Key positives-(A) Domestic business witnessed strong volume growth (23-26%), overcoming ~12-15% dip in realizations, the latter a sector wide phenomenon, (B) Room for growth remains, as capacity utilization ranges from 62%-85% across domestic business segments, (C) Management philosophy is cautious of grandiose plans in overseas M&A, historical track record has been good, (D) New products accounted for 17%-23% revenues across segments, (E) Net-cash for the first time in last 10 years, WC cycle ex-cash improves ~10% in FY10.
Strong cash generation; margin expansion led by absence of forex losses; slowdown in exports. Europe—17% of consol. sales probably lower than perception; sharp changes in subs. profitability
Expected EPS of 13.5 and 15.5 for FY 11 and fy 12 respectively. Target of Around Rs 290.
