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Deepak Vaishnav
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Apollo Tyres Ltd. |
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Margins have bottomed, Upgrade to ACCUMULATE |
ACCUMULATE
CMP: Rs59 Target Price: Rs71
n Results below est. due to disappointment in India operations. EBIDTA/PAT at Rs 2.3bn/778mn were ~17%/25% below est. Adverse product mix, the key reason for the disappointment
n Europe reported strong results. Demand scenario for winter tyres is robust with demand outstripping supply. Non removal of antidumping duty in India to provide cushion to margins
n Upgrade FY12/13 EPS est. by 6%/12.6% to Rs 8.1/10.1 (with an upward bias) due to lower rubber prices, strong performance of Europe and sequential improvement in product mix in India
n Upgrade rating to ACCUMULATE with a TP of Rs 71(FY13 PER/EV-EBIDTA – 7x/5x). Downside risk arise from lack of improvement in replacement demand in India
Regards,
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Chirag Shah |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : chira...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 252 | DID : 66121252 | Mob : +919820580701 | |
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Glenmark Pharma |
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Growth from all the corners – Maintain Buy |
BUY
CMP: Rs319 Target Price: Rs401
n Q2FY12 revenues were in-line with expectations. Revenues at Rs10.5bn (up 46%YoY), b) Adj. EBITDA at Rs1.9bn (up 32% YoY), and c) APAT at Rs1.25bn (up 60% YoY)
n Revenue growth was driven by a) 36% growth in Specialty business (56% contribution to top-line) and b) 22% growth in Generics business (44% contribution to top-line)
n Licensing income of Rs. 1.2 bn from Sanofi for GBR 500 was offset by payment of Rs1.3bn to Paul Capital
n On account of good momentum in key business verticals, we maintain our Buy rating on the stock with a target price of Rs401 (18x FY12 Base Business EPS + Adjusted NPV of Rs45)
Regards,
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Deepak Malik |
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Senior Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : deepak...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 257 | DID : 66121257 | Mob : +91 9769811227 | |
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Ranbaxy Labs |
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Lipitor ready to strike – Maintain Hold |
HOLD
CMP: Rs475 Target Price: Rs513
n Ranbaxy’s Q3CY11 results were in-line. Revenue grew 8% YoY to Rs21bn, EBITDA de-grew 29% to Rs1.7bn and APAT de-grew 15% to Rs1.5bn
n Revenue growth was driven by 44% growth in Europe, CIS, Africa & Russia and 52% increase in API sales. Domestic business grew at a lower rate of 7%
n Current valuations fully factor - in the future potential of Para-IV opportunities
n With Lipitor getting ready to strike, we maintain Hold with a target price of Rs513 (20xbase business earnings + Rs82 Para-IV NPV)
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Lupin Ltd. |
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Margins under pressure - Maintain Accumulate |
ACCUMULATE
CMP: Rs475 Target Price: Rs501
n Lupin’s Q2FY12 results were below expectations. Revenues at Rs17.7bn (up 23.6%YoY), b) EBITDA at Rs3.0bn (up 2.5% YoY), and c) APAT at Rs2.1bn (down 3.1% YoY)
n Revenues were largely driven by growth in India, and Export Formulations
n Going forward, margins will remain stressed due to adverse rupee movement as company has hedged $200mn of exports at ~Rs 46 and losses are parked in balance sheet
n Maintain Accumulate with a target price of Rs501
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State Bank of India |
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Dawn still seems far away |
REDUCE
CMP: Rs1,863 Target Price: Rs1,750
n SBI’s Q2FY12 B/S quality deteriorates sharply with slippages of Rs80bn, GNPAs @ 4.2%, PCR slipping 400bps qoq and steep pressure on tier I CAR with net NPLs/net worth @23%
n P&L provides some grim smile as NII/PAT at Rs104bn/28bn beat the consensus handsomely by 4%/12% respectively driven by 20bps expansion in NIMs and under-provisions
n No immediate catalyst in sight with no clarity on tone-down in slippages. Recoveries @ 40% of op. GNPAs not sufficient to stem the provision costs
n Operational numbers likely to stay on track, but NPLs pressure to persist. Lowered our FY12E/FY13E ABV by 6%/8% resp. Downgrade to REDUCE with target price of 1,750
Regards,
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Kashyap Jhaveri |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : kashyap...@emkayglobal.com |
