CP | Dalal Street

Lanco Infratech Amarkantak: Unit 2 Synchronized

March 12, 20101 min read

Lanco Infratech indicated that they synchronized Unit 2 of Amarkantak power plant and expect it’s commissioning during the next quarter. The synchronization of Unit 2 and consistent PLF for Unit 1 gives us more visibility on commissioning of Amarkantak power project. Further, calculations indicate the cash inflows of Unit 1 (since synchronization in May 09) have so far resulted in 21% reduction in capital cost.

Goldman Analysts expect the stock’s underperformance versus BSE Power index (14% YTD) to narrow in the medium term primarily (more…)

Equity Research

Coverage on Indian Fertilizer Stocks

March 12, 20104 min read

Indian Fertilizer sector stocks have recovered due to the allocation of natural gas, which has reduced cost and increased utilization levels of fertilizer plants. Many of these plants ran on expensive naphtha or FO / LSHS feedstock. Closed units are also likely to open due to this cost reduction. The consumption of fertilizers in India is expected to grow by 4% CAGR till FY12. Urea is expected to witness a supply deficit of 5.4mmtpa by FY12. Phosphatic and potash fertilizers also remain matters of concern due to the lack of indigenous raw materials.

De-regulation of Fertilizer Prices – While Urea was under mandatory pricing control under the New Pricing Scheme, Stage-III, the government recommended an MRP for DAP, MOP, MAP, TSP, SSP, Ammonium Sulphate and 11 other complex fertilizers under the (more…)

Equity Research

Thermax Stock on Boil with Babcock – Wilcox JV

March 11, 20102 min read

The much anticipated JV for supercritical boilers with Babcock and Wilcox was announced on 10 March 2010. The JV (51:49) intends to set up a new 3 GW per annum boiler manufacturing facility at an investment of Rs7.6 bn. Of this, equity contribution from Thermax is anticipated to be Rs1.75 bn. With sufficient cash reserves (Rs7.2 bn in 2Q), even after the Purolite settlement, Thermax should be able to fund capex through internal resources. (more…)

Breaking Corporate India Earnings News

Opportunities in Indian Infrastructure Galore

March 10, 20101 min read

All the infrastructure companies are upbeat on the immense opportunities available in the segment. Reliance Infrastructure, for instance, plans to bid for more road projects. As highlighted in our pre-conference note, private sector involvement in infrastructure development has expanded to ‘non-traditional’ areas such as metro, airports and even power transmission. Lanco plans to ramp up its generation capacity to benefit from the prevailing high merchant power tariffs. (more…)

Equity Research

Mahindra & Mahindra + Reliance Infra – Sum of Parts Valuation

March 10, 20102 min read

Is the sum of the parts greater than the whole ? We wi8ll have a look at looks at discounts to NAV as well as stub values for each holding company. Today we will analyze, Mahindra & Mahindra and Reliance Infrastructure.

Mahindra & Mahindra:
Mahindra & Mahindra rallied late in 2009 on strong auto sales in India before correcting early this year on a 3QFY10 earnings miss. We believe the auto momentum should continue and current stub values are attractive after the correction. (more…)

Equity Research

Aurobindo Pharma – Buy the CRAMS Story

March 10, 20101 min read

Aurobindo Pharma Ltd (APL) has launched a new division, AuroSource, to provide contract research and manufacturing services to innovator pharma & biotech companies. It intends to position itself as a provider of manufacturing (intermediates, APIs, pre-formulations and formulations) and research services across the life cycle (from pre-clinical to commercial stages). At a later stage, APL would also look at providing medicinal chemistry and other discovery services. (more…)

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