Recommendations Archive

Pressure Technologies plc (LON:PRES) report: Profit warning

Pressure Technologies has this morning warned that pre-tax profit for the year to 2 October 2010 is likely to be up to ?0.9m below market expectations. Our own forecast was above that of the company’s broker so our downgrade, from ?4.9m to ?3.6m, is a cut of 26.5% and will see current year profits falling by about one-third from the level achieved in FY2009. The warning stems from “some slowing in the conversion of prospects into orders for oil and gas support services projects” due to “customer indecision in setting technical specifications and continuing economic uncertainty”.

H&T Group (LON:HAT) report: Sell-off unwarranted

H&T has delivered outstanding profits growth in recent years. Between 1993 and 2005 annual Adjusted Profits were to be found in a narrow range between approximately break-even and ?4.2m. However, since 2006 an ambitious store expansion strategy (68 stores at beginning of ’06, rising to 122 by end of ’09, plus 50 Retail Mall Units) has seen profits rise from ?4.7m to an estimated ?17.6m in 2009.

Globo (LON:GBO) report: Trading update: FY’09 revenues ?23.4m

In a FY’09 update Globo reports that revenue should be ?23.4m with operating cashflow of ?8.1m; debt was “in line with the end of 2008” (Dec’08 ?9.8m) but delays in settlement of ?5.5m of government invoices indicates a higher level of net debt (which would indicate ?9.8m, at FY’08 levels). We estimate that the public sector accounts for some 45% of Globo’s software services revenue. Globo noted the positive impact of funding from the 3rd European Support Framework with the ?21bn 4th Framework expected to “enable … further growth”.

Clarkson plc (LON:CKN) report: Currency starting to help

Shares in Clarkson fell by 3.4% on Friday. A possible reason for this was that the ICAP profit warning mentioned a weaker than expected performance from its newer businesses. In particular, it said, “In shipping, the Baltic dry and wet indexes are 48% and 65% lower respectively than in the corresponding period of last year, and activity levels are severely reduced, which has affected performance.”  We are not concerned about current market levels for Clarkson. While the Baltic Dry Index has retreated sharply from its November 2009 peak (down from 4,600 to 2,715) it is exactly in line with its average level for 2009. Meanwhile, the tanker market has recovered strongly from its average levels for 2009, to the point where it could be the source of upgrades for some brokers.

CareCapital (LON:CARE) report: Sale of part of UK property portfolio

CareCapital has, this morning, announced the disposal of 14 UK primary care investment properties, through the sale of Sinclair Montrose Properties (SMP, a wholly owned subsidiary – this constitutes the majority of CareCapital’s existing UK portfolio) to PHP for a consideration of ?23.5m (a 2% premium to NAV), payable in cash on completion. After the repayment of the senior debt within SMP, the net cash proceeds will amount to approximately ?4.4m. A large proportion of this cash will be used to repay the majority of the Group's short term financing facilities (just under ?5m as at 30 June 09, of which ?4.2m was underwritten by Group Chairman, Michael Sinclair). The remainder will be used as working capital. As at 30 Sept 09, the properties included in the disposal were valued at ?22.95m and provided a rental income of ?1.41m p.a..

Brewin Dolphin (LON:BRW) report: Take advantage of Weakness

Clearly this is a market call in the short-term. However, we believe that on a medium-term view the current valuation of Brewin Dolphin looks compelling. Our forecasts for market levels are that the FSTE100 as at end of Sept’10 will be 5,060, rising strongly in 2011 to finish the FY 6.5% higher at 5,390. We expect FUM in 2010 to reach ?22.1bn, rising to ?24.4bn in 2011. Following a period of cost-cutting, and enormous margin pressure following the almost complete reduction in interest income, we see strong catalysts for upgrades.

21st Century Technology (LON:C21) report: Update on Disposal

21st Century Technology today announced that the agreement with Drake Investments Limited under which Drake had the option to purchase the Group's freehold head office premises in Mitcham, Surrey for a GBP2.7m cash consideration lapsed on 5 February 2010. The Board intends to explore other opportunities to dispose of the site. Management indicated that the disposal is not vital to the Group’s immediate growth plans.

