Summary of Contents
STOCK
UPDATE
Esab
India
Cluster:
Vulture's Pick Recommendation: Buy Price target:
Rs575 Current market price: Rs328
Top line growth ahead of
expectations
Results highlights
-
Esab India's Q4CY2006 results are good. Its top
line grew by 32.4% which was ahead of our expectations. The profit
before tax grew by an impressive 50%. However due to a higher tax
rate vis-à-vis Q4CY2005, the net profit growth of 21.7% was below
our expectations.
-
The higher top line growth was aided by the
company's new facility in Chennai. This facility, on a fully
operational basis, can contribute additional Rs60 crore to the top
line. The revenues for the quarter recorded an impressive 32.4%
growth as the equipment division's revenue increased by a whopping
98% and the consumable division's revenue grew by 16%.
-
The operating profit for the quarter grew by
49.6% to Rs14.4 crore as the operating profit margin (OPM)
improved by 211 basis points to 18.4%.
-
The improvement in the OPM was on account of
the better profitability of the equipment division. The earnings
before interest and tax margin of the equipment division improved
by 1,200 basis points to 17.5%.
-
The depreciation for the quarter increased by
35% as the company has commissioned its new plant in Chennai.
-
The tax rate for the quarter stood at 33.3% as
against 18% in the same quarter last year.
-
Consequently, the net profit grew at a lower
rate of 21.7% to Rs10.1 crore.
New Delhi Television
Cluster: Emerging Star Recommendation:
Buy Price target: Rs348 Current market price: Rs304
Fund mobilisation begins for new
channels New Delhi Television (NDTV) has
received a major push towards implementing its ambitious plans of
diversifying its broadcast offerings by entering the general
entertainment and lifestyle space. Last week the news broadcaster
received the approval of the Foreign Investment Promotion Board to
raise foreign investment of Rs585 crore (~$130 million) for its
proposed channels through its UK-based subsidiary NDTV Network Plc.
Taking a step forward, it has also entered into a definitive
agreement with Com Ventures V.I.L.P for infusing $20 million in NDTV
Network Plc. We believe the company will expedite the fund raising
process by roping in strategic/financial investors or go for a
listing on the Alternative Investment Market (commonly known as
AIM).
MUTUAL FUNDS: WHAT'S IN—WHAT'S
OUT
Fund Analysis: March
2007
An analysis has been undertaken on equity and
mid-cap funds' portfolios, indicating the favourite picks of fund
managers for the month of February 2007. Equity funds comprise of
all diversified, index, sector and tax planning funds, whereas
mid-cap funds include a universe of 18 funds such as Reliance
Growth, Franklin India Prima Fund, HDFC Capital Builder, Birla
Mid-cap Fund
etc.
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