Ashok Leyland planning acquisitions abroad

Ashok Leyland, the Hinduja Group flagship company in India,
announced that the company is seeking overseas acquisitions and
would continue to focus on 'second hemisphere' markets including
Venezuela, Vietnam, Syria, Honduras, Indonesia, Thailand and Russia.

R Seshasayee, Ashok Leyland Managing Director, said, "We are
expanding our presence in foreign countries and we are also looking
for some acquisitions. "

The country's second-biggest bus and truck manufacturer has also
earmarked Rs 3,000 crore for capex over the next three years (2010).

"The investment would be able to fund capacity expansions at
Uttarakhand, new engine and gearbox lines at Ennore plant in Chennai
and product development, " he added.

Out of the total investment, Rs 950 crore will be funded through
loans, whereas the remaining would come from internal accruals.

Besides, the company has also decided to raise its annual capacity
from 84,000 vehicles tp 1,84,000 vehicles by the next three years
(2009-10).

NTPC Mulls Entry Into Cement Manufacture With Pvt Partners

India’s largest electricity producer, National Thermal Power Corporation (NTPC) Ltd, will manufacture cement near six of its power plants through ventures with private firms. Quoting NTPC Chairman and Managing Director T Sankaralingam, Live Mint reports that the government-run company is looking at equity participation from private sector companies, the percentage for which will be decided later

Ghodawat To Invest Rs 400 Cr For Wind Power

Ghodawat Industries plans to invest over Rs 400 crore in the next two years to set up manufacturing facilities for wind power turbines and core components, such as generators and gear boxes, at Kolhapur in Maharashtra. Quoting the company Managing Director Sanjay Ghodawat, The Business Standard reports that recently, Ghodawat Industries had announced its foray into wind turbine manufacturing with exclusive technology licensing from US-based wind energy major American Superconductor Corporation (AMSC)

BHEL to invest Rs 1000 cr in Tiruchi plant

Indian energy equipment maker Bharat Heavy Electricals Ltd is spending
10 billion rupees ($240 million) to expand the capacity of a boiler
plant in southern India, an official said on Thursday.

When the expansion is completed by July next year the plant at
Tiruchirappalli in Tamil Nadu state will be able to make boilers that
can totally produce 10,000 megawatts, up from 5,750 megawatts now,
R.N. Misra, executive director of the unit, said.

LANCO Infratech bags 3,300 mw power projects in Uttar Pradesh

LANCO Infratech (LITL) secured two super critical power projects
with an installed capacity of 3,300 MW in Uttar Pradesh. The bids
called by the Uttar Pradesh Government for development of the two
thermal power projects viz., Prayagraj of 1,980 MW (3x660 MW) and
Sangam of 1,320 MW (2x660 MW) were opened on Apr. 11, 2008 at the
office of Uttar Pradesh Power Corporation which conducted the
competitive bidding process on behalf of the government. As per the
terms of the bids, while 90% of power generated through the projects
must be sold to the government of Uttar Pradesh, the remaining 10%
could be sold by the successful bidder through the merchant market.

LITL has won both the projects by outbidding other top players like
Reliance Power, NTPC and Jindal Steel & Power. The projects include
all the required infrastructure linkages like road, water, fuel and
rail.

JK Tyre to buy 100% stake in Mexican tyremaker for Rs 270 crore

JK Tyre & Industries, leading tyre manufacturer, announced the
acquisition of 100% shareholding of a Mexican tyre manufacturing
company, having 3 plants with capacity to manufacture 290 metric
tons per day, for total consideration of nearly Rs 2.70 billion.

With the above acquisition, the company will get control over the
complete Mexican company along with its subsidiaries. The above
acquisition besides providing various strategic and synergetic
advantages to the company and making it a global player, shall
also provide a manufacturing base for passenger radial tyres and
other tyres to the company and allow it access to North American and
the growing Latin American markets.