UTV Software Communications Q3 FY10 results update

UTV Software Communications Limited operates in the verticals of Television, Movies, Broadcasting, Gaming and New Media and is thus close to achieving the status of a 3600 media company. Walt Disney, which is a leading global player in the Media and Entertainment (M&E) Industry, holds 60% stake in UTV.  UTV declared its Q3FY10 results which were in line with our expectations on the revenues as well as the profitability front. The company reported revenues of Rs. 216.2 crores in Q3FY10 as against Rs. 134.9 crores in Q3FY09 a robust growth of 60.3% on a YoY basis and Rs. 237.7 crores in Q2FY10, a 9% fall on a QoQ basis. The fall on the QoQ basis is mainly attributable to the movies as well as the gaming segment of the business which showed a substantial fall on the revenue front due to lack of new content.

ICAP (LON:IAP) report: Q3’10 IMS – Acquisition & Downgrades

IMS for the period ended 31st Dec ’09 highlights that the group is acquiring TriOptima for ?109m in cash (remaining 61.8%), Plus a further ?12m of working capital. This will be funded from existing debt facilities. The acquisition is said to be EPS enhancing from date of completion. Current trading – of more immediate interest will be the profit warning that points to results for the year ended 31st March 2010, being c.6-12% below consensus. The consensus mid-point suggests an Adj. PBT of ?334m for 2010, versus a now anticipated result of ?295-315m.

Avanti Communications (LON:AVN) report: 1H’10 HYLAS 1 orders at 14% of capacity

At 1H’10 Avanti reports that the “order book and sales pipeline for HYLAS 1 is strong with over 14% already committed for the first year of operations”. Also, contracts for HYLAS 1 capacity under negotiation lead Avanti to believe that it “should exceed internal targets for launch presales”. 1H Revenue was ?3.26m (1H’09 ?3.2m: DSCE ?3.51m), operating loss was -?0.45m (DSCE -?0.74m), with EBITDA (E) at -?44k (Dec’08 -?0.99m) and a cash balance of ?24.65m (prior to receipt of ?89m of HYLAS 2 - related funding).

GIPCL 3QFY2010 performance highlights and results update

GIPCL posted a robust 3QFY2010 performance, which was ahead of our estimates. The company’s impressive showing was led by a strong performance on the operating front. The company’s OPM for the quarter grew by a whopping 1,429bp, on account of a substantial decline in the fuel cost. After the results, we have revised our EPS estimates for FY2010E upward from Rs4.3 to Rs6.1. The stock is currently trading at a P/BV of 1x and at an EV/MW Rs3.8cr, according to its FY2012 estimates. We are recommending a Buy on the stock. Stellar performance on the operating front boosts the Bottom-line: GIPCL posted a robust financial performance during 3QFY2010. Although the company’s Top-line fell by 25.4% to Rs238.3cr (Rs319.6cr), on account of the decline in the fuel cost, which is a pass through, its OPM grew by a whopping 1,429bp to 25.2% (10.9%), primarily on account of the lower fuel cost. The interest expense was also down by 53.7% to Rs3.5cr (Rs7.5cr). On the Bottom-line front, the company’s Net Profit rose by 233.1% during the quarter to Rs28.8cr (Rs8.7cr), aided by a decline in the fuel costs.

Patel Engineering Q3 FY10 results update

Patel Engineering Limited (PEL) has a rich experience of 60 years in the construction industry. PEL has expertise in the fields of tunneling, underground works for hydroelectric and irrigation projects, water conductor systems, nuclear and thermal power projects, refineries, dams, industrial projects, heavy foundations, environmental engineering projects, roads, bridges and marine works, residential and commercial complexes, hotels and leisure establishments.

Sport Media Group (LON:SPMG) report: Solid update

Sport Media released a solid trading update recently, supporting the estimates released in our most recent update of 27 October 2009. The group stated that trading for the five months to 31 December 2009 had been ‘encouraging’, with daily average circulation remaining above budget. The group has also appointed a new Non-Executive Deputy Chairman, Martin Robinson, who is expected to become Chairman at the next AGM.

Spirent Communications (LON:SPT) report: Nokia’s Ovi Maps downloads a “one per second” highlighting

Nokia has reported that the latest version of its Ovi Maps application, available on mobile or WiFi networks and offering detailed mapping and navigation for 64 countries, has achieved 1.5m downloads in its first week; “a download a second, 24 hours a day” says Anssi Vanjoki of Nokia. The service is most popular in China, Italy, the UK, Germany and Spain.

