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Reports India

Indian stock market and companies daily report (August 12, 2014, Tuesday)

August 12, 2014, Tuesday, 05:52 GMT | 01:52 EST | 10:22 IST | 12:52 SGT
Contributed by Angel Broking

Indian markets expected to open on gap up tracking SGX Nifty and the global markets.

US markets though ended positive, failed sustain early gains on account of statement of US fed Vice Chaiman that overall recoevry has been disappointing. The remarks suggested that the FedRs.s removal of stimulus may happen more slowly than many had thought.

European market ended postive amid easing concerns on conflicts in Ukarine and middle east. The market also extended rally lead by auto makers posting good numbers. Renewed speculation that the U.S. Federal Reserve will keep interest rates at zero for another year has also generated hunger for equities.

Indian markets closed postive on easing cues of the geopolitical concerns on Iraq and hopes of conflits in Ukraine easing. The market remained strong lead by bargain hunting.

Markets Today

The trend deciding level for the day is 25,503 / 7,620 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 25,569 - 25,620 / 7,641 - 7,657 levels. However, if NIFTY trades below 25,503 / 7,620 levels for the first half-an-hour of trade then it may correct 25,453 - 25,387 / 7,605 - 7,583 levels.

CBI clean chit to IRB Infra on RTI activist murder

CBI filed murder case of Mr Shetty a RTI activist who exposed several land scams in Maharashtra on Mr Mhaiskar, promoter of the company on Jan 2010. This hampered the stock to more than 50% on rising issue of corporate governance. The companyRs.s involvement with the case was due to IRBRs.s acquisition of around 1,100 acres of land near the Mumbai-Pune Expressway between 2007 and 2010. After more than 4 years, the promoter got the clean chit by CBI on 11th August, 2014. This will be postive for the company as the corporate governance issue will be resolved.

Result Review

Relaxo Footwear (CMP: Rs.390/ TP: Rs.433 / Upside: 11%)

Relaxo reported mixed set of numbers for 1QFY2015. The revenue for the quarter grew by 19.1% yoy and stood at Rs.372cr, higher than our expectation of Rs.342cr. The operating margin for the quarter declined by 1 28bp on yoy basis and came in at 12.5%, mainly on account of increase in raw material cost as a percentage of sales. Depreciation cost for the quarter increased by 24.6% qoq and 45.5% yoy to Rs.10.40cr because of change in the useful life of fixed assets under the new Companies Act 2013. As a result, the net profit for the quarter grew by a modest 7.1% yoy and came in at Rs.23cr. On the valuation front, the stock is trading at 20.7x FY16E EPS of Rs.18.8. With the consolidating business and increasing brand value, we are valuing the company at a higher multiple of 23x FY2016E earnings and recommend an Accumulate rating on the stock with a target price of Rs.433.

Result Preview

Sun Pharma (CMP: Rs.763/ TP: - / Upside: - )

Sun Pharma is slated to announce its 1QFY2015 numbers today. We expect the company to post revenue of Rs.4200cr, up 20.6% yoy, lead by exports. EBITDA margin is expected to come in at 41.8% V/s 44.0% during the last corresponding. PAT is expected to come in at Rs.1427.6cr, up 13.1% yoy. We maintain our neutral rating on the stock.

Glaxo Pharma (CMP: Rs.2,495/ TP: - / Upside: - )

Glaxo Pharma is slated to announce its 2QCY2014 numbers today. We expect the company to post revenue of Rs.660cr, up 3.6% yoy. EBITDA margin is expected to come in at 19.8% V/s 17.8% during the last corresponding. PAT is expected to come in at Rs.124.8cr, up 22.7% yoy. We maintain our neutral rating on the stock.

Economic and Political News

- Govt plans to set up committee to look into FCI restructuring

- 29 hydro power projects await CWC evaluation: Goyal

- Economy can grow by 5.8% this fiscal: Mayaram

Corporate News

- Bank of India raises Rs.2,500 crore from bonds

- AkzoNobel plans to set up plant in Bangladesh via tolling agreement