"This acquisition extends our global reach and is also a strategic
fit for JK Tyres as we are already the largest exporter to the North
and the South American markets," JK Tyre and Industries Chairman
Hari Shankar Singhania told.

The closing of the transaction is likely to take place by end of May
2008. The board of directors of the company has approved raising of
bridge loan for this purpose for immediate finalizing of the
transaction and approved raising of long term funds.

Gujarat NRE Coke to invest Rs 750 mn for plant expansion

Gujarat NRE Coke revealed its plan to invest Rs 750 million to expand
its steel TMT bars manufacturing capacity by 60%.

The company manufactures low ash metallurgical coke (LAMC) and has
wind mills, and a mini steel mill manufacturing TMT bars from recycled
steel scraps. LAMC finds use in integrated steel plants, ferro alloy
industries, etc. The company has a NZD 20 million shareholding in Pike
River Coal Company, a subsidiary of New Zealand Oil and Gas.

Whirlpool to invest Rs 200 cr

Home appliances maker Whirlpool of India Ltd today said it will
invest up to Rs 200 crore in product development by 2010, while the
company is certain to break-even when it announces the results of
2007-08.

"We expect to break-even in 2007-08 results. This will be a record
turnover. The results will be declared very soon," Whirlpool of
India Ltd vice-president (marketing) Shantanu Das Gupta told
reporters here.

The company in the last calender year grew by 20 per cent and made a
net profit of Rs 15 crore in the nine months ended December 31,
2007, he added. In FY07, Whirlpool had recorded a net loss of Rs
5.32 crore against the total income of Rs 1,496.78 crore.

Having seen a turnaround, the company expects to become a leading
home appliances maker in the country by 2010.

India's Biggest IPO Ever Is First Of 35 This Year

Mumbai-based Reliance Power raised $3 billion in January in India's largestever initial public offering. The shares sold represented a 10% stake in the company, which aims to provide electricity to power the country's fast growth but which so far doesn't have a single operating power plant. That didn't stop investors from submitting $28 billion in bids in what promises to be a big year for Indian equity issues. The 228 million shares Reliance Power offered on January 15 sold in less than a minute. In a country where 400 million people have no electricity and peak demand exceeds supply, power companies are expected to issue as much as $10 billion of shares this year. Sterlite Industries, National Thermal Power and JSW Energy are among the major power companies planning to tap the equity market in 2008. Sterlite Industries, a leading producer of copper in India, issued $2 billion of American depositary receipts on the New York Stock Exchange in June 2007. The company recently entered the commercial electricitygenerating business and is setting up a 2,400 megawatt (MW) independent power plant through its Sterlite Energy subsidiary.

According to Thomson Financial, companies based in India are expected to raise $15.8 billion from a total of 35 IPOs this year, nearly double the $8.3 billion from 91 issues in 2007. Reliance Powers IPO surpassed the previous record $2.3 billion raised by New Delhi-based real estate developer DLF in June 2007.

Reliance Power, which has several power plants under development, won a bid last July to build a 4,000 MW coal-fired plant in the state of Madhya Pradesh. The plant is expected to require an investment of about $5 billion. The Indian government, which has a goal of electric power for every household in the country by 2012, will build seven new 4,000 MW power plants by then. It plans to spend $200 billion in seven years on generation and distribution facilities.

Reliance Power is a unit of Reliance Energy, India's second- largest private sector power company after Tata Power. Reliance Energy's stock quadrupled in value last year and was the topperforming issue on India's 30-stock benchmark Sensex index. The company's shares trade on the Bombay Stock Exchange and the National Stock Exchange of India.

ABN AMRO Rothschild, Deutsche Bank, Enam securities, ICICI securities, JM Financial Consultants, JPMorgan Chase, Kotak Mahindra Capital and UBS arranged the Reliance Power IPO.

The issue met huge demand from retail investors, who are familiar with the Ambani family name. Reliance Power is headed by billionaire Anil Ambani, son of the late Dhirubhai Ambani, who founded the Reliance Group in 1958. Anil's ; billionaire brother Mukesh runs Reliance Industries, which is India's largest oil and petrochemicals firm.

