The document discusses increasing the portfolio weighting for metals stocks, particularly integrated Indian steel companies. It notes that while India has large iron ore reserves, it exports ore and imports steel, an imbalance the strategy looks to benefit from. Smaller integrated steel firms like Electrosteel Castings, Godawari Power & Ispat and Bhushan Steel are expected to see strong volume growth and margins over the next 2-3 years as demand increases while larger firms face debt issues limiting expansion. The withdrawal of Chinese export rebates also reduces competitive pressure on domestic steel prices.
The Indian stock markets fell sharply on May 3, 2011, with the BSE Sensex losing 463 points and the NSE Nifty falling 136 points. The RBI increased the repo rate by 50 basis points to 7.25% to contain inflation. Rate sensitive sectors like banking, real estate and auto declined the most. Globally, most US stocks fell and commodity prices declined. The Indian rupee closed lower at Rs. 44.34 against the US dollar. Corporate earnings and other news like projects awarded, acquisitions and investments were also reported.
The document discusses the steel sector in India, with a focus on Steel Authority of India Limited (SAIL). It provides an overview of SAIL's business model, government policies impacting the steel industry, key developments, expansion plans, and short and long-term earnings growth projections. Valuation of SAIL is performed using the free cash flow to firm and residual income methods, arriving at a per share value of Rs. 154-151.
The Indian steel industry has experienced steady growth since the country's independence. It is now in its best position compared to past decades due to various reforms and the rising global demand for steel. While domestic production has increased, it is still insufficient to meet growing demand. The industry is dominated by a few major players and exhibits characteristics of oligopoly. Continued economic growth and investment in infrastructure are expected to further support the growth and competitiveness of the Indian steel industry. However, issues around raw material availability, transportation infrastructure and the global economic climate remain as challenges.
Indian markets extended their gains for a fourth consecutive session as global markets were firm and on speculation the central bank may cut rates further, though inflation rose in February. Key indices rose around half a percent while banking and capital goods stocks performed well but real estate and IT declined. The document also provides domestic and global market snapshots, the day's top gainers and losers, and notes on economic developments and corporate news.
The key points from the document are:
1) Indian markets reached their highest closing levels in over six weeks driven by rising foreign inflows and improving global risk sentiment.
2) Except for IT and FMCG sectors, all indices closed higher led by real estate, metals, power and banking stocks. Foreign institutional investors were net buyers of Indian stocks.
3) Asian markets opened higher following gains in US stocks and optimism over Europe, and the Indian markets are expected to have a positive opening as well.
- Indian shares rose for a second consecutive session on Monday as banking stocks rallied on expectations that the cash crunch constraining the sector would ease in the new fiscal year due to government spending and central bank intervention.
- Sentiment was also supported by foreign buying and improved global risk sentiment after China's manufacturing index rose.
- Market breadth was strong with advances outnumbering declines by over 2 times as investors bought large cap stocks. Foreign institutional investors were net buyers of Indian stocks.
The document discusses the growing Indian economy and its increasing globalization. It notes that India's GDP has grown significantly from 1999 to 2010, with services contributing over 60% to the economy. Exports and imports have also increased substantially. Foreign direct investment in India has risen sharply, and major mergers and acquisitions have involved Indian firms purchasing overseas companies. Overall, the Indian economy has rapidly integrated into the global marketplace in recent decades.
The Indian markets closed lower amid volatility, snapping a two-day rally. Auto stocks declined sharply after disappointing monthly sales results. Investors were wary ahead of quarterly earnings and slowing economic growth. Asian markets were mostly lower in early trade following a flat close in the US and renewed European debt concerns. The Indian markets were expected to have a weak opening, following Asian cues.
The Indian stock markets fell sharply on May 3, 2011, with the BSE Sensex losing 463 points and the NSE Nifty falling 136 points. The RBI increased the repo rate by 50 basis points to 7.25% to contain inflation. Rate sensitive sectors like banking, real estate and auto declined the most. Globally, most US stocks fell and commodity prices declined. The Indian rupee closed lower at Rs. 44.34 against the US dollar. Corporate earnings and other news like projects awarded, acquisitions and investments were also reported.
The document discusses the steel sector in India, with a focus on Steel Authority of India Limited (SAIL). It provides an overview of SAIL's business model, government policies impacting the steel industry, key developments, expansion plans, and short and long-term earnings growth projections. Valuation of SAIL is performed using the free cash flow to firm and residual income methods, arriving at a per share value of Rs. 154-151.
The Indian steel industry has experienced steady growth since the country's independence. It is now in its best position compared to past decades due to various reforms and the rising global demand for steel. While domestic production has increased, it is still insufficient to meet growing demand. The industry is dominated by a few major players and exhibits characteristics of oligopoly. Continued economic growth and investment in infrastructure are expected to further support the growth and competitiveness of the Indian steel industry. However, issues around raw material availability, transportation infrastructure and the global economic climate remain as challenges.
Indian markets extended their gains for a fourth consecutive session as global markets were firm and on speculation the central bank may cut rates further, though inflation rose in February. Key indices rose around half a percent while banking and capital goods stocks performed well but real estate and IT declined. The document also provides domestic and global market snapshots, the day's top gainers and losers, and notes on economic developments and corporate news.
The key points from the document are:
1) Indian markets reached their highest closing levels in over six weeks driven by rising foreign inflows and improving global risk sentiment.
2) Except for IT and FMCG sectors, all indices closed higher led by real estate, metals, power and banking stocks. Foreign institutional investors were net buyers of Indian stocks.
3) Asian markets opened higher following gains in US stocks and optimism over Europe, and the Indian markets are expected to have a positive opening as well.
- Indian shares rose for a second consecutive session on Monday as banking stocks rallied on expectations that the cash crunch constraining the sector would ease in the new fiscal year due to government spending and central bank intervention.
- Sentiment was also supported by foreign buying and improved global risk sentiment after China's manufacturing index rose.
- Market breadth was strong with advances outnumbering declines by over 2 times as investors bought large cap stocks. Foreign institutional investors were net buyers of Indian stocks.
