Godrej Properties IPO review and analysis by Angel Broking
9 December 2009 | Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang
8 December 2009 | JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking
7 December 2009 | JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
Surgutneftegas: Currency rates are putting away the dividends...
26 November 2009 | We have revised our model of Surgutneftegas. The reason for that was the output of the 3Q 2009 report, correction of our suppositions of the company’s future development, and also the postponing of the target time and evaluation one year forward. Particularly, in our model of Surgutneftegas we have corrected the former forecast of income for the current year towards reduction: on EBIT – by 2.2%, on the net profit – by 21.5%. Mainly that happened due to the corrections on the operating estimates, and also due to the continuing strengthening of Russian ruble, which, considering significant dollar liquidity of the company, turns into negative currency exchange. Due to the negative currency exchange precisely For the second quarter in a row Surgutneftegas shows low level of the net profit. The fourth quarter, as we see it, will not make an exception and we expect negative currency exchange similar to the ones in the third quarter.
Gazprom: Having passed the bottom
23 November 2009 | We have revised our estimation of Gazprom’s shares. The reason for up-dating the company’s model was the report by IAS for 1H 2009, the budget draft for the next year and corrections of WACC method calculation. The provided financial report of the gas monopoly totally brought no surprises. As it has been expected, the second quarter was worse than the first one and likely was the weakest within the whole year. In 1H 2009 the financial estimates were affected by the decline of the gas sale at all markets by 22.3% average, and by the reduction of the retail price of gas by 9.6% in the state of the far abroad and by 24% in Russia. As a result within the six months of the year 2009 sales slipped by 24.1 bn USD or by 32.8% and formed 49.285 bn USD, operating profit and EBITDA showed reduction by 56.7% and 52.6% respectively and formed 12.98 bn USD and 16.18 bn USD.
Cox and Kings IPO review, analysis and recommendation
18 November 2009 | Cox and Kings proposes to make its IPO in the price band of Rs316-330/share, at a face value of Rs10 each, and to issue 1.85cr shares, of which 30.5lakh shares are offered for sale by Lehman Brothers Opportunity, Deutsche Securities Mauritius and Merrill Lynch Capital Markets Espana. Therefore, the fresh issue by the company will be to the extent of 1.55cr shares. The company plans to use the proceeds for debt repayment (Rs129.6cr), acquisitions and other strategic initiatives (Rs150cr), investment in overseas subsidiaries (Rs62.5cr), and investment in corporate offices and upgrading its existing operations (Rs60cr).
Rostelecom: Prospects are limited again
11 November 2009 | On Monday Rostelecom summed up the results of 1H 2009 by IAS. According to the report, the sales within the half year year grew by 4.4% versus 1H 2008 and formed 32.8 bn RUR. Net profit dropped from 9.8 bn RUR to 1.5 bn RUR. OIBDA margin reduced by 7.6 p.p. to the level of 17.6%.
Mahindra & Mahindra reported Net Sales of Rs4,557.8cr for 2Q FY2010
30 October 2009 | For 2QFY2010, Mahindra and Mahindra (M&M) clocked Net Sales of Rs4,557.8cr, up by 35.9% yoy. This growth was aided by the 29.3% yoy growth in core Volumes, while the average realisation per vehicle decreased by around 4.4%. The Punjab Tractors (PTL) consolidation, greater volumes and lower Excise rate also aided the Top-line growth. The UV segment posted a robust growth of 43.7%, where its new model Xylo and the existing model Bolero continue to see a good off take and aided substantial growth in 2QFY2010. M&M’s EBITDA Margins (adjusted for Forex losses) witnessed around a 902bp yoy increase, owing to lower Raw Material costs, which declined by 584bp yoy and accounted for 62.5% of Sales (68.3% in 2QFY2009). Further, higher volumes during the quarter, supported by the cost synergies post the merger of PTL with M&M, helped the substantial improvement in OPM. The company’s Bottom-line for the quarter, at Rs702.9cr, was substantially above our expectation, mainly due to an improvement in the OPM and higher Exceptional Items.
Sun Pharmaceuticals reported Net Sales of Rs1,185.2cr for 2Q FY2010
30 October 2009 | Sun Pharma reported Net Sales of Rs1,185.2cr (Rs1,177.8cr), which were flat on a yoy basis and were above our estimate of Rs913.0cr, primarily on the back of a one-time receipt from Lexapro settlement of US $20mn from Forest Labs and higher sales of Protonix. As a result, Export Formulation sales de-grew by a mere 5.1% to Rs592.9cr (Rs624.5cr). Sun’s US subsidiary, Caraco, reported Net Sales of US$78.4mn which were up by 63.3% sequentially, driven by Protonix sales. Caraco received a one-time payment of US $20mn from Forest labs on the Lexapro settlement during the quarter. Domestic Formulation sales increased by 5.3% to Rs471.0cr (Rs447.3cr) and continue to be impacted by one-time sales of Rs200cr booked in Q4FY2009. The company expects its Domestic Formulation sales to grow in line with the Industry rate in 2HFY2010. For 1HFY2010, the company reported Net Sales of Rs1,972.8cr (Rs2,219.6cr), down 11.1%.