The Reliance Power IPO was delayed from the fourth quarter of 2007 after investor complaints that Reliance Energy was transferring high-value power projects to the listing vehicle without being properly compensated. The issue went ahead after Reliance Power obtained a Supreme Court ruling against a petition by an investor association, which had persuaded the Gujarat High Court to stall the offering.

Reliance Power plans to hire 5,000 people to build 13 power projects across India. The greenfield power producer's first project, Rosa Phase I, was the only plant under construction at the time of the listing. The company said that it is pursuing various gas, coal and hydro power-generation facilities strategically located near potential customers but that it cannot guarantee they will begin operations as expected. Several of the planned projects face land disputes. The completion targets also could be affected by contractor performance shortfalls, fuel supply and government approvals, Reliance Power said.

Microsoft's Yahoo foray signals

WHO'S THE bigger loser from Microsoft's withdrawn bid for Yahoo? Investors certainly punished the Internet company on Monday for letting the prospective deal go away, and they enthusiastically cheered Microsoft's abandonment of a $42 billion bid. But a jog through the numbers, starting from before the software giant showed its hand, suggests that it's actually Microsoft that has emerged most damaged from the affair.

The truth is, Microsoft shareholders were never entirely sold on the Yahoo takeover. At one point in early March, they had sliced more than $50 billion off the software giant's pre-bid market value. Even after Monday's relief rally, Microsoft is worth some $24 billion less than it was before it bid for Yahoo on Feb. 1.

What's more, the tech sector has rallied since then. The Philadelphia Semiconductor Index, a widely used proxy for the industry, is up 6%. Microsoft should have profited more than most. While its domestic business might have been hurt by stalling U.S. economic growth, its strong international presence should have insulated it better against a recession than the typical tech firm.

How to explain this evaporation of Microsoft's value? There's the prospect that Microsoft will try again to acquire Yahoo -- or bid aggressively for other Internet properties, such as Time Warner's AOL. This speculation is most apparent in Yahoo's valuation. Even after Monday's 15% slide, Yahoo is worth $4 billion more than it was before Microsoft publicized its offer.

More importantly, there is a fear among shareholders that the Yahoo bid exposed weaknesses in Microsoft's business model. Its operating margins on desktop software hover around 70%. Companies led by Google are now offering competing, ad-supported applications such as spreadsheets and word-processing -- free. The worry is that Microsoft may need to combat these efforts.

That's where Yahoo, which excels in selling online advertising and subscription services, came in. Microsoft's bid for Yahoo was seen by many as a signal the company recognized its grip on the desktop may be slipping. That, more than anything else, may account for the billions that have gone missing from Microsoft's value.

DT/Sprint: Some Risks

Deutsche Telekom would have its work cut out with Sprint Nextel. The German telecom operator, already the fourth-largest wireless player in the U.S., is eyeing a bid for the troubled third-place operator. Squishing the two together would catapult DT to pole position in the U.S., but a deal won't be easy to pull off.

Trading at an enterprise value of €27 billion ($41.6 billion), Sprint looks affordable for DT. The German company's debt is currently just under two times earnings before interest, taxes, depreciation and amortization, at the bottom of its desired range of two to three times. Assuming that DT paid a 30% premium for the shares and that Sprint managed to meet its forecast of €5 billion in Ebitda for 2008, DT's debt would climb to an acceptable 2.9 times Ebitda.

However, price is just the starting point. DT would be walking into a political and regulatory minefield. U.S. politicians won't be keen to see one of the largest telecom operators effectively controlled by the German government -- particularly in an election year. Nor is it clear that U.S. competition authorities will allow further industry consolidation.

If DT did manage to get past those obstacles, it would then have to deal with Sprint's own big problems. The shares are affordable for a reason. Since its 2004 merger with Nextel, poor service has created a downward spiral. Ebitda has been cut in half in two years. In February, Sprint wrote down $30 billion of goodwill from the deal.

