatively early in the life cycle. This is mainly on account of the Hinduja Group's presence abroad, which increases the comfort level of the customers.

* HSBC Securities has upgraded its recommendation on Videsh Sanchar Nigam(VSNL) from hold to add at Rs 137.65. There could be a short-term upside of about 20 per cent as the dispute over its contingent liabilities of nearly Rs 300 crore has been resolved in its favour and divestment gathers pace.

VSNL's disputed tax liabilities on account of disallowance of licence fee paid to be treated as an expense amount to about Rs 1470 crore, of which the company has already paid about Rs 1060 crore.

If these liabilities are dropped, the company will receive net cash inflow of around Rs 700-800 crore (Rs 25-27 per share). This has not been factored in the price as yet, says the report.