SAI PARSADAM +
VIKAS P SAMWATSARE
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Pre-Market Call - Sell TATA STEEL for target of 386 – 381 with stop loss of 398 . . . . . . . .
Comments -
After a substantial rise from 359 to 404, scrip started moving in a sideways & on Wednesday it closed negative at
394.50 supported by negative indicators indicates weakness in the scrip. From here near term possible target price
comes to 386 – 381.
Indicators –both stochastic & RSI are stooping down ward & quoting below its average line at 47 & 55 levels
signaling weakness in the scr
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Buy Tata Coffee Ltd For Target Rs. 1620.00
* The estates of the company are situated in coorg.
* The Company has started using Wind power in the manufacture of Freeze dried coffee.
* Tata Coffee Ltd has demonstrated the results during the quarter; its boisterous growth of Net Profit is steers by 109.44% to Rs. 368.49 million.
* The company focuses to grow the market for differentiated coffee to show results with volumes growing to 2123 MT as against 1847 MT in the previous year.
* Profit before interest, depreciation and tax is Rs.911.82 millions as against Rs.411.11 millions in the corresponding period of the previous year.
* Tata Coffee Ltd has recommended a Dividend of Rs. 11 per share of face value of Rs. 10 each aggregating to Rs. 2054.47 Lakhs for the year ended March 31, 2012.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 16% over 2011 to 2014E respectively.
Outlook and Conclusion
* At the current market price of Rs.1420.80, the stock P/E ratio is at 23.23 x FY13E and 19.26 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.61.16 and Rs.73.77 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 16% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 9.19 x for FY13E and 7.75 x for FY14E.
* Price to Book Value of the stock is expected to be at 4.29 x and 3.51 x respectively for FY13E and FY14E.
The second quarter witnesses a healthy increase in overall sales as well as profitability on account of Sharp increase in Shareholder funds Rs.45.70 Million from March 12 to Rs.50.10 Million in Sept 12 driven by higher profits. 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 arget price of Rs.1620.00 for Medium to Long term investment.
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Buy UltraTech Cement Ltd For Target Rs.2145.00
* UltraTech Cement has more than 200 sales offices across the country, which handles a combined load of around 14,000 orders per day.
* During the quarter, the robust growth of Net Profit is increased by 97.21% to Rs. 5500.30 million.
* UltraTech Cement has entered into a Share Purchase Agreement with the shareholders of Gotan Limestone Khanij Udyog Pvt. Ltd (GKU) and has acquired GKU’s entire equity stake.
* UltraTech Cement is planning to set up additional clinkerisation plants at Chhattisgarh & Karnataka are progressing on schedule & these are expected to be operational from early FY14.
* During the quarter ended, the combined cement and clinker sales was 9.06 MnT (8.94 MnT) while it was 2.39 LmT (2.11 LmT) for white cement and wall care putty.
* Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 42% over 2011 to 2014E respectively.
Outlook and Conclusion
Cement demand is likely to grow over 8% linked to the Government focus on infrastructure development. The surplus scenario is expected to continue over the next 3 years. Any rise in input costs will impact margins.
* At the current market price of Rs.1915.00, the stock P/E ratio is at 15.74 x FY13E and 12.99 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.121.67 and Rs.147.37 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 42% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 10.28 x for FY13E and 8.78 x for FY14E.
* Price to Book Value of the stock is expected to be at 3.24 x and 2.59 x respectively for FY13E and FY14E.
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.2145.00 for Medium to Long term investment.
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Buy Jammu & Kashmir Bank For Target Rs.1403
Snapshot
Jammu & Kashmir Bank has emerged as one of the handful (quasi) Government Banks to have registered consistent growth in earnings while maintaining the asset quality. We expect this to lead to a re-rating in the stock price.
Investment Rationale
Strong performance to lead to re-rating: The Bank has reported a consistent growth in financial performance with Net Interest Income and
PAT registering a growth of 19.1 per cent and 24 per cent respectively during FY’07-12 period. The Bank has strong return ratios with a RoE in excess of 20 per cent and RoA in excess of 1.5 per cent.
Play on the economy of J&K: Being a dominant player in the state of Jammu & Kashmir, the Bank should mirror the performance of the state’s economy, which is showing signs of stability.
Adequately funded to pursue future growth opportunities: Jammu & Kashmir Bank is adequately funded to pursue future growth opportunities over the next 2-3 years.
