Category: Equity Research

Merill lynch just a while ago initiated coverage on the stock of GMR Infrastructure with a neutral rating. GMR’s head-start in profitable airport development at India’s capital city (Delhi), fast growing cities such as Hyderabad and at Istanbul, Turkey. With India likely to auction 35 non-metro airports & many east-European airports coming-up for bidding, we see immense opportunity for growth ahead. Expansion into toll road development as India aims to quadruple road capex and also Power Generation. Entry into real-estate development led by access to prime land-bank (next to airports) and scale-up the business through SEZs.

GMR has a portfolio of extremely profitable assets such as airports
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Merill Lynch has initiated coverage on Titan Industries with a BUY recommendation.

Initiate with a Buy, PO of Rs1,850 – 30% potential upside Titan is a high quality, high growth domestic consumption story. Its offers strong brand equity, wide distribution & high quality mgmt coupled with strong structural growth drivers.

Titan sells watches through a mix of exclusive brand outlets (EBOs), multi brand outlets and dealers. (more…)

Reliance money has initiated coverage on Indoco Remedies with a BUY rating. Indoco has recently entered into a JV partnership with US based Amneal Pharmaceuticals to develop, manufacture, market and distribute 10 ophthalmic products for the US market.The patents of 3 products have already expired and rests are under patent. Indoco expects few Para-IV opportunities from these product baskets. The important aspect worth noting is that the cost of product development and manufacturing would be borne by the duo equally. (more…)

Ahmednagar Forgings Ltd – AFL
AFL is a 50.7% subsidiary of Amtek Auto, manufactures small- and medium-sized forged components such as connecting rods, gear blanks, shafts, transmission components, flanges and hubs.The company’s sales for the quarter grew by 30.5% to Rs159.2 crore. The growth was led by a 16% increase in the domestic sales and a 62.5% surge in exports. The operating profit margin (OPM) increased by 100 basis points to 20.3%. As a result, the operating profit grew by 37.3%. Higher interest and depreciation costs led the profit after tax (PAT) to grow by 26.8% to Rs17.1 crore.

AFL stock trades at attractive valuations of (more…)

ICICI Securities, has not initiated coverage on LIC Housing Finance [We had in July] and Lanco Infratech. Here is a Detailed Review about the same.

LIC Housing Finance:
RBI’s directive to commercial banks to reduce focus on housing finance will benefit focussed players like LICHF. Expect a 28% CAGR in bottom line to Rs 455 crore over FY07-09E. Its significant exposure to retail book will help in registering healthy yields.

LICHF’s net profit grew 33% to Rs 279.1 crore in FY07 from Rs 208.5 crore in FY06. Its ROA is expected to improve to 1.8% in FY08E from 1.4% in FY06. Assuming a ROE of 18%-19%, even after factoring in the equity dilution, I-Sec arrives at a fair value (more…)

Kotak has initiated coverage on Ranbaxy with a BUY rating in view of the company’s strong product pipeline, increased contribution of the branded generic business and acquisitions, growth from domestic and semi-regulated markets.

Ranbaxy’s Para-IV pipeline comprises around 18 first-to-file products representing a market size of ~ US$26 bn valued at innovator prices. In the next two years, the company is expected to benefit from the launch of complex injectables in the area of Penems and Limuses, which has a market potential of over US$3 bn.

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