The document discusses the growing Indian economy and its increasing globalization. It notes that India's GDP has grown significantly from 1999 to 2010, with services contributing over 60% to the economy. Exports and imports have also increased substantially. Foreign direct investment in India has risen sharply, and major mergers and acquisitions have involved Indian firms purchasing overseas companies. Overall, the Indian economy has rapidly integrated into the global marketplace in recent decades.
The Indian markets closed lower amid volatility, snapping a two-day rally. Auto stocks declined sharply after disappointing monthly sales results. Investors were wary ahead of quarterly earnings and slowing economic growth. Asian markets were mostly lower in early trade following a flat close in the US and renewed European debt concerns. The Indian markets were expected to have a weak opening, following Asian cues.
The document provides an overview of the Indian stock market performance on July 26, 2012. It mentions that the key Indian indices closed lower due to concerns over the government's ability to raise fuel prices. It also notes weakness in steel stocks and public sector oil companies. The document highlights some top gaining and losing stocks. It provides currency rates and commodity prices. Overall, it analyzes factors impacting the Indian market and expectations for the next day.
RBI surprised markets by raising key policy rates 25 basis points to address high inflation and negative real interest rates in India. This is seen as a preparatory step by RBI, with expectations for further rate hikes of 50 basis points in April and additional hikes through mid-2010. India has the second highest inflation in the world and largest negative short-term real interest rates. RBI aims to gradually normalize rates as inflation is expected to fall to under 6% by the end of fiscal year 2011.
The document provides a summary of Indian and global market performance on August 17th, 2011. Key Indian indexes closed slightly higher, with the Sensex up 0.66% and Nifty up 0.41%. Most global markets also saw small gains or losses. Commodity prices were mixed with Brent crude and gold up slightly while the rupee strengthened against the dollar. News briefs covered various companies, sectors, economic indicators and policy developments.
The key points from the India Morning Note document are:
- The BSE Sensex and Nifty 50 indexes ended flat on Thursday as software exporters fell ahead of quarterly results while cement stocks slipped due to outlook concerns.
- Oil stocks gained after officials said a proposal to raise fuel prices would be submitted to the cabinet. Meanwhile, Citigroup downgraded India to "underweight".
- Market activity was mixed with the FIIs being net buyers of stocks while domestic institutions were net sellers.
Restructuring Scenario of the Indian Steel lndustry to Enhance Its Global Com...POSCO Research Institute
On the Cover
Restructuring Scenario of the Indian Steel lndustry to Enhance Its Global Competitiveness
The Indian government has recently released the“National Steel Policy (NSP) 2017,”which declares the aim of increasing steel production capacity from 122 Mt in 2015 to 300 Mt in 2030 in order to attain self-sufficiency. However, the insolvency issue recently looming large in the Indian steel industry makes this goal appear somewhat hollow. As of March 2016, the Indian steel industry’s debt surpassed INR 3 trillion, and between INR 1.15 to 2 trillion within it is categorized as non-performing assets. However, steel imports are not the only culprit in the insolvency of the Indian steel industry. There are other fundamental reasons underlying the insolvency. The first relates to policies based on the ripple effect from the NSP 2005. The second cause of insolvency is investment fervor among Indian steelmakers, which left huge aftermath within the industry. Restructuring of the Indian steel industry will be mainly led by Tata and JSW.
Now is the right time for the Indian government to seek not only quantitative growth, but also qualitative improvement to enhance the global competitiveness of the domestic steel industry.
- The Indian markets rallied on Friday led by gains in banking and consumer stocks. The markets were boosted by strong quarterly results from Wipro and Axis Bank.
- Asian markets traded mixed on Monday as encouraging corporate earnings were offset by concerns over Greece's debt negotiations.
- The document provides an overview of the performance of the key Indian indices and sectors on January 20, along with FII/DII flows and global market updates. It also lists some corporate developments and the top gainers and losers during the day.
The document summarizes the outlook for the Indian ferro alloy industry. It discusses key factors driving demand, including growth in crude steel and alloy steel production. The ferro alloy industry's structure and production levels are presented. It also examines raw material availability and infrastructure needs, particularly for power and manganese and chrome ores. The document concludes by noting opportunities for India in global markets given power issues facing competitors.
Indian markets rose on Monday led by gains in software exporters and higher European markets. The BSE Sensex rose 0.76% while the Nifty gained 0.75%. Market breadth was lower with advances outnumbering declines. FIIs were net buyers of stocks worth Rs. 4.79 billion while domestic institutions were net sellers of Rs. 2.46 billion. Asian markets were mostly higher tracking gains on the Wall Street overnight.
Indian markets continued their downward trend for a third straight session, falling to their lowest close in over five weeks. Key factors included weak European markets and a credit rating downgrade of State Bank of India. Bank stocks fell sharply on renewed concerns about weakening asset quality. Overall market breadth was weak as investors sold large cap stocks. Asian markets opened lower today following declines in Japan.
The Indian iron and steel industry has grown significantly since liberalization in the early 1990s. Production has doubled over the last decade and a half and India is now the 5th largest steel producer in the world. Consumption has also increased rapidly, driven by growth in infrastructure, real estate, and automobiles. The industry is dominated by large integrated steel producers but also includes many smaller secondary steel producers. The government has pursued policies to promote investment and growth in the industry through deregulation, allowing private and foreign investment, and improving infrastructure. The industry is poised for further expansion to meet growing domestic and international demand.
- The Indian stock markets reversed gains from the previous day and closed lower due to risk aversion in global markets and fears about the impact of an earthquake in Indonesia.
- Key indices like the Sensex and Nifty fell around 0.3% while mid-cap stocks declined more. Selling pressure was seen in metal, consumer durable, oil & gas and capital goods stocks.
- Market volatility is expected to continue ahead of important domestic economic data releases and the RBI's monetary policy meeting next week.
- Indian markets snapped a two-day winning streak and closed lower as investors turned cautious ahead of Infosys earnings results and industrial production data. Weak European markets also weighed on sentiment.
- Selling pressure was mainly seen in IT stocks ahead of Infosys results, with Infosys, Wipro and TCS all declining. Telecom stocks rallied after a positive draft policy from the government.
