Buy Hindustan Zinc Ltd For Target Rs.150Hindustan Zinc reported Q4FY13 earnings ahead of our expectation on the back of better-than-expected concentrated sales volumes. Given the strong likelihood of Govt. stake sale at a much higher price and beaten down valuations (EV/EBITDA:3.6x FY14E), we reiterate our ''BUY'' rating with TP of Rs150, EV/EBITDA of 4.5x FY15E.
* Strong concentrated sales leads the beat: Thanks to higher-than-expected concentrated sales (61kt v/s PLe: 30kt), revenues grew ahead of our expectation at Rs38.5bn (PLe: Rs37.3bn), up 22.6% QoQ (24.5% YoY). Higher concentrated sales compensated lower-than-expected refined metal (215kt v/s PLe: 220kt) and silver (107t v/s PLe: 119t) volumes. Led by higher concentrated sales, EBITDA grew ahead of our expectation at Rs20.6bn (PLe: Rs19.4bn); up 46% QoQ (27% YoY). Gap further widened on PAT level on account of lower tax rate (9% v/s PLe: 13%). Adj. PAT grew ~39.5% QoQ (53.7% YoY) at Rs21.8bn (PLe: Rs20.1bn).
* Key takeaways from earnings con‐call: 1) Zawar (capacity of 1.2mtpa) secured all requisite approvals to resume production 2) Management guided 15% growth in mined metal production in FY14 at 1m tonnes on the back of increased production in Zawar, SK and Kayar mines 3) Integrated saleable silver production (net of own
consumption) is guided to grow 25% YoY at 360t. 4) Net addition of 16m tonnes to Reserves and Resources (R&R) after depletion of 8.6m tonnes in FY13. Total R&R stood at 348m tonnes at the end of FY14 with a mine life of 25+ years. 5) Cost of production guided to remain stable in FY14 6) Tax rate is guided to be in mid-teens in FY14.
* Valuation and Outlook: We remain positive on the stock given the play on attractive valuations and quality assets, coupled with strong likelihood of Govt’s stake sale at a significant premium. We maintain our “BUY” rating with TP of Rs150, EV/EBITDA of 4.5x FY15E.
Buy Pennar Industries Ltd.For Target Rs.31Moderate Quarter…
Pennar Industries has reported a moderate consolidated quarter due to lower demand in the auto, engineering, railways and infrastructure sectors for the steel products which includes steel strips and engineered profiles. We believe the scenario looks challenging in near term due to subdued performance by the heavy engineering segment and overall slower growth in the infrastructure in India though we draw comfort on the steady performance in PEBS. However, EV/EBITDA of 3.8x FY13E and 3.3x FY14E broadly factors the challenging scenario.
* Net Sales was flat YoY to Rs. 266.4 crore and up by 2.5% QoQ. The sales improved due to the growth in Tubes by 66% YoY, Industrial Components by 30.8% YoY and System Projects divisions by 17.4%.
* The Consolidated EBITDA fell by 17.5% YoY to Rs. 27.7 crore and was flattish QoQ basis. The EBIDTA margin fell by 210bps to 10.4% in Q3FY13 as against 12.5% in Q3FY12 and down by 30bps QoQ basis. This was primarily due to margin pressures in the Systems and Projects, Engineered Profiles and Cold Rolled Steel Strips businesses.
* The Adj PAT declined by 19.9% YoY to Rs. 10.8 crore and down by 3.5% QoQ.
* The PAT margin stood at 4.1% in Q3FY13 as against 5% in Q3FY12 and 4.3% in Q2FY13. Decline in tax rate supported the steep fall in profitability of the company. Tax rate stood at 30.9% in Q3FY13 as against 33% in Q3FY12 though tax rate was low at 24.8% in Q2FY13 as compared to Q3FY13. The fluctuation in tax rate is attributed to the tax benefit in PEBS for the period of five years which is valid till 2016.
PEBS, a subsidiary of Pennar Industries has reported a consistent performance, contributed to 25.4% of total consolidated Net Sales in Q3FY13 up from 22.8% in Q3FY12 and 24.1% in Q2FY13. The Net sale was Rs. 67.5 crore, up by 10.4% YoY and 7.9% QoQ. An EBITDA margin was 10.6%, down by 70bps YoY. The order book at PEBS currently stands at Rs. 235 crore. We are of the view that this segment has the capacity to outperform other segments though margins will remain under pressure due to the increase in competition from its peers.