Prosperity Minerals Holdings Ltd (LON:PMHL) report: Possible share buyback

Prosperity has confirmed that a circular has been sent today to shareholders seeking their approval for the disposal of its cement interests as detailed in recent announcements. Prosperity will also seek approval to increase its general authority for share buybacks from the current 5% level up to 30%. The proposed maximum buyback price would be the higher of (a) 120% of the average closing midmarket price for the preceding five business days and (b) the unaudited NAV per share the day after completion of the cement disposal.

Titan Industries performance highlights and results update

For 3QFY2010, Titan Industries (Titan), reported a stellar performance, which was above our expectations. The company reported a top-line growth of 30.3% yoy to Rs1,333.8cr. The growth was backed by robust performances of the Jewellery and Watches segments, which grew by 33.7% and 24.8%, respectively. The EBITDA margin improved by 110bp, from 7% in 3QFY2009 to 8.1% in 3QFY2010, mainly on the back of a significant improvement in the performance of the Watches segment. Considering the reversal in the declining volume trend in the Jewellery segment and a revival in consumer sentiment, we foresee better times in the future. We maintain our Neutral rating on the stock.

NIIT performance highlights and results update

NIIT witnessed a spurt of 72.7% yoy in Bottom-line in 3QFY2010 on a consolidated basis marking strong performance for the quarter. This is attributed to the 275bp jump in EBIDTA Margin led by all the business segments, better product mix and strong recovery witnessed in the Indian economy exhibiting improved job prospects with demand revival across industries. Thus, with positive economy indicators aiding the company’s strong business plans, we expect it to seize the upcoming opportunities and register strong Operational performance in the near future. Based on SOTP based Fair Value, we remain Neutral on the stock.

Anant Raj Industries performance highlights and results update

Anant Raj Industries’ (ARIL) 3QFY2010 Revenue and PAT came in line with our estimates. Net Revenues were largely driven by sale of its commercial property at Greater Noida at Rs6,500/sq ft during the quarter. Total Project cost including land cost was Rs10.5cr, which resulted in higher EBIDTA Margin of 92.4% for 3QFY2010. During the quarter, the company registered steady growth in Rental income, which grew 16.4% qoq as additional 0.1mn sq ft moved in for fit-outs for its Manesar IT Park. During the quarter, the company acquired 40 acres of land for Rs23cr (Rs132/sq ft) at Punjab Khor outside Delhi, which it intends to launch as a Mid-income Residential project after three years as it still classifies it as a agricultural land. Pre-lease commitment for its Kirti Nagar mall still remains at 30% indicating a challenging environment for leasing. Management has maintained its guidance of launching its super premium Residential project in Hauz Khas in 4QFY2010, which should drive Revenues in the ensuing quarters. We maintain a Buy on the stock.

Sun Pharmaceuticals performance highlights and results update

Sun Pharmaceutical (Sun) having one of the strongest ANDA pipelines in the Indian Pharma space, reported 3QFY2010 numbers which were ahead of our estimate. Net Sales came in at Rs1,021cr, up 11.2% yoy along with a healthy OPM of 36.1%, which was ahead of our estimate driven by lower Employee and R&D expenses. The company reported Net Profit of Rs339.0cr, which though down 17.0% yoy was ahead of our expectation. On the Caraco front, the subsidiary submitted a work plan to the Regulator for remedial action that could lead to commencement of manufacturing. Further, pending resolution of the USFDA issue, the subsidiary has transferred some of its products to alternate manufacturing sites. Owing to Fair Valuations, we remain Neutral on the stock.

Sasken Communications Technologies Q3 FY10 results update

Sasken Communication Technology Ltd (Sasken) is an embedded communications solution company that helps businesses across the communications value chain to accelerate product development life cycles through a unique combination of research and development consultancy, wireless software products and software services. Sasken employs more than 3,000 people operating from state-ofthe- art research and development centers in India, Finland, Mexico and the US. Over the years Sasken has grown organically as well as inorganically by acquiring stakes in several small companies.

NTPC IPO review and analysis by Nirmal Bang

NTPC is one of the largest power generating company in India. It has been granted the “Navratna” status by the Govt. of India. With having around 18.6% of country’s installed capacity, it generates about 28.6% of total power in India. Currently, it has generation capacity of 30644 MW out of which 28350 MW is through its owned 112 units and 2294 MW through Joint ventures. In addition to generation business, it carries electricity distribution and power trading business through its subsidiary, and also provide consultancy to state and private sector power companies.

