MosT GooD MorninG
Rajesh Desai
View-Point:
- Brent ($115/bbl) is concerning but appreciation of INR is keeping situation under control.
- Local currency appreciation, a function of fund-inflow due to capital raising by AXSB, OINL and NTPC. Impact could be much larger, helping sentiments.
- Monthly sales nos. from Auto and Cement Cos. will influence moves in respective counters.
Buy Oil India (OINL IN. CMP 526)
- We expect the recently-announced diesel reforms and likely gas price hike before March-14 to lead Oil India Ltd's (OIL) growth in the next 2 years.
- Operational performance is on track. We expect company to report oil/gas production CAGR of 2%/6% over FY12-15E.
- Stock trades at historical low P/E of 6.5x our FY15E EPS estimate of INR 81.2 and has a dividend yield of ~4%.
- Recommend buying into the upcoming OFS for target of Rs. 638 (21% upside)
News:
- The eight core sector rose 2.6% in December, lower than the 4.9% posted in same month last year, dragged down by a decline in coal, natural gas and fertilizer sectors.
- OINL IN: Govt. has fixed floor price for sale of its 10% stake in Oil India Ltd at Rs. 510 per share, a 5.41% discount to its current market rate, to garner over Rs. 30bn for the exchequer.
- Making home and auto loans cheaper, Punjab National Bank (PNB IN) and Union Bank of India (UNBK IN) today cut their base rates by 25bps to 10.25%
- DLFU IN: DLF has sold off its 150MW wind turbine project in Gujarat to Bharat Light and Power for Rs 2.82bn as part of its strategy to exit from non-core business.
- SUEL IN: Cos’ REpower Systems unit has bagged an order for setting up a 350 MW wind farm at Quebec in Canada.
- Jindal Steel and Power (JSP IN) has made an all-cash AUD 221.61 mn offer to buy out Gujarat NRE Coking Coal Ltd, the Australian subsidiary of Kolkata-based Gujarat NRE Coke (GNC IN).
- PIPV IN: Pipavav Defence & Offshore Engineering Company has offered to sell 26% of its equity. A group of corporate majors is interested. Talks are in an advanced stage and Pipavav’s board would soon meet to decide on the buyer, based on the offers received, a source involved with the negotiations said.
Derivatives:
- Nifty Futures OI stands at 13.1m shs. Nifty Feb futures settled at a premium of 32 as against a premium of 39 in the previous session.
- Jan series has witnessed Total Rollovers of 82% (6m-avg 81%) and Nifty Rollovers of 59% (6m-avg 63%).
- Total OI at the start of the Feb’13 series is at INR 971.0b as against INR 960.3b at the start of the Jan’13 series.
- Stocks witnessing high rollovers include Kotak Bank, Mcleod Russel, Oracle Financial Services and United Spirits.
- In Feb series for Nifty, Highest Call OI is at 6200 strike with 4.3m shs up 0.6m shs and highest Put OI is at 6000 strike with 3.5m shs up 0.5m shs.
Results Today:
BHEL
Sales INR 102.1b -3.1% yoy
EBITDA INR 18.21b -10.5% yoy
EBITDA Margin 17.5% vs 19.1% in 3QFY12
Reported PAT INR 12.48b -12.9% yoy
Bharti Airtel:
Sales INR 202b +9.5% yoy
EBITDA INR 62.6b +5.1% yoy
EBITDA Margin 31% vs 32.2% in 3QFY12
Reported PAT INR 7.15b -29.3% yoy
IDFC
NII INR 6.91b +27.3% yoy
Fees INR 1.43b +17.2% yoy
EBITDA INR 7.45b +17% yoy
Reported PAT INR 4.7b +23.3% yoy
Marico
Sales INR 12.2b +15.8% yoy
EBITDA INR 1.71b +41% yoy
EBITDA Margin 14% vs 11.5% in 3QFY12
Reported PAT INR 1.1b +30.4% yoy
MCX
Net Sales INR 1.2b -5.1% yoy
EBIT INR 662mn -11.2% yoy
EBITDA Margin 53.3% vs 57.0% in 2QFY13
PAT INR 668mn -18.0% yoy
Other Results:
Adani Enterprises, Corporation Bank, Godfrey Phillips India, HCC, Jet Airways, Karur Vysya Bank, TTK Healthcare and TVS Motor Company.
Corporate Actions :
- India Bulls Finance (Rs 5.50), Torrent Pharma (Rs 6.00) to trade ex-dividend today.
Key Statistics:
Market Sensex 19,895 down 110 & Nifty 6,035 down 21
Advance:Decline 1093 : 1066
F&O data (31st) Index Rs. (4.58)bn & Stock Rs (5.34)bn
Cash (Prov 31st) FIIs Rs 9.59bn & DIIs Rs. (8.64)bn
Cash (30th) FIIs Rs 10.35bn & MFs Rs. (3.96)bn
Others Brent Oil $ 115.60 v 114.90 & Rs 53.22 v 53.30
This e-mail (including any attachments to it) may contain confidential, proprietary or privileged information belonging to Motilal Oswal group and is intended solely for the addressees. Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this e-mail, or any information it contains, is prohibited. If you are not the intended recipient of this e-mail, please delete it immediately from your system and notify the sender of the wrong delivery and the mail deletion. Internet communications may not be secure or error free as information could be intercepted, susceptible to alteration, corrupted, lost, destroyed, may arrive late or be incomplete, or may contain viruses etc. Neither the sender nor Motilal Oswal group /any of its associates accepts any liability for any errors or omissions in the contents of this message, and shall have no liability for any loss or damage suffered by the user, which may arise as a result of such e-mail transmission. The contents of this message do not necessarily represent the views or policies of Motilal Oswal group. This e-mail does not contain any professional advice and does not constitute an offer regarding any financial or other service towards the addressee.
