Emkay- Acc hpcl pfizer ambuja orient paper united bank allahabad bank
Deepak Vaishnav
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ACC |
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Price hikes to improve margins-Upgrade to Accumulate |
ACCUMULATE
CMP: Rs1,184 Target Price: Rs1,290
n EBITDA of Rs2.2bn (+30% yoy) below est dragged by higher P&F costs (Rs972/t +30% yoy) & higher other expenses (Rs5.2bn vs est of Rs4.78bn). Total cost/t up 12% at Rs3394
n Revenues in line- up 31.3% yoy fuelled by 18% volume growth and 11.5% jump in realizations (led by minimal seasonal drop in prices in south , 20% of ACC’s sales)
n Downgrade CY11EPS by 2.4% led by higher costs. However momentum in cement price hikes (Oct-11 prices already up Rs18-20/bag from Q3CY11 avg) lead to higher exit realizations driving 2.8% upgrade in CY12 earnings
n Introduce CY13 EPS at Rs87. Improving margins with minimal capex to drive significant FCF & healthy volume growth to improve return ratios. Upgrade to Accumulate -revised target to Rs1290 by rolling over valuations to CY13
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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HPCL |
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Result below estimates |
BUY
CMP: Rs 337 Target Price: Rs 463
n HPCL reported results which were below our estimates with EBIDTA loss at Rs.26.8bn and Net loss at Rs.33.6bn, revenue grew by 20.2% to Rs.371bn
n Direct market sales grew by 15% YoY to 6.94mmt, while crude throughput increased by 37.8% YoY to 4.2mmt
n Average gross refining margin for Q2 FY12 was at $1.9/bbl as compared to $2.7/bbl, declined by 27.5% YoY, however GRM grew by 76.8% sequentially
n Valuations look attractive at 0.7x FY13E ABV, continue BUY rating with TP of Rs.463
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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Pfizer Ltd |
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Growth trajectory intact - Maintain Accumulate |
ACCUMULATE
CMP: Rs1,325 Target Price: Rs1,574
n Decent performance by Pfizer with a) Revenue up by 11% QoQ to Rs2.9bn, b) EBIDTA up by 23% QoQ to Rs516mn and c) PAT increased by 14% QoQ to Rs470mn
n Pharma revenue growth on a like-to-like basis was at 13% led by volume increase (9-10% growth) and price increase (3% growth)
n The company has launched insulins for diabetic patients from Biocon’s portfolio in the Indian market. We expect stronger traction from this opportunity going ahead
n On back of good growth in formulations business & launch of Biocon’s Insulin, we maintain our target price of Rs1574 (20x FY13 EPS of Rs78.7) on the stock
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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Ambuja Cement |
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Higher realizations boost EBITDA |
HOLD
CMP: Rs157 Target Price: Rs165
n EBITDA of Rs3.1bn (+10% yoy) above estimates led by higher Cement realizations (Rs3848/t , +7% yoy, -11% qoq). Higher other income boost above est APAT (Rs1.9bn,+13% yoy)
n Though P&F costs at Rs1055/t was higher than est, tight control on fixed costs restricted cost pressures - Staff costs grew just 4.3% yoy while other expenses remained flat.
n Momentum in cement price hikes (Oct-11 prices already up Rs18-20/bag from Q3CY11 avg) lead to higher CY11 exit realizations driving 2.8% upgrade in CY12E EPS
n Introduce CY13 EPS at Rs11.2. Recent decline in petcoke & sharp cement price hikes to improve ACL’s margins. Upgrade to Hold -revise TP to Rs165 by rolling over to CY13E numbers
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Orient Paper & Industries Ltd |
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Poor performance of Electricals division drags profits |
BUY
CMP: Rs62 Target Price: Rs82
n EBITDA at Rs556 mn (+196.2% yoy), lower than estimates (Rs652mn) led by poor performance of electricals division. Electrical revenues grew 7% with EBIT margins at mere 1.9%
n Cement revenues grew 57% yoy (Rs2.9) bn entirely driven by a sharp 55% yoy jump in realization (Rs3555/t). However with higher energy & freight cost, cement EBIT/t at Rs683 came in lower than est(Rs730/t)
n De-merger of cement business into a new wholly owned sub- Orient Cement Ltd - triggers the much awaited value unlocking process
n Maintain Earnings. Stock trades at undemanding valuation of 5.5x FY13 PER & EV/EBIDTA of 3X. We maintain our BUY rating on the stock with target price of Rs82
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United Bank of India |
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Downgrade to HOLD |
HOLD
n UNTDB’s NII (Rs6.2bn) marginally ahead of expectations. Net profit at Rs1.25bn was dragged by higher NPA provisions and tax outflow. Slippages at Rs6.2bn was a key -ve
n Deposits were up 1.5% qoq; CASA ratio remains strong at ~40% levels. NIM expansion was aided by improvement in LDR and broad based loan growth
n … however, with net NPL/networth at high 27%, tier-I CAR, adjusted for same, will fall to sub-7%. Resultant, growth rate is set to moderate. Factoring 16% loan CAGR over FY11-13E
n Lowered our FY12/FY13 earnings estimates by 18%/21% by factoring in relatively higher credit cost, growth moderation and margin compression. Downgrade to HOLD with tp of Rs73
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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Allahabad Bank |
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Positive surprises on all fronts |
ACCUMULATE
CMP: Rs161 Target Price: Rs200
n ALBK results well ahead of estimates with NII at Rs13.2bn. Net profit at Rs4.9bn further aided by lower tax rate of 9%
n The NII grew by 36%yoy to Rs13.2n driven by 28bps expansion in NIM’s, albeit advance growth remain moderate at just 16.6%yoy
n Key highlight for the quarter was- significantly lower slippages at just Rs5.2bn. Mgmt guided for slippage to fall back to normal levels
n Positively surprised by the substantial improvement in NIMs and lower slippage numbers. Maintain ACCUMUALTE rating with TP of Rs200