02/04/2013
Buy SBI For Target Rs.2,245/2,270
SBI `2,096:- The stock has taken support at a cluster zone which coincides at the rising trendline drawn from its Decemeber’11 lows , rising window pattern (dashed horizontal line) and 50% projection from wave ‘iv’ which marks the completion of wave ‘v’. The is presence of positive divergence in RSI and a probable double bottom pattern near the strong support zone indicating a bullish bias. The weekly charts suggests limited downside from the current levels as the RSI has tested a strong support cluster along with a Bullish Harami candle pattern.
Buy Bajaj Corp Ltd For Target Rs.261
Risk-Reward Ratio Favourable; Upgrade To Buy
We feel the recent decline in Bajaj Corp’s (BCL) stock price provides a good buying opportunity. While we have been positive on the structural story in the light hair oil (LHO) segment, our view was constrained by valuation. Following the 12% correction in stock price post 3QFY13 results, we have upgraded BCL to Buy (from Hold) but retained our target price of Rs261. We expect BCL to maintain strong
volume growth momentum of 18%-20% over the next two years, largely driven by robust product distribution in rural areas, higher nvestments on brands and rising urbanisation leading to a shift in the consumers’ preference from unbranded hair oils to branded LHOs. Further, the dividend yield stands at 3.4%, higher than peers at the current market price, assuming similar dividend payout for FY14E.
Volume growth to remain intact: BCL posted strong volume growth of 22.3% in its lead brand Almond Drops Hair Oil (ADHO) in the 9MFY13 period. The strong volume growth was on account of robust product distribution in rural areas - ADHO was available at 2.54mn retail outlets as of end-November 2012 (17% YoY growth), higher investments on brands with advertising expenditure at 13.7% of sales in the 9MFY13 period versus 12.3% in the 9MFY12 period and rising urbanisation leading to a shift in the consumers’ preference from unbranded hair oils to branded LHOs. Further, the management has indicated that BCL is not witnessing any demand slowdown for its products in rural areas. We expect BCL to continue its strong double-digit volume growth trajectory and look forward to positive results again in 4QFY13.
Stable LLP prices: Gross margin expanded by 349bps YoY in the 9MFY13 period on account of reduction in LLP (liquid light paraffin) prices by ~6% YoY, a key raw material. Further, the management has indicated that it has booked LLP at Rs75/kg in 4QFY13 (5% down QoQ). Our channel checks showed stable LLP prices so far in 4QFY13, which indicates that booking prices for 1QFY14 are likely to remain stable. We have factored in a 3% YoY increase in LLP prices for FY14E.
Stock trades at attractive valuation: At the current market price, BCL trades at 14.6x P/E based on FY15E earnings, which is at a 37% discount to peers despite the in-line performance expected over FY13-FY15. Dividend yield stood at 3.4%, higher than peers at the CMP, assuming similar dividend payout for FY14E. Lower PAT growth is likely in FY15E despite better volume growth than peers on account of higher effective tax rate (27.0% versus 20.6% currently), as the income-tax benefit for one of its manufacturing plants in Himachal Pradesh expires in 2015. However, the management has stated that in case the Goods and Services Tax (GST) is implemented before the end of 2015, the effective tax rate would be below 27% as BCL is entitled for tax abatement, which can provide upside to our earnings estimates. We have upgraded our rating on BCL to Buy with a TP of Rs261 based on 17x FY15E earnings.
Buy Larsen & Toubro Ltd For Target Rs.1,525/1,540
LARSEN & TOUBRO `1,397.5:- The stock has been in a rising channel pattern since December’11 and the recent decline has taken support at the lower end of the channel. The decent observed from the October’12 highs has been in 5 wave formation and has completed its wave ‘v’ decline near the channel support zone. The RSI has also declined near the support range and has formed a probable double bottom pattern which has been confirmed by an uptick in the indicator. There is also a probable double bottom pattern on daily price chart and positive divergence in RSI which is a positive signal and indicates an upside in the near term.
Buy Kolte-Patil Developers Ltd For Target Rs. 100.00
Kolte-Patil Developers Ltd (KPDL) is among the top premier league of real estate developers in India is headquartered in Pune.
* Kolte-Patil Developers has acquired a 49% stake in its two subsidiaries namely Oakwoods Hospitality and Jasmine Hospitality for consideration of R. 65.62 crores.
* During the quarter, the robust growth of Net Profit of the company is increased by 85.93% to Rs. 138.13 millions.
* Kolte-Patil Developers is in the process of signing two new redevelopment projects in Mumbai.
* Kolte-Patil Developers have plans of launching three new projects in Bangalore.
* The company plans to close out this financial year at Rs 600 crore of topline, and next year the company is eyeing a topline of close to Rs 900-1,000 crore.
* Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 16% over 2011 to 2014E respectively.
Results updates- Q3 FY13,
Kolte Patil Developers Ltd (KPDL) is among the top premier league of real estate developers in India, reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witnesses a healthy increase in overall sales as well as profitability of the company.
The company net profit jumps to Rs.138.13 millions against Rs.74.29 millions in the corresponding quarter ending of previous year, an increase of 85.93%. Revenue for the quarter rose 133.47% to Rs.492.38 millions from Rs.210.90 millions, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.82 a share during the quarter, registering 85.93% increase over previous year period. Profit before interest, depreciation and tax is Rs.223.69 millions as against Rs.116.41 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.88.65, the stock P/E ratio is at 11.29 x FY13E and 8.25 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.7.85 and Rs.10.75 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 16% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 7.44 x for FY13E and 5.55 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.86 x and 0.78 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.100.00 for Medium to Long term investment.