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Board No. : +91-22-6612 1212 | Extn. : 249 | DID : +91-22-6612 1249 | Mob : +91-98202 41712 | Fax : +91-22-6624 2410 | |
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Cadila Healthcare |
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Slowing business momentum - Maintain Hold |
HOLD
CMP: Rs 760 Target Price: Rs 760
n Muted revenue growth (up 11% YoY) to Rs12.4bn and poor operating performance (up 6% YoY) to Rs2bn resulted in 2% YoY de-growth in Adjusted PAT to Rs1.77bn
n Muted revenue growth was due to 7% growth in domestic formulations, 5% growth in Consumer business and 5% in Europe business
n Higher interest expenses because of increase in debt by ~Rs10bn to Rs20bn over the last 6 months. Company is looking for strategic investment in US
n With business momentum slowing down and possibility of earnings downgrade going forward– we maintain Hold rating with a revised target price of Rs760 (17xFY13 EPS of Rs44.7)
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Mahindra Satyam |
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Higher other income drive profit beat |
HOLD
CMP: Rs 73 Target Price: Rs 80
n MSat’s Q2FY12 profits beat estimates aided by higher other income despite a relatively anemic revenue growth at ~3.1% QoQ ( INR rev bolstered by lower US$/INR conversion rate)
n Revenues at US$ 330 mn(+3.1% QoQ) missed estimates while EBITDA margins improved by ~50 bps QoQ to 15.3% (V/s est of ~60 bps increase). HC increased by ~654 QoQ to 32,092
n Growth within top clients impressive( top 5/10 client revenues up by 8%/4% QoQ) while US/BFSI/TIME drive growth with a 8%/16%/9% sequential increase
n FY12/13E earnings raised by 15/17% to Rs 7.3/7.5 driven by lower currency resets despite moderation in our US$ revenue assumptions. Retain HOLD with a revised TP of Rs 80
Regards,
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Manik Taneja |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : manik....@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 253 | DID : 66121253 | Mob : +919833934924 | |
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ACCUMULATE
CMP: Rs 288 Target Price: Rs 381
n IOCL reported results which were below our estimates with EBIDTA loss at Rs.53.2bn and Net loss at Rs.74.8bn, however revenue grew by 15.3% to Rs.891.8bn
n The direct market sale grew by 4.6% to 17.7mmt, while crude throughput increased by 7.5% to 13mmt YoY
n Average gross refining margin for Q2 FY12 was at $-0.03/bbl as compared to $6.6/bbl YoY and $4.7/bbl QoQ
n Valuations look reasonable at 1x FY13E ABV, maintain ACCUMULATE rating with TP of Rs.381
Regards,
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Dhaval Joshi |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : dhaval...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 282 | DID : 66121282 | Mob : +919920871839 | |
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IL&FS Transportation |
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New project wins becoming critical – Reducing Target |
ACCUMULATE
CMP: Rs 205 Target Price: Rs 234
n Q2FY12 APAT down 22.5%yoy at Rs0.61bn v/s exp. Rs0.41bn, EBITDA at Rs 1.30bn v/s Rs 1.0bn led by higher than expected fee booking – Sustenance of outlook depends on fresh orders
n Revenue at Rs 6.48bn, up 74% yoy led by construction revenues doubling yoy to Rs 5.1bn v/s exp. of Rs 5bn, Construction margins at 10.4% v/s exp of 12.8%
n Conso. Rev. up 42%yoy to Rs 12.5 bn led by 69% yoy growth in construction Rev (Rs8.9bn) & avg. daily toll collection +27.8% yoy at Rs 8.75mn/day, Elsamax Rev down 32% to Rs 1.8bn
n Reduced order inflow for FY12E to Rs25bn v/s Rs50bn leading to 11%/19% downgrade for FY12E/13E earnings. Rolled over valuation to FY13E- Maintain Accumulate - Reduce TP Rs234
Regards,
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Ajit Motwani |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : ajit.m...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 255 | DID : 66121255 | Mob : +919820934229 | |
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Jitesh Bhanot |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : jitesh...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 491 | DID : 66242491 | Mob : +919221393422 | |
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Lakshmi Machine Works |
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Q2FY12 Conference Call Transcript |
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Emkay Global Research |
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Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : emkayglob...@emkay.co.in |
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