Reliance Industries reported 4.8% yoy revenue growth to Rs46,848cr for 2Q FY2010
30 October 2009 | Reliance Industries (RIL) reported in-line 2QFY2010 numbers on the EBITDA front, while the same were lower than our expectation on the Bottom-line front. Top-line increased 4.8% yoy to Rs46,848cr (Rs44,688cr) primarily on the back of 8.9% yoy growth in Refining Revenues to Rs39,564cr (Rs36,316cr) and a whopping 214.1% yoy increase in Oil & Gas Revenues to Rs2,937cr (Rs935cr). Net Profit fell 6.4% yoy to Rs3,852cr (Rs4,116cr). Crude processing during the quarter was higher by 90.4% yoy to 15.63mn tonnes (8.21mn tonnes) following commissioning of RPL’s refinery. KG-D6 gas production, which commenced last quarter, scaled up in the current quarter with average production increasing qoq to 33mmscmd (19mmscmd in 1QFY2010).
ONGC posted 13.2% yoy revenue decrease to to Rs15,192cr for 2Q FY2010
30 October 2009 | ONGC registered a decent set of numbers for 2QFY2010 compared to our estimates. Top-line registered de-growth of 13.2% yoy, while Bottom-line grew a marginal 5.8% yoy. The decline in Top-line to Rs15,192cr (Rs17,500cr) could be attributed to termination of sales of MRPL products and lower sales of value-added products. Crude oil sales declined to 5.55MMT (5.67MMT), while gas sales volume were flat at 5.19BCM (5.21BCM). ONGC’s Gross realisations from crude oil sales stood at US $70.5/bbl (US $119.3/bbl). During the quarter, the company shared a Subsidy burden of Rs2,630cr. Hence, Net realisations stood at US $56.4/bbl (US $46.6/bbl). While Gross realisations were in line with our estimates, Net realisations exceeded our estimates on account of the lower-than-anticipated Subsidy burden during the quarter.
Tata Steel posted 17.8% yoy revenue decrease to Rs5,630cr for 2Q FY2010
30 October 2009 | For 2QFY2010, the Top-line witnessed de-growth of 17.8% yoy to Rs5,630cr (flat qoq), and was below our estimates of Rs6,214cr. While the sales volume increased by 19.4% yoy and 2.7% qoq to 1.45mn tonnes, average steel realisations dipped by 26.2% yoy and 2.9% qoq, to Rs35,652. This was mainly due to the increased sale of long products, which accounted for 45% of the sales (as compared to 40% in 1QFY2010). While flat product realisations were up by 5.9% qoq, long-product prices declined by 6% qoq, leading to a dip in the overall average realisations.
Crompton Greaves posted a 16.8% yoy revenue growth to Rs1,269cr for 2Q FY2010
30 October 2009 | Crompton Greaves posted a 16.8% yoy growth in its standalone top-line to Rs1,269cr (Rs1,086cr) for 2QFY2010, which was primarily driven by the strong performance in the domestic power systems and consumer products segments. The EBITDA margin expanded by 336bp to 16.5% (13.1%), due to lower other expenses, coupled with lower raw material costs. Consequently, the standalone net profit for the quarter grew by 47.1% yoy to Rs136cr (Rs93cr). For 1HFY2010, the net profit grew by 38.2% yoy to Rs251cr (Rs181cr).
UTV Software Communications reported revenues of Rs. 237.7 crores in Q2 FY10
30 October 2009 | UTV declared its Q2FY10 results which were above our expectations on the profitability front. The company reported revenues of Rs. 237.7 crores in Q2FY10 as against Rs. 170.9 crores in Q2FY09 a rise of 39.1% on a YoY basis and Rs. 115.4 crores in Q1FY10, a 106.0% rise on a QoQ basis. This was mainly because in Q1FY10 there was a standoff between Producers and multiplex chains and so there were no movie releases, whereas in Q2FY10 UTV had nine releases including three Disney productions as part of the exclusive distribution deal with Disney. The company reported EBIDTA of Rs. 21.5 crores in Q2FY10 as compared to a marginal loss of Rs. 0.1 crores in Q2FY09 and a loss of Rs. 32.9 crores in Q1FY10. The company reported net profits to the tune of Rs. 8.3 crores in Q2FY10 as compared to net profit of Rs. 25.1 crores in Q2FY09 a fall of 67% and a loss of Rs. 23.3 crores in Q1FY10.
