Category: Equity Research

Bharat Bijlee’s [BBL] numbers though good appears to indicate moderate growth.BBL reported 11% growth in Q4FY08 to Rs.1.9 bn. On a sequential basis, revenue growth was strong at 79% QoQ. In the third quarter, the company had suffered loss of production on account of the capacity expansion work being carried out at its facility. Hence, the fourth quarter also had some revenue spillover of the previous quarter. (more…)

Here is a chart provided by Sharekhan about returns in Indian Indices in May of every year from 1998 to 2008.
Months Index returns (%)
May-98 -9.05
May-99 13.61
May-00 -1.89
May-01 3.65
May-02 -5.41
May-03 7.23 (more…)

Techno Electric company has posted its Q4FY08 performance, which saw an improvement in all its divisions. The stock is in for a re-rating on the back of continued strong order inflow, huge order backlog and timely execution capability.

Techno Electric order backlog stood at Rs. 8,500 mn as on FY08. The total backlog is 2x of FY08 revenues. The company has bid for more than Rs. 2,500 mn till date. (more…)

Just few minutes ago, HSBC Equity Research has downgraded Jindal Saw Ltd to UNDERWEIGHT. This change in recommendation comes after the back of poor Q4 results from the company. Another Jindal Group company, JSW Steel had to face the same plight earlier this morning.

Jindal Saw (JSAW) had favourable coal prices for a long time, but the inventory of this low-cost (USD100/t) coal is over, the contract for which expired in April 2008. Management guided recently that new supplies should come in only at USD300/t. (more…)

All though Energy / Power sector looks attractive, Kotak Sec Analyst has recommended a REDUCE on BGR Energy Systems. The company is poised to grow strongly on the back of massive investments expected in the country, especially in the power generation sector. BGR Energy has expanded the scope of its products/services to emerge as a complete Balance-of-Plant (BOP) contractor for power plants. Successful project execution and managing strong growth are key challenges.

Kotak expects revenues and earnings to grow at CAGR of 53% and 62%, respectively, over FY2007-10E, led by growth in power division. Order backlog of Rs36 bn at beginning Mar’08 provides visibility of 1.8 years based on FY2009E revenues. (more…)

Research Analysts at Citigroup and Morgan Stanley are having a tug of war when it comes to Index Heavyweight State Bank of India. Morgan Stanley Downgraded the bank to Underweight [If you follow their MCSI, then you have to SELL the stock] while, Citigroup lowered the price target but still retained a BUY on the stock.

SBI reported a 21% sequential increase in NPLs. This was driven by higher agricultural NPLs (farmers stopped coming to branches to repay, after the debt waiver scheme announced by government – according to management). The other driver for higher NPLs is SME/ SSI – a sector witnessing some stress. Given that these remain focus areas for growth, we expect an NPL increase as we move forward. Moreover, with NPL coverage of 42%, credit costs could rise significantly. (more…)