SAI PARSADAM 

BIG BOSS

VIKAS PARSHURAM SAMWATSARE

DATED 11/12//12

 

Buy Jubilant Life Sciences Ltd For Target Rs. 278/286/295

LONG TERM TECHNICAL BUY CALL ON JUBILANT LIFE SCIENCES LIMITED CMP: RS. 239 AND DIPS TO 227 WITH THE STOPLOSS OF RS. 220 ON CLOSING BASIS FOR THE TARGET OF RS. 278/286/295.
HOLDING PERIOD:3-4MONTHS
* After the fall from Rs. 390 to 147, the stock made “Harami Pattern” at the bottom in Daily chart andmoved up. The share price went into a consolidation mode after moving up. The stock spent the last eighteen months consolidating between the broad range of Rs 150 to Rs 228 levels. Lastweek, it broke the falling trendline resistance in daily chart and moved up.
* We saw “Rectangle Pattern” breakout in the stock in weekly chart with healthy volumes, which is bullish chart pattern.
* On the oscillator front, RSI is movingwell above its  average in weekly chart and it also broke the rectangle pattern, which indicates price tomove towards north.
* MACD is alsomoving in upward direction in positive zone, which supports the buy call on the stock



 Buy Shriram Transpor Finance Co.Ltd For Target Rs.702.00


* Shriram Transport Finance co. Ltd is a part of Shriram Group, a prominent player in commercial vehicle financing business, chit funds, consumer finance, life insurance, general insurance, stock broking, property development, project engineering and IT.
* The company has raised the funds by the way of public issue of 60,00,000 secured Nonconvertible Debentures during the quarter.
* The company has demonstrated the results during the quarter; its boisterous growth of Net Profit is steers by 12.74% to Rs. 3375.60  million.
* The company has declared an Interim Dividend of 30% i.e. Rs. 3/- per equity share of the face value of Rs. 10/- each fully paid up. 
* As per the Court Order, the company has sanctioning the Merger is yet to be filed by Shriram Holdings (Madras) Private Limited (SHMPL) & the Company with Registrar of Companies, TamiI Nadu, the Financial affects of the merger have not been given effect to in the financial results.
* Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 6% over 2011 to 2014E respectively.
 
Outlook and Conclusion
* At the current market price of Rs.615.40, the stock P/E ratio is at 9.99 x FY13E and 9.39 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.61.63 and Rs.65.55 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 11% and 6% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 3.21 x for FY13E and 2.96 x for FY14E.
* Price to Book Value of the stock is expected to be at 1.89 x and 1.57 x respectively for FY13E and FY14E.
The second quarter witnesses a healthy increase in overall sales as well as profitability on account of powerful combination of exciting products, an enhanced store network and robust infrastructural Support system. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.702.00 for Medium to Long term investment.

 Buy Muthoot Capital Services Ltd For Target Rs.110



Snapshot
A small player in the NBFC segment, Muthoot Capital is a part of the Pappachan Muthoot Group. The company is growing at a scorching pace in mumuthe financing of the two-wheelers and three-wheeler segment.
Investment Rationale
* Changing the business model at the right time: The company has changed the business model at the right time and shifted from the regulatory-impacted gold loan business to relatively stable and safer automobile finance business.
* Strong growth expected going forward: The AUM of the company stood at approximately Rs.300 crore. We expect the company to reach
a target of Rs.450-500 crore by the end of FY’13E.
* Strong promoter holding: The promoter holding in the company stood at 77 per cent. In order to comply with the regulatory requirements,
the holding has been reduced to marginally below 75 per cent.
* Consistent dividend pay-out ratio: The company has got a consistent dividend pay-out ratio of around 25 per cent. We expect this trend to
continue further and going by the earnings for H1FY’13, the company should pay a dividend of Rs.4 for FY’13E translating into a dividendyield
of ~4.5 per cent.
Valuation & Recommendation
Muthoot Capital Services logged interest income of Rs.67.3 crore compared to Rs.37.1 crore, an increase of 80.9 per cent y-o-y for FY’12. Profit after tax for the year stood at Rs.15.5 crore compared to Rs.9.7 crore for FY’11. EPS for the year stood at Rs.13.12 and adj. book value stood at Rs.68.7.
During H1FY’13, the company registered interest income of Rs.46.2 crore, an increase of 72.2 per cent y-o-y. Net Interest Income for half-year stood at Rs.30.5 crore compared to Rs.17.8 crore last year, an increase of 71.3 per cent y-o-y. PAT for the H1FY’13 stood at Rs.10 crore compared to Rs.5.7 crore last year, translating into an EPS of Rs.8.02. The book value as on date stands at Rs.77.7.
We value the company at 1.25x FY’13E adj. book value to arrive at a target price of Rs.110 over the next 6 to 9 months providing an upside potential of 24 per cent.


Buy Cipla Limited For Target Rs.445.00




Cipla laid foundations for the Indian pharmaceutical industry back in 1935 with the vision to make India self-reliant in healthcare.
* Cipla is planning to new joint ventures and even acquisitions in key markets like Turkey, Morocco, Brazil and Nigeria.
* Cipla had acquired the over-the-counter and pharmaceutical divisions of Australian drug maker Sigma Pharmaceuticals for $800 million.
* Cipla has already invested $165 million in India and China to acquire facilities and build new ones for its foray.
* During the quarter, the robust growth of Net Profit is increased by 61.83% to Rs. 5000.10 million.
* Cipla has plans to increase its focus on domestic markets, with introduction of its offerings in new oncology and neuropsychiatry therapeutic segments.
* Cipla has launched of ‘Qvir’ drug kit for treating HIV/AIDS.
* Cipla has get approval from World Health Organization for anti-malaria drug.
* Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 18% over 2011 to 2014E respectively.
 
Outlook and Conclusion
India's pharmaceutical sector is gaining its position as a global leader. The pharma market in India is expected to
touch US$ 74 billion in sales by 2020 from the current US$ 11 billion, according to a PricewaterhouseCoopers
(PwC) report.
* At the current market price of Rs.390.00, the stock P/E ratio is at 22.62 x FY13E and 19.83 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.17.24 and Rs.19.67 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 10% and 18% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 14.44 x for FY13E and 12.75 x for FY14E.
* Price to Book Value of the stock is expected to be at 3.44 x and 2.93 x respectively for FY13E and FY14E.
Cipla plans to shift headquarters, keen on buying Rs 270 crore space in central Mumbai. At the end of financial year 2011-12, the company cash and cash equivalents stood at about Rs 1,400 crore while its assets were worth nearly Rs 4,000 crore.
The second quarter witnesses a healthy increase in overall sales as well as profitability on account of growth in anti-depressants, anti-ulcerant, anti-asthma, anti-biotics and cardiovascular therapy segments. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.445.00 for Medium to Long term investment.