India Cements stock recommendation is Neutral by Angel Broking
29 October 2009 | India Cements posted a 7% yoy growth in its Top-line to Rs995cr (Rs930cr) for 2QFY2010, which was in line with our expectation. The Top-line growth came mainly on the back of higher cement volumes during the quarter. Cement volumes were up by 4% yoy to 2.5mn tonnes (2.4mn tonnes). The average realisation was, however, slightly lower, by 1.2% yoy to Rs3,025/tonne (Rs3,063/tonne), on account of low demand from the Andhra region and a higher component of clinkers in the total sales volume. During the quarter, India Cements also posted Revenues of Rs14.2cr and Rs7.9cr from its Freight business and IPL franchisee, respectively. For 1HFY2010, the company’s Top-line grew by 8.3% yoy to Rs1,955cr.
GAIL stock recommendation is Neutral by Angel Broking
29 October 2009 | For 2QFY2010, GAIL reported a mere 1.2% yoy growth in Revenues to Rs6,202cr (Rs6,129cr), which was lower than our expectation of Rs6,589cr. Revenue growth was aided by good performance in the Natural Gas Transmission, Natural Gas Trading and LPG Transmission Segments. The Natural Gas Transmission and Trading Segments grew 39.2% and 10.8% respectively, whereas the LPG Transmission Segment grew 15.0%. Revenues of the Natural Gas Transmission Segment were driven by both higher realisations and volume. The Natural Gas Trading Segment Revenues were driven by higher revenue per unit, while the LPG Transmission Segment Revenues were driven by higher volumes.
Idea Cellular stock price target is Rs49 by Angel Broking
29 October 2009 | Idea Cellular recorded a 0.1% qoq drop in its consolidated top-line, on account of the subdued rural demand due to the delayed monsoon (rural areas contribute ~40% to the company’s top-line). However, on a yoy basis, the top-line grew by 29.1%. Idea’s standalone subscribers moved up from 42.8mn to 46.8mn qoq in 2QFY2010 (30.4mn in 2QFY2009), while the total subscriber base, including Spice, has moved up from 47.1mn to 51.5mn qoq in 2QFY2010 (34mn in 2QFY2009). However, the ARPU (Idea standalone), was down by 20.5% yoy and 9.9% qoq to Rs209. Segment-wise, the top-line growth, (including Spice) was backed by National Long Distance (NLD) services, which grew by 25% qoq (87% yoy growth) to Rs269cr. The revenues from Passive Infrastructure services, which had a miniscule revenue contribution of Rs9cr in 2QFY2009, were up by 2.1% qoq in 2QFY2010 to Rs225cr. The only laggard in the growth during 2QFY2010 was a 2.8% qoq de-growth (27.5% yoy growth) in the Mobility services segment to Rs2,926cr. Minutes of Usage (MoUs) declined by 11% yoy and 6% qoq to 375 minutes for Idea Standalone, while MoUs in Spice stood at 429, down by 1.1% yoy and 5.5% qoq. In 2QFY2010, Idea Standalone recorded Rs182.2cr of Revenues from its newer circles, Mumbai, Bihar, Orissa and Tamil Nadu (incl. newly launched services in Chennai), witnessing a growth of 27.6% qoq.
JK Lakshmi Cement reported sales growth of 17.7% yoy to Rs345.4cr for 2Q FY2010
29 October 2009 | JK Lakshmi Cement (JKLC)’s 2QFY2010 Top-line grew by 17.7% yoy to Rs345.4cr (Rs293.3cr), in line with our estimates. The growth in the Top-line was on account of higher volumes. Cement sales volumes grew 3.5% yoy to 1.01mn tonnes during the quarter, from 0.97mn tonnes in 2QFY2009. The average cement realisation for JKLC grew by 12% yoy to Rs3,265/tonne (Rs2,906/tonne). For 1HFY2010, the company’s Top-line grew by 23.7% to Rs696.3cr.
Madhucon Projects reported 4.9% yoy growth in Net Sales to Rs254.7cr for 2Q FY2010
29 October 2009 | Madhucon Project’s (MPL) 2QFY2010 results were below our expectations. The company recorded 4.9% yoy growth in Net Sales to Rs254.7cr (Rs242.9cr) as against our estimate of Rs280cr. The company has acknowledged that its Irrigation Segment has been hit by delays consequent to Andhra Pradesh, Chief Minister, YSR Reddy’s untimely demise. Hence, we have pruned our Top-line estimates by 7% and 11% for FY2010E and FY2011E, respectively.
Taj GVK posted a decline of 13% yoy in Net Sales to Rs53.8cr for 2Q FY2010
29 October 2009 | TajGVK posted a decline of 13% yoy in its Net Sales to Rs53.8cr (Rs61.8cr) for 2QFY2010. The decline was primarily caused by a 12% decline in its occupancy levels and a 25% decline in room rentals. Room revenues during the quarter declined by ~19% to ~Rs27cr, while Food and Beverages revenue witnessed a fall of ~8% to ~Rs26cr. However, the declining trend of occupancies has been arrested, with visible signs of a revival. Occupancy rates in Hyderabad and Chennai have improved to 65% and 47%, respectively, during the quarter under consideration. We expect the occupancies to improve further in the future.