Stagecoach Theatre Arts (LON:STA) report: Solid H1 performance

Stagecoach has reported H1 10A revenue of ?3.03m, representing a 1% decline on H1 09A (?3.05m). Despite the revenue decline, the group has reported a gross margin expansion from 40.8% to 44.1%, driving a 7% YoY increase in gross profit to ?1.34m (vs ?1.25m). A marginal increase in group overheads has resulted in broadly flat operating profit. Likewise, underlying earnings were flat, showing EPS in H1 10A of 1.87p (vs reported 2.42p in H1 09A) and the group has recommended an unchanged interim dividend of 0.50p

Prodesse (LON:PRD) report: Strong NAV, positive Annaly performance in Q4’09

Two reasons this morning to be buying Prodesse. Firstly, the Group last night announced that unaudited NAV as at 31st Jan’10 was $8.75 (including estimated liquidation costs). This equates to 546p (?:$ 1.6033). In $ terms the NAV was +5% month-on-month and +28% year-on-year. Secondly, overnight the parent Group, Annaly reported Q4’09 Core EPS of $0.79 +68% Y-on-Y and +5% Q-on-Q. The DPS of $0.75 was +50% Y-on- Y and +9% Q-on-Q.

PartyGaming (LON:PRTY) report: Strong Q4 KPIs and outlook

PartyGaming has announced a strong Q4 trading update, with revenue up by 32% YoY (LFL +12% excluding acquisitions) and EBITDA expected to be ahead of management’s expectations. Current consensus is for EBITDA of $131m and we would expect the actual figure (to be reported 4 March 2010), to be at or above our top-ofconsensus estimate of $133.1m. The revenue growth (+17% QoQ against a tough Q3 period) has been compounded by higher margins (a natural consequence of inherent operational gearing in the business model) driven by improved yields per customer that were up by 8% QoQ.

Healthcare Locums (LON:HLO) report: Upgraded to buy

Shares in Healthcare Locums are 11% below their high for the year and offer 13% upside to our 290p target price. We are upgrading from Hold to Buy. The UK trading background is still very positive for HLO and the 2010 looks to have started well. The “Report on Jobs” for January was published at midnight last night. For temporary staff, which covers nearly all of HLO’s UK business, the demand reading was usefully positive at 55.7, up from last month’s 53.2 and in line with the average level of the preceding six five months.

Acal (LON:ACL) report: Trading update: “operating profitably”

Acal (March year-end), electronics and medical components distributor, reports that since Oct’09 it is “operating profitably”, with a net cash position (FY’09 net cash was ?24.6m (E)). Order backlog in the Electronics division (63% of FY’09 total of ?165.4m) is +3%YoY, and 16% above its Apr’09 low point. Supply Chain (33% of revenues, where Acal previously announced it had ended a major contract) and Medical (5% of revenues) divisional “sales remain stable although margins are coming under pressure”. NHS-related spending increased but Acal remains “cautious for the remainder of the year”.

Gujarat State Petronet Q3FY10 results update

Gujarat State Petronet Limited (GSPL), a subsidiary of Gujarat State Petroleum Corporation Limited (GSPC) was incorporated in December 1998 for the purpose of constructing and managing a state?]wide gas transmission network in Gujarat. GSPL, a Pure Natural Gas Transmission Company is a pioneer in developing energy transportation infrastructure and connecting major natural gas supply sources and demand markets. GSPL is the first company in India to transport natural gas on ?eopen access?f basis i.e. it makes the gas transmission capacity available to any shipper on a nondiscriminatory basis.

Maruti Suzuki Q3FY10 results update

Maruti Suzuki India Limited, a subsidiary of Suzuki Motor Corporation of Japan, is the leader in the Indian car market with 54% market share. The company has State?]of?]the?]art Manufacturing Facilities at Gurgaon located some 25 km south of New Delhi. Maruti Suzuki has a sales network of 741 state?]of ?]the?]art showrooms across 509 cities, with a workforce of over 15000 trained sales personnel.

System C Healthcare (LON:SYS) report: All eyes on May

A strong 1H led by revenues from Products (which doubled); post-May, questions remain. Our view is unchanged: Buy. 1H10 revenues grew 77%YoY (?18.3m) with underlying 34% improvement and Products up 2.4x. EBITDA grew 85%YoY with improved (21.6%) margin. Cash balance was ?16.0m.