Right now, DT, along with current market leaders AT&T and Verizon Wireless, is profiting from Sprint's malaise by picking up its disaffected customers. If DT ends up owning Sprint, the shoe will be on the other foot. It would have to stop the rot, while trying to integrate competing and not obviously compatible technologies.

DT paid too much to get into the U.S. in 2001. Asset prices are much lower now, but DT risks finding another way to overpay.

Beyond Bonus Shares

When Anil Ambani decided to issue one-off bonus shares to compensate investors for Reliance Power's abysmal initial public offering, the move was seen as an act of generosity. Now it has emerged the Indian billionaire, chairman of the Reliance Anil Dhirubhai Ambani Group, wants to list more of the conglomerate's companies. The bonus shares look like an act of enlightened self-interest.

Excitement around India's biggest IPO was short-lived. Reliance's domestic reputation as a trusted brand meant that Reliance Power's $3 billion issue was fully subscribed in less than a minute. Yet the stock, which nosedived on its February debut, now trades at a 27% discount to its issue price and the Reliance name, once tantamount to a sure thing in the stock market, has been tarnished.

Mr. Ambani quickly moved to reassure the market that the stock was an attractive long-term investment. Within two weeks of the IPO, Reliance Power's board approved an issue of three free bonus shares for every five held, for all investors except those related to the parent company. The issue, expected in June, appeared to be an act of selfless contrition for the poor market debut.

Yet it now appears Mr. Ambani's primary aim wasn't to compensate investors, but rather to protect his own ambitions. The Reliance ADA Group is eyeing at least two more stock-market listings. Reliance Infratel, a telecom-tower business, has been lined up to raise $1.5 billion on the Indian market. Meanwhile, Reliance Globalcom is reportedly looking at a London listing that could value it at up to $12 billion.

After Reliance Power's disastrous debut, Mr. Ambani is on a mission to shore up market sentiment around the Reliance brand. Indeed, that might also help explain Reliance Energy's odd decision back in March to launch a shareholder-friendly stock buyback.

Mr. Ambani's enlightened act of self-interest may be understandable, but it won't guarantee any of Reliance's future listings a bouncy stock market debut. Only the most naive of investors can be bought off by the occasional bonus-share issue.

CIPLA

The largest pharmaceutical company in the domestic market, with a 5.42% market share, ahead of Ranbaxy and GSK, Cipla has posted encouraging financial results for the year ended 31st March 2008.



The net sales of the company increased 18% at Rs.4,226.81 crore. Interest outgo increased from Rs.6.97 crore in FY07 to Rs.11.59 crore in FY08. PBT was up 4% at Rs.830.66 crore and PAT was up 6% at Rs.700.48 crore. On an equity of Rs.155.46 crore, the EPS is at Rs.9.01.



Employee cost increased by a whopping Rs.254.31 crore due to overall increase in manpower, salary revisions and change in Bonus Act. Operating margin was down at 23.06% and NPM was also down at 16.57%.

It had a whopping ‘other expenditure’ of Rs.1,041.23 crore and this was mainly on account of sales promotion/advertisement campaign and processing charges. The hi-profile advertising campaign on Cipla’s I-pill, “the morning after pill”, accounted for a large part of this expense.

Regarding the SEZ in Goa where Cipla was to set up its plans, on which the company had already invested Rs.200 crore, the project eventually got scrapped due to a petition filed by Meditab Specialities Pvt Ltd, developer of the SEZ. The case is still being pursued in the courts and it would require only a crystal ball to see and tell us what the future holds regarding the SEZ.

What does not require a crystal ball is that the company, for the current fiscal, has projected a growth between 12 -15%.
There is no doubt that Cipla is one of the bluest of the blue-blooded pharma companies listed on the Indian bourses today. There have some concerns regarding the various demand notices it has been receiving from the Supreme Court though the legal advisors to the company continue to maintain the opinion that the demand notices of the government are not tenable and sustainable.
Currently quoted at Rs.217, Cipla is a great pharma company. Hold on.