Indraprastha Gas reported revenues of Rs. 307.3 crores for Q2 FY10
29 October 2009 | IGL declared its Q2FY10 results which were in line with our expectations. The company reported revenues of Rs. 307.3 crores as against Rs. 243.1 crores in Q2FY09 i.e. a 26.4% rise on a YoY basis and Rs. 261.5 crores in Q1FY10, a 17.5% rise on a QoQ basis. This was on account of volume growth in both the segments; viz. CNG recorded sales of Rs 275.09 crores a growth of 25% on a YoY basis and PNG sales registering a growth of 37% on a YoY basis at Rs 32.17 crores.
BG Group Q3 results: International growth spurs a move towards the US dollar
29 October 2009 | The group’s recent third quarter results (28 October 2009) saw the company exceeding analysts’ forecasts. Thanks largely to lower natural gas and oil prices, third quarter net profit declined by 43.5pc to ?484m, against ?857m in Q3 2008. However, as has been the case for some time, resilient performances from the group’s Transmission & Distribution division and from its Liquefied Natural Gas (LNG) business helped to cushion the downturn. On the production front, output materialised at 615,000 barrels a day, a rise of 4.8pc on the year, although below many analyst expectations of nearer 8pc, thanks mainly to a delay in the start-up of the Hasdrubal facility in Tunisia. As for the outlook, production targets over the fourth quarter are expected to come in around 700,000 barrels of oil equivalent, a 12pc increase on last year. Finally, given the group’s continuing international growth, like its major rivals, BG is moving during 2010 to report its results in US dollars.
Reckitt Benckiser Q3 results: Another polished performance
29 October 2009 | The group's recent third quarter results (27 October 09) saw the company retaining its reputation for reliability. Again, the company generated profits ahead of analysts' expectations – Q3 net profit rose to £357m (£285m – Q3 2008) against a consensus forecast of around £341m – but management was confident enough to raise its full year target for revenue growth to 6pc to 7pc against a previous target of 5pc to 6pc. Profit estimates were also raised to between 12pc and 13pc from 10pc to 11pc. Emerging markets again proved a growth driver, with strong free cash flow helping the company to reduce net debt (£423m against £1.1 billion as of 31Dec08).
BP Q3 results: Again exceeding forecasts
29 October 2009 | The group’s recent third quarter results (27 October 09) saw BP comfortably exceeding analysts’ forecasts. While the global economic downturn continued to impact, an improved operational performance combined with additional cost savings helped to cushion the fall. Third quarter profits on an underlying replacement cost basis (strips out gains or losses in inventories held) declined to $4.98 billion, down 50.2pc over Q3 2008. Excluding exceptional items, profit fell to $4.67 billion, ahead of the consensus estimate at $3.25 billion. The fall in both oil and natural gas prices continued to sit at the heart of the downturn. In addition, profit margins at the group’s refining business remained under some pressure. However, despite the fall in profitability against last year, signs of improving operational performance continued to show through. Reported production for the quarter was 3.917 million barrels of oil equivalent per day (mboe/d), more than 7pc higher than for Q3 2008 - +4pc when adjusted for hurricanes during 2008.
Cipla reported sales growth of 5% yoy to Rs1,371.2cr for 2Q FY2010
29 October 2009 | For 2QFY2010, Cipla reported Net Sales of Rs1,371.2 (Rs1,302.5cr), which was up a mere 5.3% and lower than our estimate of Rs1,453.8cr. This dismal Sales performance was on account of the lackluster performance by the Export and Domestic Formulation businesses. While Export Formulations de-grew 3.4% to Rs581.9cr (Rs602.4cr) in spite of Rupee depreciating by 11% yoy on an average during 2QFY2010, the Domestic Formulations business grew by a tepid 6.8% to Rs631.4cr (Rs591.3cr) as against the Industry growth rate of 11-12%. Management indicated that the dismal performance on the Sales front was on account of loss of anti-retroviral drugs tenders on account of price competition both on the Export and Domestic fronts. However, Export API grew 37.5% to Rs170.6cr (Rs124.0cr).
Ceat reported sales growth of 8.9% yoy to Rs719.4cr for 2Q FY2010
29 October 2009 | Ceat clocked turnover of Rs719.4cr (Rs660.3cr) for 2QFY2010, an increase of 8.9% yoy. Replacement sales registered 18% yoy growth during the quarter and contributed 73% to 2QFY2010 Revenues compared to 65% in 2QFY2009. OEM Sales fell 18% during the quarter, which was however an improvement over the 48% yoy de-growth recorded by the company in 1QFY2010. Similarly, the domestic markets, following recovery in the industrial cycle, registered 12% yoy growth in 2QFY2010 compared to the meagre 3% yoy growth in 1QFY2010. Exports however, continued to be subdued with the company recording 19% yoy de-growth in 2QFY2010, decelerating at a constant rate over the past two quarters.
