08/04/13
HOLD NHPC Ltd
NHPC announced that consequent upon successful trial run and demonstration of peaking capability corresponding to installed capacity of 33 MW each, Unit 2 & Unit # 3 of Teesta Low Dam - III HE Project have been declared under commercial operation with effect from 00:00 hrs of 01 April 2013.
* NHPC plans to take up three thermal power projects; 1,320-MW Rewa Thermal Project in Madhya Pradesh and two projects of 1,320-MW each at Lakhi Sarai and Pirpainthi in Bihar.
* NHPC's net profit rose 46.9% to Rs 311.77 crore and net sales grew by 5.7% to Rs 911.57 crore in Q3 December 2012 over Q3 December 2011. During 9M FY13 its net profit decreased by 7.9% to Rs 17650 cr and net sales also decreased by 2.7% to Rs 4011.42 crore.
Outlook:
The company has already commissioned three power projects in 2012-13 with a total capacity of 407 MW. By the end of 2013-14, it is expected to add around 1.1 GW, which will be one-fourth of its capacity. A capacity addition of this magnitude is taking place after a dry run of several years. The capacity addition will increase its topline and bottom line in the coming years. NHPC recently saw its stock price nosedive, but there is no change in fundamentals of the company.
The stock is moving in the range of 19-22 from past one month and 200 DMA is proving to be a major resistance on daily chart. Any decisive break on either side of the range will result in stock finding its direction.
Reudece Reliance Industries Ltd
Reliance Industries is planning to set up a chip manufacturing plant and is looking to invest close to Rs18000cr in the project.
* Reliance Industries and two partners, BP and Niko Resources, plan to invest Rs27,127 crore ($5 billion) over the next three to five years in the KG-D6 block to develop four trillion cubic feet (tcf) of discovered natural gas re-serves.
* RIL's net profit rose 23.9% to Rs 5502 crore and net sales grew by 10.3% to Rs 93886 crore in Q3 December 2012 over Q3 December 2011. During 9M FY13 its net profit decreased by 2.5% to Rs 15414 cr and net sales increased by 12.8% to Rs 276098 crore.
* Reliance Industries has shut its seventh well on KG-D6 gas block due to high water and sand ingress as it awaits regulatory nod to carry out urgent work over to plug the problem responsible for drastic fall in output.
Outlook:
Gas output from Reliance's D6 block has fallen sharply but the company says production will rise once new discover-ies in the block will be developed. However, the company wants market-linked prices to justify multi-billion dollar expenditure to develop new deep-sea fields.
After breaking important support levels of 800, the stock fall down rapidly to 765 levels. It tried to rebound, but again 800 levels proved to be important resistance. Stock should held above levels of 760 for any near term upside move and break below this level will result in more downside in the stock. In near term, more positions can be only added if stock decisively trade above levels of 800.
Reudece Reliance Power Ltd
Fundamental View:
* RPower received the first disbursement of funds amounting to Rs 2,550 crore ($470 million) from the US Exim Bank and offshore commercial banks. This is part of the overall financing for Reliance Power's 4,000-MW power project at Sasan in Madhya Pradesh. The project is being built at an estimated cost of Rs 23,000 crore.
* The company also announced that the first 660 MW unit at the Sasan Ultra Mega Power Project has been successfully commissioned on 30 March 2013.
* Reliance Power's third quarter consolidated net profit jumped 30% to Rs265.6 crore from Rs204 crore in the corresponding period last year. The total income, too, doubled to Rs1,586 crore compared with Rs674 crore on the back of increased power generation from its Rosa power plant. During 9M FY13, its consolidated net profit in-creased 17.3% to Rs 745.40 cr and net sales increased by 147.5% to Rs 3678.80 crore.
Outlook:
The company has the largest portfolio of power projects in the private sector based on coal, gas, hydro and renewable energy, with an operating portfolio of 1,540 MW. The company also has the largest captive coal reserves in the private sector, estimated at more than two billion tonnes. Besides, the company has purchased three coal mines in Indonesia and is also having plans to develop coal bed methane based generation capacity
After
forming all time low of 58.55, the stock showed some good rebound, but
could not sustain through the important resistance levels of 70. Any
decisive break from above levels will decide the direction of the stock
Buy Aarti Drugs Ltd For Target Rs.175.00
Aarti Drugs Ltd engages in the manufacture and sale of bulk drugs and its intermediates in India and internationally.
* During the quarter, the robust growth in the Net Profit of the company and it is rose by 127.18% to Rs. 109.50 million.
* Aarti Drugs has declared second Interim Dividend of Rs. 3/- per equity shares of Rs. 10/- each amounting to Rs. 3,63,25,650 /-
per share for the financial year 2012-2013.
* The Company aims at becoming the first choice of this expanding market through better products, ensuring quality & timely delivery.
