Indian Equity Research and Investment Strategy
How to Get More Returns in Mutual Fund SIP with Swing Strategy ?
Max Life Insurance – Revised Deal, Positive for Max Financial
Will the Digital Neo Banking Platforms Succeed in India ?
Should you own the Life Insurance Business ?
Does HDFC AMC deserve High Valuation ? Review
Valuation of Indian Markets & Relentless FII Selling
Why Indian StockMarket Quoting at High P-E ?
Why Value Investing Does not Work in India ?
We had an in depth and up to date coverage about Nagarjuna Constructions. Now we are raising the price target to Rs 350. Primary reason for the same is revisions in earnings estimates by -9% to +14% over FY08E-10E. Increasing target multiple for core business to 19x from 16x earlier due to a structural change in the business mix, and rolling forward our target basis to Sept. 09E from Mar. 09E.
Just a while ago, we received communication from Bharat Earth Movers Ltd. They stated that they have secured an order from Delhi Metro Rail Corporation (DMRC) for manufacture and supply of 156 numbers state-of-the-art standard gauge stainless steal metro cars towards second phase of operation worth Rs 1144 crore. This order is the single largest historic contract BEML has bagged. BEML is also looking forward for an additional order of 36 metro cars from DMRC.
BEML’s Rail & Metro Business Group has tied up with IL&FS for working as a consortium to bag metro projects in the country and BEML will supply rolling stock, spares and after sales service for metro projects. BEML & ILFS combine is also exploring the possibility to work on the city centre to international airport segment of Metro project at both Hyderabad and Bangalore Metro.
Karaikal Port, a wholly owned subsidiary of Marg Construction has entered into a MoU with Pembinaan Redzai Sdn Bhd (PRSB), a leading Malaysian company engaged in management and operation of forest plantations, logging, saw milling, chipping and other downstream manufacturing and related activities. PRSB also undertakes civil engineering and construction works and project management services in Malaysia.
Meanwhile, New Chennai Township, its another wholly owned subsidiary has got regulatory nod for setting up a special economic zone for light engineering sector.
The current price of Rs 223.50 discounts Q1 June 2007 annualized EPS of Rs 17.86 by a P/E multiple of 12.51.
JBF Industries reported an excellent set of Q2FY08 numbers. The company’s earnings estimates have been revised upwards and continue to recommend BUY with increased price target of Rs.250 .
Net sales for Q2FY08 were at Rs.5.3 bn. Up by 76.2% YoY. EBIDTA margin during Q2FY08 was up by 190 bps at 14.0%. EBIDTA for Q2FY08 was at Rs.742 mn up by 72.0% YoY and PAT is at Rs 571 mn up 68%.
Dishman Pharma reported an inline Q2 ended Sept-30th. Sales up 59% and PAT up 67%, although YoY figures are not entirely comparable given that Carbogen Amcis (CA) was present only for 1 month in 2Q07.
Management expects significantly large contract wins from Solvay over the next few quarters. Dishman has recently increased capacity for Solvay; Vitamins business buyout from Solvay to be effective by October end; 8 projects from CA have been transferred to India.
Reliance Capital’s net profit rose 20.41% to Rs 201.28 crore on 75.58% rise in total income to Rs 391.27 crore in Q2 September 2007 over Q2 September 2006.
Compare this with HDFC Bank, which reported a 40% growth in Net Profit. As an investor we are more confident in HDFC / HDFC Bank than Reliance Capital though we recommend adding those stocks only on market corrections.
The current price of Rs 1,822.40 discounts Q1 June 2007 annualised EPS of Rs 49.14 by a PE multiple of 37.08. Reliance Capital recently launched consumer loans for various purposes.
