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STOCK UPDATE
Television
Eighteen India
Cluster: Emerging
Star
Recommendation: Buy
Price target:
Rs704
Current market price: Rs595
Revising price target to
Rs704
Result highlights
-
Television Eighteen India's (TV18)
Q4FY2006 and FY2006 results were ahead of our expectations.
-
TV18's revenues for Q4FY2006 grew by 74%
year on year (yoy) and by 40.4% quarter on quarter (qoq) to
Rs53.5 crore.
-
The operating profit was up by 91.5% yoy
and by 46.1% qoq to Rs28.6 crore. The operating profit
margins (OPMs) expanded by 490 basis points yoy and by 230
basis points qoq.
-
The adjusted net profit grew by 62.6% yoy
and by 48.7% qoq to Rs17 crore.
-
The company has taken the inorganic route
to expand its presence in the Internet ventures as well as
in the broadcast media. During the year TV18 acquired stakes
in various Internet portals as well as in a Hindi general
news channel.
-
TV18 has also entered the new business of
home shopping network to leverage on its brand name as well
as to increase the reach of its channels.
-
The consolidation of its group companies
(see our report Shareholders' Awaaz Heard dated October 17,
2005 and Back to square one dated January 02, 2006) is on
track. We expect the process to be completed and the new
entities to get listed by September 2006.
-
We believe that the fair value of TV18
based on the values of the demerged entities works out to
Rs704 per share. Accordingly we are revising our price
target on the stock to Rs704.
Bharat Heavy
Electricals
Cluster: Apple
Green
Recommendation: Buy
Price target:
Rs2,650
Current market price: Rs1,906
Powering ahead
Result highlights
-
At Rs868 crore the Q4FY2006 net profit of
Bharat Heavy Electricals Ltd (BHEL) is ahead of our
expectations. That is primarily because of a
higher-than-expected improvement in its operating profit
margin (OPM).
-
The revenues for the quarter grew by a
smart 23% year on year (yoy) to Rs5,516 crore driven by an
order backlog of Rs37,500 crore.
-
The OPM for the quarter grew by 220 basis
points to 21.7% primarily because of a lower raw material
cost and a strict control over the other costs.
-
The improvement in the OPM and the smart
revenue growth of 23% resulted in an operating profit growth
of 37% for the quarter.
-
The other income increased by 31% to
Rs213 crore mainly on account of the huge cash reserves of
the company. This coupled with a sharp 45% decline in the
interest charge and stable depreciation resulted in a net
profit growth of 49% for the quarter. The net profit for the
quarter stood at Rs868 crore.
-
The order backlog during the quarter grew
by an impressive 17% to Rs37,500 crore, resulting in an
order inflow of Rs9,771 crore.
SECTOR
UPDATE
Automobile
Acceleration
continues
-
Bajaj Auto's motorcycle sales for the
month of May 2006 grew by 27.4% year on year (yoy) and
touched 196,120 units. The numbers include the sales of its
recently launched bike Platina.
-
Strong growth in the motorcycles segment
boosted the overall sales of TVS Motors in May 2006.
The overall two-wheeler sales rose by 17% to 124,678
units.
-
Hero Honda has reported a
better-than-expected 34% rise in its two-wheeler sales in
May.
-
Maruti has reported better-than-expected
sales for the month of May 2006 at 53,396 vehicle as against
42,286 vehicles last year, marking a growth of 26.3%. The
export sales grew by 9.3% yoy to 2,492 units.
-
M&M's three-wheeler segment continued
to perform well recording a phenomenal growth rate of 52.7%
yoy. |
