Category: Equity Research

SBI cap securities has initiated coverage on Sujana Towers Ltd [STL] with a BUY rating.

STL has the complete integrated manufacturing process right from billets procurement to erection. Its galvanized tower capacity, has gone up from 28000 MT by four fold to 128000 MT and will add another 100000 MT through a Greenfield facility in Chennai.

STL has an unexecuted order book of Rs350 crore to be realized in the next 3-6 months. In addition, it is also expected to receive an EPC contract of Rs200-250 crore during FY09. (more…)

Indiabulls Financials Q1FY09 profits were down 22% QoQ (+29% YoY). The sharp reduction in profits was largely due to lower IPO funding opportunities, higher cash on books (earning negative carry) and lower loan yields (change in loan mix). Revenues declined 3% qoq at Rs5.6bn; operating income net of interest expense was down 11% qoq to Rs3.3bn owing to
higher financing costs.

The Management has guided a 50-60% loan growth [down from 100% earlier] due to challenging environment. The company is reducing exposure to unsecured loans (15% of loans); increasing exposure to mortgages (50%), commercial credit (20%, backed by real estate / securities) and loans against securities (10%). (more…)

IDFC is caught in the crosswinds of capital constraints, macroeconomic headwinds and a financial market downturn. But, core fundamentals, management quality and long-term value proposition remain attractive.

In 1Q09, income from investments and investment banking fees declined as capital markets went on a downturn. The ongoing downturn in the capital market will be good for the company’s private/project equity business. In the short term, we expect RoI on existing assets to fall, though this should enable IDFC to acquire stakes at much reasonable valuations. The longterm benefits far outweigh the negatives from the expected fall in RoI. (more…)

Riddhi Siddhi Gluco Biols is expected to report solid performance for the current FY09. Maize starch and its derivatives industry to double in next five years. RSGB with around 25%market share is the leader and is expected to maintain its market share going forward due to recently commissioned expansions at Viramgam and Uttarakhand (more…)

DLF’s Buyback saga is a negative to the company in the prevailing macro situation. Credit Suisse just a while ago has downgraded the stock from NEUTRAL to UNDERPERFORM. It would have been better had the company utilised its cash to fund upcoming developments. (more…)

Infosys Technologies well known for building luxury IT campuses on land acquired at cheap prices from various Governments, today reported results for Q1FY09, which are below expectations. Infosys and other Indian IT companies which are mainly dependent on outsourcing were dumped on the bourses in afternoon trading. Infosys led the massive sell off in IT stocks with loss of 7.11%.

Infosys reported revenues of $1155m (1.1% qoq), below Street expectations. Margins declined ~210 bps, in line with expectations. (more…)