SRF

SRF Ltd has been consistently posting not-so-good results. It had reported a dip in its performance for Q3 and now, it has ended the year on a pretty bad note. Infact, its performance in Q4 has been the worst ever, with net profit dipping to its lowest ever level at Rs.1.02 crore, with a NPM lower than one percent. PBT for the quarter was negative at Rs.2.26 crores.


For the full year ended 31/03/08, the company reported a fall in its top as well as bottomline. Net sales also fell 10%, operating expense was maintained around the same level, EBIDTA fell 41%, PBT fell 54% and PAT was down 52% at Rs.138.73 crore. On an equity of Rs.67.89 crore, the company’s EPS stands at Rs 20.44 for the year.



Despite the fall in the profits, the company did not disappoint its shareholders further and announced a final dividend of 20%, which was over and above the interim dividend earlier declared of 30%. One cannot exactly call this a very prudent move, with dipping profits.



In the last quarter of FY08, the company increased the capacity of its chemical business, the Chloromethanes plant, from 82.5 TPD to 102 TPD through de-bottlenecking. It also commissioned 6 Wind Turbine Generators in Tamil Nadu for production of 9.3 MW of Wind Power for captive consumption of the company.

The Board, on April 25, 2008 approved buy back of shares of the company upto Rs 70 crore at a price not exceeding Rs 160/- per share from open market.
Currently quoted at Rs.127, it would be better to remain invested as share price seems to have reached its bottom.

TITAN INDUSTRIES

A name associated with watches in India, Titan has indeed come a long way from the days when it had to break the fixation of HMT from the mind of Indians. Today a good watch necessarily means Titan and no longer HMT. And through smart marketing and advertising techniques, Titan has managed to make a name for itself as a high quality jewellery company also.

The company has posted good results for the year ended 31st March 2008. Net sales rose 46% at Rs.3,046.56 crore. Its watch segment sales grew 17.2% per cent to Rs 918.7 crore, while jewellery sales increased 57% to Rs 2,028 crore. Sales of other products, including eyewear, accessories and precision engineering components, rose 53.1% to Rs 96 crore. The company spends quite a lot on advertising, it spent Rs.151.55 crore as against Rs.133 crore in FY07.

PBT was up 27% at Rs.189.17 crore. PAT was up 48% at Rs.147.56 crore. On an equity of Rs.44.39 crore, EPS was at Rs.33.24 as against Rs.22.52 in FY07.

The company hopes to end the current fiscal, FY09 with a topline of $1 billion.
In the coming months, the company’s focus will be on developing its eyewear business, mainly prescription eyewear, where it foresees tremendous potential. A market hitherto dominated by the unorganised small scale sector, the company plans to make itself into an indispensable brand presence in the eyewear segment too, with the brand name Titan Eye+.

The company is doing well and if you are already a shareholder, stay invested at the current rate of Rs.1,250.

CRISIL

With the soaring inflation and slowing economic growth, everyone has been very busy reworking their math’s for the economic figures. And one thing in common to all is that – all have revised the forecasts downwards, some sharply, some cautiously and some reluctantly.



Rating agency Crisil has revised its GDP growth forecast to 8.1% for 2008-09 from the earlier forecast of 8.5% in view of the worsening inflation, interest rate and global growth outlook.

Growth for sectors such as industry and services has also been adjusted downwards to 8% and 9.8% respectively. Agriculture sector will grow at 3% assuming a normal monsoon this year.

Well, this is a very optimistic forecast. Given the current scenario of rising prices, the GDP forecast of 8.1% for FY 09 is still better. But the moot question is whether this 8.1% itself will be possible, in view of higher inflation, rising interest rates and lower growth.

Whether achievable or not, this is most certainly a very positive piece of news for the markets, that is if the markets decide to go just by the news and do not get into basics and questions the credibility.