- Market breadth was strong but Asian markets traded lower following disappointing US results and uncertainty over Europe's bailout fund expansion.
The key points from the document are:
1) Indian stock indices ended higher led by gains in metal, auto and IT stocks, while mid and small cap indices underperformed.
2) In company results, Cairn India and Colgate reported better than expected earnings growth while Jagran Prakashan saw strong revenue growth.
3) Previews suggest Apollo Tyres and Asian Paints may report revenue and earnings growth for their upcoming quarterly results.
The paper to be published as the lead article in the Metals & Minerals Review – Ferroalloy Special – January 2013 issue makes a case that while there are many positives for the ferroalloy industry in India, viz. scalability, location near high growth markets, cost advantages of labour, technical manpower domestically available ore and reducing price of reductant blend; the growth in ferroalloy production is stymied by inadequate infrastructure, rising cost & availability issues in thermal coal, fear of getting saddled with old technology, and lack of capital.
The global slowing of demand for ferroalloys, the re-emergence of China as a major exporter and the threat of imports are other factors that the Indian ferroalloy industry would need to tackle.
Therefore it is very difficult to predict if the ferroalloy industry in India can repeat the spectacular double digit growth of the last five years. The only certainty is of ferroalloy prices; which have been volatile and unpredictable in the past – they will remain volatile and unpredictable in the future: some things will never change!!
Market Research Report : Foundry Market in India 2012Netscribes, Inc.
The document provides an overview of the foundry market in India in 2012. It notes that India was the world's second largest producer of castings in 2010 and one of the top 10 in terms of average production per plant. The foundry industry employs millions of people directly and indirectly. While production dipped in 2008 due to the global crisis, it has since recovered with strong growth. The market is expected to continue growing due to increasing demand from sectors like automobiles and supportive government initiatives. However, challenges include market constraints, rising input costs, and low capacity utilization.
- Indian stock indices rose to their highest levels in 25 months, with the Sensex and Nifty gaining 1.4% and 1.5% respectively, lifted by sustained buying in index pivotals.
- Regional stocks were mixed, with metal and auto stocks rising on firm commodity prices and strong auto sales, while IT stocks declined due to a stronger rupee.
- In corporate news, steel makers raised prices for the third time in 2010 due to higher raw material costs, while ACC reported a 3.5% drop in cement dispatches for March.
Indian markets recovered after opening lower, as Asian markets rose. The Sensex closed near flat while the Nifty fell slightly. FIIs were net buyers of stocks, while domestic institutions also purchased shares. Market breadth was positive. Global markets gained on signs of progress in Europe and better-than-expected US corporate results. The rupee is expected to settle between 52-54 against the dollar by the end of the fiscal year.
Titan Industries reported strong performance in the first quarter of fiscal year 2011 that was above expectations. Revenue grew 41.9% year-over-year driven by robust growth in the jewelry and watches segments. Operating and net profits increased 40.2% and 76.5% respectively. The company's jewelry segment saw a 49.6% revenue increase and 30% volume growth. The watches segment grew revenues 21.8% with improved sales of higher margin watches. While remaining positive on growth prospects, the analyst maintains a Neutral rating due to expensive valuations.
The document provides a summary of derivative market activity in India for July 29, 2010. Key points include:
- Open interest for Nifty futures decreased slightly while Minifity futures open interest decreased more sharply. Nifty July futures closed at a discount.
- Implied volatility increased and total open interest in the market was over Rs. 1.72 trillion with stock futures open interest at Rs. 44,894 crore.
- Rollover percentages for various contracts like Nifty, Banknifty were over 60%.
- Some stocks like Reliance, Aban saw increases in open interest while others like Samrudhhi, EKC saw decreases.
The document provides an overview of the Indian stock market performance on July 26, 2012. It mentions that the key Indian indices closed lower due to concerns over the government's ability to raise fuel prices. It also notes weakness in steel stocks and public sector oil companies. The document highlights some top gaining and losing stocks. It provides currency rates and commodity prices. Overall, it analyzes factors impacting the Indian market and expectations for the next day.
RBI surprised markets by raising key policy rates 25 basis points to address high inflation and negative real interest rates in India. This is seen as a preparatory step by RBI, with expectations for further rate hikes of 50 basis points in April and additional hikes through mid-2010. India has the second highest inflation in the world and largest negative short-term real interest rates. RBI aims to gradually normalize rates as inflation is expected to fall to under 6% by the end of fiscal year 2011.
The document provides a summary of Indian and global market performance on August 17th, 2011. Key Indian indexes closed slightly higher, with the Sensex up 0.66% and Nifty up 0.41%. Most global markets also saw small gains or losses. Commodity prices were mixed with Brent crude and gold up slightly while the rupee strengthened against the dollar. News briefs covered various companies, sectors, economic indicators and policy developments.
The key points from the India Morning Note document are:
- The BSE Sensex and Nifty 50 indexes ended flat on Thursday as software exporters fell ahead of quarterly results while cement stocks slipped due to outlook concerns.
- Oil stocks gained after officials said a proposal to raise fuel prices would be submitted to the cabinet. Meanwhile, Citigroup downgraded India to "underweight".
- Market activity was mixed with the FIIs being net buyers of stocks while domestic institutions were net sellers.
Restructuring Scenario of the Indian Steel lndustry to Enhance Its Global Com...POSCO Research Institute
On the Cover
Restructuring Scenario of the Indian Steel lndustry to Enhance Its Global Competitiveness
The Indian government has recently released the“National Steel Policy (NSP) 2017,”which declares the aim of increasing steel production capacity from 122 Mt in 2015 to 300 Mt in 2030 in order to attain self-sufficiency. However, the insolvency issue recently looming large in the Indian steel industry makes this goal appear somewhat hollow. As of March 2016, the Indian steel industry’s debt surpassed INR 3 trillion, and between INR 1.15 to 2 trillion within it is categorized as non-performing assets. However, steel imports are not the only culprit in the insolvency of the Indian steel industry. There are other fundamental reasons underlying the insolvency. The first relates to policies based on the ripple effect from the NSP 2005. The second cause of insolvency is investment fervor among Indian steelmakers, which left huge aftermath within the industry. Restructuring of the Indian steel industry will be mainly led by Tata and JSW.
