Category: Equity Research

Motilal Oswal, the fundamentals research company has initiated coverage on Unichem Laboratories with a BUY Rating. Here is the justification on the same.

The Indian pharmaceuticals industry is likely to grow at 12-15% compounded average growth rate (CAGR) over FY10-FY12E after having grown by 14% CAGR over the last 15 years. Unichem’s domestic business, which contributed 81.5% to revenues in FY10, had a market share of 1.5% and is currently ranked 25th.

Strong brands power domestic growth – (more…)

Goldman Sachs has initiated Coverage on IL&FS Transportation Networks – ITNL with a BUY Rating. ITNL has 1,673 lane kms of road projects under construction and 3,683 under development as of March 31, 2010. We believe this will result in a sustained revenue stream from BOT project-related services, growing at 43% CAGR over FY10-FY13E. Expect 5 projects worth Rs77 bn (2 awarded in FY10 and 3 in 1QFY11) to achieve financial closure in the medium term, thus augmenting its financial and operational ability. (more…)

Tata Motors reported consolidated 1QFY11 adjusted net income of Rs20.3bn vs. Rs6.6bn loss in 1QFY10, and Rs8.8bn profit in 4QFY10 (up 130% qoq). This is significantly ahead of our adjusted net income estimate of Rs12.1bn and implied Bloomberg consensus of Rs10.1bn for the quarter. The company reported consolidated EBITDA margin of 14.3% vs. 3.1% in 1QFY10 and 10.9% in 4QFY10.

The main source of surprise was performance at the JLR division, which reported an adjusted net income of Rs15bn vs. Rs4.8bn loss (more…)

Jaiprakash Associates reported strong F1Q11 top-line performance. Total revenues grew 52% YoY to Rs31.7 bn. However, significant margin weakness across divisions (mainly cement and construction) meant that even though the high-profitability real estate segment stepped up in the quarter (revenue share rose from 5% in F1Q10 to 11% in F1Q11), EBITDA for the company as a whole grew only 15% YoY.

Net profit of Rs1,051 mn, post adjustment for exceptional income related to the profit booked on the sale of its 4.94% stake in (more…)

India’s larges Cigarette manufacturer ITC saw a dip in volumes during the last quarter. This does not necessarily mean increasing health consciousness amongst Indians but their affluent lifestyle making them to hop on to Foreign Brands.

ITC’s recent pricing, coupled with mix improvements led to ~12% and ~16% YoY growth (90bps margin expansion) in cigarette revenues and profits respectively. PAT growth of ~22% YoY to Rs10.7bn was marginally ahead of our/consensus estimates of Rs10.6/10.4bn respectively. Moderate EBITDA margin expansion of ~110bps YoY to 33.4% was primarily on (more…)

United Spirits Revenue growth of ~18% YoY
to Rs14.7bn reflects various changes in accounting bases (re-grouping of sales/A&SP expenses ex tie up units). Like to like, revenues rose ~11% YoY, comprising 6% YoY volumes and the rest due to mix/price increases. Mgmt noted that volume growth during the Q was adversely impacted by de-stocking in the state of Andhra Pradesh due to a fresh (more…)