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Reports India

Indian stock market and companies daily report (June 11, 2014, Wednesday)

June 11, 2014, Wednesday, 06:45 GMT | 01:45 EST | 11:15 IST | 13:45 SGT
Contributed by Angel Broking


Indian markets are expected to start on a flat note today following flattish start to SGX Nifty and most of the Asian markets.

U.S. market ended on a flat note after moving moderately lower in early trading on Tuesday. Despite the lackluster close, the Dow still ended the session at a new record closing high. The early weakness was partly due to profit taking. However, news out of China helped limit the downside for the markets, as the Bank of China lowered the reserve requirement for banks advancing loans to the rural sector and small businesses by 50bp. Meanwhile, the European market inched higher on Tuesday still reacting positively to the ECB announcement aimed at stimulating the euro zone economy.

Back home, Indian markets pared most of their early gains in yesterday's session and ended on a flat note due to profit booking seen in banks, realty, power and oil & gas stocks.


Markets Today

The trend deciding level for the day is 25,547 / 7,640 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 25,747 - 25,911 / 7,700 - 7,744 levels. However, if NIFTY trades below 25,547 / 7,640 levels for the first half-an-hour of trade then it may correct 25,384 - 25,184 / 7,596 - 7,536 levels.


ITD Cementation India - Reiterate coverage with BUY recommendation

We resume our coverage on ITD Cementation India (ITD) with a Buy recommendation. We are bullish on the stock on account of its strong order book, which stands at Rs.4,100cr as on March 31, 2014, and improving macro scenario, with the new government having come in.


Strong OB coupled with improving macro scenario to drive growth

The company's order book stands at ~Rs.4,100cr (as of March 31, 2014), which provides strong revenue visibility for the coming more than two years. Also, the company is expected to benefit from the new government's emphasis on spurring infrastructure growth and removing regulatory bottlenecks in the infrastructure space, which should help revive several stalled projects. There is scope for significant growth for the company as it has wide presence in the infrastructure space with several opportunities being anticipated. We believe these factors will improve the company's revenue visibility after it having witnessed negligible growth in the past two years. We expect the company to post a revenue CAGR of 13.9% over CY2013-15E to Rs.1,636cr.

Outlook and valuation: We expect the company's revenue to post a 13.9% CAGR over CY201 3-15E to Rs.1,636cr. The operating margin for the company is expected to hover around 1 1.0% for the same period. Further, we expect the interest rate to soften by ~122bp to 16.0% for CY2015E. The net profit for CY2015E is estimated at Rs.31cr with an improved net profit margin of 1.9% for the same year. We resume our coverage on the stock with a Buy recommendation and target price of Rs.346 based on a target P/BV of 0.9x for CY2015E, given the visibility of new order inflows.


Economic and Political News

- Domestic car sales up 3%, bikes 11.7% in May

- Railways earnings go up by over 8%

- PE investments in India have potential to reach US$40bn by FY2025

- Excise duty cuts provide relief to auto firms

- Government plans to set up 3 new petrochemical investment regions

- RBI net purchaser of US$5.87bn from spot forex market in April


Corporate News

- SBI to merge five subsidiary banks with itself

- Coal India to foray into fertiliser, chemical production

- R-Com said to plan US$300mn share sale to institutions

- L&T may sell 1.6 per cent stake in L&T Finance for Rs.204cr

- UltraTech in talks to buy JP AssociatesRs. cement assets

- United Bank gets RBI nod to lend up to Rs.200cr to top-rated firms

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