L&T gets BHEL-like privileges, may power super-critical drive

Private sector engineering major L&T is being officially promoted as the BHEL-II for manufacturing power equipment required for large super critical thermal power plants. The prime minister’s committee on infrastructure (CoI) is likely to give L&T some projects for 800 MW super critical on a nomination basis at par with BHEL. This would be the first instance of giving private companies projects on a nomination basis, an exercise reserved only for public sector BHEL till now.

The new proposal includes providing both BHEL and L&T (which now qualifies as major producer of power equipment) about 8-10 power projects on a nomination basis to give cushion (by way of assured customers) for investing in developing and absorbing technology for equipment required for new generation 800 MW sets.

L&T has now been included in the scheme as BHEL has indicated that it would reach 90% indigenization only by the time it supplies the 10th unit of 800 MW by the end of 11th Plan. This may have delayed implementation of over 78,500 MW additional generation capacity during the 11th Plan.

On its part, L&T has tied up with Mitsubishi for the technology and will be producing boilers and turbines by 2009. Till then, it can import the equipment from Mitsubishi.

Source - Economic Times

TATA Nano – Common Man's Car

The Nano could become a huge hit for Tata Motors, but it could also be a shot in the arm for companies that make car components Auto component makers have played a major role in the creation of Tata Nano, which has dominated the Auto Expo 2008. Vendor companies, that are supplying parts to the car, consider it a matter of pride to be associated with the world’s cheapest car.

• Tata's Nano car will now be powered by Exide batteries. Exide is planning to increase its battery capacity to 10 million
• Another component maker Rico Auto has entered into a long-term supply agreement with Tata Motors. It expects to make Rs 2,200 on each Nano car sale from its ancillary supplies.
• Auto lamp makers Lumax Industries has lined up Rs 60 crore as capex for Nano car project. The company expects Rs 80 crore in revenues from Nano project and a 20 per cent boost to topline
• The German-based Bosch, which supplied gasoline fuel injectors for the Tata’s small car, Nano, will also supply other key components like starters, alternators and electronic parts for building the car.

The biggest gain for the vendors is their ability to produce components for the small car which now opens a whole new business for itself as several other car manufacturers are planning their own versions of the small car at various price points.

Vendors Associated with Tata Nano

Sl No	Company	Item Supplied
1	AVTEC	Axles, transmission, gear boxes
2	Bosch	Fuel Injection System, Ignition Systems
3	Caparo Engineering	Sheet metal and stamping facility - Interior
4	Delphi	Instrument Cluster
5	Exide	Battery
6	GABRIEL	Suspension
7	JBM Auto	Sheet metal components
8	Kinetic Engineering	Axles, transmission, gear boxes
9	Lucas - TVS	Alternator - Starter
10	Lumax	Headlights
11	MRF	Tyre
12	NK Minda Group	Electric Switches , Horns
13	Rane Group	Steering gear, seat belt
14	Rasandik Engineering Industries	Fuel Tank
15	Rico Auto	Aluminium Engine Head Block
16	Rucha Engineers	Sheet metal tubes - interiors
17	Saint Gobin	Glass
18	Sharda Motor Industries	Exhaust Systems
19	Sona Koyo Steerings	Steering Column
20	Tata Bearing	Bearing
21	Tata Johnson Control	Seating Systems
22	Tata Ryerson	Steel requirement of the car production

Prabhudas Liladher Recommends Tulip IT Services

Tulip IT Services
CMP: Rs 1037 (11/01/08)
Target Price: Rs 1,410

Prabhudas Lilladher has initiated coverage on Tulip IT Services with a 'buy' rating as it expects the company to accelerate its net additions in corporate data connectivity over the next few quarters, on the back of increased business.

"The company is well positioned to ride the growth in virtual private networks (VPN) business; the market is expected to grow at a CAGR of 17.6% over the next four years to evolve into a Rs 2,800 crore industry," says the report.

Nearly all types of enterprises, including banks, retail chains, stock brokers, airlines/travel agents, telecom operators, SMEs and government agencies are looking at connectivity through VPN, it adds.

According to the brokerage, Tulip has expanded its wireless network from 350 cities in FY06 to more than 1,000 cities in Q2FY08 and currently has around 2,950 points of presence in these cities. "We believe Tulip is well poised to post a 28.8% CAGR in revenue, and more importantly, 54% CAGR in net profit over FY07-10," adds the report.

Source - Economic Times