Emkay Broking > GSK Pharma | Manappuram | Bharti | Gsk Consumer | Nestle | Marico | Emkaynomics |Tulip
Deepak Vaishnav
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GlaxoSmithKline Pharma |
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Challenges Ahead – Downgrade to Reduce |
REDUCE
CMP: Rs2,110 Target Price: Rs1,714
n GSK Pharma Q3CY11 results were below expectations with a) Revenues at Rs6bn (up 4% YoY) b) EBITDA at Rs1.8bn (down 15% YoY) and c) PAT at Rs1.5bn (down 8% YoY)
n Lower revenue growth at 4% and decline in EBITDA margins by 687bps to 29.8% was due to intense pricing pressure in existing brands & new product launches at lower prices
n Going forward – high dependence on acute therapy will keep the top-line growth subdued & intense competition and govt. price control policy will keep the margins under pressure
n We downgrade the stock one notch from Hold to Reduce with a revised target price of Rs1,714 (22x CY12E EPS)
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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Manappuram General Finance |
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Strong operating performance |
HOLD
CMP: Rs61 Target Price: Rs65
n MAGFIL results ahead of expectation with NII at Rs3.7bn and Net profit at Rs1.4bn. Asset quality stable with GNPA at 0.44% and NNPA at 0.25%.
n The company’s AUMs grew by a robust 17.4% qoq to Rs106bn in Q2FY12 aided by 12%qoq increase in customer base and ~10%qoq increase in branch network
n The company’s Cost/ Income ratio improved by 207bps to 46% despite the company adding 223 branches during the quarter
n Rising competition and possibility of NPA recognition on 90dpd as mentioned in the draft discussion paper could hurt growth and margins. Downgrade to HOLD with TP of Rs65
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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Bharti Airtel |
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Forex marred bottom-line, Retain ACCUMULATE |
ACCUMULATE
CMP: Rs398 Target Price: Rs464
n Q2FY12 revenue at Rs172.8bn up 1.7% qoq. EBITDA at Rs58.1bn, up 1.9% qoq. PAT at Rs10.3bn below est. of Rs12.9bn on account of forex loss (Rs2.4bn) & higher tax rate
n KPI’s remained weak qoq due to pronounced seasonally weak quarter. APRU at Rs183 down 3.8% qoq, MoU was down 4.9% qoq to 423, subsequently ARPM was up 0.9% qoq to Rs0.43
n Cons. EBITDA margin was flat qoq to 33.7% (our est. of 33.4%). EBITDA margin from African operation stood at 26.4% v/s 26.7% in Q1FY12
n Cut EPS by 13.4% & 6.1% for FY12E/13E on account of higher interest & tax rate going forward. Valuations at 8.0/6.6 EV/EBIDTA for FY12E/13E. ACCUMULATE with TP of Rs464
Regards,
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Naval Seth |
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Research Associate | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : naval...@emkayglobal.com |
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Board No. : +91-22-66121212 | Extn. : 414 | DID : 66242414 | Mob : +919930468398 | |
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GSK Consumer |
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Swings Continues… Maintain Accumulate |
ACCUMULATE
CMP: Rs 2,499 Target Price: Rs 2,743
n Buoyed by other income, GSK Consumer’s Q3CY11 results ahead of expectations… Sales growth of 17.5% yoy to Rs 7.2 bn and APAT growth of 16.4% yoy to Rs 1.0 bn
n Swings in volume growth – Moderates to 8% yoy in the domestic malted food beverage segment, with Horlicks growing at 10% and Boost at 8% for the quarter
n Non-MFD portfolio remains mixed bag… Biscuits grows by 35% yoy, but Foodles slows downs to 0-2% facing distribution issues
n Maintain estimates for CY11E/12E at Rs 85.6/share and Rs 101.1/share. Maintain ‘ACCUMULATE’ rating with revised target price of Rs 2,743/share
Regards,
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Pritesh Chheda |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email: pritesh...@emkayglobal.com |
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Board No. : +91- 22- 6612 1212 | Extn. : 273 | DID : +91-22- 6612 1273 | Mob : +91 98208 07241 |
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Sweta Jain |
