Category: Equity Research

HSIL is a market leader in sanitaryware with a 40% market share and second largest player in container glass products in India both contributing equally to the top line. The sanitaryware market in India has grown rapidly during the last 5-6 years, with key players doubling their production capacities. India has emerged as a major bath and sanitaryware market in the Asia-Pacific region. The cost of producing sanitaryware in India is substantially lower as compared to developed countries.
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For Everest Kanto Cylinder – EKC, the uncertainty over cylinder sales and realizations from the Dubai facility (44% of FY09 sales, Iran major market) to continue at least till FY10 end. Although domestic cylinder sales, particularly to the OEM segment, should grow over the next 6 m, this may not be enough to fill the gap from Dubai slowdown.

EKC benefitting from favorable regulatory changes in India and incremental gas supply from the KG – D6 basin remains intact, problems at the Dubai operations of the company will dominate earnings for the next 6-12 months. (more…)

HDFC Securities, first initiated coverage on Pidlite Industries 2 years ago. The performance of the stock has been in-line with second rung stocks in the FMCG counter since then. However, HDFC Securities is pitching it differently now – Product company and lower valuations compared to Asian Paints – a peer company (more…)

The mid-cap construction space has underperformed the broader indices recently and is trading around 10x FY11E (adjusted for subs valuations) due to short-term irritants, despite we believe substantial growth opportunities beginning in FY11. Issues like the Dubai credit crisis and a separate statehood issue in Telangana have created a dampener on stock prices.

We expect order inflow in the infra space to strongly rebound in FY11 as governments get their acts together on sectors like roads, ports and continued push in power.
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Major Indian broadcasters such as Zee Entertainment and Sun TV Network have indicated plans to hike rates on flagship channels by 5%-15%, pointing to improving utilizations and signs of a broader recovery in advertising spend. Apart from this, the thesis of structural positives for the broadcasters from increased digitization is intact and strengthening as digital subscriber growth has continued to be robust.

Investors must prefer established broadcasters as the best way to gain exposure to increasing penetration of digital distribution platforms (like DTH, digital cable)

In line with earlier view of 10%-12% sequential growth in advertising (more…)

HDFC Insitutional Research has initiated coverage on eClerx Services – a niche player in the Knowledge Process Outsourcing market. The company survived through the bankruptcy of its key client and utilising the downturn to build up management bandwidth and infrastructure facilities, eClerx is comfortably placed to take advantage of increasing demand for offshoring.

eClerx recorded a growth of 15% in revenues and 36% in earnings in Q2FY10 and won 2 large accounts after competing with established players. (more…)