Category: Equity Research

TVS Motors:Q3 results were predictably very poor, with net profit declining 49% YoY, and EBITDA declining 49% YoY and 24% QoQ. We are again revising down forecasts. With no change in fundamentals, we maintain our Sell rating on the stock. Q3 margins contracted to another low of 1.7% (down 145bps QoQ), compared to our estimate of 2.6%. We see continuation of muted trends, given the squeeze from competition, and delays in upcoming launches which could improve sales mix i.e. 125cc bike Flame. (more…)

Cipla’s 3Q net income (Rs2.1bn; 14% growth YoY) came in 8% ahead of consensus estimates driven by a significant 192% rise in technology income (Rs748mn vs. estimates of Rs450mn) which resulted in a 23.7% EBITDA margin for 3Q (vs. estimates 22%). Excluding technology income, Cipla’s EBITDA margin was sharply lower to 18% (from 23% on YoY basis). (more…)

Here is a BUY List from ENAM Securities Research and ICICI Securities.

ICICI Securities Research List:

Scrip + 12Mth Target Price + Expected Returns
HDIL 2076 145
Sobha Developers 1324 106
Balrampur Chini 116 73
Ashok Leyland Auto 55 72
Tata Tea 1050 66
Tata Steel 1090 62
3i Infotech Technology 180 62
(more…)

Satyam Computers continued with its winning momentum in Q3FY08 and also acquired Business / management consultancy firm – Bridge Consulting. Given the forecasts of a significant slowdown in the US economy in 2008, it appears that the market is worried about the growth of Indian IT companies. This could keep the near-term share performance in check. Companies themselves lack visibility, and hence it remains difficult to forecast FY3/09 numbers.

With 9.4% QoQ volume growth, Satyam easily dwarfed the growths exhibited by Infosys and TCS. Satyam has managed to buck the trend of rising attrition – it has reduced attrition rates by 450 bp YoY. (more…)

UBS has changed recommendations on several stocks including BHEL, Punj Lloyd, TCS etc with the correction in their stock prices.

BHEL:
UBS upgraded BHEL from Neutral to Buy following the recent correction in stock price. Of the nearly 75,000MW of private-sector capacity proposed to be built by 2015, BHEL’s potential target market is 43,000MW (72% of the yet to be ordered portion) (more…)

The company expects to benefit from decline in lead price in LME to US$2,532/t in Dec07 from a peak rate of US$3,666/t in Oct07 from Jan08 onwards.The company expects its average cost lead to be benchmarked to around US$2,500/t in Q4FY08E, which is 21% lower than its average benchmark cost of US$3,200/t.

Q3FY08 PAT at Rs552mn, is up 58% y-o-y, about 8% below our estimate. The company absorbed the impact of 115% y-o-y increase in lead cost and improved its EBITDA margin by 20bp y-o-y to 15.1% thanks to pricing power. (more…)