Valuation & Recommendation
At CMP of Rs. 25, Pennar is trading at a P/E of 6.6x FY13E and 5.8x FY14E. The EV/EBITDA is 3.8x FY13E and 3.3x FY14E. The company has been able to maintain the top-line during the quarter but the pressure on operating margin continues, which is a matter of concern.
We have introduced FY14E estimates where we expect net revenue to grow by 8.6% to Rs. 1215.5 crore on account of benefit of capacity expansion in PEBS Gujarat from 60000MTPA to 90000MTPA and solar segment. We rollover our target multiple from FY13E to FY14E to a target of Rs. 31 per share (Rs. 29 per share), valued on an EV/EBITDA 4x FY14E and recommend BUY rating.
Buy Oberoi Realty For Target Rs.359Oberoi Realty (OBER) reported 3QFY13 results above our estimates.
* Revenue stood at INR2.9b (v/s est. of INR2.3b), up 53% YoY/11%QoQ. Hotel Westin revenue grew 28% QoQ/7%. Rental (including hotel) stood at INR585m (9MFY13 run-rate of INR1.6b) v/s our FY13E/FY14E estimates of INR2.2b (stable YoY)/INR3.1b.
* EBITDA grew 51% YoY to INR1.7b (v/s est of INR1.4b), while EBITDA margin is up by 1.6pp QoQ to 59.7%. Core EBITDA (ex hotel) improved to 62% v/s 61% in 2QFY13 on account of higher realizations in fresh sales at Exquisite. PAT grew 32% YoY to INR1.3b (v/s est INR1.1b).
* Sales momentum remains stable sequentially at 0.12msf (INR2.2b). Average realizations stood at INR17,451/sf (+2% QoQ, +22% YoY), led by higher realizations in fresh sales at Exquisite. 9MFY13 sales stood at 0.4msf (INR6.5b) v/s our FY13/14 estimates of 0.6/1.1msf (INR10b/16b).
* Despite steady execution progress, customer collections remain weak over past couple of quarters at INR1.6-1.7b v/s INR2.3b in 1QFY13 and earlier. The reason is slowing down of construction linked payments post slab casting.
* We believe, going forward, the key factors to improve cash flow would be fresh launches, and steady construction progress in Esquire.
* The management has started evaluating non-Mumbai land parcels of late, improving the probability of value accretive deployment INR11b of surplus cash.
* So far, OBER has been a strong defensive bet due to high cash surplus and existing annuity assets (~40% of market cap) rendering resilience to downcycle risks. Going forward, deployment of cash in attractive projects and new launches would be the key drivers of stock price. Concern over leasing at nearcompleted commercial projects is another factor to watch out for.
* The stock is currently trading at 13.3x FY14E EPS, 2.1x FY14E BV and ~12% discount our FY15 NAV of INR359. Maintain Buy with TP of INR359.
Valuation and view:
Faster monetization, re-leveraging and cash deployment key to restore high RoCE
* Sluggish market, delay in launches and idle cash have been key factors behind Oberoi's subdued capital efficiency over FY12/13.
* However, we expect a meaningful uptick in sales momentum over FY14-15 on the
back of
(1) much awaited Worli and Mulund launches,
(2) conversion of JVLR project from commercial to residential and hence faster monetization,
(3) improvement in Mumbai market, and
(4) steady progress in execution.
* The management has started evaluating non-Mumbai land parcels of late, improving the probability of value accretive deployment INR11b of surplus cash.
* So far, the company has been a strong defensive bet due to high cash surplus and existing annuity assets (~40% of market cap) rendering resilience to downcycle risks. Going forward, deployment of cash in attractive projects and new launches would be the key drivers of stock price. Concern over leasing at near-completed commercial projects is another factor to watch out for.
* The stock is currently trading at 13.3x FY14E EPS, 2.1x FY14E BV and ~12% discount our FY15 NAV of INR359. Maintain Buy with target price of INR359.
Buy Selan Exploration Technology Ltd For Target Rs.339.00Selan Exploration Technology Ltd is a private sector listed company, incorporated in 1985, engaged in oil-gas exploration & production.
* Selan Exploration Technology Ltd announced sharp growth of 15.14% in its net profit to Rs 120.90 million for the quarter ended Dec. 31, 2012 as compared to Rs 105.00 million in the same period last year.
* During the quarter, Revenue for the company rose 2.54% to Rs.246.00 millions from Rs.239.90 millions, when compared with the prior year period.
* Selan Exploration Technology Ltd has declared an Interim Dividend of 50% (i.e. Rs. 5.00/- per equity shares) for the financial year 2012-13.