Now is the right time for the Indian government to seek not only quantitative growth, but also qualitative improvement to enhance the global competitiveness of the domestic steel industry.
- The Indian markets rallied on Friday led by gains in banking and consumer stocks. The markets were boosted by strong quarterly results from Wipro and Axis Bank.
- Asian markets traded mixed on Monday as encouraging corporate earnings were offset by concerns over Greece's debt negotiations.
- The document provides an overview of the performance of the key Indian indices and sectors on January 20, along with FII/DII flows and global market updates. It also lists some corporate developments and the top gainers and losers during the day.
The document summarizes the outlook for the Indian ferro alloy industry. It discusses key factors driving demand, including growth in crude steel and alloy steel production. The ferro alloy industry's structure and production levels are presented. It also examines raw material availability and infrastructure needs, particularly for power and manganese and chrome ores. The document concludes by noting opportunities for India in global markets given power issues facing competitors.
Indian markets rose on Monday led by gains in software exporters and higher European markets. The BSE Sensex rose 0.76% while the Nifty gained 0.75%. Market breadth was lower with advances outnumbering declines. FIIs were net buyers of stocks worth Rs. 4.79 billion while domestic institutions were net sellers of Rs. 2.46 billion. Asian markets were mostly higher tracking gains on the Wall Street overnight.
Indian markets continued their downward trend for a third straight session, falling to their lowest close in over five weeks. Key factors included weak European markets and a credit rating downgrade of State Bank of India. Bank stocks fell sharply on renewed concerns about weakening asset quality. Overall market breadth was weak as investors sold large cap stocks. Asian markets opened lower today following declines in Japan.
The Indian iron and steel industry has grown significantly since liberalization in the early 1990s. Production has doubled over the last decade and a half and India is now the 5th largest steel producer in the world. Consumption has also increased rapidly, driven by growth in infrastructure, real estate, and automobiles. The industry is dominated by large integrated steel producers but also includes many smaller secondary steel producers. The government has pursued policies to promote investment and growth in the industry through deregulation, allowing private and foreign investment, and improving infrastructure. The industry is poised for further expansion to meet growing domestic and international demand.
- The Indian stock markets reversed gains from the previous day and closed lower due to risk aversion in global markets and fears about the impact of an earthquake in Indonesia.
- Key indices like the Sensex and Nifty fell around 0.3% while mid-cap stocks declined more. Selling pressure was seen in metal, consumer durable, oil & gas and capital goods stocks.
- Market volatility is expected to continue ahead of important domestic economic data releases and the RBI's monetary policy meeting next week.
- Indian markets snapped a two-day winning streak and closed lower as investors turned cautious ahead of Infosys earnings results and industrial production data. Weak European markets also weighed on sentiment.
- Selling pressure was mainly seen in IT stocks ahead of Infosys results, with Infosys, Wipro and TCS all declining. Telecom stocks rallied after a positive draft policy from the government.
- Market breadth was strong but Asian markets traded lower following disappointing US results and uncertainty over Europe's bailout fund expansion.
The key points from the document are:
1) Indian stock indices ended higher led by gains in metal, auto and IT stocks, while mid and small cap indices underperformed.
2) In company results, Cairn India and Colgate reported better than expected earnings growth while Jagran Prakashan saw strong revenue growth.
3) Previews suggest Apollo Tyres and Asian Paints may report revenue and earnings growth for their upcoming quarterly results.
The paper to be published as the lead article in the Metals & Minerals Review – Ferroalloy Special – January 2013 issue makes a case that while there are many positives for the ferroalloy industry in India, viz. scalability, location near high growth markets, cost advantages of labour, technical manpower domestically available ore and reducing price of reductant blend; the growth in ferroalloy production is stymied by inadequate infrastructure, rising cost & availability issues in thermal coal, fear of getting saddled with old technology, and lack of capital.
The global slowing of demand for ferroalloys, the re-emergence of China as a major exporter and the threat of imports are other factors that the Indian ferroalloy industry would need to tackle.
Therefore it is very difficult to predict if the ferroalloy industry in India can repeat the spectacular double digit growth of the last five years. The only certainty is of ferroalloy prices; which have been volatile and unpredictable in the past – they will remain volatile and unpredictable in the future: some things will never change!!
Market Research Report : Foundry Market in India 2012Netscribes, Inc.
The document provides an overview of the foundry market in India in 2012. It notes that India was the world's second largest producer of castings in 2010 and one of the top 10 in terms of average production per plant. The foundry industry employs millions of people directly and indirectly. While production dipped in 2008 due to the global crisis, it has since recovered with strong growth. The market is expected to continue growing due to increasing demand from sectors like automobiles and supportive government initiatives. However, challenges include market constraints, rising input costs, and low capacity utilization.
- Indian stock indices rose to their highest levels in 25 months, with the Sensex and Nifty gaining 1.4% and 1.5% respectively, lifted by sustained buying in index pivotals.
- Regional stocks were mixed, with metal and auto stocks rising on firm commodity prices and strong auto sales, while IT stocks declined due to a stronger rupee.
- In corporate news, steel makers raised prices for the third time in 2010 due to higher raw material costs, while ACC reported a 3.5% drop in cement dispatches for March.
Indian markets recovered after opening lower, as Asian markets rose. The Sensex closed near flat while the Nifty fell slightly. FIIs were net buyers of stocks, while domestic institutions also purchased shares. Market breadth was positive. Global markets gained on signs of progress in Europe and better-than-expected US corporate results. The rupee is expected to settle between 52-54 against the dollar by the end of the fiscal year.
Titan Industries reported strong performance in the first quarter of fiscal year 2011 that was above expectations. Revenue grew 41.9% year-over-year driven by robust growth in the jewelry and watches segments. Operating and net profits increased 40.2% and 76.5% respectively. The company's jewelry segment saw a 49.6% revenue increase and 30% volume growth. The watches segment grew revenues 21.8% with improved sales of higher margin watches. While remaining positive on growth prospects, the analyst maintains a Neutral rating due to expensive valuations.
