12/04/13

Buy AuroPharma For Target Rs.188/196


DAILY CHART
* Momentum Indicator RSI showing a positive cross over in daily chart indicates strength in the stock is keeping a positive closing above the 6/30-DMA from two trading sessions Stock is showing strong signs of revival.
* The stock is keeping a positive closing above the 200-DMA from few trading sessions Stock is showing strong signs of revival and is holding firmly above its 20- average of the Bollinger band daily chart on closing basis
* Daily chart indicates that stock has given a breakout of downward sloping trend line i.e. 162 levels with volumes which indicates an potential up move in coming trading session. Another interesting observation is that stock has formed an inverse head and shoulder pattern which is a bullish indicator and stock is on the verge of giving the breakout of neck line i.e. 165 levels.
* Therefore, traders can buy the stock at 163 and on dips to Rs 155 for a target of Rs 188/196 with a strict stop loss placed below Rs 145.
 Buy TVS Motors (TVSM) For Target Rs.51


TVSM announced a long term co-operation agreement with BMW Motorrad. Under the said agreement, TVSM and BMW Motorrad will develop and produce new series of motorcycle in the 200cc-500cc category. Both TVSM and BMW Motorrad do not have products in the 200cc-500cc segment and the tie-up provides them an opportunity to explore this space. For TVSM, the deal is a long term positive, with no significant impact in the near to medium term. Given current slowdown, TVSM's volumes are under pressure. Over the medium to long term though, improvement in consumer sentiment and new launches should aid volume growth for the company. We thereby maintain our long term positive outlook on the stock with BUY rating and price target of Rs51.
Outlook and Valuations
* We expect the 2W industry volumes to stay soft in the near term. Factors like good monsoons and pick-up in economic activity will be critical for improvement in consumer sentiments over the medium term.
* Given current slowdown, TVSM's volumes are under pressure. Over the medium to long term though, improvement in consumer sentiment and new launches should aid volume growth for the company.
* At CMP of Rs35, the stock trades at 6.8x its FY14 standalone earnings estimate.
* We retain our BUY rating on the stock with long term price target of Rs51.

 Buy IndusInd Bank For Target Rs.480


IIB’s Q3FY13 performance adjusted for one‐off was better‐than‐expected. Top‐line performance continues to be robust, with core fee and advances growing faster than expected and margins showing a better‐than‐expected improvement. Asset quality remains stable and management is now getting more sanguine on the CV cycle. IIB continues to deliver on structural growth drivers and with a strong margin and fee performance, we expect ROEs to inch back to ~18% in FY14. We maintain ‘BUY’ with a PT of Rs480/share (2.9x FY14).
* Continues to deliver on top‐line: IIB continues to deliver on strong top-line growth with robust loan book growth, a surprise in NIMs and +30% fee income growth. Loan book growth at 8% QoQ was supported by growth across segments, especially LAP/Car/Utility loans. NIM expansion of ~20bps was higher-than-expected as the positive impact of the equity issue + large fixed rate book is yet to come in H1CY13. Fee income growth also continues to remain best in class with strong momentum continuing in IB/FX/Trade businesses.
* Asset quality remains pristine; improving feedback on CVs: Adjusting for the Deccan write-off, credit costs at ~0.4% continue to remain low. Going forward, management sounded incrementally positive on the asset quality, particularly on the CV front. With limited exposure to the stress sectors and no CDR pipeline, we remain positive on IIB’s asset quality though corporate ratings profile of the bank shows some marginal inch-up in BB rated corporate v/s AA.
*ROEs +17.5% again by FY14: Post the dilution (Rs20bn), we expect ROE’s to again inch back to +17.5% levels by FY14 driven by expansion in NIMs (~30bps from Q3FY13 levels) and steady fee income growth. We believe as ROEs inch up swiftly to ~18% from <16% in Q4FY13, market would start benchmarking valuations to other defensives names. Our PT of Rs480/share implies 2.9x FY14 book.
 

