Indian Equity Research and Investment Strategy
Apollo Hospitals Enterprise’s net profit advanced 17.74% to Rs 14.60 crore in Q4 March 2007 as against Rs 12.40 crore in Q4 March 2006. Revenue rose 21.56% to Rs 233.40 crore in Q4 March 2007 as against Rs 192.00 crore in Q4 March 2006.
Net profit surged 66.28% to Rs 100.10 crore in the year ended March 2007 as against Rs 60.20 crore in the year ended March 2006. Revenue increased 25.88% to Rs 891.00 crore in FY 2007 as against Rs 707.80 crore in FY 2006.
Citigroup research has recommended a BUY on ABG Shipyard, Bharti Shipyard ONGC and Mphasis. We had a BUY on Mphasis much before Citigroup did.
ABG Shipyard and Bharti Shipyard:
Citi raiseed their target price for ABG Shipyard to Rs560 (Rs430 earlier) and Bharati Shipyard to Rs670 (Rs525 earlier) as we roll forward our target multiple for both companies to 12x FY09E PE (15x FY08E earlier), in line with valuations of similar-sized shipyards in the region.[Asia]
Both the companies are expected to report a EPS growth of 50% from 2008-10. Bharti Shipyard is expected to report a fully diluted EPS of Rs 38.53 and Rs 55.87 for FY08 and FY09. While ABG is expected to report EPS of Rs 29.92 and Rs 47.18 for FY08 and FY09.
The target multiple of 12x FY09E earnings for the Indian shipyards also compares favorably with the imputed target P/E (average 12.4x CY08E) of Korean shipyards.
ONGC:
Citi rates ONGC as Buy/Medium Risk (1M) with a target price of Rs1100. Despite near-term uncertainties on subsidy payouts, ONGC’s asset valuations have improved with higher net realizations and greater confidence in gas price deregulation.
The target price of Rs 1100 is based on a PER of 11x FY08E P/E (previously 10x) on account of greater confidence in adherence to a subsidy-sharing formula and the company’s recent successes in driving volume growth and potential improvement in reserve replacement. The new target price imputes EV/EBITDA of 5.5x FY08E. This is at the higher end of historical trading ranges – PER of 2.1x to 11.3x and EV/EBITDA of 0.8x to 5.6x – but in-line with regional peers.
Sun TV Network has announced the launching of its FM Radio Station in Bhubaneshwar under the brand 93.5 S FM from 28 June 2007 through its subsidiary South Asia FM.
This station can be heard at 93.5 MHz frequency in Bhubaneshwar and Cuttack.
With this, the total FM stations of the company’s group operational goes up to 8. The company hold licences for 45 FM Radio Stations across India, and will be one of the largest radio broadcasters in India when all the remaining 37 stations becomes operational.
Value investors should avoid investing in the IPO of Spice Communications. I am a subscriber of Spice in Karantaka and it is the worst Telecom company in the History of India.
They were the first one to introduce Telecom services in Karnataka. Today Karnataka is the largest Telecom Circle and Spice is Last in the race. What have they done in the past 10 years ? They are promising they will do a lot in the next 10-12 months is a straight forward lie.
Spice is backed by non-investor friendly promoters, Modis, who are like fly by night operators.
National Stock exchange refused to list the shares of Spice because they have acumulated losses more than their net worth.
Blindly Avoid the IPO of Spice. Instead look at RCom or Bharti Airtel.
Vishal Retail Allotment Status is now available online and can be checked here.
As per reports, the Central government has agreed to Cairn India’s proposal to lay a pre-heated 580-kilometre (km) pipeline at a cost of $600 million (Rs 2,400 crore) to transport the crude oil from its Barmer oil fields in Rajasthan to Virangam in Gujarat. The cost of laying the pipeline is to be shared between Cairn and Oil and Natural Gas Corporation (ONGC) in a 70:30 ratio, the same as the shareholding in the oil field, laying to rest a contentious issue between the government and Cairn.
Petroleum Minister Murli Deora is expected to announce the decision shortly, reports suggest. With this, a solution will be in place to evacuate the waxy crude oil from Cairn’s Rajasthan oil find, the largest in the country since ONGC’s Bombay High in 1974.
Crude oil from the field will reach a peak production of 1.5 lakh barrels per day (bpd) of oil, which will boost the country’s output by 20% from 6.8 lakh bpd. The area is estimated to have 1 billion barrels of oil. Cairn is confident of delivering 1,50,000 bpd as has been agreed by the government. Cairn had applied to the government to get the pipeline included in the overall field development cost, which will enable it to recover the cost from the revenue earned from selling crude oil. The field is expected to run at peak production for 10 years.
On 10 May 2007, Cairn India said it had made two new discoveries in the Rajasthan block in northern India. The company received a six-month extension from the government for further exploration in the block.
Cairn India reported net loss of Rs 8.54 crore in Q1 March 2007. Sales were Rs 0.50 crore in Q1 March 2007.
Net profit of Ansal Properties & Infrastructure rose 254.01% to Rs 41.49 crore in the quarter ended March 2007 as against Rs 11.72 crore during the previous quarter ended March 2006. Sales rose 106.88% to Rs 253.90 crore in the quarter ended March 2007 as against Rs 122.73 crore during the previous quarter ended March 2006.
For the full year, net profit rose 225.22% to Rs 131.91 crore in the year ended March 2007 as against Rs 40.56 crore during the previous year ended March 2006. Sales rose 118.74% to Rs 753.70 crore in the year ended March 2007 as against Rs 344.56 crore during the previous year ended March 2006.
Net profit of Oil & Natural Gas Corpn declined 13.10% to Rs 2681.64 crore in the quarter ended March 2007 as against Rs 3085.89 crore during the previous quarter ended March 2006. Sales rose 4.19% to Rs 12396.97 crore in the quarter ended March 2007 as against Rs 11898.37 crore during the previous quarter ended March 2006.
For the full year, net profit rose 8.40% to Rs 15642.92 crore in the year ended March 2007 as against Rs 14430.78 crore during the previous year ended March 2006. Sales rose 18.17% to Rs 56632.81 crore in the year ended March 2007 as against Rs 47922.87 crore during the previous year ended March 2006.
Net profit of TVS Electronics declined 25.99% to Rs 2.25 crore in the quarter ended March 2007 as against Rs 3.04 crore during the previous quarter ended March 2006. Sales rose 19.26% to Rs 77.47 crore in the quarter ended March 2007 as against Rs 64.96 crore during the previous quarter ended March 2006.
For the full year, net profit declined 41.27% to Rs 1.85 crore in the year ended March 2007 as against Rs 3.15 crore during the previous year ended March 2006. Sales rose 4.98% to Rs 272.42 crore in the year ended March 2007 as against Rs 259.50 crore during the previous year ended March 2006.