The document provides a summary of derivative market activity in India for July 29, 2010. Key points include:
- Open interest for Nifty futures decreased slightly while Minifity futures open interest decreased more sharply. Nifty July futures closed at a discount.
- Implied volatility increased and total open interest in the market was over Rs. 1.72 trillion with stock futures open interest at Rs. 44,894 crore.
- Rollover percentages for various contracts like Nifty, Banknifty were over 60%.
- Some stocks like Reliance, Aban saw increases in open interest while others like Samrudhhi, EKC saw decreases.
The document provides a summary of derivative trading activity in India for October 12, 2010. It notes that open interest for Nifty futures decreased slightly while implied volatility also decreased. Top gainers in open interest were Exideind, Bankbaroda, and PFC. Top losers were Nagarfirt, Unionbank, and Divislab. Put-call ratios remained low for stocks like Reliance and Tatasteel. Historical volatility was highest for Chamblfert and Nagarfirt. Bullish and bearish spread strategies are presented for the Nifty.
Angel Securities - 4 QFY2010 Result PreviewAngel Broking
The document provides an outlook on the Indian economy and stock market for the fourth quarter of FY2010. It predicts that GDP growth will continue improving through FY2011-2012, reaching 8.5-9% annually. This will be driven by a shift from government-driven consumption to private sector consumption and investment as the main growth engines. Infrastructure, banking, capital goods, and select mid-cap companies in sectors like pharma and autos are predicted to benefit. Industrial production is showing a recovery, with manufacturing and capital goods growth expected to accelerate in the coming years.
The market indices opened flat but ended in the red. Key gainers were SAIL, RCOM, HDFC, SUNPHARMA and GAIL, while major losers were TCS, ITC, HINDUNILVR, HINDALCO and IDEA. FMCG and IT sectors saw losses while healthcare saw gains. Technical indicators suggest the indices may test lower support levels if they trade below given thresholds, but a bounce back is also possible. Key stocks with positive bias included RCOM and NTPC, while negative bias stocks were HINDALCO and IBREALEST.
The document provides a technical market summary for July 20, 2010. It reports the day's opening and closing levels for key indices like Nifty and Sensex, along with the top gainers and losers. It also lists sectoral performances and notes that markets closed with marginal losses despite weak global cues, consolidating previous gains. The report provides positive and negative stock biases for the next 2-3 days, along with pivot table supports and resistances for various stocks.
The market indices opened with a gap up and saw a sharp short covering rally, closing at higher levels. The Nifty closed at 4917, up 2.3% and the Sensex closed at 16388, up 2.28%. Hindalco, IDFC, and JPSociate were the top gainers, rising over 5%, while RCOM, Sun Pharma, and Idea were the top losers falling around 2%. Most sectors closed in the green with IT and Realty seeing gains over 3%. The technical outlook indicated the trend remains in a lower top, lower bottom cycle but an extended pullback could be expected if levels are crossed.
The key Indian stock market indices opened weak but gained through the day, closing flat, as positive results from State Bank of India helped contain losses. NCC secured several new construction orders worth 673 million rupees. Indraprastha Gas reported quarterly results above expectations for revenue but slightly below for profits due to higher raw material costs. The document provides an analysis of market performance and notable company news and results.
Ramky Infrastructure is tapping the IPO market to raise Rs. 530 crores through a fresh issue of equity shares and an offer for sale. The company operates in the construction and infrastructure development sectors across six segments. It has a diversified presence across various states in India. Ramky has a robust order backlog of Rs. 7,432 crores providing revenue visibility. It is expected to grow at a CAGR of 31.7% over FY2010-12 driven by its strong order book and presence in growing segments like water and waste water.
Dena Bank reported a 20.7% increase in net profit for the first quarter of fiscal year 2011 compared to the same period the previous year, ahead of analyst estimates. Net interest income grew 43.9% year-over-year due to higher loan growth, especially in retail, SME, and agriculture loans. However, gross non-performing assets also increased sequentially. The bank maintained a strong capital adequacy ratio of 11.8% and expects the ratio to increase further with an expected capital infusion of Rs. 600 crore from the government. The analyst maintains a "Buy" rating on the stock with a target price of Rs. 114 based on expected earnings growth and an appropriate price-to-book
1) Monnet Ispat & Energy reported an 18% year-over-year increase in net sales to Rs420 crore for the first quarter of FY2011 due to higher realizations in steel sales.
2) EBITDA margins dipped slightly by 138 basis points to 28.8% despite sales growth, due to a 27.5% rise in raw material costs from higher iron ore prices.
3) Net profit grew by 18.7% year-over-year to Rs73 crore for the quarter, in line with top-line growth, as interest expenses declined.
HDFC Bank reported a 33.9% year-on-year increase in net profit to Rs. 812 crore for the first quarter of FY2011, which was close to analyst estimates. Key highlights included a 40.2% rise in loan advances and an improvement in asset quality. The bank saw robust growth across parameters such as net interest income, deposits, and CASA ratio. While recommending a 'Buy' rating, analysts believe HDFC Bank is well positioned for continued high quality growth driven by its expansion plans and improving economic conditions.
Aventis Pharma reported lower-than-estimated sales growth of 6.6% for the quarter due to a decline in exports. However, domestic sales grew 14.6%. Net profit was higher than expected at Rs. 47 crore due to higher other income. The analyst maintains a Neutral rating on the stock and expects sales to grow at a 14% CAGR through 2012, with upside potential from acquisitions or a stake sale in a joint venture.
The technical report provides a daily market summary for the Indian stock market. It shows that indices closed near their daily highs, with the Nifty up 1.62% and Sensex up 1.59%. Top gainers were led by ITC at 5.55% while top losers were led by STER at 0.84% loss. Most sectors closed in positive territory. The report also provides analysis of support and resistance levels for key stocks and recommends some stocks that are expected to trend positively or negatively over the next 2-3 days.
