Category: Equity Research

Indian Markets have entered into an era of Conflicting valuations. Credit Suisse [CS] continues to be bullish on Capital Goods while HDFC and Citi have bearish to Neutral views on the same. Anyway, here is CS’s theme for 2008.

Category + Weightage + Rating + Preferred Picks
Private Sector banks 10.0 UW Prefer HDFC Bank and Axis Bank
NBFC 6.0 UW UW stock brokers
Real estate 6.0 OW Buy Sobha and Parsvnath (more…)

Panacea announced WHO pre-qualification for their pediatric combination vaccines Easy Four (DTP+Hib) and Ecovac (DTP+Hep B) which implies global acceptability of these vaccines by various UN procuring agencies. Expect approval for the crucial pentavalent vaccine (EasyFive) as well to be in place shortly. The combined demand of all combination pediatric vaccines worldwide was US$600mn in 2005 and is estimated to grow up to US$1.6bn by 2012.

Driven by combination and IPV vaccines as well as robust 14%+ domestic formulations growth, we expect Panacea to deliver EPS growth of 44% in FY09E and 26% in FY10E. Overall, we estimate 35% EPS CAGR (FY08E-10E) on the back of 23% revenue CAGR (FY08-10E). (more…)

IDFC SSKI in a report punctured the hopes of Apollo Tyres stock. The tyre industry is more of a commodity play with limited pricing power for players despite >90% capacity utilization. Though select players have hiked prices by ~1% in December 2007 in the replacement market to counter rising raw material prices, MRF’s non-participation raises doubts on sustainability of the price hike and rules out future increases. (more…)

Citi in a research report released minutes ago has recommended a SELL on Religare. Religare is India’s fastest growing, most aggressive and leveraged retail brokerage entity. The stock is up 280% from its IPO price; currently trading at 30x FY09E EPS.

India’s equity markets have grown rapidly in both retail and institutional volumes. Trading volumes have expanded rapidly (+150% yoy) and have exceeded growth in market capitalization. While economic growth continues to be strong, and expect structural growth in retail volumes, the recent rapid pace of growth suggests near-term volatility. (more…)

XPRO India Ltd. is a part of S.K. Birla Group and is a diversified company involved in the manufacture of BOPP Films, Coextruded Plastic Sheets, Coextruded Cast Plastic Film, Thermoformed Components, Refrigerator Liners, Thermoset Moulding Powders and Synthetic Resins.The company has its manufacturing operations located at Faridabad, Greater Noida, Ranjangaon (Pune) and Barjora (West Bengal). The company had relocated its manufacturing plant located at Kandivali, Mumbai to Ranjangaon, Pune. (more…)

ABN Amro in a report released minutes ago has advised to Book Profits in Canara Bank as the bank struggles with lower operating margins than its peers. Poor core fee income and rising loan loss provisions are unlikely to help the bank’s cause.

Can Bank will witness a higher increase than its peers in the average cost of interest-bearing liabilities in FY08 from FY07. The small proportion of low-cost deposits is also a key reason for the relatively high cost of Can Bank funds. We expect low-cost deposit ratios to fall to 30.4% by March 2008 from 31.5% in March 2007. (more…)