Indian Equity Research and Investment Strategy
Pantaloon Retail (PRIL), the largest and the fastest growing retail play in India, has best anticipated the Indian retail revolution.
It has reported strong revenue growth of 80% at Rs10.9bn, EBITDA of Rs956m and PAT of Rs297m during Q1FY08 (double the adjusted profits for Q1FY07). PRIL now reaches out to 6m sq. ft. of retail space spanning across 32 Pantaloons Outlet, 68 Big Bazaar, 98 Food Bazaar, 4 Home Town outlets (more…)
Gujarat Apollo Industries Ltd (GAI) is a leading supplier of asphalt road construction equipment with ~30% market share and is a direct beneficiary of the investments in road infrastructure. Rs3,300bn worth of investment (including share of private sector of Rs877bn) is proposed for road infrastructure in the 11th five year plan.
GAI has started its diversification in related areas. It recently tied up with an European Company for manufacturing of 2 models of soil compactors and 3 models of tandem vibratory compactors. It has also concluded exclusive technical know how agreement with a German Company for design and (more…)
Sterlite Optical Technologies has received a contract from BSNL valued at Rs 1.43 billion for supply of copper telecom cables. These cables would be used to enhance BSNL’s pan-India network to provide basic telephony and broadband services.
Broadband services have sparked off a fresh wave in demand for wire line connectivity with leading telecom incumbents in India opting to launch broadband services using the ADSL 2+ technology, which has given copper cables a fresh lease of life. The copper cables are used for the last mile wiring for landline phones while fiber optic cables are used up to the junction box.
Punj Lloyd has announced that Sembawang Engineers and Constructors, a wholly owned subsidiary of the company has been awarded a major turnkey contract worth Rs 1770 crore for engineering, procurement and construction work at the new mega aromatics plant on Jurong Island, Singapore by Jurong Aromatics Corporation.
The contract was awarded by Jurong Aromatics Corporation (JAC) which had recently announced plans to develop the world-scale US$ 2 billion JAG complex that will produce energy and aromatic products to regional end-users as well as to global downstream producers and traders in the textile md plastics industries.
Under the terms of the contract, Sembawang E&C will be responsible for the engineering, procurement and construction of all the ancillary facilities, including the intermediary and finished product tenkage, receiving and exporting jetties, power and steam co-generation plant, waste water treatment unit as well as other utilities and infrastructure which are necessary to provide support to the main conversion units.
Work on the JAG complex will start in 2008 and is slated for completion in 2011. Upon completion, the JAG acuity will have a capacity of around 1.5 million tonnes of aromatics, comprising 800,000 tonnes of para-xylene, 200,000 tonnes of ortho-xylene, and 450,000 tonnes of benzane, as well as about 2.5 million tonnes of petroleum products.
With this, the order backlog for the Punj Lloyd group on consolidated basis ha gone up to Rs 18,622 crore. This is the total value of unexecuted orders as of 30 September 2007 end new order, received till date.
Usha Martin’s consolidated Topline and EBITDA grew 11% and 6% Y-o-Y at INR 5.8 bn and INR 903 m against our expectation of INR 5.7 bn and INR 801 mn. This was achieved due to higher proportion of value added products in the sales mix and good increase in realization (ranging from 5 to 10% YoY). Net profit at INR 460 mn was ahead of expectations.
At Rs 89, the stock is trading at an EV/EBITDA of 9.6x and 7.5x and at PE of 15.4x and 10.0x FY08E and FY09E earnings.
Jet Airways India will revise the fuel surcharge by Rs 150 applicable on all types of fares in both club premiere and economy class tickets on all domestic routes in India with effect from 05 November 2007. The surcharge has been necessitated in view of the escalation in aviation turbine fuel (ATF) prices.
The revised fuel surcharge of Rs 1350 which has gone up from Rs 1200 will be applicable on all tickets purchased within India. This surcharge of Rs 1350 will be collected per flight coupon on all domestic routes within India. For tickets issued outside India, a surcharge of US $ 34 will be applicable on each sector of domestic travel in India.
It is also applicable on all domestic segments, even if the domestic segment is part of an international journey. The surcharge will not be applicable on sale of tickets on or before 04 November 2007. However, the surcharge will be applicable if tickets are presented for any voluntary change on or after 05 November 2007.