* The Company has laid down diverse growth and expansion plans for its oil and gas fields; which shall lead to higher production of crude oil / gas.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 21% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
Selan Exploration Technology Limited (SELAN) is a private sector listed company & engaged in oil exploration and production, reported its financial results for the quarter ended 31 DEC, 2012.
The company’s net profit rose to Rs. 120.90 million against Rs. 105.00 million in the corresponding quarter ending of previous year, and increase of 15.14%. Revenue for the quarter rose 2.54% to Rs. 246.00 million from Rs. 239.90 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.18 a share during the quarter, registering 16.17% increase over previous year period. Profit before interest, depreciation and tax is Rs. 180.60 millions as against Rs.151.30 millions in the corresponding period of
the previous year.
Outlook and Conclusion
* At the current market price of Rs.303.00, the stock P/E ratio is at 10.15 x FY13E and 9.14 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.29.85 and Rs.33.15 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 21% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 6.68 x for FY13E and 6.12 x for FY14E.
* Price to Book Value of the stock is expected to be at 1.98 x and 1.63 x respectively for FY13E and FY14E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.339.00 for Medium to Long term investment.
Friends!!!!
From Last Many Days We Were Shouting About Dabba Stocks and Advising You to Exit at Any Cost.!!!
We & You Know Some Stock Crash Heavily & Some Stock Ready For Crash Or Out of Business In Nex 1 to 3 Year!!!!!
Friends!!!!
From Year 2003 to 2008 We Saw Biggest Bull Run In Stock Market !!!!!!
In This Bull Run Many Stock Rise 10 time to 100 time and Some stock Rise 500 time to 1000 time !!!!!
In Last Bull Run Leadership In The Hands Of Cyclical Industry Like Commodity Infra Power Real Estate!!!!
Every Trend Has to An End So As Per Our Estimate Bull Market In Cyclical Already End Or Ready For End!!!!
It Can Happen In Next 1 to3 Year!!!!!!
1.So Be Ready For More Down Fall In Commodity Stocks !!!
2.All Commodity Stocks May Not Go There 2008 High In Hurry Or May Be In Next 5-10 Years.
3. Forget All 2008 Bull Market Leaders !!!
4. Friends Infra As A Invesment We Not Expect Any Profit From This
Sector. Sooner Or Later All Infra Projects Can Be Takeover By Govt.
Friends!!!!
In Last Many Days We Got Many E-Mails About New Bull Market !!!!
All E-mails Says That If All 2008 Leaders Not Go Up Where From New Bull Market Come !!!!
Dont Panic Bull Market Still Alive & Definatly Come & Come With More Force Full .Even Bull Market Alreday Started!!!!!
Friends!!!!
You All Know Dow Jones & S&P Alreday Hitt There Life Time Closing High!!!!
Just See Last 120 Years U.S Stock Market Trend U.S. Bull Market Start When Commodity Bull Market End!!!!
Stocks and commodities have Historically Moved in Opposite Directions!!!!!
Each Asset Class Typically Has a 16-18 Year Bull Market Followed by an Equally Long Bear Market!!!!!
In India We See In Last Bull Market 2003-08 Commodity Stocks In Center
Stage Like...SAIL..SESA GOA...TATA STEEL..HINDALCO.......ETC
Yesssssssssss
Friends!!!!
Now Million Dollar Qestion Where From New Bull Market Come!!!!!!!
Last Many Days We Research All Above Factor & Find Result About Next Bull Market!!!!
Friends India is the biggest Exporter of Services & IT & Gems & Jewellary!!!
In Last 2-3 Year India's Biggest Problem Spike In Commodity Price !!!!!!
India Biggest Importer of Commodity Gold Crude Oil Edible Oil!!!!!!
As Commodity Price Rise India's Inflation Also Spike RBI Rise Interset Rate 12 Time In Last 2-3 Years!!!!!
Now In Last One Year Commodity Price Almost Stable Or Trend Down!!!!
Inflation Also Trend Down & RBI 's Stance Now More to Growth From Inflation!!!!!!
Yessssssssss
Friends!!!
So We Ready For Big Bull Market In IT -Media -Consumption- FMCG- Pharma --Export-- Financial !!!!!
Sooner Or Later We See In Next 3-5 Years TCS Will Hitt Rs.5000/- ZEE Ent
Again Cross Rs.1000/- HUL To Cross Rs.1500/- JUBLIFOOD Can Cross
Rs.5000/-
So Bull Already Enter In IT--MEDIA--FMCG--
CONSUMPTION---PHARMA--EXPORT
Alert:------------
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