Category: Equity Research

Citi has initiated coverage on Pipavav Shipyard (PSL) at Sell / High Risk (3H) rating. The risk / reward remains unfavorable at current levels.

PSL is constructing a shipbuilding, shiprepair, and offshore fabrication complex at Pipavav which will have the capability to build and repair vessels of up to 400,000 DWT and provide offshore construction facilities. (more…)

Nestle India’s outlook remains robust on the back of its star performing brand – Maggi which is now contributing between 25% to 35% of total sales. Nestle is favorably placed to benefit from the structurally strong demand conditions in semi-urban and rural areas.

New Product Pipeline:
Nestle’s topline growth of 18-20% to be sustained led by high single digit vol growth. Focus on low unit price pack & enhanced distribution continues to expand its customer base. Its exports, institutional accounts and out-of-home segments should revive with pick up in eco. (more…)

India is witnessing robust demand trends in the car segment. Demand continues to be strong against a backdrop of economic recovery. Bank financing continues to improve; Maruti’s cars sold on credit reached 71% now from 60% last year.

The Manesar plant (where Swift and Dzire are produced) is operating at peak capacity, while the Gurgaon plant offers scope for expansion. (more…)

This is the Last series of the 3 part post on MidCap Companies in India. Read Part – 1 [Aurbindo Pharma, BGR, IRB Infra, IVRCL, Everonn Systems] and Part -2 [Infotech Enterprise, Koutons Retail, Mahindra Holidays, Shiv Vani Oil & Gas] . All these have to be invested with a time horizon of 2 years according to Edelweiss.

South India Bank:
South Indian Bank’s (SIB) advances book is set to post a robust 22% CAGR over FY09-11E after having slowed down the pace of growth in FY09. SIB has a niche franchisee with nearly ~42% of total deposits comprising low-cost deposits; 24% current account and savings account (CASA) deposits, and a stable ~18% non-resident external (NRE) term deposits (where the bank pays close to 3%).SIB has (more…)

The Capital restructuring and the award of long-term contracts at premium dayrates have helped Aban tide over its near-term cash shortfall. Aban has raised US$150 mn through issue of 5.7 mn shares at Rs1,224/share. This amount will primarily be used to redeem the outstanding bonds of NOK1 bn (US$150 mn) due in Dec’09, which were issued by its Norwegian subsidiary Sinvest.

The deployment of four of its jackup rigs at better-than-market rates has significantly improved near-term revenue and cash flow visibility for Aban. Management indicates that it is in an advanced stage of negotiation for the (more…)

India’s leading construction company L&T which has tremendous know-how in building mega power plans and projects has jumped into the business of power generation. Its 100% subsidiary L&T Power Development Ltd (LPDL) has emerged as lowest bidder to develop and operate a 1,320MW thermal power project in state of Punjab.

The project is expected to be operational only in 2014. However, on a longer term basis, we believe that it is positive because: (more…)