Result Update: ONGC (Q1 FY12) – BUY
CMP Rs227, Target Rs330, Upside 15.7%
± Net
sales remain increase 18.7% yoy driven by higher crude oil volumes
(Rajasthan field) and higher realizations for natural gas and VAP
products
± Gross
realizations for ONGC increased by 50.1% yoy to US$121/bbl, while net
realizations rose marginally by 1.5% to US$48.8/bbl in Q1 FY12
± Natural gas realization was at Rs6,859/tscm as compared to Rs4,951/tscm on back of hike in APM gas price
± Increase in production from JV fields and OVL would be key to earnings growth in near term
± We maintain our BUY recommendation with a 9-month target price of Rs320
Result Update: ITC (Q1 FY12) – BUY
CMP Rs206, Target Rs232, Upside 12.8%
± Q4
revenues register ~20% yoy growth at Rs57.7bn - above our expectations,
driven by strong growth in cigarettes and agri segment
± Operating
margin for the quarter declined by 70bps to 32.7% due to higher raw
material cost. EBIT margin in the cigarettes segment expanded by 200bps
to ~30%.
± Net profit for the quarter matched our expectations by recording a strong 24.5% yoy growth at Rs13.3bn
± We expect the company to witness a 16.5% CAGR in revenues and 17.8% in net profit over FY11-13. Maintain BUY with a revised 9-mth price target of Rs232
Result Update: Hindustan Unilever (Q1 FY12) – Market Performer
CMP Rs323, Target Rs324, Upside 0.3%
± Q1 revenues increased by 14.8% yoy to Rs55bn - in line with expectations, driven by 15.4% yoy growth in HPC business. Domestic FMCG business witnessed a healthy underlying volume growth of 8.3%
± Operating
margin declined by 15bps to 12.3% due to sharp increase in raw material
cost. Personal products segment witnessed 50bps expansion in EBIT
margins. However, 170bps decline in Soaps and detergents segment margin
remains a concern
± Net
profit increased by 10.4% to Rs5.7bn driven by strong topline growth.
APAT after extraordinary income of Rs588mn increased by 17.6% yoy to
Rs6.3bn
± We maintain Market Performer rating with a revised 9-mth target price of Rs324
Result Update: Jindal Steel & Power (Q1 FY12) – Market Performer
CMP Rs614, Target Rs660, Upside 7.6%
± Q1 FY12 standalone revenue of Rs25.3bn was lower than our estimate on account of lower steel sales volume
± Except sponge iron, production of all other products declined on a qoq basis
± Operating profit decreased 9.9% qoq to Rs9.6bn, marginally lower than our estimate of Rs9.9bn on account of lower steel sales
± Average power realizations under JPL declined on a qoq basis from Rs4.1/unit in Q4 FY11 to Rs3.8/unit
± JPL’s PAT decreased by 8.6% qoq and 19.5% qoq to Rs4.5bn, on the back of lower power tariffs
± Maintain Market Performer rating with a revised 9-month price target of Rs660
Result Update: Punjab National Bank (Q1 FY12) – Market Performer
CMP Rs1,100, Target Rs1,185, Upside 7.7%
± Loan growth slows down; deposits growth remained strong
± NIM was resilient; lending rate hikes come to the rescue
± Robust growth in core fee income; C/I ratio deteriorates
± Asset quality continues to deteriorate; capital adequacy remains reasonable
± Valuation re-rating unlikely in near term; downgrade to Market Performer
Result Update: Ambuja Cements (Q2 CY11) – Market Performer
CMP Rs133, Target Rs123, Downside 9.2%
± Revenues grew 4.8%, above our estimate on account of higher realizations
± Surge in power and fuel cost pulls down OPM by 350bps yoy
± Reported PAT below estimates; down 11.2% yoy
± Upgrade to Market Performer with a 9-mth TP of Rs123
Result Update: ACC (Q2 CY11) – SELL
CMP Rs1,020, Target Rs918, Downside 10.0%
± Revenue growth of 18% yoy higher than our estimate driven by higher realization; volumes in-line with expectation
± OPM tumbles 500bps on the back of surge in power and fuel cost
± Higher tax rate drags PAT lower 6.3% yoy, in-line with our estimate
± Sector to witness margin pressure; retain our SELL rating with 9-mth TP of Rs918