RM Group (LON:RM) report: BSF prospective contract win: Essex

The Skanska RM consortium has been selected as preferred bidder for a (Phase I) ?150m BSF programme in Essex. The first four schools in the programme are due to be opened in 2012. This is one of the largest BSF contract awards. This decision means that RM has been selected for BSF ICT provision in 15 out of a total of 39 contracts so far awarded, as part of a variety of consortia including Balfour Beatty, Laing O’Rourke, Hochtief and others.

Playtech (LON:PTEC) report: Gala Coral deal validates Videobet technology

Playtech’s recently announced (see our note of 21 January 2010) joint venture with Scientific Games’ (SGMS.N) subsidiary Global Draw has benefited from almost immediate validation with the announcement from Sci Games yesterday that Global Draw’s key contract with Gala Coral in the UK has been extended. Global Draw is the exclusive provider of SBG machines into the Gala Coral estate, generating income from a total of c.6,500 machines across Gala Coral’s 1,646 units.

Gartmore Group (LON:GRT) report: Takeaways from analyst teach-in

Yesterday, management provided the first teach-in for analysts since listing in Dec ’09. We took away the following key points: Alternatives to drive success – alternatives account for 17% of FUM (as at 30 Sept ’09), but around half of net revenues, which, in our view, is an attractive dynamic relative to the remainder of the institutional asset management sector. The Group’s alternatives funds are likely to have delivered strong performances in FY’09. Notwithstanding this, it saw very significant fund outflows in late ’08 and early ’09 as no gates or side pockets were imposed. The decision to maintain liquidity has, in our view, generated goodwill on the part of the investors and we understand recent net inflows have averaged ?140m per month.

Jagran Prakashan 3QFY2010 performance highlights and results update

For 3QFY2010, Jagran delivered muted Top-line growth of 9.7% yoy, marginally below our estimates. However, Earnings continued their strong momentum registering a robust 157% yoy growth aided by Gross Margin expansion of 1,307bp. Going ahead, we expect momentum in Advertising Revenues to sustain in 2HFY2010 driven by up-tick in the economic activity and higher spend by sectors like Real Estate, BFSI and Auto. Moreover, most Print Media companies (including Jagran) are likely to hike Advertising rates, which will also aid growth in the ensuing quarters. We maintain Jagran as our Top Pick in the Print Media space and upgrade the stock to Buy.

Madhucon Projects 3QFY2010 performance highlights and results update

Madhucon Projects (MPL) posted good set of numbers for 3QFY2010 on Standalone basis and exceeded our estimates. This was mainly on account of strong Order Book and fast ramp up of in-house projects. MPL has a strong Order Book of Rs4,065cr or 3.3x FY2010E Revenues, lending Revenue visibility. MPL is aggressively eyeing current opportunities in the Road space and expects some order booking in the near future. We believe any positive developments on this front would serve as a catalyst for the stock. We maintain a Buy on the stock.

Bank of India 3QFY2010 performance highlights and results update

Bank of India reported a Net Profit de-growth of 53.5% yoy, against our expectations of a 31% de-growth. The yoy growth in advances was at 15.3%, while deposit growth was strong at 20.0%. The continuing pressure on the asset-quality and the poor core operating performance of the bank were the key highlights from the results. We maintain a Neutral rating on the stock.

Punjab National Bank 3QFY2010 performance highlights and results update

Punjab National Bank (PNB) reported a flat Net Profit yoy of Rs1,011cr, in-line with our estimates. The core performance was strong, with robust NII growth, driven by an improved CASA ratio and a 20bp qoq improvement in the NIM. We remain concerned on the asset-quality front, though a healthy coverage ratio of 83% (highest among peers) provides some cushion. However, at the current levels, we believe that the stock is fully valued, relative to peers. Hence, we maintain a Neutral rating on the stock.

Cairn India 3QFY2010 performance highlights and results update

Cairn India (CIL) reported better-than-expected set of numbers for 3QFY2010 on the back of higher-than-expected Sales volumes from the Rajasthan block, and lower-than-expected DD&A expenditure. This was the first quarter when the company reported Sales from its core asset ‘MBA’ fields, which are still under ramp up mode. Management has guided for slower than anticipated Sales ramp up going ahead. Accordingly, we have pruned our Volume estimates in turn leading to decline in our FY2011E EPS to Rs21.5 (earlier Rs25.2), a reduction of 14.9%. However, with profit petroleum now pushed back, our FY2012E stands increased to Rs42.2 (earlier Rs40.1). We remain Neutral on the stock.

