Category: Equity Research

Navneet Publications business has been affected by the sudden entry of state governments into the study material market. Government has started distributing workbooks free of cost (Gujarat and Maharashtra). The government with its social objectives could severely hamper private companies in the education market, we believe this could be restricted to the retail segment – which is currently very small for the major education companies. (more…)

Citigroup has downgraded Larsen & Toubro from BUY to Hold due to changing macro environment that is likely to affect the best in the Capital Goods class. Adding to L&T’s woes is the availability of capital has reduced and the cost of the same has increased, growth in capital formation is likely to come in at low single digits vs. the 17% CAGR seen during FY03-FY08. Capex cycle is far healthier than the one in the 1990s, incrementally things will only get worse before (more…)

Ruchi Soya and Industries Ltd. (RSIL) is largest producer and supplier of vegetable oil and soya foods in India with an annual seed crushing capacity of over 2.9 million MT. RSIL is also a largest player in branded edible oil category accounting for ~19% of Indian market (Nutrela, the biggest Soya foods brand in the country, enjoys more than 50% of the market share).

The branded category of edible oil for the company has grown over 30 percent CAGR since last 8 years from Rs500 crore to over Rs3000 crore in FY08 whereas the share of branded sale to total sales has increased from 19 percent in FY01 to 30 percent (more…)

The Tata Steel group delivered strong results in 1HFY09, due to stronger price realizations across all geographies, higher volumes in India and Southeast Asia, and performance improvements. Tata Steel consolidated PAT for 2QFY09 was Rs48bn. Adjusting for extraordinary items, PAT would be Rs51bn, +180% yoy. EBITDA margins rose 440bps to 18.9% and EBITDA grew 78% to Rs83bn. 2Q also benefited from a 40% decline in interest expense and strong operational performance across regions. Group total volumes were flat yoy at 7.9m tonnes.

From their peaks in July 2008, global steel prices have corrected as much as 50%, with much of the decline occurring in the past two months. Prices have fallen (more…)

Jaiprakash Associates [JP] has emerged as the lowest bidder for 1.32GW Karchana project with tariff of Rs2.97/kWh beating Adani Power by just 1 paise. JP’s levelised tariff is healthy – Rs2.97 (plus tax) v/s two earlier lowest bids rejected by the UPPCL in April (Lanco Rs2.83) and Jun ’08 (Reliance 2.64).

As the project is won through competitive bidding under case-2 guidelines of the Govt. of India, Sangam Thermal Power Project (STPP) at Karchana will have support to secure land, environment and water clearances. STPP has secured low cost coal (US$26/tn) linkage of 4.68MTPA for 1.32GW (more…)

Havells India’s (Havells) management indicated that growth in Sylvania could become challenging, especially in Europe that accounts for over 70% of revenues. Further, the domestic business is likely to be negatively impacted by slowdown in construction activities and industrial capex.

Sylvania is witnessing troubled times with 6% contraction in its European revenues in Q2FY09. Other geographies such as Latin America and Asia, which offered Sylvania (more…)