20/05/2013

Buy Unichem Laboratories Ltd For Target 203.00 


Unichem Laboratories Ltd is engaged in manufacturing formulations, active pharmaceutical ingredients (APIs) and pharmaceuticals.
* Unichem Laboratories has received ANDA approval from the United States Food and Drug Administration for Tizanidine Tablets.
* Unichem Laboratories has received ANDA tentative approval from the USFDA for Memantine Hydrochloride Tablets.
* Unichem Farmaceutica Do Brasil Ltd is wholly owned subsidiary has launch generic & branded generics products in the Brazilian market.
* Unichem Laboratories Ltd has recommended Dividend of Rs. 4.50 (225%) per equity share of Rs. 2/- each, for the year ended March 31, 2013.
* The company’s net sales registered a 26.20% increase and stood at a record Rs. 2435.30 million from Rs. 1929.74 million over the  corresponding quarter last year.
* The company’s net profit registered a 33.55% increase and stood at a record Rs. 310.34 mn from Rs. 232.37 mn over the corresponding quarter  last year.
* Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 27% over 2012 to 2015E respectively.

Investment Highlights
Results updates- Q4 FY13,
Unichem Laboratories, incorporated in 1962, engaged in the manufacturing formulations, pharmaceuticals and active pharmaceutical ingredients (APIs), reported its financial results for the quarter ended 31st MARCH, 2013.
The company’s net profit jumps to Rs. 310.34 million against Rs. 232.37 millions in the corresponding quarter ending of previous year, an increase of 33.55%. The company’s standalone revenue from operations stood at Rs. 2435.30 million for the quarter ended March 2013 against Rs. 1929.74 million recorded during the corresponding quarter of the previous year reflecting 26.20% growth. Reported earnings per share of the
company stood at Rs.3.43 a share during the quarter, registering 33.35% increase over previous year period. EBITDA is Rs.449.72 millions as against Rs.346.80 millions in the corresponding period of the previous year.

Outlook and Conclusion
* At the current market price of Rs.185.00, the stock P/E ratio is at 11.55 x FY14E and 10.21 x FY15E respectively.
* Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.16.39 and Rs.18.56 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 19% and 27% over 2012 to 2015E respectively.
* On the basis of EV/EBITDA, the stock trades at 7.45 x for FY14E and 6.49 x for FY15E.
* Price to Book Value of the stock is expected to be at 1.84 x and 1.59 x respectively for FY14E and FY15E.
* We recommend ‘BUY’ in this particular scrip with a target price of Rs.203.00 for Medium to Long term investment.
  Buy Bajaj Finance Limited For Target Rs.1,638 


Strong operational performance
Bajaj Finance (BFL) reported net profit of Rs 160 cr (+33.4% YoY) in Q3FY13 driven by growth across consumer and SME business.  Management continues with its cautious approach towards infra and construction lending leading to a de growth in the commercial book. The company provided one time provision of Rs 7.5 cr on an infra loan which led to an increase in overall provisions of the company. The asset quality remained fairly stable during the quarter with gross NPA at 1.0% and net NPA at 0.2%. Other operating income witnessed some sort of pressure in this quarter. However, control over marketing and recovery costs led to a remarkable decline in cost to income ratio of the company. We like the company’s mantra of “Aiding growth instead of creating growth” which hasled a sustainable growth in the company’s loan book. The company has been able to grow in a scenario where the consumer discretionary was soft, autosector performance was flat and consumer durables industry grew 6-8% on an overall basis. However, Management believes that once the economy recovers leading to an improvement in consumer discretionary spending, Bajaj Finance would be in a position to outperform the broader market. Going forward, we believe that Bajaj Finance will continue to show a strong growth trajectory. With control over NPAs, wider access and strong growth in the book, Bajaj Finance will continue to strengthen its position as a retail finance company.
At CMP the stock is trading at 2.09x FY13E and 1.77x FY14E ABV and 10.37x FY13E and 9.64x FY14E EPS. We arrive at a target price of Rs 1,638 (P/ABV multiple of 2.1x) indicating further potential upside of 18% from current levels and recommend to BUY the stock.