Never say die attitude:IOC

Notwithstanding the oil price hike and the constant drain on its resources, it is good to know that the Indian Oil Corporation (IOC) has learned to live with the situation and is infact looking ahead. It has apparently drawn up a Rs.80,000 crore plan to fund a major acquisition in the exploration & production (E&P) sector. It is on the lookout for an oil producing company, mainly in Africa or in CIS countries



And for this purpose it is also doubling of its borrowing limits, which will make it the largest borrower in the public sector. It has been allowed to borrow upto Rs 20,000 crore from the domestic market through loans and credits, besides foreign currency loans of up to Rs 18,000 crore ($4,500 million). The estimated borrowings of IOC as on March 31, 2008 are Rs 35,400 crore, an increase of Rs 8,300 crore over the previous year’ Rs 27,083 crore.



And this increase was mainly on account of rising crude oil prices, a sustained increase in under-recoveries, coupled with the low liquidity of special oil bonds. Due to these factors, the company is as such today suffering a loss of Rs.350 crore a day. Now one has to hope and pray that the current increased borrowings would help the company indeed pursue its acquisitions abroad and not make up for the rising crude price, which is proving to be a black hole, sucking everything into in relentlessly.

Good idea which may not get any power

There are some things which are crystal clear; the solutions to the problems are as stark as daylight, yet blinded by the sunlight, we continue to look all around for the solutions. That is precisely the situation with the present UPA Govt and the problem being the power sector.



It has always been the best possible thing to do – divest stake in the profitable PSU and raise enough funds to tide over any monetary situation. And finally the Govt seems to be looking at this avenue. Inorder to fund the fresh additional capacity of 1,11,000 MW during the 11th Five-Year Plan, the group of ministers (GoM) examining the finances of the power sector has proposed that the government divest up to 49% of its stake in profitable PSUs like NTPC, PFC, REC, PGCIL and NHPC.



They have come up with a plan to combine a funding using IPOs and follow-on public offers to generate about Rs 1,66,000 crore, which would take care of more than a third of the Rs 4,38,319 crore investment required in the sector during the 11th Plan period. The money so raised could be used to fund power projects, as well as improve outdated transmission & distribution systems in many states.



This is probably one of the best and most viable solutions which will help power the power sector. But as usual, in all probability this plan will remain on paper as there is no way, with the Left being a part of the Govt, this plan ever getting an approval. Infact, the entire PSU disinvestment program, which was proposed by Chidambaram in his very first Budget speech when the UPA Govt tookover, was rolled back due to protests led by the Left. So when the disinvestment plan was not allowed to be passed then, how will the Left allow it go through this time?

Buy :- Super Tannery Ltd.

Super Tannery Ltd.

BSE Code: 523842

Super Tannery Ltd. is a Kanpur based leather products producer with over Rs.200 cr. turnover. The company has an equity of just Rs.3.58 cr. and the promoters hold 56.75% stake in the company. It also has overseas offices in UK and UAE.

First nine months of FY08, its net sales touched Rs.167.73 cr. with net profit of Rs.2.15 cr. For FY08, net sales Rs.220-230 cr. with net profit of Rs.2.95 to Rs.3.05 cr. is likely. The stock is available at P/E ratio of just 6 against its FY08 EPS, which is the cheapest in the leather industry.

Investors can buy this Rs.2 paid-up share with a stop loss of Rs.9.50. On the upper side above Rs.12, it will go up to Rs.14.50 in coming days and is the best stock for medium-term investors. Its 52-week high is Rs.16.58.

BUY:- Uni Abex Alloy Products Ltd.

Uni Abex Alloy Products Ltd.

BSE Code: 504605

Uni Abex Alloy Products Ltd. is a Neterwala group company, a pioneer and leading manufacturer of centrifugal and static casting in heat, wear and corrosion resistant alloys. Located at Thane, near Mumbai, the company was incorporated in 1972 and has an excellent track record of supplying critical components to a wide range of industries. It is equipped with modern manufacturing & testing facilities and is a premier source for high nickel and chromium alloys conforming to global standards.

