Friday, July 29, 2011
Result Update ...
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
Market Commentary
Indian
markets are down for three straight days. The F&O expiry has been
higher, but short positions are believed to have been carried over amid a
spate of headwinds.
We
expect another muted start today as world markets are still nervous
about the political gridlock in the US over the sensitive issues of debt
and deficit.
Corruption
cases continue to hog the headlines. Social activist Anna Hazare is
apparently not happy with the draft Lokpal Bill approved by the Cabinet,
and has threatened another fast-unto-death.
On
the other hand, the fate of scam-tainted Karnataka chief minister BS
Yeddyurappa has been sealed with the BJP asking him to step down in the
wake of the Lokayukta report on illegal iron ore mining.
The
monsoon session of parliament begins next week and promises to be
another stormy affair. A few very important bills are slated to be
presented in parliament. Hopefully, the warring political class will set
aside their differences and clear at least some of them.
Lots of results are due today and in the next few days. US GDP data will be a key monitorable for the day.
Thursday, July 28, 2011
Result Update: HCL Tech Ltd (Q4 F6/11) – BUY
CMP Rs503, Target Rs600, Upside 19.3%
± Consolidated dollar revenues in-line; Software services volumes sluggish; Twenty transformational deals signed
± Core services drive growth; Manufacturing and Americas grow higher than company average.
± Consolidated as well as core software OPM came in-line; BPO profitability improves
± Employee addition relatively strong amongst peers; Attrition down marginally
± Impressive operational performance; Market share gain to drive revenue expansion; Maintain BUY
Result Update: GAIL (India) Ltd (Q1 FY12) – BUY
CMP Rs458, Target Rs525, Upside 14.6%
± Net
sales rise 24.9% yoy on the back of higher transmission volumes, better
realizations for natural gas sales (APM gas price hike)
± OPM
falls 270bps yoy on account of more than doubling of subsidy burden and
sharp fall in EBIT margins for all segments except for natural gas
trading
± Increased gas supplies in the country lends strong revenue visibility
± Maintain our BUY rating with 9-month target price of Rs525
Market Commentary ..
Multiple
pressure points are at work in the markets at the current juncture. The
RBI’s shock treatment is on top of the list followed by the political
posturing in the US over how to manage the debt crisis. Mind you, the
eurozone credit problems are not over yet.
The
issue of corruption continues to haunt the markets. RBI governor D.
Subbarao (he was finance secretary then) has been named in the 2G scam
by former Telecom Secretary. The BJP is all set to dump B.S. Yeddyurappa
after the Karnataka Lokayukta submitted its report on illegal mining.
Moderation
in FII inflows is also a cause for concern. Meanwhile, SEBI’s Board
will meet today to mull a string of important issues.
The
start will be soft due to a worldwide selloff linked to the US debt
drama. Wall Street suffered badly overnight while European stocks too
were hit. Asian markets are mostly lower as well.
The
key indices will go through usual intraday gyrations associated with
F&O expiry. For the Nifty, the key level to watch will be 5500 on
the downside and 5600 on the higher side.
Nifty & Sensex Levels Nifty / Sensex
Nifty & Sensex Levels
Nifty / Sensex
|
F & O Close Rate
|
R-1
|
R-2
|
S1
|
S2
|
NIFTY
|
5547.95
|
5589
|
5613
|
5525
|
5500
|
Sensex
|
18432
|
18558
|
18630
|
18366
|
18291
|
Sell Call Scrip Name
Sell Call
Scrip Name
|
F & O Close Rate
|
Target 1
|
Target 2
|
Stoploss
|
Cairn
India
|
317.25
|
313
|
309
|
322
|
Power
Grid
|
106.50
|
104.50
|
103
|
108
|
J.
P. Associates
|
72.50
|
71
|
69.80
|
73.30
|
NTPC
|
180.50
|
177
|
175
|
183.20
|
Daily & Short Term Recommendations
Daily
& Short Term Recommendations
Buy Call
Scrip Name
|
F & O Close Rate
|
Target 1
|
Target 2
|
Stoploss
|
HDFC
Bank
|
502
|
508
|
512
|
495
|
Sesa
Goa
|
288.90
|
296
|
296
|
284.50
|
Maruti
|
1216.75
|
1232
|
1240
|
1199
|
Ambuja
Cement
|
131
|
133
|
134.60
|
129
|
Reliance
Capital
|
588
|
596
|
602
|
580
|
Wednesday, July 27, 2011
L&T Finance Holdings Ltd (L&TFH) – Subscribe Price band Rs51-59
Diversified loan book; growth has been strong in the recent past
L&TFH
through its subsidiaries L&T Finance and L&T Infra Finance
offers a broad spectrum of financial products and services. The
consolidated loan book of the company could be broken into
infrastructure finance (40%), retail finance (37%), corporate finance
(20%) and others (3%). Over the past two years, the consolidated loan
book has witnessed 57% CAGR. More importantly, the book has become more
diversified with the share of retail and corporate finance segments
combined having declined from 69% in FY09 to 58% in FY11.
