Category: Equity Research

Zee is third behind Colors in ratings but still has more shows in the Top100. Star Plus has regained the number 1 slot with 24% share of the Hindi GEC audience. While Colors continues to be number 2 at 20% share, Zee is close behind at 17% and actually has more shows in the Top100 than Colors.

Sports business is a key part of Zee’s bouquet strength; helping the company drive higher subscription revenues. Sports revenues have averaged 12.5% of Zee’s total revenues in the past 8 quarters but EBITDA contribution has been marginally negative. With the sports business strategy revolving around cricket, securing exclusive telecasting rights remains key to its (more…)

Rosa Phase I is the first of the 13 power plants being developed by Reliance Power. It will be a 600 MW (2×300 MW) plant, which, as per the agreement is likely to be commissioned by March 2010. The estimated cost of the plant is Rs27 bn and it is being funded in a debt:equity mix of 80:20. Until now, the company has spent approximately Rs12 bn on its construction. The power produced from the project will be sold to the Uttar Pradesh Electricity Regulatory Commission (UPERC) on a cost plus basis.

Shanghai Electric Corporation (SEC) is the EPC contractor for the plant and is supplying the BTG equipment while the BOP works are subcontracted to various players in India. (more…)

Polymer costs for JISL have declined by around 25% over the past three months which includes cut in excise duty, this implies a margin expansion of ~700 bps. JISL has wound down its capex plans for F09 and now plans to invest around Rs2.0 bn (Rs3.0 bn earlier). Certain corporate capital expenditure has been deferred, and the company plans to outsource non-critical MIS component manufacturing.

JISL intends to reduce its working capital requirement by around 30%. This reduction will be driven by a combination of lower polymer cost, low raw material inventory, and de-bottlenecking. (more…)

Kansai Nerolac Paints Ltd – KNPL is the 2nd largest paints company in India with a market share of approximately 21%. It is the largest in the industrial paint segment with a 45% market share and has a substantial market share of 14% in the decorative segment. Sales contribution from both the segments for KNPL is almost equal.

For Q2 FY09, Net Sales grew 12% to Rs.390cr – another quarter of weak performance given the impact of high raw material costs and subdued demand from the crucial (more…)

Lakshmi Machine Works – LMW, is today a global player and among the top three manufacturers of the entire range of textile machinery in the world. The company currently has 60% market share in the domestic Textile Spinning Machinery Industry. LMW has diversified into CNC machine tools and is a brand leader in manufacturing customized products.

For Q2 FY09, Textile machinery division’s revenues were down 24% while the foundry division’s revenues declined 22%. (more…)

The news is not at all good for the Indian IT companies. Citi conducted a survey and the outcome is Negative – IT budgets down 10%-20%, marking a rapid deterioration from past survey of 200 CIOs in Sep-08, which indicated weak 1% growth. IT buyers may defer spending until 2H09 to protect against further budget cuts. Large banks are asking for a ~15% cut, in return for increased volumes. If the top 10%-15% of customers get 10%-12% discounts and the remaining 85%-90% with less purchasing power may get discounts approaching 3%-6%.

Goldman Sachs has revised estimates for FY2010 put us as at an average EPS growth of 1% in INR terms and -3% in USD terms (more…)