Changing Coverage Patern – Your Views ?

In the past 3 years you have read us covering about individual companies from various Research entities. Since 2008, research reports have followed the markets, the fall and then the rise. Hence, we got together and have come with a new idea on presenting the coverage that will be more helpful to Investors / Readers. We now propose to overhaul the entire reporting pattern so that Investors can take informed decision and invest wisely.

Here are some tips on how we will be shaping future coverage, (more…)

ATUL Ltd – Multibagger from Anand Rathi

Atul Ltd is a diversified Specialty chemical company, engaged in manufacturing of – agrochemicals, Bulk chemicals, Dyes, intermediates and polymers. It is also undertaking toll manufacturing of herbicides & custom manufacturing of bulk drugs for large MNCs. Company is also increasing capacities of various products mainly by de-bottlenecking, so as to involve less capital expenditure. It is also expanding capacities of – bulk chemicals & Intermediates; Vat & Reactive dyes; Pharma & Intermediates and in polymers divisions. They will mostly go on stream in current (more…)

Real Estate – Equity Dilution an Overhang

A significant increase in risk appetite, capital flows and preference for high-beta names have largely driven the 55% out performance of property stocks over the past 3 months. While $1.7bn raised last month (more on the anvil) has eased liquidity, we believe it’s coming at the cost of sizeable dilution, which would take time to digest and act as an overhang.

Fundamentals are still weak. Some pick-up is seen in volumes with new launches and B/S concerns addressed, but there are no signs of a meaningful recovery yet. Risk of cancellations/bad debts is high, and there is a marked slowdown in leasing and mortgage growth to 8% in 4Q (vs. 10% in 3Q) despite the recent (more…)

OnMobile Global – Global contracts to drive growth

Vodafone Group has announced that they have chosen OnMobile Global to provide its ring-back tone (RBT) service in emerging markets ex-India. This deal highlights OnMobile’s ability to convince international telecom operators to shift to a revenue share model for Mobile Value-added Services (MVAS), which is different from the one-time licensing model prevalent in international markets. We believe that this deal could be a precursor to more global contract wins for OnMobile. (more…)

Morgan Upgrades Financial Services

With strong election results for UPA, in our opinion, reduces the tail risk of sharply higher NPLs. Morgan’s economist has upgraded his GDP forecast for India. In an improving economy, banks are less likely to underperform. Morgan has raised its industry view to In-Line.

The negative view on Indian banks has been premised on a weak outlook for revenues and a likely increase in non-performing loans (NPLs). This view still holds. However, with the general elections sending the strongest government since the early 1990s, the outlook for reform has increased – implying potential pickup in capital flows. (more…)

JSW Steel – Results Cracking – SELL

JSW Steel Sales rose 5% yoy to 1.06m tonnes. FY09 adj PAT fell 44% yoy to Rs9.3bn. JSTL reported standalone PAT of Rs492m. Adjusting for the FCCB buyback & forex gains, net loss for 4Q was Rs258m vs profit of Rs4.4bn in 4QFY08.

4Q EBITDA/t fell to $67 vs $188 last year and $122 in 3QFY09. Even though JSTL had contracted coking coal at $175/t for most of its 4Q off-take (vs $305/t for FY09), the quarter was impacted by significant high-cost opening inventory. ~8% of coking coal contracted at $305/t in FY09 is yet to be lifted and JSTL is in negotiations to spread it over the next 2-3 yrs. (more…)

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