Jyoti Structures reported sales growth of 13.1% yoy to Rs470cr for 2Q FY2010
29 October 2009 | Jyoti Structures posted a moderate top-line growth of 13.1% yoy to Rs470cr (Rs415cr) for 2QFY2010, primarily driven by the steady execution of the outstanding order book. For 1HFY2010, the company’s top-line grew 16.5% yoy to Rs952cr (Rs817cr). Going ahead, with the execution beginning on the Reliance order, we expect the sales growth to pick up pace during 2HFY2010. On the Operating front, however, Jyoti Structures reported a dip in its EBITDA Margin, by 130bp to 10.8% (12.1%), which was in-line with our expectations. Although the raw material cost reduced by a substantial 463bp to 63.3% (67.9%) of net sales, it was more than offset by the higher erection and sub-contracting expenses, which increased 484bp to 15.4% (10.6%) of net sales. Other expenses also jumped by 94bp (due to the higher conversion charges and increased bank guarantee charges), adding to the margin fall. For 2HFY2010, the EBIDTA margin fell by 143bp to 10.6% (12.0%), again led mainly by higher erection and sub-contracting expenses. Notably, however, the management re-iterated its yearly guidance of maintaining margins at around the 11-11.5% levels.
Consolidated Construction Consortium reported sales decrease of 3.4% yoy to Rs451.3cr for 2Q FY2010
29 October 2009 | Consolidated Construction Consortium (CCCL) registered Top-line de-growth of 3.4% to Rs451.3cr (Rs467.1cr), which was below our expectation of Rs501cr. The major reason for the same was muted Order inflow in FY2009. Nevertheless, we expect the company to clock decent CAGR of 18.2% in Top-line over FY2009-11E on the back of strong Order Book and better execution. EBITDA Margins for the quarter came in at 8.9% (6.8%), a jump of 210bp yoy. Going ahead as well, we expect Margins to show an uptick on the back of cooling commodity prices. We have factored in Margin improvement over the next two years in our financial model.
Marico declared sales growth of 14.4% yoy to Rs692.2cr for 2Q FY2010
29 October 2009 | For 2QFY2010, Marico declared a steady Top-line growth of 14.4% yoy to Rs692.2cr (Rs604.9cr), on a consolidated basis, in line with our expectations of a 14.2% yoy growth to Rs689cr. A strong volume growth of 14% in the consumer business, a 49% rise in revenues from the international business and a 24% yoy growth in Kaya aided the Top-line growth. Both its core brands, Parachute and Saffola, registered a double-digit volume growth of 10% and 22%, respectively. Hair Oils’ volume growth was also strong at 17%.
Inox Leisure reported sales growth of 18% yoy to Rs61.1cr for 2Q FY2010
29 October 2009 | For 2QFY2010, Inox reported a modest growth in its Top-line of 18% yoy to Rs61.1cr (Rs51.8cr), in line with our expectations. A Strong movie pipeline, after the 63-day Multiplex-Producers strike, boosted the revenue this quarter, with footfalls increasing 14.8% yoy to 3.9mn (3.4mn). Prominent movies released in 2QFY2010 were New York, Love Aaj Kal and Kaminey. On the operating margin front, Inox posted a 380bp yoy Margin expansion to 19.3% (15.5%), driven by savings in Other expenses (down 680bp yoy), Staff costs (down 240bp yoy), and Film and Print Costs (down 240bp yoy). However, the company has forayed into production; a high production cost of 610bp yoy and the jump in Film distribution cost by 250bp yoy arrested further Margin expansion, while the property rental cost remained flat (as a % of Sales). EBITDA for the quarter registered a robust growth of 46.2% yoy to Rs11.8cr (Rs8.1cr).
Oriental Bank of Commerce stock price target is Rs290 by Angel Broking
28 October 2009 | Oriental Bank of Commerce reported a Net Profit growth of 14.3% yoy, which was ahead of our estimates, due to a better-than-expected growth in NII, coupled with robust other income growth and lower provisioning. The key positive surprise from the result was the loan growth of 25.0% yoy, with the industry growing at 14.0%, while deposits grew by 23.0% yoy. As a result, the NII grew by 7.6% yoy and 15.9% sequentially. The core performance of the bank during the quarter has been impressive, with NIMs of 2.02% (against 1.83% in 1QFY2010). At its current levels, we believe that the stock is trading at attractive valuations, relative to the sector. Hence, we maintain an Accumulate rating on the stock.
