Dalal Street :: India Equity Research, Investment Analysis

Citi Upgrades Corporation Bank Target Price

July 17, 20071 min read

Citigroup just a while ago upgraded Corporation Bank to a BUY and also revised its target price upwards to Rs 455 from Rs 379. The reason for the upgrade is the solid performance in Q1-08; profits are up 23% – well ahead of 3% growth expectations. Balance-sheet driven NII expansion, fee growth and reduced bond portfolio charges (sharp base effect) drive profits up 23%.

Management foresees about 20% growth, which should alleviate recent funding pressures and support its above-industry capital cushion. Corp Bank is expected to report a fully diluted EPS of Rs 45.53 and Rs 55.44 for FY2008 and FY2009 respectively.

EVA-based target price of Rs455 is premised on a risk free rate of 8%, industry average margins of 230bps and higher than industry long-term capital ratio of 6.5% vs 6% average. Citi is also benchmarking target price on a 1.3x FY09E P/BV multiple (FY08E earlier), which is in-line with industry average target multiple.

Breaking Corporate India Earnings News

Lupin receives US FDA approval

July 17, 20071 min read

Lupin has received approval from the US FDA for Abbreviated New Drug Application (ANDA) for Amlodipine Besylate tablets, 2.5 mg (base), 5 mg (base) and 10 mg (base). Commercial shipments of Amlodipine Besylate tablets will commence shortly.

The company’s Amlodipine Besylate tablets are AB-rated generic equivalent of Pfizer’s Norvasc tablets, a long-acting calcium channel blocker indicated for the treatment of hypertension. The brand product had annual sales of approximately $ 2.7 billion for the twelve months ended December 2006, based on IMS Health sales data.

Economy, Markets and Macro Views

Pyramid Saimira Theatres – New Business Initiatives

July 17, 20072 min read

Pyramid Saimira Theaters Ltd [PSTL] which hopes to be the largest Theater Chain operator in the world has set some ambitious plans with new business tactics to make the best use of its resources. PSTL operates 402 screens in 340 cities in India.
PSTL hopes to have 700,000 seats by the end of this year thus beating World’s Number One Theater chain, Regal which has 600,000 seats.

PSTL’s new Business Initiatives are as follows,

Let teachers take private tuitions in their premises because until afternoon their are no shows scheduled. They expect students to BUY Coffee and Snacks which will aid their bottomline.
Sell subscriptions instead of tickets. Instead of buying ticket per film, consumers can BUY monthly subscriptions – Rs 100 or so. They will be given a bio-metirc identity card which can be used in any PSTL theater. Ofcourse for peak hour shows you have to make a reservation calling their call center. PSTL will profile consumer habits and then will sell that database to Advertising and Marketing agencies.
PSTL is in talks with a Match Making agency to setup retail outlets in its theaters.
It is also exploring other retail initiatives on its premises.
PSTL’s immediate goal is to eliminate the middlemen – distributors and establish their presence in both film production and exhibition.

Way to go PSTL. Now their are copycats in the Ambani camp who are all set to copy this idea and tune it to suit their business.

Breaking Corporate India Earnings News

L&T consortium bags orders from Tata Steel

July 16, 20071 min read

Larsen & Toubro led consortium has bagged orders worth Rs 1070 crore for supply & installation of sinter plant and other packages from Tata Steel.

The company in consortium with Outotec GmbH, Germany bagged EPC (Engineering – Procurement – Construction) Contract for 5.75 MTPA Sinter Plant valued at Rs 836 crore. L&T ‘s share of this order is Rs 623.30 crore. This would be the single largest Sinter Plant to be built in India. This is scheduled for completion in 30 months.

L&T has also been awarded the contract for civil & structural steel works of steel melt shop valued at Rs 233.59 crore. This is scheduled for completion in 28 months.

Breaking Corporate India Earnings News

TCS Q1 Results

July 16, 20071 min read

The software giant has posted Q1 consolidated net profit of Rs 1202.9 crore versus Rs 1195.2 crore on QoQ basis as per Indian GAAP.

During the corresponding quarters, its consolidated revenue was up at Rs 5202.9 crore versus Rs 5162.1 crore on QoQ basis.

Breaking Corporate India Earnings News

RCOM Acquires Yipes

July 16, 20071 min read

ADAG Group company, Reliance Communications just a while ago made an announcement to the Mumbai Stock Exchange that it has acquired Yipes Enterprise Services. goBroadband has an exclusive coverage on how the deal makes strategic sense for Reliance Communications.

Yipes is already profitable and this may mark its ambition to enter the lucrative Datacom market in the US. RCOM may also explore the opportunities in Remote Infrastructure Management a closely related area for it to operate maybe from one of its SEZs to avail tax incentives.

RCOM stock shot up 2.7% and is trading at Rs 570 on the National Stock Exchange.

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