Ambuja Cements reported a 52.2% year-over-year decline in net profit for the third quarter of 2010 due to lower sales realizations and higher raw material and power costs. However, despatches increased 6.1% year-over-year. Going forward, analysts expect capacity additions to drive higher despatch growth and margins to improve as new clinker capacities eliminate external purchases. While third quarter results were below estimates, the stock is considered fairly priced at current levels based on estimated growth and margins over the next two years.
Elecon Engineering is a leading provider of material handling equipment and gear solutions in India. It has a 26% market share in the domestic gear market, making it the leader. The company is well positioned to benefit from an estimated Rs32,500 crore of opportunities in the material handling equipment industry over the next few years, driven by growth in core sectors like power, steel, and coal. Elecon's order book and revenues are expected to grow at a CAGR of 40% and 13.5%, respectively, during FY2010-12, supported by a recovery in industrial activity and capital expenditures. The company's strong position in the stable gear market also helps support its profitability.
The document discusses the global and Indian steel industries. Globally, steel production has risen dramatically over the 20th century to 800 million tons annually. In India, steel consumption is growing rapidly due to economic growth, but production is still low compared to other countries. The top three Indian steelmakers control over half the market. While demand is increasing from various sectors, supply is struggling to keep up due to issues like power shortages and transportation problems. However, the future outlook for the Indian steel industry remains positive due to lower costs and growing demand from key industries. Major global and Indian companies are expanding production capacity in India.
The Indian steel industry has experienced steady growth since the country's independence. It is now one of the top ten steel producers globally, though its share of global production remains low at around 3%. The industry has largely been dominated by a few major public and private sector companies. While domestic demand for steel has grown significantly, fueled by India's growing economy, domestic production has still not been sufficient to meet this demand. Moving forward, continued investment in infrastructure and developing new technologies are seen as important to further advancing the Indian steel industry.
The document summarizes a presentation on the Indian steel industry. It discusses the evolution and structure of the industry, production functions, economies of scale, growth prospects, concentration curves, demand curves, and SWOT analysis. Key points include that the industry is oligopolistic with the top 4 firms controlling around 78% market share. The industry faces threats from cheap imports but has opportunities from growing infrastructure demand. Recommendations focus on increasing R&D, technology forecasting, improving resource use, and investing in infrastructure.
The document provides an overview of the Indian steel market and potential entry strategies for 'Al Sayeed Steel Industries'. It summarizes that the Indian steel market is large but fragmented, with opportunities for growth in infrastructure, automotive, and consumer sectors. Key entry strategies identified include targeting niche products, securing raw material supply, pursuing greenfield/brownfield projects, partnerships, and acquiring existing facilities.
Shakthi Steel Plant is proposing a new coal mining plant project in Bellary, Karnataka, India to produce coal for making coke that will be used in their steel production process. The proposed project would cost 93 crores and take 18 months to build. It is estimated to have a 6 year life and aims to make the company less reliant on external suppliers of raw materials like coal and coke. The summary analyzes the steel industry outlook, raw material availability, competition in the region, and provides financial projections for the proposed project.
The steel industry in India is affected by macroeconomic factors like GDP growth and inflation. Higher GDP growth leads to increased steel consumption for infrastructure and other sectors, fueling steel industry growth. However, high inflation has negatively impacted the steel industry by slowing growth in key customer industries like automobiles and construction. Rising inflation has also reduced consumer demand for housing and vehicles. The Reserve Bank of India's interest rate hikes to combat inflation have further raised borrowing costs, negatively impacting steel-intensive industries.
The document summarizes the Indian steel industry. It states that India is the 5th largest steel producer globally and is projected to become the 2nd largest by 2015-2016. The key players in the industry are Tata Steel, Jindal Steel & Power, Jindal Iron & Steel, Essar Steel, and Steel Authority of India. The industry faces challenges such as delays in land acquisition and lack of infrastructure. The government aims to support the industry through infrastructure development and policies promoting foreign investment and SEZs.
India has become the world’s fourth-largest producer of crude steel. The country is slated to become the second-largest steel producer by 2015 as large public and private sector players strengthen steel production capacity in view of the rising demand.
The total market value of the steel sector in India stood at US$ 57.8 billion in 2011 and is expected to touch US$ 95.3 billion by 2016. Total crude and finished steel production grew at a compound annual growth rate (CAGR) of 6.6 per cent and 4.2 per cent over FY08-11 to reach 69.6 million tonnes (MT) and 66 MT respectively.
Steel consumption is expected to grow at an average rate of 6.8 per cent to reach 104 MT by 2017 driven by rising infrastructure development and growing demand for automotives. The infrastructure sector is India’s largest steel consumer, accounting for 63 per cent of total consumption in FY11. Attracted by the growth potential of the Indian steel industry, several global steel players have been planning to enter the market. The Government of India (GOI) has allowed 100 per cent foreign direct investment (FDI) in the sector through automatic route in order to attract foreign investments.
This document provides an overview of the Indian steel industry. It discusses the industry's size, major players, growth over time, and acquisitions that have occurred. Some key points:
- India is now one of the largest steel producers in the world, with both public and private sector companies involved. Major players include SAIL, Tata Steel, Essar Steel, and JSW Steel.
- The industry has grown significantly since the 1990s with increased investment and production capacity. India's crude steel production grows over 10% annually.
- Notable acquisitions include ArcelorMittal's purchase of Arcelor and Tata Steel's acquisition of Corus, demonstrating the industry's dynamic nature.
The document provides an overview of India's cement industry. It discusses that India has the second largest cement production capacity in the world after China. While cement demand has grown around 9-10% annually, per capita consumption remains low compared to global averages, indicating further growth potential. Key factors like housing driving majority of demand, regional clusters, input costs, and government initiatives are examined. The outlook suggests cement demand will be driven by infrastructure and housing, though overcapacity may weigh on prices in the near term.
The document discusses the Indian steel industry. It provides background on the industry, noting that it has a history of over a century. It discusses major players like SAIL and Tata Steel. It analyzes the industry using Porter's Five Forces model and provides a SWOT analysis. It discusses the size and growth of the industry, including production levels and major acquisitions over the years like ArcelorMittal. It also outlines the various public and private sector players in the Indian steel industry and trends in commodity prices.