Wipro stock price target is Rs636 by Angel Broking
28 October 2009 | Wipro recorded a 7.5% qoq growth (5.5% yoy growth) in overall Net Revenue on a consolidated Indian GAAP basis in 2QFY2010. In Rupee terms, combined IT Service Revenues clocked 3.5% qoq growth (5.2% yoy growth) despite the 1.3% qoq de-growth in Volumes. This is attributed to qoq improvement in Pricing productivity, which was up 3.4% Offshore and 4.7% Onsite on higher fixed price and outcome-based pricing projects. Realised Rupee rate per US Dollar depreciated 0.4% qoq to Rs46.9 (Rs42.8) in 2QFY2010. Onsite Revenues rose 3.7% qoq (4.3% yoy de-growth), while Offshore Revenues rose 2.5% qoq (13.3% yoy growth). In US Dollar terms, IT Service Revenues grew 3.2% qoq (US $1,065.2mn v/s US $1,032.6mn in 1QFY2010). This was ahead of the company’s guidance of US $1,035-1,053mn, which implied mere 0.2-2% qoq growth. In constant currency terms, IT Services Revenues touched US $1,052.5mn, a qoq growth of 1.9%. Wipro’s hedge position stands at $1bn and hedges were booked at Rupee/US Dollar rate of 40-51.6 as on 2QFY2010. The company acquired 37 new clients with its total active client position touching 840 during the quarter. Wipro’s total headcount fell by 630 to 97,891 in 2QFY2010. Attrition rate in Global IT Services was 10.5% vis-a-vis 8.4% in 1QFY2010, in BPO Services quarterly attrition stood at 17% up from 14% qoq and in Wipro Infotech the attrition was up at 8.9% from 7.4% in 1QFY2010.
Indraprastha Gas stock recommendation is Neutral by Angel Broking
28 October 2009 | For 2QFY2010, IGL reported 26.9% yoy jump in Operating Income to Rs273cr (Rs215cr), which was marginally above our expectation of Rs264cr. CNG volumes increased 14.7% yoy to 134.4mnkg (117.2mnkg), which was above our expectation of 126.2mnkg. PNG volumes increased 27.8% yoy to 17.0mmscm (13.3mmscm), which was below our expectation of 18.3mmscm. Average Gross CNG realisations were yoy higher at Rs20.5/kg (Rs18.7/kg) due to the price hike effected on June 16, 2009. Average PNG realisations were also higher yoy at Rs18.9/scm (Rs17.6/scm) yoy.
Cadila Healthcare stock price target is Rs613 by Angel Broking
28 October 2009 | For 2QFY2010, Cadila Healthcare (Cadila) reported Net Sales of Rs912.6cr (Rs737.8cr), up 23.7% yoy and in line with our estimate. This strong growth in Sales was mainly driven by the company’s US Generic and Consumer businesses. On the Domestic front, the Formulation business grew 9.9% to Rs393.5cr (Rs357.9cr) driven by the Branded Segment, which clocked 10.1% yoy growth to Rs369.5cr (Rs335.6cr). The Consumer business grew 37.4% to Rs64.9cr (Rs47.2cr). On the Export front, the US Formulation business registered a stellar 101.0% growth to Rs160.4cr (Rs79.8cr) driven by Volume expansion. The API business registered 44.2% growth to Rs83.1cr (Rs57.6cr). On the Contract Manufacturing front, the Nycomed joint venture (JV) posted de-growth of 34.9% to Rs20.8cr (Rs32.0cr), while Hospira contributed Rs20.3cr during the quarter.
Lanco Infratech stock recommendation is Neutral by Angel Broking
28 October 2009 | Lanco’s Top-line, on a Standalone basis, grew by a robust 131% yoy to Rs1,475cr (Rs639cr) in 2QFY2010, which was above our estimate. Top-line growth was also driven by strong Order Book and timely expansion in the Power Segment. Going ahead, we have upgraded our Topline estimates for FY2010 and FY2011 by 16% and 20% to factor in enhanced Order Book position.
Bayer CropScience stock price target is Rs596 by Angel Broking
28 October 2009 | Better growth compared to its peers: Bayer CropScience (BCS)’s Net Sales increased by 17% to Rs507cr (Rs435cr) in 2QFY2010, which was in line with our estimates. The growth in sales was commendable, considering that Indian agriculture has recently witnessed one of the worst droughts in its history. Additionally, this growth was notably higher than that posted by BCS’s peers, such as Rallis (15%) and United Phosphorus (4%).
Subros stock price target is Rs50 by Angel Broking
28 October 2009 | For 2QFY2010, Subros clocked 29.7% jump in Net Sales to Rs218.2cr (Rs168.3cr), which was almost in line with our expectation of Rs221.8cr. Top-line increased primarily on the back of the 15.8% growth in Volumes and 12% growth in Realisations. Subros sold around 179,462 AC units in 2QFY2010 as against 155,000 units sold in 2QFY2009. Robust performance of Maruti models such as A-Star and Mahindra & Mahindra’s high-Volume Xylo supported the company’s Volume growth during the quarter. The company’s Bottom-line grew by a substantial 81.5% yoy to Rs6.9cr (Rs3.7cr), which was above our expectation of Rs4.9cr.
