Indian Equity Research and Investment Strategy
BOFA Merrill has initiated coverage on IPCA Labs with a BUY Rating.
Expect 19% sales CAGR over FY10-12E, driven by both, domestic (18% CAGR, 39% of sales) and export (26% CAGR, 35% of sales) formulations. Domestic formulations should sustain high growth on 30% addition to fieldforce in FY10 with thrust on high-growth chronic segments. Export formulation growth to be led by US (8% of sales by FY12E vs 3% now). API business should grow a modest (more…)
In a somewhat delayed review [FOR March-2010 Quarter], we will review the performance of the the Funds that we have been recommending for quite a long time now.
HDFC Equity Fund – The fund continues to beat the benchmark S&P CNX 500 by a Huge Margin. The fund mainly consists of Large Cap Stocks with some flavor or Midcaps in the Growth sector.
Returns Delivered by HDFC Equity Fund – Data Suggests that 15 year SIP has yielded you 30.09% while a 10 year SIP would have made (more…)
Edelweiss’ 4Q10 profits were better than estimates on higher investment banking fees and a sharp expansion in the wholesale financed asset book. For the full year (FY10), profits were however 18% below our estimates. Overall, the excess balance sheet and systemic liquidity remained a drag on returns (lower working capital and arbitrage yields). (more…)
ITC India’s leading Tobacco Giants reported PAT at Rs10.28bn. Despite steady cigarette profitability and lower losses in other FMCG segment, EBITDA margins contracted ~150bps YoY to 30.5%, reflecting lower margins of agri business (revenues surged to ~Rs10bn, Rs2.5bn ahead of expectations, but mix deteriorated). Paper profitability was a tad lower.
Volumes rose 8.5% YoY, driving 14% YoY revenue growth. Margins expanded ~30bps YoY. Weighted avg. price hikes of ~13-15% in the last 3 months would aid revenue growth. After a ~8% growth in volumes in FY10, we forecast 2%/4% volume growth in (more…)
India’s Largest Bank, SBI reported a PAT of Rs18.7bn down 32% y/y and significantly lower than our and street estimates of Rs26-28bn. Higher than expected NPA provisions and operating expenses led to the large miss. Though coverage did improve by ~400bps, it was proportionately lower than the P&L hit taken. For FY10 net profit was almost flat y/y at Rs91.6bn.
NPA – NPL’s do go up and so do restructured assets, but it is not dramatic, not concentrated and both the mix and management talk suggests asset quality will probably stay at these levels, rather than deteriorate. (more…)
In FY10, NTPC’s operating income grew 9% YoY to Rs482.2bn, EBITDA rose 14% YoY to Rs143.2bn, and reported PAT was up 6% to Rs87.3bn. However, adjusting for previous years sales (Rs6.01bn +), change in DTL (Rs4.57bn -), sales related to income tax recovery (Rs7.2bn +), tax related to earlier years (Rs5.25bn +), provision for pay hikes (Rs3.14bn -) and AAD (Rs3.16bn -), the recurring PAT Rs94.85bn is up 14% YoY. The results are in-line with our expectations on a reported basis. (more…)