Indian Equity Research and Investment Strategy
Nitin Fire is one of the largest fire protection service providers in the organized sector in India. The company installs and maintains fire protection and security equipment in facilities such as malls, offices, plants, etc. The nature of this business is sticky.
With projected sales of 243,000 cylinders in FY2009E, the company (more…)
With the Government of India creating un-necessary hurdles in allotting barren lands to Corporates, companies are looking overseas for land acquisitions for their global dreams. Just a while ago, we have been informed by the management of Karuturi Global Ltd that the Company has completed its acquisition of 100,000 acres of land in Ethiopia, for cultivation of rice, vegetables, palm oil and sugarcane. The Company is in the process of acquiring a further land bank of 650,000 acres of land in Ethiopia.
Everest Kanto is a dominant player in the domestic and global high pressure seamless gas cylinder market with ~75% market share in India and about 11% worldwide. The majority of its customers are OEMs (based in India, Iran, Pakistan and China). The market has not fully priced in the company’s ability to execute and grow in a supply-constrained global cylinder market (estimated demand of 5 mn cylinders in FY2009 according to the IANGV). Estimate a utilization rate of 60% and a sales CAGR of 50% for FY2008-FY2010E. (more…)
Sintex is a market leader in the Indian plastics processing industry with an innovative product portfolio. The company has, over the years, leveraged its established market dominance in water tanks (~70% share) to tap other higher-margin segments.
Sintex is set to deliver a 45% sales CAGR in FY2008-FY2010E (53% FY2005-FY2008) through a strategy of innovation (it is the only company in India involved in monolithic construction) and acquisitions (four in the past year, which contributed US$249 mn to sales) (more…)
At the time of declaring financial results for the year ended 31 March 2008 (FY 2008) during trading hours yesterday, 28 May 2008, Tata Motors announced plans to raise about Rs 7,200 crore through three simultaneous but unlinked rights issues to be used for financing the Jaguar-Land Rover acquisition. However the offer price, ratio and conversion prices of the rights issues will be announced later.
The first issue would consist of normal shares on a right basis amounting to Rs 2,200 crore. The second would raise up to Rs 2,000 crore through issue of “A” equity shares having one vote for every 10 shares. A further amount of Rs 3,000 crore is proposed to be raised through a third rights issue of five-year 0.5 per cent convertible preference shares (CCPs), optionally convertible into “A” equity shares after three years but before five years from the date of allotment.
The company had also proposed to raise about $500/600 million through an appropriate issue of securities in the foreign markets on terms to be decided at that time.
In continuing the Goldman Sachs coverage on India Logistics & Transportation, the following stocks have been assigned Neutral rating unlike the BUY rating on Gateway Distriparks and Gati Ltd.
Transport Corporation of India Ltd: TCIL
TCIL is an integrated logistics company and the largest organized player in the road freight business, with a 15% share of the organized market – it moves close to 1.5% of India’s surface traffic annually. (more…)