* Revenue for the quarter rose 28.40% to Rs.1991.40 million from Rs.1550.90 million, when compared with the prior year period.
* The Company has received ISO 9001:2000 certifications for quality management.
* Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13
Aarti Drugs Limited engages in the manufacture and sale of bulk drugs and its intermediates in India and internationally, 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 company.
The company’s net profit jumps to Rs.109.50 million against Rs.48.20 million in the corresponding quarter ending of previous year, an increase of 127.18%. Revenue for the quarter rose 28.40% to Rs.1991.40 million from Rs.1550.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.9.04 a share during the quarter, registering 127.18% increase over previous year period. Profit before interest, depreciation and tax stood at Rs.297.80 millions as against Rs.171.60 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.155.00, the stock P/E ratio is at 4.08 x FY13E and 2.93 x FY14E respectively.
* Earnings per share (EPS) of the company for the earnings for FY13E and FY14E are seen at Rs.37.98 and Rs.52.85 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 3.80 x for FY13E and 3.10 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.84 x and 0.66 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.175.00 for Medium to Long term investment.
Buy Crompton Greaves Ltd For Target Rs.150
Standalone business showing signs of stabilization; provides downside support * Power Products: Revenue growth has improved to 4-5% and we see initial signs of improvement in the demand environment, particularly in the EHV / UHV segments. Switchgears contribute 25% and exports contribute 31% of Power Product revenues, and should witness improved demand. Margins have corrected to 9-10% from peak levels of 18-19%, but are stabilizing.
* Industrial Products: Revenue growth has been impacted, given headwinds to the investment climate. CRG is the market leader in LT motors (market share of 28%) and the business could show signs of cyclical recovery, given exposure to base industries / replacement demand. The decline in HT motors (30% of Industrial Product revenues) could be offset by higher exports (6-7% of revenues), traction motors and increased contribution of drives (from FY14). Margins, however, are showing strong resilience at 14-15%, though down from peak levels of 22%.
* Consumer Products: Revenue growth has bounced back to ~20% and CRG is attempting to rejuvenate the portfolio (particularly in fans and lighting), improve channel management, correct the manufacturing strategy, etc. Margins have declined to 10% from peak levels of 14.5%, impacted by higher ad expenses, currency movement, etc.
* Turnaround in overseas operations to be key stock price driver: Restructuring in Belgium has been completed in December 2012, with 199 employees leaving. Hungarian facilities are running at full capacity; whether all products are cleared by customers is a key monitorable. Stabilization should take two quarters (till 1QFY14). Also, detanking rates in Belgium have remained at 22.5% in 3QFY13, which CRG intends to reduce to 15% in January 2013 and to 10% in March 2013. We believe stock pe formance would largely be driven by an improvement in overseas business, though standalone performance would offer downside protection. Maintain Buy, with a target price of INR150.
Buy Sarla Performance Fibers Ltd For Target Rs.183.00
We initiated coverage of Sarla Performance Fibers Ltd and set a target price of Rs. 183.00 for Medium term Investment.
* Sarla Performance Fibers Limited (SPFL) is one of the well established and niche companies exporting regular as well as High Tenacity Polyester and Nylon Yarns.
* SPFL will set up its new manufacturing operations with an investment of $13.8 million in Colleton County, South Carolina, USA under the name Sarlaflex Inc located at Industrial Part in Walterboro.
* The company’s net sales registered an 18.90% increase and stood at a record Rs. 552.06 million from Rs. 464.30 million over the corresponding quarter last year.
* The company’s net profit registered a 318.73% increase and stood at a record Rs. 61.93 million from Rs. 14.79 million over the corresponding quarter last year.
* The company has reported an EPS of Rs. 8.91 for the 3rd quarter as against an EPS of Rs. 2.13 in the corresponding quarter of the previous year.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 38% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
SPFL, a 100% EOU engaged in the manufacturing of yarn and threads and enjoying strong customer relationships with renowned brands across the Americas, Europe and Asia, reported its financial results for the quarter ended 31 DEC, 2012.
The company’s net profit jumps to Rs.61.93 million against Rs.14.79 million in the corresponding quarter ending of previous year, an increase of 318.73%. Revenue for the quarter rose 18.90% to Rs.552.06 million from Rs.464.30 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.8.91 a share during the quarter, registering 318.73% increase over previous year period. Profit before interest, depreciation and tax is Rs.106.98 millions as against Rs.48.55 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.162.00, the stock P/E ratio is at 4.45 x FY13E and 3.45 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.36.39 and Rs.46.98 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 38% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 2.59 x for FY13E and 2.05 x for FY14E.
* Price to Book Value of the stock is expected to be at 1.01 x and 0.86 x respectively for FY13E and FY14E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.183.00 for Medium term investment.
