Indian Equity Research and Investment Strategy
Dishman Pharma reported an inline Q2 ended Sept-30th. Sales up 59% and PAT up 67%, although YoY figures are not entirely comparable given that Carbogen Amcis (CA) was present only for 1 month in 2Q07.
Management expects significantly large contract wins from Solvay over the next few quarters. Dishman has recently increased capacity for Solvay; Vitamins business buyout from Solvay to be effective by October end; 8 projects from CA have been transferred to India.
Reliance Capital’s net profit rose 20.41% to Rs 201.28 crore on 75.58% rise in total income to Rs 391.27 crore in Q2 September 2007 over Q2 September 2006.
Compare this with HDFC Bank, which reported a 40% growth in Net Profit. As an investor we are more confident in HDFC / HDFC Bank than Reliance Capital though we recommend adding those stocks only on market corrections.
The current price of Rs 1,822.40 discounts Q1 June 2007 annualised EPS of Rs 49.14 by a PE multiple of 37.08. Reliance Capital recently launched consumer loans for various purposes.
TVS Motor Company’s net profit declined 52% to Rs 11.92 crore on 23.6% decline in sales to Rs 823.42 crore in Q2 September 2007 over Q2 September 2006. The current price of Rs 56 discounts Q2 September 2007 annualised EPS of Rs 2.01 by a PE multiple of 27.86.
Gujarat Gas Company’s net profit rose 82.8% to Rs 33.92 crore on 35% rise in sales to Rs 275.68 crore in Q3 September 2007 over Q3 September 2006.The current price of Rs 313.25 discounts Q3 September 2007 annualised EPS of Rs 21.12 by a PE multiple of 14.63.
Areva T&D India’s net profit rose 39.5% to Rs 48 crore on 20.5% growth in net sales to Rs 432.60 crore in Q3 September 2007 over Q3 September 2006. The current price of Rs 2,087 discounts Q3 September 2007 annualised EPS of Rs 40.15 by a PE multiple of 52.19.
Our on-the-ground checks with industry participants suggest greater evidence of a slowdown – which also seems to be spreading to the office segment in some cities – in property transactions/prices. And many property firms’ diversification
into telecoms is also discomforting. (more…)
Commodity price forecasts are strong on the back of continued strong global demand growth and limited supply response from the mining
industry. The headwind in the US is unlikely to precipitate a sharp slowdown in demand because of the “decoupling” of the US economy from BRICs and other economies.
Tata Steel:
Estimates on greater visibility of synergy benefits from Corus and lower than expected equity dilution from the proposed equity issuances. This results in 1.3%, 8.2% and 20.7% higher net profit estimates for FY2008/09/10E estimates respectively. Following a sharp re-rating of regional steel peers, revise SOTP based 12-month Target Price (more…)
A colleague of mine told that a Research Analyst working with a famous Australian brokerage house active in the Indian market, compared in his analysis Rolta India an IT company to L&T to raise the Target price of the stock. We all know that Engineering & Construction stocks enjoy far superior rating in this Bull market than IT stocks.
(more…)