Cinemax India 3QFY2010 performance highlights and results update

Cinemax posted a stellar performance in its 3QFY2010 results. The Top-line of the company grew 57% yoy and OPMs expanded 675bp yoy, aided by a strong movie pipe-line, driving a whopping growth of 419% yoy in Earnings. After the 3QFY2010 results, we have revised our estimates significantly upwards to factor in: 1) a stronger movie pipeline in FY2011E, 2) higher OPMs, on account of better operating leverage, due to a higher revenue base, and 3) benefits from cost-rationalisation measures adopted during FY2010 to combat the economic downturn. Hence, we upgrade the stock to Buy.

Crompton Greaves 3QFY2010 performance highlights and results update

Crompton Greaves reported another strong quarter of performance, with an impressive 62.0% yoy growth in its bottom-line to Rs200cr, which was better than our estimates. Although the company had a muted top-line performance, clocking a mere 4.5% yoy growth, it made up for this with a wider-thanexpected expansion in operating margins. Currently, the stock trades at 18.3x FY2011E EPS and at 16.2x FY2012E EPS. We maintain our Buy view on the stock.

Gateway Distriparks 3QFY2010 performance highlights and results update

Gateway Distriparks’ (GDL) 3QFY2010 results were marginally above our estimates. Revenue growth was mainly driven by robust growth in the Rail business, which grew 52.9% yoy to Rs67cr. The company’s CFS Revenues declined by 23.2% yoy on a high base and dwell time returning to normalcy, impacting ground rent revenues; however, it improved sequentially with better Realisations. EBIDTA Margin came in above our estimate owing to change in Product mix in the Rail Segment and expect the trend to continue with improving Exim visibility. Management has guided that funds from Blackstone would flow in 4QFY2010, which would fasten capex and expect to break even at the PAT level in FY2011E. We maintain a Buy on the stock.

Simplex Infrastructure 3QFY2010 performance highlights and results update

Simplex Infrastructure (SI) posted disappointing numbers for 3QFY2010 on a standalone basis, which were way below our and street estimates. This was mainly on account of various delays leading to slow execution and lacklustre Top-line. On the bourses, we expect the stock to get de-rated on account of the bad performance. We downgrade our estimates due to the poor results. As a result, we downgrade the stock from Buy to Accumulate.

Tata Motors 3QFY2010 performance highlights and results update

For 3QFY2010, Tata Motors (TML) reported a substantial 88.7% yoy growth in Net Sales to Rs8,980cr (Rs4,759cr) on a Standalone basis, which was better than our expectation. The company reported Net Profit of Rs400cr (Net Loss of Rs263cr in 3QFY2009) for the quarter, which was largely in line with our expectation of Rs408cr, mainly due to a substantial improvement in OPM. We believe that FY2010 will be a year of recovery for TML’s standalone business, due to overall glimmers of improvement in the economic parameters. The cut in Interest rates, overall improvement in the financing scenario and low base are expected to help TML report better Volume growth in 2HFY2010. Our estimates for TML factor in 19% CAGR in commercial vehicle (CV) Volumes over FY2009-11E. We recommend a Buy on TML.

Tata Steel 3QFY2010 performance highlights and results update

Tata Steel’s standalone 3QFY2010 net revenue increased by 33.2% yoy and 12.0% qoq to Rs6,307.5cr, ahead of our estimates of Rs5,485cr. The outperformance is attributable to: 1) a 9.4% higher sales volume, and 2) a 5.2% higher blended realisation, as compared to our estimates. Net income grew by 155.6% yoy to Rs1,191.8cr, ahead of our estimates of Rs810cr on back of strong volume growth, lower cost and substantial jump in other income. Due to the delay of 3.2mn tonnes brownfield expansion, which is now expected to come on-stream by 2HCY11E (previous target date was 1HCY11E), we have revised our volume estimates downwards for FY2012E by 5.8%. We maintain a Buy on the stock.

Punj Lloyd 3QFY2010 performance highlights and results update

Punj Lloyd (Punj) posted a disappointing set of numbers for 3QFY2010. The quarter witnessed a Top-line de-growth, along with operating margins below our expectations. This poor performance and extraordinary expenses (on account of losses booked on the Bio-ethanol project) booked by its 100% subsidiary, Simon Carves, led to a dismal Bottom-line number, much below our expectations. In the backdrop of slower execution and a shrunken Order Book, we prune our Top-line estimates, factor in extraordinary expenses, in FY2010, FY2011E and FY2012E, resulting in the revision of Bottom-line estimates. However, considering its cheap valuations and overall opportunities in the sector, we maintain Buy.