Jagran Prakashan stock price target is Rs125 by Angel Broking
28 October 2009 | For 2QFY2010, Jagran reported a robust Top-line growth of 18.3% yoy to Rs246.8cr (Rs208.6cr), ahead of our estimates, aided by a robust 19.5% growth in advertising revenues to Rs171.6cr (Rs143.7cr) and a 15.1% increase in circulation revenues to Rs54.3cr (Rs47.2cr). While advertising revenues grew on account of the economic recovery (partially aided by the festive season), circulation revenues grew backed by both circulation growth and a rise in cover prices (affected during December 2008). The revenues from other operating activities, including revenues from Outdoor Advertising, Event Management Activity and Short Code Services, witnessed a strong growth of 36.4% to Rs17cr (Rs12.5cr). Jagran launched one more edition of City Plus in October, 2009, from Vashi, Navi Mumbai, taking the total number of editions of City Plus to 18.
Madras Cements stock recommendation is Neutral by Angel Broking
28 October 2009 | Madras Cements posted a Top-line growth of 27.7% yoy to Rs851.4cr (Rs666.5cr) for 2QFY2010, which was below our estimates. This Top-line growth came primarily on the back of higher cement sales volumes and an increase in the average realisation for cement. The Top-line growth was also aided by a 72.3% yoy increase in the Revenues of the Windmill Division to Rs68.4cr (Rs39.7cr). Cement sales volumes grew 16.7% yoy to 2.1mn tonnes during the quarter, from 1.8mn tonnes in 2QFY2009. The average cement realisation for Madras Cements grew 4.8% yoy to Rs3,712/tonne (Rs3,543/tonne). For 1HFY2010, the company’s Top-line was up 26.4% to Rs1,621cr.
Sona Koyo Steering stock recommendation is Neutral by Angel Broking
28 October 2009 | For 2QFY2010, Sona Koyo clocked 12% yoy growth in Top-line to Rs200.4cr (Rs178.9cr), which was marginally below our expectation of Rs202.9cr. The company reported Net Profit of Rs3.7cr (Rs7.3cr Net Loss in 2QFY2009) as against our Net Profit expectation of Rs3.9cr. Top-line growth was aided by 20.2% yoy growth in the Domestic markets. However, Exports which continue to remain subdued, reported 59.5% yoy decline in Export Sales to Rs7.5cr (18.4cr) during the quarter. A healthy dip in raw material costs however, aide the company’s Bottom-line. Further, favourable movement of the Rupee against the Yen helped the company’s import bill for column-type electronic power steering (CEPS) components in turn reducing the raw material cost during the quarter.
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World stock markets daily report (September 02, 2010)
A hump day rally sparked by strong Chinese PMI and Aussie GDP data was followed up by much better than expected US ISM and the sentiment was for sure “RISK-ON” this was also helped by WSJ article about further stimulus from Obama administration and rumours of massive $6bn asset reallocation trade out of German bunds (the bond bubble) into S&P 500 futures as it was the start of a new quarter.
Indian stock market daily closing report (September 02, 2010)
The markets traded within a tight range after the positive momentum witnessed for two days and ended with modest gains. All the major sectoral indices ended on a very flat note. Sugar counters witnessed a significant spike on decontrol reports. The Sensex closed at 18,238 up 34 points and the Nifty was at 5,486 up 14 points after making an intra-day high of 5,513. The Mid cap and Small cap indices were up by 0.78% and 1.11% respectively. The breadth of the market was positive and the total turnover recorded at Rs.1,02,680 Cr. The Sept future ended with 3 points discount
World stock markets news summary (US, UK, Europe, Asia) (September 02, 2010)
Nationwide House Prices SA (Aug) M/M -0.9% vs. Exp. -0.3% (Prev. -0.5%); NSA (Aug) Y/Y 3.9% vs. Exp. 4.9% (Prev. 6.6%) (RTRS) UK house prices fell the most in six months in August as increased supply of property gave buyers more bargaining power, according to Nationwide Building Society.Britain’s deficit is constraining public finances, says IMF report. (Independent) Britain’s public finances remain “constrained” and among the most precarious of the major advanced economies, the International Monetary Fund (IMF) warned yesterday. Ranking nations by their “fiscal space” – the insulation that they have against further unforeseen shocks to their economic systems – the IMF said the UK was only one notch above those countries most commonly thought of as being bust.