Buy SBI For Target Rs.2,245/2,270SBI `2,096:- The stock has taken support at a cluster zone which coincides at the rising trendline drawn from its Decemeber’11 lows , rising window pattern (dashed horizontal line) and 50% projection from wave ‘iv’ which marks the completion of wave ‘v’. The is presence of positive divergence in RSI and a probable double bottom pattern near the strong support zone indicating a bullish bias. The weekly charts suggests limited downside from the current levels as the RSI has tested a strong support cluster along with a Bullish Harami candle pattern.
Buy Bajaj Corp Ltd For Target Rs.261Risk-Reward Ratio Favourable; Upgrade To Buy
We feel the recent decline in Bajaj Corp’s (BCL) stock price provides a good buying opportunity. While we have been positive on the structural story in the light hair oil (LHO) segment, our view was constrained by valuation. Following the 12% correction in stock price post 3QFY13 results, we have upgraded BCL to Buy (from Hold) but retained our target price of Rs261. We expect BCL to maintain strong
volume growth momentum of 18%-20% over the next two years, largely driven by robust product distribution in rural areas, higher nvestments on brands and rising urbanisation leading to a shift in the consumers’ preference from unbranded hair oils to branded LHOs. Further, the dividend yield stands at 3.4%, higher than peers at the current market price, assuming similar dividend payout for FY14E.
Volume growth to remain intact: BCL posted strong volume growth of 22.3% in its lead brand Almond Drops Hair Oil (ADHO) in the 9MFY13 period. The strong volume growth was on account of robust product distribution in rural areas - ADHO was available at 2.54mn retail outlets as of end-November 2012 (17% YoY growth), higher investments on brands with advertising expenditure at 13.7% of sales in the 9MFY13 period versus 12.3% in the 9MFY12 period and rising urbanisation leading to a shift in the consumers’ preference from unbranded hair oils to branded LHOs. Further, the management has indicated that BCL is not witnessing any demand slowdown for its products in rural areas. We expect BCL to continue its strong double-digit volume growth trajectory and look forward to positive results again in 4QFY13.
Stable LLP prices: Gross margin expanded by 349bps YoY in the 9MFY13 period on account of reduction in LLP (liquid light paraffin) prices by ~6% YoY, a key raw material. Further, the management has indicated that it has booked LLP at Rs75/kg in 4QFY13 (5% down QoQ). Our channel checks showed stable LLP prices so far in 4QFY13, which indicates that booking prices for 1QFY14 are likely to remain stable. We have factored in a 3% YoY increase in LLP prices for FY14E.
Stock trades at attractive valuation: At the current market price, BCL trades at 14.6x P/E based on FY15E earnings, which is at a 37% discount to peers despite the in-line performance expected over FY13-FY15. Dividend yield stood at 3.4%, higher than peers at the CMP, assuming similar dividend payout for FY14E. Lower PAT growth is likely in FY15E despite better volume growth than peers on account of higher effective tax rate (27.0% versus 20.6% currently), as the income-tax benefit for one of its manufacturing plants in Himachal Pradesh expires in 2015. However, the management has stated that in case the Goods and Services Tax (GST) is implemented before the end of 2015, the effective tax rate would be below 27% as BCL is entitled for tax abatement, which can provide upside to our earnings estimates. We have upgraded our rating on BCL to Buy with a TP of Rs261 based on 17x FY15E earnings.
Buy Larsen & Toubro Ltd For Target Rs.1,525/1,540LARSEN & TOUBRO `1,397.5:- The stock has been in a rising channel pattern since December’11 and the recent decline has taken support at the lower end of the channel. The decent observed from the October’12 highs has been in 5 wave formation and has completed its wave ‘v’ decline near the channel support zone. The RSI has also declined near the support range and has formed a probable double bottom pattern which has been confirmed by an uptick in the indicator. There is also a probable double bottom pattern on daily price chart and positive divergence in RSI which is a positive signal and indicates an upside in the near term.
Buy Kolte-Patil Developers Ltd For Target Rs. 100.00Kolte-Patil Developers Ltd (KPDL) is among the top premier league of real estate developers in India is headquartered in Pune.
* Kolte-Patil Developers has acquired a 49% stake in its two subsidiaries namely Oakwoods Hospitality and Jasmine Hospitality for consideration of R. 65.62 crores.
* During the quarter, the robust growth of Net Profit of the company is increased by 85.93% to Rs. 138.13 millions.
* Kolte-Patil Developers is in the process of signing two new redevelopment projects in Mumbai.
* Kolte-Patil Developers have plans of launching three new projects in Bangalore.
* The company plans to close out this financial year at Rs 600 crore of topline, and next year the company is eyeing a topline of close to Rs 900-1,000 crore.
* Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 16% over 2011 to 2014E respectively.
Results updates- Q3 FY13,
Kolte Patil Developers Ltd (KPDL) is among the top premier league of real estate developers in India, reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witnesses a healthy increase in overall sales as well as profitability of the company.
The company net profit jumps to Rs.138.13 millions against Rs.74.29 millions in the corresponding quarter ending of previous year, an increase of 85.93%. Revenue for the quarter rose 133.47% to Rs.492.38 millions from Rs.210.90 millions, when compared with the prior year period. Reported earnings per share of the company stood at Rs.1.82 a share during the quarter, registering 85.93% increase over previous year period. Profit before interest, depreciation and tax is Rs.223.69 millions as against Rs.116.41 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.88.65, the stock P/E ratio is at 11.29 x FY13E and 8.25 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.7.85 and Rs.10.75 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 16% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 7.44 x for FY13E and 5.55 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.86 x and 0.78 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.100.00 for Medium to Long term investment.
No comments:
Post a Comment