Indian Equity Research and Investment Strategy
With the BSE Sensex scaling new highs, small and medium sized startup companies plan to go Public and raise as much money as possible.
We have learnt that OnMobile Global Limited a company operating in the Mobile Space in India has filed for DHRP with SEBI.
Bangalore based Brigade Enterprises Ltd, the flagship company of Brigade Group is an ISO 9001 : 2000 company with over (more…)
We had broken the store about Jubilant Organosys deal with Syngenta earlier this week. Citi in a report releases just a while ago continues to be bullish on Jubilant after the Syngenta deal.
Jubilant’s CRAMS business has got a shot in the arm in the form of a “multi-million” dollar 5-year contract with Syngenta to supply pyridines. Jubilant’s CRAMS business has grown at 45% CAGR (excluding acquisitions) over FY05-07, and this contract further improves the likelihood that this growth trend would sustain.
Jubilant is a leading player in pyridines & recently raised its capacity by c24% to 42000 TPA. These are key intermediates used in multiple pharma & agrochem APIs. Jubilant has over 150 derivatives in its product basket that are used in c229 APIs & 17 agrochem products. With the expanded capacity, Jubilant becomes the global leader in pyridines.
Jubilant as one of the superior Indian outsourcing plays, given its integrated presence across the pharma & chemicals value chain. The company is expected to report an EPs of Rs 17.57 and Rs 22.52 for FY08 and FY09 respectively. Citi reiterates a BUY with a price target of Rs 387.
Simplex Infra has bagged various contracts in four different segments i.e. industrial structures – Rs 452 crore, urban utilities Rs 178 crore, piling Rs 112 crore and marine structures Rs 60 crore, aggregating Rs 802 crore, both in India and abroad.
At the current price of Rs 414.95, the scrip trades at a PE multiple of 22.67, based on Q1 June 2007 annualised EPS of Rs 18.30. Simplex Infrastructures net profit rose 89% to Rs 19.69 crore on 68.9% rise in sales to Rs 594.43 crore in Q1 June 2007 over Q1 June 2006.
Petron Engineering’s net profit rose 97.4% to Rs 2.29 crore on 15.8% rise in sales to Rs 63.51 crore in Q1 June 2007 over Q1 June 2006. The company declared the results after market hours yesterday (20 September 2007).
Petron Engineering Construction provides engineering and construction services for refineries, chemicals, cement, fertilisers, power and other industrial plants.
ICRA Online, a wholly-owned subsidiary of ICRA is announcing the launch of ICRA Mpower, a web-based platform for mutual fund distributors and financial advisors, which provides all the tools required for making the distribution business more effective and efficient.
A cost effective solution for setting up the business, ICRA Mpower offers mutual fund distributors a gamut of financial tools to cater for both the pre- and post-investment requirements of clients, thereby paving the path for distributors to build enduring relationships with clients on the strength of quality service and appropriate advice.
ICRA Mpower is being offered by ICRA Online, an independent and credible organisation providing information services and software solutions to the financial services community. The effective combination of high quality data, technical expertise and efficient support, differentiates ICRA Online from its competitors.
ICRA Online’s earlier products like MFI Explorer, a mutual fund research and analysis product that has been subscribed to by major mutual funds, distributors and multinational banks, has been the market leader in the country. The company’s website MutualFundsIndia.com has also been rated among the best 150 sites in the world by Forbes.
A rising rupee has a negative impact on the margins of Indian IT companies who live on arbitrage with very little scope for innovation. More than 50% of their earnings are in dollar terms because of their dependence on US market.
In the case of IT stocks, the market has been looking only at the rising rupee since April 2007. The IT index has lost nearly 21% to 4310.38 from its all time high of 5,611.33 recorded on 19 February 2007. On the other hand, Indian Rupee extended gains to about 11% this year, making it Asia’s best performing currency. Infosys , Satyam and TCS are the biggest losers in the IT pack.
Today, the rupee strengthened past 40 per dollar for the first time in more than nine years, after lower US interest rates brightened the outlook for high-yielding assets like the Indian currency.
Meanwhile, Indian Trade Minister Kamal Nath, has expressed his concerns on rising rupee and said that the government would look at steps to protect exporters.
Analysts feel that high crude oil prices, hovering around $80 per barrel, and Reserve Bank of India (RBI) intervention continue to be the key risk to a sustained appreciation of the Indian unit.
Our internal analysts are of the view that one can expect a re-rating of IT stocks downwards within the next couple of weeks as they come out with their half yearly results.
In a research report released just a while ago, Morgan Stanley[MS] is bullish on the prospects of Rajesh Exports Ltd. MS has initiated coverage with a overweight on Rajesh Exports with a price target of Rs 1,051.
Bangalore based Rajesh Exports is the largest exporter of jewellery from India and now wants to shift its business mix towards the three higher-margin businesses of diamond jewellery, private label jewellery, and Retail Jewellery market in India.
The company is at an inflection point from where its three pronged growth strategy will lead to higher margins and earnings. We believe this growth is not fully captured in the stock price given that at current price the stock trades at 12.9 times F2009e earnings and at an attractive implied PEG of 0.60x.
12-month price target of Rs1051 implies 24.9x F2008e earnings and 15.9x F2009e earnings. The company is well poised to achieve good earnings growth for the next few years based on favourable industry macro factors and its three-pronged growth strategy. The company has changed its focus from revenue growth to margin expansion.
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