Indian Equity Research and Investment Strategy
Unity Infraprojects has received orders aggregating to Rs 134.15 crore. Construction of shopping centre at Koregaon Park, Pune from Anuttam Developers with the total contract value of Rs 112.40 crore to be completed by the company within 17 months.
The company has been awarded the contract for construction of BIG MALL, Thane form Serendipity Buildtech, New Delhi with a contract value of Rs 21.75 crore.
During the August Market Crash, we had recommended to HOLD Bartronics Stock at Rs 175. The stock since then has swiftly moved up to Rs 250. ICICI Research has initiated coverage on Bartronics with a price target of Rs 335, potential upside of 38% from current levels.
Bartronics India Ltd (BIL), one of the first Automatic Identification and Data Capture (AIDC) solutions company. It is investing more than Rs 270 crore
into a new 80-million smart cards manufacturing facility, that would make it one of the biggest players in South Asia and enable revenue growth by 130% CAGR over FY07-09E. Having an order book for more than 100 million smart cards over next two years is expected to generate 3.5x FY07 revenues from this segment alone.
The Indian Retail Growth story is intact and BIL has tied up with Intel and designed products and solutions for point of sales having starting price from Rs 32,000 onwards. These products are more than 20% cheaper to ones used by the industry currently and also more complex, which gives the retailers like Reliance, Big Bazaar, Subhiksha and others a huge advantage.
Currently, the stock is trading at 10.32x FY09E earnings and 6.23x FY09E EV/EBIDTA, which is very attractive. Most of the global players are trading between 15-28x FY09E earnings. Using this method, the stock can be valued at Rs 340, 15x FY09E diluted EPS of Rs 22.66.
The Godrej Properties-L&T joint venture (JV) will reportedly bid for the redevelopment of all the five sectors of Dharavi, which the government has identified. The JV has already submitted the expression of interest (EoI) to bid for the project.
The project includes replacing 57,000 slum structures spread over 500 acres. The entire area has been divided into five sectors of about 1.5 crore squre feet (sq ft) each. The project is expected to generate close to Rs 25,000 crore for the Maharashtra government.
The interested companies will be allowed to bid for as many sectors as they like. Each bidder will get only one sector to develop. Selected companies will then rehabilitate slum-dwellers in about 60 lakh sq ft in each sector while the remaining area can be sold commercially.
Two other Mumbai-based developers, Housing Development and Infrastructure (HDIL) and Akruti Nirman, have reportedly formed JVs with Lehman Brothers and Limitless, an arm of Dubai World, to bid for Dharavi.
Larsen & Toubro’s ECC division in consortium with Outotec GmbH, Germany have bagged a Rs 762 crore sinter plant order from Steel Authority Of India (SAIL). This plant of 2 X 204 square metre grate area with a capacity of 3.80 million ton per annum is to be executed on a turnkey basis at the IISCO steel plant (ISP) of SAIL, at Burnpur, West Bengal.
The order value for the company is Rs 639.99 crore and Euro 22.08 million for Outotec. The new sinter plant will be part of SAIL’s ambitious programme of expanding its capacity at ISP by 2.5 MTPA crude steel. The turnkey sinter plant project is to be completed in 29.5 months.
Outotec’s scope covers basic engineering, supply of proprietary and special equipment as well as technical services while the Company’s scope covers detail engineering, supply of indigenous mechanical, electrical and instrumentation works and complete site services including civil, structural and erection works.
Kotak securities has downgraded HPCL and BPCL to In-Line from Outperform on the grounds of Political uncertainty and high crude oil prices.
The press has been reporting a possible price increase on auto fuels but the current difficult phase of the coalition politics precludes a price increase. Also, if the government were to fall or call for early elections, it may not be in a position to issue oil bonds to the downstream oil companies including BPCL and HPCL. It is still possible to make money in these stocks based on short-term trading opportunities but ratings and earnings estimates have largely lost meaning in the current environment, said the report.
Dalal Street Research Analyst recommends to stay away from PSU Oil Distribution and Marketing companies and the only stock he is optimistic in Oil and Gas is Reliance Industries Ltd. [We don’t recommend RNRL to value investors, however who have got it for FREE can switch to RIL]
Reliance Industries (RIL) is reportedly entering shipbuilding and dredging business with two separate companies. It plans to invest around $1 billion each in two companies and has begun talks with international majors for a strategic tie-up for the dredging business. The shipyard will come up at Rewas, where RIL is setting up a mega port and a special economic zone (SEZ). The company is also looking at a ship repair yard at Kakinada for servicing offshore/platform vessels and rigs.
Separately, the empowered group of ministers have approved the pricing formula proposed by Reliance Industries (RIL) for its Krishna-Godavari (K-G) basin gas, with minor modifications that reduced the delivered price of gas. The revised formula lowers the proposed price of the gas at Kakinada to $4.20 per million British thermal unit (mmBtu) from $4.33 mmBtu that was proposed by RIL. The price at which RIL will sell its gas from the KG basin to consumers will be valid for five years, after which it will be open for revision.