It has a tiny equity of just Rs.1.98 cr. in which promoters hold 63.33% stake. Since last three years it has posted excellent numbers.

For December 2007 quarter, its net profit jumped 1225% to Rs.1.06 cr. while for the first nine months of FY08. Net sales rose by 21.18% but net profit jumped 55.03% to Rs.2.31 cr. It may end FY08 with net profit of around Rs.4 cr. and post an EPS of Rs.20. This 12.5% dividend paying stock is available at P/E ratio of just 5.

Uni Abex has executed an agreement for a joint venture with Manoir Industries of France the manufacture and marketing of reformer tubes.

Buy with stop loss of Rs.95. On the upper side above Rs.110, it can go up to Rs.120, Rs.139 levels in the medium-term. Its 52-week high is Rs.144.

Expedia, Inc. Reports First Quarter 2008 Results

"With over $20 billion in annual gross bookings and excellent first quarter results, Expedia(R) is far and away the leader in online travel services," said Barry Diller, Expedia, Inc.'s Chairman and Senior Executive. "Our unique mix of both transactional and advertising revenues, each operating at meaningful scale, continues to deliver strong profitable growth."

"Expedia employees around the globe continued to execute in the first quarter, delivering record gross bookings and solid OIBA growth," said Dara Khosrowshahi, Expedia, Inc.'s CEO and President. "While 2008 continues to present an uncertain economic backdrop, Expedia remains focused on investing in our leadership position to drive growth in long-term free cash flow and shareholder value."

Carnival time for Brazil's economy

With biofuels, investment in nuclear power and a sophisticated hydroelectricity programme, Brazil has achieved energy independence, while Lula's policy of paying families who keep their children in school has also helped blunt just a little of the social inequality. As a result foreign companies are pouring investment into the country. London-listed Eurasian Natural Resources, which yesterday paid $300m for the iron ore company Bahia Mineracao, is just the latest in a long line.

All of which has contributed to Brazil's ballooning reserves of foreign currency, which have grown to $200bn now from $85bn at the end of 2006 and $57bn at the end of 2005, when it finished paying off its IMF loans early. This cushion means the government can manage any short-term crisis very easily, if it were to come. The country is solid, and debt repayment capacity is not an issue.

The question for Brazil now turns from one of stability to one of growth. It is the B in the so-called Bric countries which promise super-size growth over the coming decades, but its 4.5 per cent rate lags Russia, India and China by some distance and it will continue to do so until it can haul its investment levels higher. Government debt remains high, at 44 per cent of GDP, and consumes significant sums in interest payments, with spending – particularly on pensions – continuing to worry economists. Only 16 per cent of Brazil's GDP is channeled into investment, compared with a Latin American average of 20 per cent and 40 per cent in China, but at least the percentage is creeping upwards.

The elevation to investment grade status should help matters, too, triggering a virtuous circle of lower sovereign debt interest costs and higher foreign investment. One of the reasons the Bovespa stock market index jumped on Wednesday was that a new cadre of overseas investors, barred from investing in sub-investment grade countries, can now buy into Brazilian companies.

Augusto de la Torre, the World Bank's chief economist for Latin America, said: "This formally opens the door to quite a bit of money in investors hands to support Brazil's development."

The timing of the S&P upgrade – in the midst of a global credit crisis and concerns over the economic outlook in North America – should be a big boost to private investor sentiment on Brazil, Mr de la Torre added.

A stable financial environment should also help Lula's government shift its focus to infrastructure investment – a key plank in Lula's re-election campaign in 2006 and vital if Brazil's economic growth rate is to be sustained. He is promising new roads, dams and railways, with tax incentives to help seal the deals.

"The country is vast and resourceful," said Global Insight's Mr Amiel. "It has plenty of natural resources and so much potential for expansion of its infrastructure and development. It has ample room to grow."

