Small cap vs. large cap discounts in Indian Cement companies is at historical highs. The disconnect – Smaller companies pricing in near distress, while large companies pricing in upturn. The discount to replacement cost ranging between 20% and 60% and the discount to large-cap peers between 40% and 70%. (more…)
Year: 2010
Status of Ultra Mega Power Projects
Till now, the government has awarded four UMPPs (two each on domestic and imported coal). Reliance Power [Reliance ADAG Group Company] has won three of them (Sasan, Krishnapatnam, and Tilaiya) and Tata Power has been awarded one (Mundra). Following the absence of significant action in the past 12 months on bidding, Power Finance Corporation (PFC), which is the nodal agency for UMPPs, has invited RFQs for a fifth UMPP in Sarguja. (more…)
Market Expectations from Infosys
The guessing game begins as volume growth and dollar revenue to remain strong in Q4 FY10, boosted by the ongoing IT budget recovery. Analysts expect Tier I vendors to report 5-5.4% dollar revenue growth, backed by similar growth in volumes.
Infosys guidance for rupee EPS is likely to be 117-120, implying YoY growth of 6.6-9.4%. Expect dollar revenue guidance at 15-18% and rupee revenue guidance at 12-15%. This could disappoint investors who are pricing in 18-20% EPS growth, as indicated by valuations at 22.7x FY11E. We believe Infosys EPS guidance needs to come in at (more…)
Corporate Free Cash Flow Positive – The Big Turn?
The tide has almost completed its turn on India: growth is well and truly back, cash (market flows) is coming, and corporates are beginning to turn in cash.
India’s high-investment-growth phase has been fuelled/dependent on capital markets, in part given its FCF-negative status in recent years. As India Inc turns FCF- positive, could this change? There are caveats – growth lies outside top corporates/SPVs, so not captured by estimates; fiscal deficit is divestment-dependent; corporate capex is still subdued, but could rise with confidence /capital
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Camson Bio Technologies – Potential Multibagger ?
Camson Bio Technologies is India’s first wholly integrated agriculture biotechnology company. Camson has a first mover advantage in certain product categories. Its future growth will depend on its ability to leverage the growth potential in replacing the chemical pesticides using the residue free platform.
Camson is all set to leverage all the hard work put in over the last one and half decade. A typical biocide research takes 9 – 12 (more…)
Cairn India’s Rajasthan resources upgraded
Cairn India (CIL) today increased its discovered Rajasthan resource base from 3.7 bn boe to 4.0 bn boe. While the 2.1 bn boe Fatehgarh formation (MBA fields) estimates have not been changed, estimates in 22 other fields (Barmer Hill formation) have been upgraded to 1.9 bn boe (1.71 bn boe earlier).
While the higher resource base is directionally positive, it requires significant work to establish new reserves in an increasingly (more…)