Wide pan-India presence; exploring opportunities to leverage it
As
of May 2011, L&TFH had 837 points-of-presence spread across 23
states thereby enabling the company to cater to a large customer base
(especially in rural and semi-urban areas). Company further plans to
strengthen its reach through expansion in areas offering significant
opportunities to increase revenue and giving competitive advantage. Such
an extensive distribution network would be leveraged by the company to
provide new products and services and also foray into new business
segments. With an edge over competition in terms of reach, robust loan
growth momentum is likely to continue.
Sanguine asset quality; however, some slippages may crop up
Across
segments, L&TFH’s asset quality has improved substantially in FY11
despite the robust growth registered over the past few years. For
L&T Finance (comprising retail and corporate finance business), the
Gross and Net NPAs stood at 1.4% and 0.8% respectively at end-FY11. In
L&T Infra Finance, the Gross and Net NPAs stood at 0.7% and 0.5%
respectively at end-FY11. More importantly, about 71%, 91% and 90% of
the Corporate, Retail and Infra segment advances are secured thereby
providing high level of comfort. However, given the current challenging
credit environment, one could expect some slippage in NPL ratios.
Robust profitability reflected in high return ratios; ‘Subscribe’
RoA
and RoE have improved materially in the past two years for L&T
Finance driven by significant expansion in NIM and improvement in asset
quality. End-FY11, RoA of the company stood at 2.5, remarkable in the
light of the loan book mix. RoE was at 16% with the leverage at 5.3x.
L&T Infra Finance’s RoA has been stable at 3.5% in the past two
years. This is better than IDFC (like-to-like competitor) which has been
earning around 3%. Further, RoE is impressive at 18%. With valuation
reasonable at mean 2.5x P/BV (pre-IPO) we recommend subscribing to the
IPO.
Result Update: Cairn India (Q1 FY12) – Market Performer
CMP Rs323, Target Rs293, Downside 9.3%
± Net
sales witness quantum jump as Mangala field achieves maintains its peak
production rate of 125,000 barrels of oil per day (bopd)
± Realization for Rajasthan crude continues to be at 10-15% discount to Brent much in line with company’s guidance
± OPM jumps 852bps yoy on account of benefits of operating leverage
± Company is holding
a postal ballot of all the shareholders to consider the conditions
imposed by the GoI such as royalty being made cost recoverable and
ending the arbitration on cess
± These
steps will erode Rajasthan field NPV by Rs45/share. Maintain Market
Performer rating with a revised 9-month target price of Rs293
Result Update: Maruti Suzuki (Q1 FY12) – Market Performer
CMP Rs1,178, Target Rs1,252, Upside 6.3%
± Net
sales rise 3.6%yoy driven by 4% yoy realization growth. Volumes were
lower by 0.6% yoy and 18% on sequential basis owing to strike at Manesar
plant
± OPM
at 9.5% (a fall of 8bps yoy and 46bps qoq) was better than our
expectations owing to higher than expected realizations and lower other
expenditure
± Net profit jumped 18% yoy against expectation of a decline as other income surged 80% on yoy basis
± Higher interest rates, rising competition and increasing input prices are major headwinds for near term earnings growth
± Maintain Market Performer with a 9-month target price of Rs1,252
Result Update: Sterlite (Q1 FY12) – BUY
CMP Rs168, Target Rs210, Upside 24.9%
± Q1
FY12 revenue jumped 65.2% yoy to Rs98.6bn, above our expectation of
Rs94.7bn, aided by outperformance in international zinc division
± Improved performance in copper business was aided by increase in sales of by-products
± BALCO’s aluminium business EBIT decreased 18.4% qoq on account of rising input costs
± Zinc domestic division EBIT outperformance was largely due to higher silver content in concentrate sales
± Contribution from international zinc assets to the company’s consolidated EBIDTA increased from Rs4.4bn to 5.2bn
± Power
business EBIT margins were under pressure due to high coal costs; Power
cost of production under SEL increased from Rs2.34/unit in Q4 FY11 to
Rs2.86/unit
± Zinc to drive earnings over the next two years, maintain BUY with a 9-month price target of Rs210
Market Commentary
It's
neither amusing nor interesting. It's a bit shocking. Some call the
RBI's move a big leap of faith while many industries are moaning on
their fate. Dr. D. Subbarao has upped the ante in the battle against
inflation by jacking up rates by an aggressive 50 bps. What’s more, the
central bank doesn’t seem to be lowering its guard either. It is ready
to sacrifice a little bit of growth in the near term to improve
long-term prospects. So, a further 25-50 bps hike is not ruled out.
Let’s hope for some big relief on the inflation front.
We
expect a better start today and hopefully an improved close. The SGX
Nifty futures in Singapore is pointing to a steady opening. Asian
markets are slightly in the red though. US stocks extended losses amid
no sign of a compromise between the Obama regime and the GOP. European
markets finished mixed.
Results
will of course continue to pour in today as well. So, the action could
largely be stock centric. Immediate support for the Nifty is seen at
~5550, below which selling pressure could aggravate and take it to
~5430.
Tuesday, July 26, 2011
Nifty & Sensex Levels
|
Nifty / Sensex
|
F & O Close Rate
|
R-1
|
R-2
|
S1
|
S2
|
|
NIFTY
|
5690.65
|
5719
|
5772
|
5650
|
5608
|
|
Sensex
|
18871
|
18954
|
19110
|
18751
|
18625
|
Subscribe to:
Posts (Atom)
JOIN US!!
Send SMS for "STUDY" on 09825677777