The document provides an overview of the Indian steel industry. It discusses the industry's vision, mission, major players, growth over the years through acquisitions and investments, impact of macroeconomic variables like GDP, inflation, and dumping. Key points include that India is the 5th largest steel producer globally and is expected to become 2nd largest by 2015-16. Economic growth and infrastructure development is driving steel demand growth. However, high inflation is negatively impacting consumer industries and slowing steel demand.
The document discusses challenges facing the Indian steel industry and its future outlook. It notes that while Indian steel companies have achieved higher profit margins than global peers, the industry now faces issues like volatile domestic iron ore supply, potential overcapacity, and changing customer demands. The industry must improve resource management, project execution, customer focus, supply chain management, and human capital management to better position itself for future growth opportunities in India.
1. Monnet Ispat & Energy Limited is an Indian steel company with sectors including steel, sponge iron, and pig iron. It has experienced consistent growth through its diversified business model.
2. The company has expanded operations through acquisitions such as an Indonesian coal company and increasing coal and power generation capacities.
3. Monnet Ispat & Energy Limited engages in corporate social responsibility initiatives in areas like healthcare, education, livelihood generation, and supporting Indian boxing.
India's steel production has grown significantly in recent years, with total finished steel production increasing at a CAGR of 8.39% between FY12-17. India is now the second largest producer of crude steel globally. Capacity has also increased over the period, reaching 128.28 million tonnes in FY17. Domestic demand for steel has outpaced supply, with consumption growing at a CAGR of 5.44% between FY08-17. The market value of the Indian steel sector has grown strongly as well, with a CAGR of 12.76% between FY07-17(estimated). Key players like SAIL and Tata Steel have leading market shares in steel production
The document analyzes the major steel industry in India. It provides an overview of the economic environment and demand for steel in India driven by infrastructure and automobiles. It then discusses the production and consumption of steel in India. It analyzes the performance and research & development efforts of major Indian steel companies like SAIL, TATA Steel, JSW Steel, Jindal Steel, and Ispat Industries. It highlights the key investment rationales and concerns for these companies. Finally, it discusses the challenges faced by the Indian steel industry.
The document provides an overview of the steel industry in India. Some key points:
- India has become the 2nd largest producer of crude steel globally as production has increased at a CAGR of 8.39% from FY12-17.
- Domestic demand and capacity have also grown steadily, with capacity reaching 128.28 MT in FY17.
- Major players like SAIL and Tata Steel dominate production, while emerging sectors like infrastructure, automotive and railways are driving growth.
- Government policies aim to boost domestic manufacturing through investments, R&D initiatives and measures like import duties.
Industry Analysis-Steel Industry of Indiasandeep7162
The steel industry in India is the 5th largest producer of crude steel globally and is expected to become the 2nd largest by 2015. Major players include Tata Steel, SAIL, JSW Steel, and Jindal Steel. The industry is growing at around 8-9% annually due to increased infrastructure investment and automobile growth. Success factors for steel companies include low production costs, expanding downstream value-added products, technology improvements, and pursuing mergers and acquisitions for economies of scale. The industry faces competition from new entrants and substitutes but benefits from growing domestic demand.
India is the sixth largest manufacturing nation globally. The country’s manufacturing agenda received a boost with the launch of the Make in India (MII) program. With recent reforms, especially in enhancing ease of doing business, opening the economy to foreign investors and international trade and increasing transparency, India is well poised to become a key manufacturing player in the global economy. Confederation of Indian Industry (CII) has been at the forefront of the Government’s Make in India action plan and has been supporting the Government in driving the National manufacturing agenda.
Going forward, the next phase of India’s manufacturing growth will require it to be future ready since there is an increase in the usage of technologies in diverse fields. The global manufacturing landscape is being transformed by digital technologies such as the “Internet of Things” collectively called “Industry 4.0”. CII believes that these digital technologies are key for unlocking manufacturing competitiveness in India and globally.
This edition of the Policy Watch dedicated to manufacturing focusses on the opportunities and growth prospects in the sector. It also highlights key interventions which need to be taken up on priority to put Indian Manufacturing on a path of high growth trajectory.
This is a PowerPoint Presentation created by me for a presentation to be made by Mr. Nirmalya Mukherjee (Editor & MD of Steel and Metallurgy Magazine) who was invited as a representative speaker from India at SEAISI Webinar organized on 30th June 2020. The data was collected from various sources and presented in a manner to make the presentation attractive and interesting.
The Indian markets are expected to open higher, tracking gains in most Asian markets. Spain has asked for a bailout of up to €100 billion for its banking system. Chinese exports grew more than expected in May. In India, shares extended gains for a fifth session despite weak global cues as major central banks held off on additional stimulus. The key support and resistance levels for the Nifty are 5,023 and 5,114 respectively. L&T has bagged orders worth Rs. 483 crore to build commercial vessels in Qatar. Vedanta Resources has acquired a 24.5% stake in Raykal Aluminium for Rs. 201 crore.
Axis Bank reported a 27.0% year-over-year increase in net profit to Rs. 942 crore for the first quarter of fiscal year 2012, in line with analyst estimates. Business growth momentum slowed as advances declined 7.4% quarter-over-quarter and deposits fell 3.0% quarter-over-quarter, moderating the bank's cash-deposit ratio to 40.5% from 41.1% last quarter. However, asset quality remained healthy with slippage ratio declining to 0.8% and gross and net NPA ratios stable.
1) For 1QFY2012, Electrosteel Castings reported 16.4% sales growth but margins declined due to higher raw material costs. EBITDA fell 18.2% and net profit declined 7.2%.
2) While sales volumes grew, costs increased more due to a rise in raw material costs as a percentage of sales.
3) The company maintains a buy recommendation due to initiatives in steelmaking and backward integration that should lower costs starting in FY2013 and valuation remains attractive.
1) For 1QFY2012, Persistent Systems reported revenues of ₹224 crore, up 5.2% over the previous quarter and 23.6% over the same period last year.
2) EBITDA was ₹40 crore, up 5.3% over the previous quarter but margins declined.
3) PAT was ₹28 crore, down 16.8% over the previous quarter due to higher taxes.