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Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : sweta...@emkayglobal.com |
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Board No. : +91-22-6612 1212 | Extn. : 479 | DID : 6624 2479 | Mob : +9198923 17596 | |
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Nestle India |
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On Track… Maintain Accumulate |
ACCUMULATE
CMP: Rs 4,499 Target Price: Rs 5,110
n Marginally lower sales growth at 19.9% yoy to Rs19.6 bn, but Ebidta growth at 27.2% yoy to Rs4.1 bn and APAT growth at 23.5% yoy to Rs2.7 bn, beats expectation
n Domestic growth of 20.7% yoy remains broad-based; also indicative volume growth of 16% yoy; but exports stumbles with growth of 4.6% yoy
n Better product mix coupled with Nestle initiatives on cost and operations management resulted in 90 bps expansion in gross margins and 120 bps expansion in Ebidta margins
n Maintain estimates for CY11E/12E at Rs 102.4/share and Rs 121.9/share. Maintain ‘ACCUMULATE’ rating with target price of Rs 5,110/share
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From: Deepak Vaishnav <dip.re...@gmail.com>
Date: Sat, Nov 12, 2011 at 11:02 AM
To:
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Marico |
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Volumes Intact, Maintain ACCUMULATE |
ACCUMULATE
CMP: Rs 149 Target Price: Rs 172
n 14% volume growth driving performance; Also write back of excise duty resulted in net profit growth of 9.4% yoy to Rs783 mn, being in-line with estimates
n Both volume growth and market shares remain intact for core portfolio; Volume growth of 10% in Parachute, 11% in Saffola and 26% in Hair Oils
n International business grew 19% yoy to Rs2.4 bn; 14% organic growth and 19% inorganic growth gets marginally offset by -19% FX change
n Earnings factor softening of input prices. Retain FY13E earnings at Rs7.5/Share. Maintain ACCUMULATE rating with target price of Rs172/Share
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Emkaynomics |
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Fortnightly round up of key banking and economic indicators |
n After a gradual up-tick in Sept-Oct period, growth in non-food credit has now eased to sub-19% levels. Non-food credit for fortnight ended 21st Oct, 2011 came in at 18.9% yoy (5.3% YTD)
n As higher base-effect of previous year and elevated interest rate hurt growth, we expect credit growth to taper-off to sub-20% level by end-FY12
n Growth in deposits too has eased and stands at 15.2% yoy (up 8.0% YTD). Demand deposits stood at 10.1% of total deposits (-14% yoy). CD has remained stable; inc. CDR has inched upwards to 51%
n Money supply growth at 14.4% yoy is lowest in past six-years. On the other hand, reserve money growth came in at healthy 18.4% yoy. Money multiplier continues to hover at 5x levels
n Net liquidity deficit for the fortnight came in at ~Rs800bn. Given, higher government borrowing and credit up-tick, we expect liquidity to remain in negative terrain for H2FY12
n Higher borrowing programme, elevated inflation and volatile IIP have pushed yields upwards. Call money rates have moved in tandem with repo rate.
n With H1FY12 fiscal deficit at high 70% of FY12BE, we expect GoI to raise the borrowing programme by further Rs300-400bn.
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Tulip Telecom |
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Going strong, Maintain BUY |
BUY
CMP: Rs150 Target Price: Rs218
n Revenue at Rs7.0bn grew 20.1% yoy (in line with our est.), led by strong revenue from the fibre business which aided the strong margins as well
n Q2FY12 EBIDTA grew 24.4% to Rs2.0bn with EBITDA margin improving 100bps yoy to 28.9%. APAT grew 11.6% yoy to Rs870mn (our est. of Rs865mn)
n Net-debt further increased to Rs18.9bn at the end of Q2FY12 v/s Rs16.5bn in Q1FY11, to fund ongoing expansion in both NLD & data centre. Debt/EBITDA stands at 2.7x & D/E at 1.6x
n EPS cut by 2.7%/ 2.2% for FY12E/FY13E on account of higher interest cost. Valuations attractive at FY13E EV/EBIDTA of 4.1x & P/E 3.4x. Maintain BUY with TP of Rs218
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