Indian Equity Research and Investment Strategy
Citi in a report released just a while ago has recommended a SELL / High Risk on Tech Mahindra.
Tech Mahindra (TM) posted revenue of US$258m (vs. estimate of US$260m) and a margin decline of ~20bps, despite sharp uptick in utilization (400bps) and no pass-through revenue in 4Q. Net profit of Rs2.2bn was below expectations (est. Rs2.27bn) despite forex gains of US$7m. (more…)
Steel Authority of India (SAIL) reported robust numbers for the quarter ended March 2008. Revenues for the quarter rose 32.8% YoY to Rs 137.9bn on the back of sharply higher realizations, with record saleable steel production of 3.5mn tons and improved product mix. However, bottom-line growth lagged that of the top line mainly due to higher employee costs (additional provision of Rs 15.9bn), which rose 100% YoY due to wage revision of employees, w.e.f 1 Jan 2007.
EBITDA margins declined by 260bps YoY, primarily due to higher employee costs. Profits rose 25% YoY to Rs 23.7bn. For FY08, the company reported an 18.2% growth in revenues (including price escalation) and an EBITDA of Rs 122bn, up 24% YoY. Operating margins for the year stood at 29.7% vs. 28.3%.
India’s leading IT company Satyam Computer services is facing charges of Fraud by UPaid in a Patent Dispute involving hundreds of millions of dollars.Here is the sequence of events that has happened in the last 12 years with Upaid. (more…)
Mahindra Lifespace is probably the only Developer who has witnessed higher selling prices even in areas like Delhi’s NCR where prices have fallen. We are in receipt of confirmed reports that in Faridabad, the company’s realisation actually increased to Rs4,000 psf from the launch price of Rs3,875 psf in Q4FY2008.
Project / City / Commencement
Mahindra Eminente Phase II Mumbai FY 2009
Mahindra Splendour Phase II Mumbai FY 2009
GE Gardens Mumbai FY 2009
Commercial Pimpri FY 2009
Sylvan County Chennai FY 2009
Residential Gurgaon FY 2010
Residential Nasik FY2010
Residential Nagpur FY 2009
We expect Mahindra Eminente to sell upwards of Rs 10,000 / sft based on previously sold prices of various Mahindra Lifespace Residential projects in India.
In a report released just minutes ago, HSBC has reiterated its OVERWEIGHT rating on Dabur India. Dabur is one of the least expensive consumer stocks in India and trades at an 18% discount to peers on PEG basis. (more…)
Punjab National Bank (PNB) delivered Q4FY08 results, which were ahead of our expectations. The net profit rose 128.8%, whereas net interest income (NII) grew at 12.6%.PNB appears to have consolidated on its gains from 3Q08 and despite an aggressive loan growth, improved both margins and asset quality.
NIMs for the quarter were 366bps (up 10bps qoq) – a surprise and a contrast to most PSU bank peers. Margins could, however, come under some pressure due to aggressive loan growth (+18%qoq), and its relative disadvantage in a declining interest rate situation as its deposit repricing could be slower than peers.
PNB’s NPLs have declined 22% qoq – a combination of higher recoveries and little pressure from its relatively large agriculture portfolio (contrary to expectations). Loan loss provisioning was also lower (excl Rs1bn floating provision) and coverage levels jumped to an impressive 77%.
The bank reported an EPS of Rs 64.98 for FY08. EPS estimates for FY09 and FY10 are Rs 76.88 and Rs 91.20 respectively.