HOLD NHPC Ltd NHPC announced that consequent upon successful trial run and demonstration of peaking capability corresponding to installed capacity of 33 MW each, Unit 2 & Unit # 3 of Teesta Low Dam - III HE Project have been declared under commercial operation with effect from 00:00 hrs of 01 April 2013.
* NHPC plans to take up three thermal power projects; 1,320-MW Rewa Thermal Project in Madhya Pradesh and two projects of 1,320-MW each at Lakhi Sarai and Pirpainthi in Bihar.
* NHPC's net profit rose 46.9% to Rs 311.77 crore and net sales grew by 5.7% to Rs 911.57 crore in Q3 December 2012 over Q3 December 2011. During 9M FY13 its net profit decreased by 7.9% to Rs 17650 cr and net sales also decreased by 2.7% to Rs 4011.42 crore.
Outlook:
The company has already commissioned three power projects in 2012-13 with a total capacity of 407 MW. By the end of 2013-14, it is expected to add around 1.1 GW, which will be one-fourth of its capacity. A capacity addition of this magnitude is taking place after a dry run of several years. The capacity addition will increase its topline and bottom line in the coming years. NHPC recently saw its stock price nosedive, but there is no change in fundamentals of the company.
The stock is moving in the range of 19-22 from past one month and 200 DMA is proving to be a major resistance on daily chart. Any decisive break on either side of the range will result in stock finding its direction.
Reudece Reliance Industries Ltd Reliance Industries is planning to set up a chip manufacturing plant and is looking to invest close to Rs18000cr in the project.
* Reliance Industries and two partners, BP and Niko Resources, plan to invest Rs27,127 crore ($5 billion) over the next three to five years in the KG-D6 block to develop four trillion cubic feet (tcf) of discovered natural gas re-serves.
* RIL's net profit rose 23.9% to Rs 5502 crore and net sales grew by 10.3% to Rs 93886 crore in Q3 December 2012 over Q3 December 2011. During 9M FY13 its net profit decreased by 2.5% to Rs 15414 cr and net sales increased by 12.8% to Rs 276098 crore.
* Reliance Industries has shut its seventh well on KG-D6 gas block due to high water and sand ingress as it awaits regulatory nod to carry out urgent work over to plug the problem responsible for drastic fall in output.
Outlook:
Gas output from Reliance's D6 block has fallen sharply but the company says production will rise once new discover-ies in the block will be developed. However, the company wants market-linked prices to justify multi-billion dollar expenditure to develop new deep-sea fields.
After breaking important support levels of 800, the stock fall down rapidly to 765 levels. It tried to rebound, but again 800 levels proved to be important resistance. Stock should held above levels of 760 for any near term upside move and break below this level will result in more downside in the stock. In near term, more positions can be only added if stock decisively trade above levels of 800.
Reudece Reliance Power LtdFundamental View:
* RPower received the first disbursement of funds amounting to Rs 2,550 crore ($470 million) from the US Exim Bank and offshore commercial banks. This is part of the overall financing for Reliance Power's 4,000-MW power project at Sasan in Madhya Pradesh. The project is being built at an estimated cost of Rs 23,000 crore.
* The company also announced that the first 660 MW unit at the Sasan Ultra Mega Power Project has been successfully commissioned on 30 March 2013.
* Reliance Power's third quarter consolidated net profit jumped 30% to Rs265.6 crore from Rs204 crore in the corresponding period last year. The total income, too, doubled to Rs1,586 crore compared with Rs674 crore on the back of increased power generation from its Rosa power plant. During 9M FY13, its consolidated net profit in-creased 17.3% to Rs 745.40 cr and net sales increased by 147.5% to Rs 3678.80 crore.
Outlook:
The company has the largest portfolio of power projects in the private sector based on coal, gas, hydro and renewable energy, with an operating portfolio of 1,540 MW. The company also has the largest captive coal reserves in the private sector, estimated at more than two billion tonnes. Besides, the company has purchased three coal mines in Indonesia and is also having plans to develop coal bed methane based generation capacity
After
forming all time low of 58.55, the stock showed some good rebound, but
could not sustain through the important resistance levels of 70. Any
decisive break from above levels will decide the direction of the stockBuy Aarti Drugs Ltd For Target Rs.175.00Aarti Drugs Ltd engages in the manufacture and sale of bulk drugs and its intermediates in India and internationally.
* During the quarter, the robust growth in the Net Profit of the company and it is rose by 127.18% to Rs. 109.50 million.
* Aarti Drugs has declared second Interim Dividend of Rs. 3/- per equity shares of Rs. 10/- each amounting to Rs. 3,63,25,650 /-
per share for the financial year 2012-2013.
* The Company aims at becoming the first choice of this expanding market through better products, ensuring quality & timely delivery.