Madras Cements 3QFY2010 performance highlights and results update

Madras Cements (MAC) posted a weak 3QFY2010 performance, which was below our estimates. The net profit for the quarter was down by 74.5% to Rs16cr. The company’s performance during the quarter was affected by a decline in realisations, due to the floods and political uncertainty in Andhra Pradesh. MAC also faced pressure on its operating margins, due to a steep increase in the raw material costs by 76.6%. After the results, we have revised our EPS estimates for FY2010E downward from Rs20.8 to Rs17. The stock trades at a P/E of 4.4x, at an EV/EBITDA of 3.2x and at an EV/tonne of US $57/tonne, according to its FY2012E estimates. We maintain a Buy on the stock.

IRB Infrastructure 3QFY2010 performance highlights and results update

IRB Infrastructure (IRB) posted strong set of numbers for 3QFY2010, which were broadly in line with our expectations. Consolidated Top-line witnessed robust growth owing to traction in the Construction and BOT Segments. Strong Operating Margins and in-line Interest and Depreciation costs resulted in consolidated Bottom-line surging as well. In light of strong 3QFY2010 numbers, vast experience in areas of Road BOT Segment and huge upcoming opportunity in the Road Sector, of which IRB will be a prime beneficiary, we maintain a Buy on the stock.

DB Realty IPO review and analysis by Angel Broking

DB Realty (DBRL), a leading realty player in the Mumbai Metropolitan region, has firmed up development plans for 100mn sq ft with a total saleable area of 60.9mn sq ft (DBRL's share). Around, 65% (40mn sq ft) of its total saleable interest is concentrated in the outskirts of Mumbai (Dahisar, Mira Road, Mahul, Mankhurd, Pune) , 6.6% in South Mumbai, 21% in Western Suburbs and rest in Central Mumbai. We have assumed average realisation of Rs6,000p sq ft on DBRL's saleable interest based on its geographical presence, which gives us a Fair NAV of Rs412/share. Hence, we believe that the IPO is expensive and recommend an Avoid. However, investors could consider alternate, existing listed realty players like Anant Raj and HDIL.

THB Group (LON:THB) report: Strong 09; compelling valuation

2009 results significantly exceeded DS forecasts. Following a strategic review, we expect the Group to be aggressive in its pursuit of organic and acquisitional growth, whilst driving margin expansion through operational efficiencies. Core broking profit of ?5.3m in 2009, 20% ahead of DS forecasts.

Synchronica (LON:SYNC) report: Dec’09 Trading Update

In a Trading Update, Synchronica reports; “In the second half of the year Synchronica won new contracts with eight mobile operators for its award winning Mobile Gateway push email product, bringing to thirteen the total number of operators signed up in 2009. All contracts are in the Company's target market of developing countries”.

ReNeuron (LON:RENE) report: Clinical advisory board appointments

ReNeuron today announced the appointment of four opinion-leading clinicians to its newly-established Clinical Advisory Board for its ReN009 stem cell therapy for peripheral arterial disease (PAD). The board will advise ReNeuron on the clinical development of its ReN009 therapy and review its progress along the clinical development pathway.

Prosperity Minerals Holdings Ltd (LON:PMHL) report: Disposal process rolls on

Prosperity has made a long announcement this morning entitled –“Further Announcement in Relation to Disposal of Cement Business in the People's Republic of China” There are two main parts to the announcement, neither of which is price sensitive: An MD&A of the businesses which are being retained by PMHL covering the three and a half years ended 30 September 2009. The company has already given a description of this before in its financial reports so there is little new here. An independent property valuation report in respect of the property interests of the disposal group. These are being sold anyway so this is not price sensitive.

Planet Payment (LON:PPT) report: Standout UAE deal

Planet Payment recently announced an agreement with Network International to provide the Middle Eastern-based company with the Planet Payment proprietary Dynamic Currency Conversion (DCC) services, branded as ‘Pay in Your Currency’. Network International is the largest acquiring bank in the Middle East and North Africa and therefore represents the ideal partner from which Planet Payment can launch DCC into the region as the first entity to do so (estimated Q2 2010).

