Economy |
Industrial Production slips to 1.9% in Sep 2011 |
n IIP grew by a meager 1.9% in Sep-11, significantly lower than the market expectation of ~3.5% led by just 2.1%yoy growth in manufacturing. Mining output declined by steep 5.6% yoy
n Capital goods data continues to remain volatile with 6.8%yoy decline in September 2011, as against 4.1% yoy growth in August 2011
n Consumer goods pick up slightly, with growth inching up to 3.5%. Higher demand ahead of festive season drive consumer durable growth to 8.7%; Non durables however falls 1.3% yoy
n We expect lower IIP growth rate to continue as is reflected in significant deceleration in growth of intermediate goods production
Regards,
Kashyap Jhaveri |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : kashyap...@emkayglobal.com |
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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DLF |
Non-Core becomes Core |
REDUCE
CMP: Rs 228 Target Price: Rs 220
n With Core side of the business lagging, Non-Core Asset sale become the core focus to generate cash and reduce debt which increased by Rs 10bn to Rs 225bn at net level
n Operating Cashflows plummets from Rs 8.37bn to Rs 2.76bn on QoQ; company is not able to meet interest cost outflow (Rs 6.9bn in Q2FY12) from core business cash inflow
n Sales bookings of 1.28 msf in Q2FY12 with no new launches in the quarter. We continue to believe that the company will fail to meet its sales booking target of 10-12 msf in FY12
n We maintain our Reduce rating with TP of Rs 220. We also maintain our sales booking target of 7.4msf for FY12E for total value of Rs 32.6bn
Regards,
Tejas Sheth |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : tejas...@emkayglobal.com |
Board No. : +91-22-66121212 | Extn.: 482 : | DID : 66242482 | Mob : +919920314167 | |
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Shree Cement |
Impressive Performance, upgrade earnings |
ACCUMULATE
CMP: Rs 2,025 Target Price: Rs 2,400
n Shree’s 2QFY12 EBITDA at Rs2.0bn (+41% yoy) significantly ahead of est (Rs1.49bn) led by higher cement realizations (Rs3412/t,+13% yoy).Revenues grow 24% yoy to Rs8.54bn
n Better realization & higher share of cement in dispatches (98% vs 92%) help 39% improvement EBIDTA/t to Rs816. Muted power offtake lead to 96% decline in Power EBIDTA
n Cement price in North already up 7% vs Q2FY12 avg. Despite factoring higher RM cost & lower power volumes, recent price hikes drive EBITDA upgrade of 8%/5% for FY12E/13E
n Shree remains our top pick. Raise TP to Rs2400 driven by earnings upgrade & roll over to FY13. Valuation at 4.4X EV/E & EV/t of USD84 for FY13 remain attractive. ACCUMULATE
Regards,
Ajit Motwani |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : ajit.m...@emkayglobal.com |
Board No. : +91-22-66121212 | Extn. : 255 | DID : 66121255 | Mob : +919820934229 |
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Godawari Power & Ispat |
Steady performance |
BUY
CMP: Rs 119 Target Price: Rs 193
n Performance remained in line with our estimates; consolidated revenues at Rs 4.3 bn was down 13% QoQ. YoY figures not comparable due to mergers during Q4FY11
n Consolidated EBITDA at Rs 526 mn was down 31% QoQ. EBITDA margin also contracted 309 bps QoQ to 12.3% due to higher employee costs and other expenses
n Lower interest costs on QoQ basis aided PAT to remain at Rs 106 mn, in line with our estimates; MTM forex loss of Rs 120 mn was not adjusted in the P&L accounts
n Stable performance likely to continue, however, factoring in higher costs and slowing demand we revise our EPS for FY12 and FY13. Maintain Buy with a revised target price of Rs 193
Regards,
Goutam Chakraborty |
Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com| | Email : goutam.ch...@emkayglobal.com |
Board No. +91-22-66121212 | Extn. 275 | DID : 66121275 | Mob No. : +919867361765 | |
Jagdish Agarwal |
Senior Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : jagdish...@emkayglobal.com |
Board No. : +91-22-66121212 | Extn. : 381 | DID : 66121381 | Mob : +919820869499 | |
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Dishman Pharma |
Gradual Recovery Ahead – Maintain Accumulate |
ACCUMULATE
CMP: Rs 46 Target Price: Rs 53
n Q2FY12 revenues at Rs2.7 bn grew by 27% YoY, Adj. EBIDTA at Rs471 mn grew by 174% YoY and APAT at Rs125mn was up 46% YoY
n Revenue growth was mainly driven by 28% growth in MM business. Improvement in profitability was primarily due to non-cash forex loss of Rs188mn vs. gain of Rs197mn in Q2FY11
n Going forward, commencement of supplies to Abbott for Teveten & Tricor API, commencement of Vit D plant in next month and ongoing supplies of Gemcitabine from Unit IX are key performance indicators
n We expect gradual recovery in business with +ve contribution from all the subsidiaries, however mounting debt remains a concern. Maintain Accumulate with a target price of Rs53
Regards,
Deepak Malik |
Senior Research Analyst | Emkay Global Financial Services Ltd. | www.emkayglobal.com | Email : deepak...@emkayglobal.com |
Board No. : +91-22-66121212 | Extn. : 257 | DID : 66121257 | Mob : +91 9769811227 | |
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Tata Steel |
Cost pressures pull margins down |
BUY
CMP: Rs 430 Target Price: Rs 503
n Consolidated topline at Rs 328 bn, up 15% YoY and down 1% QoQ as the steel realizations (Rs 51727/ tonne) in INR term and volume remained flat QoQ
n EBITDA at Rs 28 bn, down 25% YoY and 38% QoQ primarily due higher raw material costs. EBITDA/ tonne in Europe and India declined to US$30 and US$342 (Rs 16786) respectively
n While the standalone APAT stood at Rs 15 bn, weaker performance at other subsidiaries and inter-company tax adjustments dragged the consol. APAT down to US$2.1 bn
n Revising FY12 and FY13 EPS to Rs 70 and Rs 72 respectively; we cut our target price to Rs 503 valuing the company on SOTP basis. Maintain Buy