* Revenue for the quarter rose 28.40% to Rs.1991.40 million from Rs.1550.90 million, when compared with the prior year period.
* The Company has received ISO 9001:2000 certifications for quality management.
* Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13
Aarti Drugs Limited engages in the manufacture and sale of bulk drugs and its intermediates in India and internationally, 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 company.
The company’s net profit jumps to Rs.109.50 million against Rs.48.20 million in the corresponding quarter ending of previous year, an increase of 127.18%. Revenue for the quarter rose 28.40% to Rs.1991.40 million from Rs.1550.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.9.04 a share during the quarter, registering 127.18% increase over previous year period. Profit before interest, depreciation and tax stood at Rs.297.80 millions as against Rs.171.60 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.155.00, the stock P/E ratio is at 4.08 x FY13E and 2.93 x FY14E respectively.
* Earnings per share (EPS) of the company for the earnings for FY13E and FY14E are seen at Rs.37.98 and Rs.52.85 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 26% and 42% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 3.80 x for FY13E and 3.10 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.84 x and 0.66 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.175.00 for Medium to Long term investment.
Buy Crompton Greaves Ltd For Target Rs.150Standalone business showing signs of stabilization; provides downside support * Power Products: Revenue growth has improved to 4-5% and we see initial signs of improvement in the demand environment, particularly in the EHV / UHV segments. Switchgears contribute 25% and exports contribute 31% of Power Product revenues, and should witness improved demand. Margins have corrected to 9-10% from peak levels of 18-19%, but are stabilizing.
* Industrial Products: Revenue growth has been impacted, given headwinds to the investment climate. CRG is the market leader in LT motors (market share of 28%) and the business could show signs of cyclical recovery, given exposure to base industries / replacement demand. The decline in HT motors (30% of Industrial Product revenues) could be offset by higher exports (6-7% of revenues), traction motors and increased contribution of drives (from FY14). Margins, however, are showing strong resilience at 14-15%, though down from peak levels of 22%.
* Consumer Products: Revenue growth has bounced back to ~20% and CRG is attempting to rejuvenate the portfolio (particularly in fans and lighting), improve channel management, correct the manufacturing strategy, etc. Margins have declined to 10% from peak levels of 14.5%, impacted by higher ad expenses, currency movement, etc.
* Turnaround in overseas operations to be key stock price driver: Restructuring in Belgium has been completed in December 2012, with 199 employees leaving. Hungarian facilities are running at full capacity; whether all products are cleared by customers is a key monitorable. Stabilization should take two quarters (till 1QFY14). Also, detanking rates in Belgium have remained at 22.5% in 3QFY13, which CRG intends to reduce to 15% in January 2013 and to 10% in March 2013. We believe stock pe formance would largely be driven by an improvement in overseas business, though standalone performance would offer downside protection. Maintain Buy, with a target price of INR150.
Buy Sarla Performance Fibers Ltd For Target Rs.183.00We initiated coverage of Sarla Performance Fibers Ltd and set a target price of Rs. 183.00 for Medium term Investment.
* Sarla Performance Fibers Limited (SPFL) is one of the well established and niche companies exporting regular as well as High Tenacity Polyester and Nylon Yarns.
* SPFL will set up its new manufacturing operations with an investment of $13.8 million in Colleton County, South Carolina, USA under the name Sarlaflex Inc located at Industrial Part in Walterboro.
* The company’s net sales registered an 18.90% increase and stood at a record Rs. 552.06 million from Rs. 464.30 million over the corresponding quarter last year.
* The company’s net profit registered a 318.73% increase and stood at a record Rs. 61.93 million from Rs. 14.79 million over the corresponding quarter last year.
* The company has reported an EPS of Rs. 8.91 for the 3rd quarter as against an EPS of Rs. 2.13 in the corresponding quarter of the previous year.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 38% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
SPFL, a 100% EOU engaged in the manufacturing of yarn and threads and enjoying strong customer relationships with renowned brands across the Americas, Europe and Asia, reported its financial results for the quarter ended 31 DEC, 2012.
The company’s net profit jumps to Rs.61.93 million against Rs.14.79 million in the corresponding quarter ending of previous year, an increase of 318.73%. Revenue for the quarter rose 18.90% to Rs.552.06 million from Rs.464.30 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.8.91 a share during the quarter, registering 318.73% increase over previous year period. Profit before interest, depreciation and tax is Rs.106.98 millions as against Rs.48.55 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.162.00, the stock P/E ratio is at 4.45 x FY13E and 3.45 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.36.39 and Rs.46.98 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 38% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 2.59 x for FY13E and 2.05 x for FY14E.
* Price to Book Value of the stock is expected to be at 1.01 x and 0.86 x respectively for FY13E and FY14E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.183.00 for Medium term investment.
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