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Godrej Properties IPO review and analysis by Angel Broking, 9 December 2009
Godrej Properties Limited (GPL) intends to develop its projects through joint development agreements with land owners. Under this asset-light model, GPL will enter into revenue, profit or area-sharing agreements with land owners, instead of an outright purchase of the land. This model avoids direct land dealings for GPL and the locking-up of extensive capital in land. Around 80% of GPL's existing land bank will be executed through joint developments with partners. The Godrej brand name has been associated with quality and strong corporate governance. Both of its existing listed entities, Godrej Consumer Products and Godrej Industries have given CAGR Returns of 48% and 77%, respectively, to investors since 2001. We believe that GPL could leverage its parentage brand (with respect to access to the land at Vikhroli and a strong customer preference towards it), assuring a timely delivery of execution. More than 50% of GPL's existing land bank is exposed towards township projects and in one location (Ahmedabad), which will be executed over the next ten years. Any delay in this execution or a fall in property prices in Ahmedabad will impact our NAV estimates, as 50% of our NAV is derived from this project.
JSW Energy Ltd IPO review and analysis by Nirmal Bang, 8 December 2009
JSW Energy Ltd. (JSWEL) is a power project development company, which is developing, and will operate and maintain, power projects in India. The company has two thermal power projects under operation, with a combined installed capacity of 860 MW. JSWEL is a part of the JSW Group, a leading business group in India. JSW Group has a presence in high growth sector like Steel, Energy, Aluminium, Cement, Infrastructure and Logistics. Post IPO holding of Promoter and Promoter Group would be 78.12%
JSW Energy IPO review and analysis by Angel Broking, 7 December 2009
JSW Energy (JSWEL) currently has operational capacity of 995MW and is in the process of executing projects with capacity of 2,655MW. In addition, the company has 7,740MW power generation projects at an early stage of development. A major portion (2,145MW) of JSWEL’s upcoming capacities is expected to be operational by FY2011E thereby providing near-term visibility. Out of the plants under construction, the company expects to commission 570MW by end FY2010E, while another 1,575MW is expected to get operational in FY2011E. Thus, a robust portfolio and near-term Revenue visibility is a major positive for the company.
Surgutneftegas: Currency rates are putting away the dividends..., 26 November 2009
We have revised our model of Surgutneftegas. The reason for that was the output of the 3Q 2009 report, correction of our suppositions of the company’s future development, and also the postponing of the target time and evaluation one year forward. Particularly, in our model of Surgutneftegas we have corrected the former forecast of income for the current year towards reduction: on EBIT – by 2.2%, on the net profit – by 21.5%. Mainly that happened due to the corrections on the operating estimates, and also due to the continuing strengthening of Russian ruble, which, considering significant dollar liquidity of the company, turns into negative currency exchange. Due to the negative currency exchange precisely For the second quarter in a row Surgutneftegas shows low level of the net profit. The fourth quarter, as we see it, will not make an exception and we expect negative currency exchange similar to the ones in the third quarter.
Gazprom: Having passed the bottom, 23 November 2009
We have revised our estimation of Gazprom’s shares. The reason for up-dating the company’s model was the report by IAS for 1H 2009, the budget draft for the next year and corrections of WACC method calculation. The provided financial report of the gas monopoly totally brought no surprises. As it has been expected, the second quarter was worse than the first one and likely was the weakest within the whole year. In 1H 2009 the financial estimates were affected by the decline of the gas sale at all markets by 22.3% average, and by the reduction of the retail price of gas by 9.6% in the state of the far abroad and by 24% in Russia. As a result within the six months of the year 2009 sales slipped by 24.1 bn USD or by 32.8% and formed 49.285 bn USD, operating profit and EBITDA showed reduction by 56.7% and 52.6% respectively and formed 12.98 bn USD and 16.18 bn USD.
Cox and Kings IPO review, analysis and recommendation, 18 November 2009
Cox and Kings proposes to make its IPO in the price band of Rs316-330/share, at a face value of Rs10 each, and to issue 1.85cr shares, of which 30.5lakh shares are offered for sale by Lehman Brothers Opportunity, Deutsche Securities Mauritius and Merrill Lynch Capital Markets Espana. Therefore, the fresh issue by the company will be to the extent of 1.55cr shares. The company plans to use the proceeds for debt repayment (Rs129.6cr), acquisitions and other strategic initiatives (Rs150cr), investment in overseas subsidiaries (Rs62.5cr), and investment in corporate offices and upgrading its existing operations (Rs60cr).
| | News |
Tandy Leather Factory, Inc. Reports August 2010 Sales Up 7% Over August 2009, 3 September 2010
UTi Worldwide Reports Fiscal 2011 Second Quarter Results, 3 September 2010
SectorWatch.biz: An Energetic Chorus of Optimism, 3 September 2010
Duckwall-ALCO Stores Reports August Sales Results, 3 September 2010
On Track Innovations, Ltd (OTI) to Present at Rodman & Renshaw Annual Global Investment Conference, 3 September 2010
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