Consistent dividend pay-out ratio: The Bank has a consistent dividend pay-out policy. J&K Bank distributes ~20 per cent of the earnings as
dividends. Extrapolating this trend, we expect the dividend to be minimum Rs.40 for FY’13E and Rs.48 for FY’14E.
Valuation & Recommendation
Jammu & Kashmir Bank posted Net Interest Income of Rs.1089 crore compared to Rs.871 crore, an increase of 25 per cent y-o-y. The Bank
registered a pre-provisioning profit of Rs.837.8 crore compared to Rs.629.1 crore, an increase of 33.2 per cent y-o-y. Profit after tax for H1FY’13 stood at Rs.515.6 crore. EPS for the half-year stood at Rs.106.4.
Considering the improving prospects, consistent growth in earnings, we expect a strong re-rating in terms of valuation. We value J&K Bank at 1.45x FY’14E adj. book value to arrive at a price target of Rs.1710 over the next nine months (an upside potential of 22 per cent).
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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.
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Buy Parekh Aluminex Ltd For Target Rs.357.00
* Parekh Aluminex Ltd is in the process of acquiring 100 % Share of American Foils Inc of USA.
* The Company plans to focus more towards retail business, product brand building, develop custom made products for food chains.
* Parekh Aluminex Ltd has demonstrated the results during the quarter; its boisterous growth of Net Profit is steers by 44.90% to Rs. 288.88 million.
* The company has recommended a dividend of Rs. 4/- per share i.e. 40%.
* The first company in its category to receive the prestigious ISO 9001:2000 certification from BVQI, UK & only the company from India to break into the highly quality conscious of European markets.
* Net Sales and PAT of the company are expected to grow at a CAGR of 42% and 23% over 2011 to 2014E respectively.
Outlook and Conclusion
* At the current market price of Rs.315.95, the stock P/E ratio is at 3.86 x FY13E and 3.27 x FY14E respectivel.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.81.92 and Rs.96.77 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 42% and 23% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 4.14 x for FY13E and 3.28 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.73 x and 0.60 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.357.00 for Medium to Long term investment.
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Buy Havells India Ltd For Target 684.00
Havells India Ltd, is a $1.3 billion leading Fast Moving Electrical
Goods (FMEG) Company and a major power distribution equipment
manufacturer with a strong global footprint.
During the quarter, the robust growth of Net Profit is increased by 23.82% to Rs. 869.70 million.
During the quarter, Havells India has launched a new range of premium domestic appliances.
Havells India has launched new products in the market – Reo Switches, Smoke extraction motors and fans.
The Company has expands the existing Havells Galaxy chain by opening 30 more stores across India taking the total galaxy figure to 177.
Havells India has invested Rs 6.1 crs in Jiangsu Havells Sylvania Lighting Co.Ltd China.
Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2011 to 2014E respectively.
Outlook and Conclusion
At the current market price of Rs.605.00, the stock P/E ratio is at 20.38 x FY13E and 18.24 x FY14E respectively.
Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.29.69 and Rs.33.17 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2011 to 2014E respectively.
On the basis of EV/EBITDA, the stock trades at 13.28 x for FY13E and 11.64 x for FY14E.
Price to Book Value of the stock is expected to be at 3.82 x and 3.16 x respectively for FY13E and FY14E.
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.684.00 for Medium to Long term investment.
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During the quarter, the robust growth of Net Profit is increased by 23.82% to Rs. 869.70 million.
During the quarter, Havells India has launched a new range of premium domestic appliances.
Havells India has launched new products in the market – Reo Switches, Smoke extraction motors and fans.
The Company has expands the existing Havells Galaxy chain by opening 30 more stores across India taking the total galaxy figure to 177.
Havells India has invested Rs 6.1 crs in Jiangsu Havells Sylvania Lighting Co.Ltd China.
Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2011 to 2014E respectively.
Outlook and Conclusion
At the current market price of Rs.605.00, the stock P/E ratio is at 20.38 x FY13E and 18.24 x FY14E respectively.
Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.29.69 and Rs.33.17 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 20% over 2011 to 2014E respectively.
On the basis of EV/EBITDA, the stock trades at 13.28 x for FY13E and 11.64 x for FY14E.
Price to Book Value of the stock is expected to be at 3.82 x and 3.16 x respectively for FY13E and FY14E.
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.684.00 for Medium to Long term investment.
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