Category: Equity Research

After numerous delays in commissioning the rigs for the ONGC order, SVOG has chartered four rigs in July 2009, with two rigs expected to commence drilling in October 2009 and the other two by December 2009. In spite of these delays, SVOG reported a 14% increase in revenue on a q-q basis with PAT growing by 34% for the same period. Improved profitability is attributed to the strong EBITDA margins at ~42%, which in turn was a result of the commencement of the high margin ONGC order. (more…)

BOFA_Merrill Lynch which had already told that Tech sector will be under performer yesterday, has come out with a SELL on Indian IT Sector.

Why does BOA-Merrill Lynch expect FY11 margins to disappoint consensus
expectations ?

They differ from consensus and believe FY11 margins will decline not only because we expect 5% Re/USD appreciation next year but because a) expect wages will recover earlier than pricing and (more…)

Oil India Limited (OIL), engaged in exploration, development, production and transportation of crude oil and natural gas in India listed on the exchange today and we had a SUBSCRIBE Recommendation for the IPO. OIL has 2P reserves of 974mmboe, with ~94% of these located in North East India. It has 26% stake in Numaligarh Refinery and 10% stake in the under-construction Assam Gas Cracker Project, Brahmaputra Cracker and Polymer Limited (BCPL).

The management has indicated annual growth of 4-5% in oil production (currently (more…)

Asian Paints (APNT) continues to be Analysts top pick in midcap FMCG as they see (1) good volume growth sustaining, (2) potential for positive margin surprise in FY2010E versus Street estimates and (3) likely pickup in residential sales volumes in FY2010-11E. Our EPS estimates are the highest on the Street and 10% higher than consensus. Reiterate ADD.

Factors aiding the good volume growth in decorative (likely >12% in 1QFY10, similar trends seen in 2QFY10E) for APNT are (1) continuing good demand conditions in Tier II and (more…)

BoFA Merrill Analysts have taken a contrarian view against the streets and have come up with a bold report and have recommended a UNDERPERFORM on the Indian IT Sector.

Software stocks have rallied sharply and consensus is now positive. Bofa-ML said, sector will Underperform and believe the market will be disappointed in the near term,on margins and in the longer term on revenue growth trajectory. Unlike consensus, we expect margins to decline in FY11, not only due to Rupee appreciation but due to likely rise in wages, ahead of pricing recovery and a pick up in discretionary S&M costs. Structurally, we expect slower revenue growth going ahead on slower expansion of addressable market and greater competitive
(more…)

HCC’s order backlog as at September 1, 2009 is at Rs163bn implying Rs8bn of order inflows in F2Q10. The company has shifted its strategic focus to the high margin hydropower and water solutions segments and expects an improvement in its margins to 12-13%. The recent QIP raising of Rs4.8bn has helped the company improve its debt/equity ratio. Management indicated that it also expects its working capital cycle to compress.

HCC is developing the 12,500-acre Lavasa project, phased over 13 years (2008-21). Planned for a permanent population of 200,000 and a tourist inflow envisaged at two million p.a., Lavasa presently has about 6msf under development (12-13msf sold) with its first town, Dasve, scheduled to be operational by 2010. (more…)