STM Group (LON:STM) report: Trading update

STM has provided a trading update ahead of its FY’09 results on 9 March. The statement guides that results for 2009 will be ‘broadly in-line with market expectations.’ We expect adj. PBT to come in towards the bottom of the consensus range at c.?0.6m versus our forecast of ?1.1m. This is clearly disappointing, particularly after the significant downgrades we have already made to 2009 forecasts.

RM Group (LON:RM) report: On-screen marking contract confirmed

RM has announced confirmation its 4-year contract with the Qualifications and Curriculum Development Agency (QCDA) to provide outsourced onscreen marking services (following the announcement of preferred bidder status on Jan’5th). RM will be the primary supplier of on-screen marking services to QCDA, whilst it reports that the Agency may request RM to provide services for test marking on a cycle-by-cycle basis over the term of the agreement.

NEXUS MANAGEMENT (LON:NXS) report: Integrated, always-on IT support for SMEs

Nexus Management offers a range of services that provide full-service IT support for SMEs, backed by its own data centre and helpdesk support staff. Nexus has used acquisitions in data storage, network security and helpdesk IT support to access SME demand for IT services, targeting Europe and the US.

Blue Star 3QFY2010 performance highlights results update

For 3QFY2010, Blue Star recorded a modest 5.1% yoy growth in Top-line to Rs596cr (Rs567cr), which was in line with our estimate. Top-line growth was primarily driven by robust Sales registered by the Professional Electronics and Industrial Systems (PEIS) Division. OPM also came in line with our estimate at 9.5%. Net Profit posted 32% yoy growth to Rs42cr primarily on the back of Exceptional Items of Rs8.7cr. Excluding Exceptional Items, Net Profit grew by 4.4% yoy. The company’s Order Book yoy increased to Rs1,890cr (Rs1,626cr) during the quarter. The stock is currently trading at 13.4x FY2012E Earnings, factoring in all the visible growth. We remain Neutral on the stock.

NALCO 3QFY2010 performance highlights and results update

Nalco’s net revenue increased by 36.5% yoy and 21% qoq to Rs1,386.5cr, as against our estimate of Rs1,190cr. The growth in the top-line was mainly driven by higher realisations and an increase in electricity sales. Due to a substantial increase in input costs, the net profit declined by 29.3% to Rs155.2cr, which was lower than our estimate of Rs205.1cr. We believe that NALCO is trading at rich valuations, as compared to its peers like Hindalco and Sterlite. We maintain a Sell on the stock.

HUL 3QFY2010 performance highlights and results update

HUL reported a muted Top-line growth of 4.6% yoy to Rs4,504cr, below our expectation, despite a modest 5% overall volume growth, on account of steep price cuts and a weak performance of Soaps/Detergents segment. The OPM for the current quarter declined marginally by 14bp to 16% due to a 66.4% rise in ad-spends, resulting in a muted EBITDA growth of 3.7% yoy. HUL’s recurring Bottom-line registered a decline of 8.8% yoy to Rs605cr, below our estimates, due to a higher tax rate. After the 3QFY2010 results and revenue de-growth in the core Soaps/Detergents segment, we have marginally tweaked our Top-line estimates downward by 1-2%, factoring in lower value growth. In terms of earnings, we have tweaked our model to factor higher advertising spends. We maintain our Accumulate rating on the stock.

Hindalco 3QFY2010 performance highlights and results update

Hindalco’s standalone net profit declined by 22% yoy to Rs427.1cr, in-line with our estimates of Rs448.7cr. EBITDA margins plunged on account of: 1) higher input costs, 2) lower by-product realisation, and 3) rupee appreciation. In the near term, we expect some correction in metal prices, following the recent run-up amidst high inventory levels. We maintain a Neutral on the stock.

Godrej Consumer Products 3QFY2010 performance highlights and results update

Godrej Consumer (GCPL) posted a strong set of numbers for 3QFY2010 with 53% yoy growth in Top-line (largely Volume driven) and 113% yoy growth in Bottom-line ahead of our estimates. Adjusted for GSL’s contribution, Top-line growth stood at 16% yoy and Earnings grew 64% yoy. While GCPL witnessed moderation in Soaps Revenue growth to 13% (Volume growth at 10%), strong performance of its International business (grew 26% yoy driven by Rapidol and Kinky, Keyline disappointed) boosted growth this quarter. We believe the current underperformance provides investors an attractive entry point. Hence, we maintain a Buy on the stock.