Key development
The company in on track to capitalize itself sufficiently to adhere to the Usha Thorat Committee recommendations regarding higher capital requirements. The board has approved to raise capital via rights issue of Rs 743 cr at Rs 1,100 per share, leading to 16% equity dilution. We have factored in the dilution in our FY13E estimates.
* Net Interest Income increased 35.5% YoY to Rs 471 cr in Q3FY13 resulting from growth in disbursements on YoY basis and lower cost of funds.
* The growth in disbursements stood at 20.0% YoY to Rs 5,200 cr in Q3FY13. Management expects the overall loan book to witness strong growth for FY13E with more focus on secured businesses.
* Asset under management (AUM) grew by 41.3% YoY and 9.6% on QoQ basis at Rs 16,844 cr. Management expects AUM to reach around Rs 17,500 cr by FY13E.
* Asset quality remained fairly stable in Q3FY13. Construction Equipment book’s receivables portfolio deteriorated sharply in line with sharp

 Buy Axis Bank Ltd For Target Rs.1579.00 



Axis Bank is the 3rd largest private sector bank in India which offers services to customer segments covering large & SME, Mid-Corporate, Agriculture & Retail Business.
* Bank’s Capital Adequacy Ratio registered at 15.17% as on 31.12.12.
* Savings Bank Deposits recorded a healthy growth of 22% Y-O-Y to touch Rs. 575210 mn as on 31st December 2012.
* The total assets under overseas operations were USD 6.41 billion as on 31st December 2012, a growth of 18%.
* The bank had a network of 1787 domestic branches and extension counters & 10,363 ATMs situated in 1,139 cities & towns as on Q3 FY13.
* The shareholders’ funds of the Bank grew 22% Y-O-Y and stood at Rs. 270270 million as on 31st December 2012.
* During the nine months ended 31st December, 2012, the Bank allotted 1,861,681 equity shares pursuant to the exercise of options
under its Employee Stock Option Scheme.
* Net Income and PAT of the company are expected to grow at a CAGR of 33% and 21% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY1
The company’s net profit jumps to Rs. 13472.20 million against Rs. 11022.70 million in the corresponding quarter ending of previous year, an increase of 22.22%. Revenue for the quarter rose 20.56% to Rs. 69649.30 million from Rs. 57769.60 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 31.54 a share during the quarter, registering 17.98% an  increase over previous year period. Net Interest Income is Rs. 85803.00 millions as against Rs. 72067.70 millions in the corresponding period of the previous year.
Outlook and Conclusion
According to the RBI's 'Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks', September 2011, Nationalised Banks, as a group, accounted for 52.2 per cent of the aggregate deposits, while State Bank of India (SBI) and its associates accounted for 21.8 per cent.
* At the current market price of Rs.1410.00, the stock P/E ratio is at 11.89 x FY13E and 10.14 x FY14E respectively.
*  Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 118.61 and Rs.139.07 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 33% and 21% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 10.48 x for FY13E and 9.94 x for FY14E.
* Price to Book Value of the stock is expected to be at 2.16 x and 1.78 x for FY13E and FY14E respectively.
*  We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs. 1579 .00 for Medium to Long term investment.


 

The investment ideas of Warren Buffett is most basic and simple to implement. The beauty of his investment ideas is that they are so easy and logical that at timespeople overlook the same ideas even though it must have crossed their mind. These investment ideas of Warren Buffett has not only help the maestro to make billions but also stands as a guiding principles for every other investor of this world.

Warren Buffett’s investment ideas asks us to buy stocksof only those companies whose “fundamentals” are very strong and its stock is available at “undervalued price”. When we say strong fundamentals we mean a healthy financial report, unique product line which is run by exceptional managers.

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