The Motilal Oswal group does not accept responsibility for any loss arising from unauthorised access to, or interference with, any Internet communications by any third party. Replies to this e-mail may be monitored by the Motilal Oswal Group for operational or business reasons.
Any opinion or other information in this e-mail or its attachments that does not relate to the business of the Motilal Oswal Group, is personal to the sender and is not given or endorsed by the Motilal Oswal Group.
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CA. Rajesh Desai
Rajesh Desai
View-Point:
- Local markets will open with weakness, tracking cues from overseas.
- Key is to see how they would behave at lower levels. Whether buying emerges or players give away the hope.
- We believe buying should emerge back with support to benchmark coming in at 5,950 levels.
Buy Maruti (MSIL IN - CMP 1599)
- Better product mix led to lower discounts and 1% price increase helped in improving realization.
- For Q3 Co reported above est. EBIDTA margin at 8% (v/s est 7.2%)
- Depreciating JPY is helping the EPS upgrade further. JPY is trading at lowest since Aug '10 (92.29 to USD)..
- This translates into a JPY-INR cross currency of 0.578 vs our FY14 est of 0.646.
- We are upgrading our consolidated EPS estimate by 4.5% (Rs. 110) and 6.6% (Rs. 139.4) for FY14 and FY15respectively, led by margin assumption on favorable currency movement and lower discounts on petrol cars
- The stock trades at 11.5x FY15 EPS of INR139.4. Buy with price target of Rs. 2,220 (~10x FY15 EPS).
News:
- NTPC IN: Government to divest 9.5% via OFS on February 7th to raise ~Rs. 121bn.
- ADE IN: Offer for Sale of 7mn shares on February 6th by promoter.
Derivatives:
- Nifty Futures OI increased by 0.7m shs to 14.4m shs. Nifty Feb futures settled at a premium of 9 as against a premium of 37 in the previous session.
- Stock Specific: IDFC IN (Cmp 159, down 5%) witnessed delivery of 6.8m shs (10d-avg 2.1m shs) along with 19% rise in Fut OI to 17m shs indicating creation of short positions.
- APNT IN (Cmp 4643, up 2%) witnessed delivery of 0.1m shs (10d-avg 0.05m shs) along with 11% rise in Fut OI to 0.2m shs indicating built up of long positions.
- In Feb series for Nifty, Highest Call OI is at 6300 strike with 5.5m shs up 1.8m shs which has changed from 6100 (OI at 5.3m shs up 0.8m shs) and highest Put OI is at 5700 strike with 4.6m shs up 0.1m shs.
Results Today:
NHPC
Net Sales Rs. 9.5Bn +7.7% YoY
EBITDA Rs. 4.42Bn +16.8% YoY
Margins 46.6% V/s 43% YoY
Adj PAT Rs. 2.57Bn -13.7% YoY
Other Results:
- Ballarpur Industries, Carborundum Universal, JB Chemicals & Pharmaceuticals, UCO Bank and United Bank of India.
Corporate Actions :
- BHEL (Rs 2.12), EID Parry (Rs 6) to trade ex-dividend today.
Key Statistics:
Market Sensex 19,751 down 30 & Nifty 5,987 down 12
Advance:Decline 886 : 1308
F&O data (4th) Index Rs. (7.10)bn & Stock Rs 3.77bn
Cash (Prov 4th) FIIs Rs 8.57bn & DIIs Rs. (5.92)bn
Cash (1st) FIIs Rs 25.65bn & MFs Rs. 1.42bn
Others Brent Oil $ 116.76 v 115.60 & Rs 53.19 v 53.22
This e-mail (including any attachments to it) may contain confidential, proprietary or privileged information belonging to Motilal Oswal group and is intended solely for the addressees. Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this e-mail, or any information it contains, is prohibited. If you are not the intended recipient of this e-mail, please delete it immediately from your system and notify the sender of the wrong delivery and the mail deletion. Internet communications may not be secure or error free as information could be intercepted, susceptible to alteration, corrupted, lost, destroyed, may arrive late or be incomplete, or may contain viruses etc. Neither the sender nor Motilal Oswal group /any of its associates accepts any liability for any errors or omissions in the contents of this message, and shall have no liability for any loss or damage suffered by the user, which may arise as a result of such e-mail transmission. The contents of this message do not necessarily represent the views or policies of Motilal Oswal group. This e-mail does not contain any professional advice and does not constitute an offer regarding any financial or other service towards the addressee.
The Motilal Oswal group does not accept responsibility for any loss arising from unauthorised access to, or interference with, any Internet communications by any third party. Replies to this e-mail may be monitored by the Motilal Oswal Group for operational or business reasons.
Any opinion or other information in this e-mail or its attachments that does not relate to the business of the Motilal Oswal Group, is personal to the sender and is not given or endorsed by the Motilal Oswal Group.
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CA. Rajesh Desai