2010 | Dalal Street

Equity Research

Pantaloon Retail – Future Group – Riding Retail Spend

August 31, 20102 min read

Pantaloon’s 4QFY10 revenues grew 91% yoy to Rs31.8bn. The underlying samestore sales growth (SSSG) for value retailing was 11%, while the lifestyle SSSG came was 19%. EBITDA grew 15% yoy to Rs2.1bn. PBT (pre-ex) grew 36% yoy to Rs750mn due to higher other income. Tax reversal led to adjusted PAT growth of 154% to Rs927mn.

Lifestyle-retailing delivered SSS growth of 19.4% YoY on a normal base quarter. Valueretailing SSS grew 11.5% YoY – marginally slower growth than in 3QFY10, but on a much stronger base quarter. Home-retailing SSS grew 57% YoY on a very weak 4QFY09, (more…)

Breaking Corporate India Earnings News

New Direct Tax Code Bill

August 30, 2010September 2, 20102 min read

We have been able to obtain a copy of the Direct Tax Code Bill as Introduced by the Government in the Lok Sabha. As discussed earlier by our Analysts, the content in the new bill is very similar. Major Changes apart from what is already discussed is,

Applicable from 1st March 2010. That means it will be applicable for Citizens filing IT returns on or after April-1st 2013.
5% Dividend Income Distribution tax to be Paid by MutualFunds [AMCs] and ULIPs [Insurance companies]

(more…)

Breaking Corporate India Earnings News

Pranab Mukherjee Does U Turn on Direct Tax Code

August 27, 2010August 27, 20102 min read

Finance Minister Mr. Pranab Mukherjee did a complete “U” turn on the Direct Tax Code Bill. The first draft released in August-2009 [See here] had proposed some very drastic changes raise the individual income tax limits in 3 big slabs of 1.6 Lakhs to 10 Lakhs, 10 Lahks to 25 Lakhs and 25 Lakhs & above. Get rid of all exemptions as well as total savings was encouraged to take it upto Rs 3 lakhs.

The Second draft [See here]had also proposed to tax capital gains from stock markets currently 100% exempt. However, the (more…)

Equity Research

Unichem Laboratories – Review

August 26, 20102 min read

Motilal Oswal, the fundamentals research company has initiated coverage on Unichem Laboratories with a BUY Rating. Here is the justification on the same.

The Indian pharmaceuticals industry is likely to grow at 12-15% compounded average growth rate (CAGR) over FY10-FY12E after having grown by 14% CAGR over the last 15 years. Unichem’s domestic business, which contributed 81.5% to revenues in FY10, had a market share of 1.5% and is currently ranked 25th.

Strong brands power domestic growth – (more…)

Economy, Markets and Macro Views

SEBI – IRDA – Finance Minsitry – Total Disconnect

August 24, 20103 min read

The Pillars of Indian Capital Market – SEBI, IRDA and the Supreme Veto Authority, the Finance Ministry are somewhat disconnected in their recent actions and functioning.

It all began with Mr. C.B.Bhave the Chairman of SEBI tightening the rules for errant Agents / brokers in the Mutual Funds and Insurance industry. Since AMFI, the body overlooking Mutual Funds was meek, SEBI overpowered and to an extent cleaned the mess of funds churning and underhand commissions AMCs were rolling out at the cost of investors. SEBI introduced a regime of Zero entry load, a good move. However, recent implementation of compulsory KYC is uncalled for as the systems that approve KYC reject an application if there is a single mis-match of a “letter” anywhere in your address putting investors at loss. Standardize PAN card for now is our opinion.

Mr. Bhave knows the Day Light Loot Insurance Agents have been resorting to by ripping commissions as high as 20% on ULIP Policies. (more…)

Equity Research

Buy IL&FS Transportation Networks – GS

August 23, 20101 min read

Goldman Sachs has initiated Coverage on IL&FS Transportation Networks – ITNL with a BUY Rating. ITNL has 1,673 lane kms of road projects under construction and 3,683 under development as of March 31, 2010. We believe this will result in a sustained revenue stream from BOT project-related services, growing at 43% CAGR over FY10-FY13E. Expect 5 projects worth Rs77 bn (2 awarded in FY10 and 3 in 1QFY11) to achieve financial closure in the medium term, thus augmenting its financial and operational ability. (more…)

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