Ashok Leyland in Rs 3,000cr expansion plan

Hinduja flagship company Ashok Leyland today said it will invest Rs
3,000 crore on its new plant, coming up in Uttarakhand and on capacity
expansion of its existing unit at Ennore.

A part of the planned investment will also be on engine development.
The company is developing six cylinder and four cylinder engines with
Austrian firm AVL complying with the Euro IV norms.

"The company will be investing Rs 3,000 crore on the new vehicle plant
coming up in Uttarakhand, which will be capable of rolling out 50,000
vehicles and expansion of manufacturing facility at Ennore and the new
engine development project," Ashok Leyland Chief Financial Officer K
Sridharan told reporters on the sidelines of CFO Asia Summit.

Elgi Equipments net profit rises 75.43%

Net profit of Elgi Equipments rose 75.43% to Rs 10.21 crore in the
quarter ended March 2008 as against Rs 5.82 crore during the previous
quarter ended March 2007. Sales rose 17.33% to Rs 125.68 crore in the
quarter ended March 2008 as against Rs 107.12 crore during the
previous quarter ended March 2007.

For the full year, net profit rose 69.11% to Rs 39.52 crore in the
year ended March 2008 as against Rs 23.37 crore during the previous
year ended March 2007. Sales rose 19.24% to Rs 451.41 crore in the
year ended March 2008 as against Rs 378.58 crore during the previous
year ended March 2007.

JK Tyre's Q2 net jumps 67.4%

JK Tyre, India's second largest manufactures of radial tyres for heavy
vehicles, increased its second quarter (January-March) net profit by
67.41 per cent to Rs 23.02 crore compared with Rs 13.75 crore in the
previous comparable quarter.

The company is one of the few truck majors in the country
manufacturing truck and bus radials. The company has recently
announced acquisition of 100 per cent stake in Tornel, Mexico.
Strategic location of Mexico offers the company free access to NAFTA
trade block and emerging economies of the central and southern
America.

The combined capacity after the acquisition will become 940 tonnes per
day, making JK Tyre the largest Indian four-wheeler tyre company with
turnover of over $1 billion (Rs 4,000 crore).

Sesa Goa board approves stock split, bonus issue; pays 450 per cent

The board of Sesa Goa Ltd, at its meeting held on 28 April, has recommended sub-division of its equity shares of the face value of Rs10 each to shares with face value of Re1 each.

The board also recommended issue of bonus shares in the proportion of one bonus share of Re1 for every fully paid-up equity shares of Re1 each, Sesa Goa said in filing with the Bombay Stock Exchange.

The board of directors of the company also recommended a final dividend of Rs30 per share (300 per cent) on the existing capital in addition to interim dividend of Rs15 per share (150 per cent).

The same amount of final dividend would be payable to recipients of company's shares on approval of merger of Sesa Industries Ltd (SIL) with the company with effect from 1 April 2005, the company said.

For the quarter ended 31 March 2008, the company posted a profit after tax of Rs798.3 crore as compared to Rs252.3 crore for the quarter ended 31 March 2007. Total income for the quarter increased to Rs1,670.9 crore from Rs772.4 crore in the same quarter in the previous financial year.

For the year ended 31 March 2007-08, the company posted a profit after tax of Rs1,492 crore as compared to Rs606.4 crore for the year ended 31 March 2006-07. Total income for the year increased to Rs3,672.4 crore from Rs2,049.4 crore for the previous year.

The group posted a net profit of Rs811.6 crore for the quarter ended 31 March 2008 as compared to Rs263.3 crore for the quarter ended 31 March 2007. Total income increased to Rs1,732.3 crore from Rs832.2 crore for the same quarter of the previous year.

Net profit rose to Rs1,541.6 crore for the year ended 31 March 2008 as compared to Rs646.1 crore for the year ended 31 March 2007. Total income increased to Rs3,897.1 crore from Rs2,263 crore for the previous year.