Buy Info Edge (India) Ltd For Target Rs.371.00



Info Edge (India) Ltd is premier on-line classifieds company engaged in recruitment, matrimony, real estate, education & related services.
* During the quarter ended, the robust growth of Net Profit is increased by 6.70% to Rs. 307.86 million.
* Info Edge recorded Net Sales of Rs 1064 mn for the quarter ended Dec 31, 2012 compared to Rs 920 mn in quarter ended Dec 31, 2011.
* During the quarter ended Dec 31, 2012, the  company has acquired “TooStep” business on a slump sale from an Indian Private Ltd company for a net consideration of 41.25 million.
* During the quarter revenue from recruitment solutions grew at 10.1% while the real estate vertical grew by 54.6%.
* Info Edge has invested Rs. 318.00 Millions in tranches for around 49% stake in Applect Learning systems Pvt. Ltd.
* Info Edge has invested Rs. 50 million through fully convertible cumulative redeemable unsecured debentures in Ninety Nine Labels Private Ltd.
* Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 22% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
Info Edge India Ltd is one of India’s premier on-line classifieds company in recruitment, matrimony, real estate, education and related services, 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’s net profit jumps to Rs. 307.86 million against Rs. 288.54 million in the corresponding quarter ending of previous year, an increase of 6.70%. Revenue for the quarter rose 15.67% to Rs. 1064.05 million from Rs. 919.94 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.82 a share during the quarter, registering 46.65% decrease over previous year period. Profit before interest, depreciation and tax is Rs. 465.22 millions as against Rs. 429.16 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.331.00, the stock P/E ratio is at 26.90 x FY13E and 23.69 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.12.31 and Rs.13.97 respectively.
*  Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 22% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 16.67 x for FY13E and 14.43 x for FY14E.
* Price to Book Value of the stock is expected to be at 4.73 x and 3.95 x respectively for FY13E and FY14E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.371.00 for Medium to Long term investment.
The other businesses are gaining traction is primary revenue generator is still the online recruitment classifieds and related services through naukri.com. The improvements in the Indian economy and hiring picking up, recruitment solutions had a good year in 2011-12. The investee companies are still developing the business models and will gain some visibility on future prospects in the next 2 to 3 years.
  Buy Control Print Ltd.For Target Rs.77.00


We initiated coverage of Control Print Ltd and set a target price of Rs. 77.00 for Medium term Investment.
* Control Print Limited provides coding and marking solutions in India.
* Control Print Ltd has made allotment of 3,75,000 Warrants convertible into Equity shares of Rs. 10/- each at a premium of Rs.43.60/- per Share to the Promoter of the Company on preferential basis.
* The company’s net sales registered a 29.80% increase and stood at a record Rs. 185.99 million from Rs. 143.29 million over the corresponding quarter last year.
* The Company has posted a net profit of Rs. 34.29 million for the quarter ended Dec. 31, 2012 as compared to Rs. 33.56 million for the quarter ended Dec. 31, 2011.
* The company has reported an EPS of Rs. 3.78 for the 3rd quarter as against an EPS of Rs. 3.87 in the corresponding quarter of the previous year.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 49% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
Control Print Limited provides coding and marking solutions in India, reported its financial results for the quarter ended 31 DEC, 2012.
Control Print Ltd achieved a turnover of Rs. 185.99 million for the 3rd quarter of the current year 2012-13 as against Rs. 143.29 millions in the corresponding quarter of the previous year. The company has reported an EBITDA of Rs. 45.21 millions and a net profit of Rs. 34.29 million against Rs. 33.56 million reported respectively in the corresponding quarter of the previous year. The company has reported an EPS of Rs. 3.78 for the 3rd quarter as against an EPS of Rs. 3.87 in the corresponding quarter of the previous year.
Outlook and Conclusion
* At the current market price of Rs.67.00, the stock P/E ratio is at 4.24 x FY13E and 3.13 x FY14E respectively.
*  Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.15.78 and Rs.21.39 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 49% over 2011 to 2014 respectively.
* On the basis of EV/EBITDA, the stock trades at 3.20 x for FY13E and 2.40 x for FY14E.
* Price to Book Value of the stock is expected to be at 0.82 x and 0.65 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.77.00 for Medium to Long term investment.