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STOCK
UPDATE
ICI
India
Cluster: Ugly
Duckling
Recommendation: Buy
Price target:
Rs420
Current market price: Rs335
Colours shine
bright
Result highlights
-
ICI India Ltd (IIL) has reported a
strong set of numbers for both Q4FY2006 and FY2006.
-
The net revenues adjusted for the
discontinued rubber chemical business grew by 20.7%
year on year (yoy).
-
The operating profit grew by 30%
yoy as the operating profit margin (OPM) expanded by
214 basis points. While the transfer of the rubber
chemical business to a joint venture aided part of the
OPM expansion, operational efficiencies also
contributed to the same.
-
The profit before tax (PBT) and
extraordinary items grew by 32.6% to Rs15.7 crore.
-
For FY2006, IIL's consolidated
revenues grew by a 17% yoy. The operating profit grew
by 46% yoy as the OPM expanded by 250 basis points.
The profit after tax (PAT; adjusted for extraordinary
items) grew by 23% yoy to Rs61.2 crore.
-
IIL has a right to acquire the
balance 49% stake in its subsidiary, Quest
International, at any time after April 2006. Though
IIL has not exercised the right yet, but the company
plans to acquire the same in the future.
-
At the current market price of
Rs335, the stock trades at 14.1x its FY2008E earnings
per share (EPS) and 6.7x FY2008E enterprise value
(EV)/earnings before interest, depreciation, tax and
amortisation (EBIDTA). We maintain our Buy
recommendation on the stock with the price target of
Rs420.
Lupin
Cluster: Apple
Green
Recommendation: Buy
Price target:
Rs1,130
Current market price:
Rs1,042
On
growth track
Event
-
Lupin has announced that the US
Food and Drug Administration has approved the
company's abbreviated new drug application (ANDA) for
Cefdinir capsules 300mg.
-
Lupin has announced that it has
signed a memorandum of understanding (MoU) to acquire
a 51% equity stake in Artifex Finance CVA, Belgium,
and its subsidiaries including Dafra Pharma, a Belgian
pharmaceutical company focused on anti-malarials.
Crompton
Greaves
Cluster: Apple
Green
Recommendation: Buy
Price target:
Rs1,144
Current market price: Rs1,049
Price target revised to
Rs1,144
Result highlights
-
Crompton Greaves' stand-alone
revenues grew by 27.8% in Q4FY2006 to Rs798.3 crore
backed by the strong performance of all its three
divisions: power systems (revenue up 31.2%), consumer
products (revenue up 27.0%) and industrial systems
(revenue up 20.3%).
-
The stand-alone operating profit
margin (OPM) improved by 290 basis points year on year
(yoy) in the quarter to 10.7%, driven by strong order
booking, stable material costs and the leverage effect
that came into play during the quarter.
-
For Q4FY2006 the profit before
interest and tax (PBIT) margin of the power system
division grew by ten basis points to 9.4%. That of the
consumer product division grew by 130 basis points to
10.9%. The industrial system division's PBIT margin
grew by 80 basis points to 12.2%.
-
The stand-alone net profit (before
extraordinary items) grew by 85.1% to Rs66.1 crore,
driven partly by the strong performance of its three
segments and partly by the 85.4% year-on-year jump in
the other income to Rs11.9 crore.
-
Pauwel posted a net profit (before
extraordinary) of Rs63.0 crore on sales of Rs1,606
crore for FY2006. It saw a smart turn-around, as the
company was making losses when it was acquired in May
last year. Pauwel's results were better than expected,
generating a positive surprise on the consolidated net
profit front.
-
The consolidated order backlog for
Crompton Greaves stood at Rs2,950 crore at the end of
FY2006 (including Rs1,450 crore of Pauwel) which is
0.7x FY2006 consolidated revenues.
-
Pauwel has shown a remarkable
turn-around in performance, reporting a profit after
tax (PAT) of Rs63.0 crore, way ahead of estimates. We
believe this is just the beginning and expect Pauwel
to report a smart improvement in its margins and boost
the consolidated performance of Crompton Greaves. We
maintain a Buy on the stock with a revised price
target of Rs1,144, discounting its FY2008E
consolidated earnings by 18x.
Ashok
Leyland
Cluster: Ugly
Duckling
Recommendation: Buy
Price target:
Rs53
Current market price: Rs38
Margins may
expand
We recently attended the
analyst meet of Ashok Leyland Ltd (ALL). The key
takeaways from the same are
mentioned. |