4) Management maintained revenue guidance of 29% growth for FY2012 and expects PAT to remain flat despite higher tax rates.
HT Media reported a 22.7% year-over-year increase in revenue to ₹494 crore for the first quarter of FY2012. Revenue was also up 5.8% quarter-over-quarter. Advertising revenue grew 17% year-over-year, with 18% growth in English and 15% growth in Hindi. Operating profit rose 11.8% year-over-year to ₹87.8 crore due to higher other income and lower tax rates, although operating margins contracted by 174 basis points. The company maintained its Accumulate rating based on expectations of continued revenue growth and margin expansion.
The summary is:
1) The derivative report analyzes the performance of the Nifty futures, options, and key stocks from the previous trading session on July 18, 2011.
2) It provides details on changes in open interest, premium levels, volatility, and turnover for various derivatives contracts.
3) Trading strategies and technical analysis is also given for some stocks along with risk-reward profiles of sample spreads trades for the Nifty.
The market ended lower, with the Sensex and Nifty closing down 0.3%. Mid- and small-cap indices closed higher. Select heavyweights like Hindalco Industries and BHEL gained 1-3%, while TCS and Tata Motors lost 1-2%. In corporate news, Motherson Sumi Systems agreed to acquire an 80% stake in Peguform for €141.5 million. HDFC Bank, Cadila Healthcare, Crompton Greaves, and Ashok Leyland are scheduled to announce their quarterly results. The trend for the day will be decided by whether Nifty trades above or below the levels of 18,533/5,572 in early trade.
- GSM subscriber additions in India continued their declining trend in June 2011, with net additions of 9.6 million, down 10% from the previous month.
- All major operators except BSNL reported a drop in subscriber additions. Bharti and Vodafone each added 2.1 million subscribers.
- The total GSM subscriber base reached 598.8 million in June 2011, with Bharti, Vodafone, Idea and BSNL maintaining their major market shares.
The document provides a technical analysis of the Indian stock market indices Sensex and Nifty for the week of July 16, 2011. It summarizes that the indices declined over 1.5% for the week and are currently trading in a range between 18,326/5496 on the downside and 19,132/5740 on the upside. It notes that a break above or below this range would dictate the direction of the upcoming trend. The analysis also lists pivot levels for 50 Nifty stocks to watch in the coming week.
The document provides a summary of derivative market activity in India for July 18, 2011. Key points include:
- Nifty futures open interest increased 0.67% while Mini Nifty increased 3.48% as the market closed at 5581.10
- Nifty July futures closed at a premium of 5.85 points and August futures at a premium of 22.60 points
- Implied volatility of at-the-money options decreased from 18% to 17.3%
- Total open interest in the market was Rs. 135,158 crore with stock futures open interest at Rs. 34,675 crore.
The indices opened flat but traded choppily throughout the day. Metal, auto and realty stocks declined while IT stocks gained. The indices are currently trading in a range between 18,326-18,810/5496-5653 on the downside and 19,132-19,094/5740-5700 on the upside. A break above these resistance levels could lead to further gains while a break below support could result in losses extending to 17,805-17,950/5350-5400. Pivot levels for 50 Nifty stocks are provided.
- The key Indian stock indices declined slightly, with the Sensex and Nifty closing down 0.3%.
- GSM subscriber additions in India continued their declining trend in June across most major operators such as Idea, Bharti Airtel, and Vodafone. Total GSM subscriber addition was 9.6 million, down 10% from the previous month.
- Tata Motors reported flat annual global sales growth in June 2011 compared to the previous year.
- South Indian Bank reported a 41.2% year-over-year increase in net profit to Rs. 82 crores for the first quarter of fiscal year 2012, slightly below analyst estimates.
- Business growth remained strong, with advances growth of 31.2% and deposits growth of 35.5% year-over-year. However, net interest margins compressed by 29 basis points sequentially to 2.8% due to a sharp rise in the bank's cost of deposits.
- Non-interest income was boosted by treasury gains, but fee income growth was modest. Asset quality was stable with gross and net NPAs rising marginally, and provision coverage at a comfortable 73.1%.
Bajaj Auto reported marginally lower-than-expected results for the first quarter of fiscal year 2012, with net sales growth of 22.8% year-over-year driven by a 17.7% increase in volumes. However, operating margins contracted by 145 basis points quarter-over-quarter to 19.1% due to a 150 basis point increase in raw material costs. As a result, net profit grew by 20.5% year-over-year to ₹711 crore, which was slightly below analyst estimates. Going forward, the analyst expects further margin pressure and has revised downward its earnings estimates for fiscal years 2012 and 2013 to factor in higher raw material costs and changes to export incentives.
1) Tata Consultancy Services (TCS) reported strong results for the first quarter of fiscal year 2012, outperforming expectations with revenue growth of 6.3% over the previous quarter and 31.4% over the same quarter of the previous fiscal year.
2) A key highlight was 7.4% quarter-over-quarter growth in business volumes. While profit margins declined due to wage hikes, net profit remained flat due to foreign exchange gains.
3) Management maintained a positive outlook, highlighting strong demand environment and deal pipeline, and expects pricing increases later in the fiscal year.
The document summarizes the Indian stock market outlook and performance on July 15, 2011. It reports that domestic indices closed with modest gains of 0.1-0.4%, while global indices declined. Wholesale price inflation in India rose to 9.44% in June 2011, above estimates and persisting above 9% for seven months, driven by increases in primary articles and fuel costs. Key benchmark levels are identified for determining if the market may continue rallying or correct in the near term.
The summary is:
1) The derivative report analyzes the movement in Nifty futures, options, and individual stocks between July 14-15, 2011.
2) Nifty futures open interest decreased while mini Nifty open interest increased as the market closed at 5599.80.
3) Implied volatility of at-the-money options increased from 17.6% to 18%.
The Sensex and Nifty indices opened lower and traded with volatility, closing marginally lower. On the sectoral front, Realty, Banks and Healthcare gained while IT and FMCG fell. The advance-decline ratio favored advancing stocks. On the daily chart, prices tested but did not close above the downward gap area of 18,679-18,589/5,601-5,580 levels. Immediate resistance is seen at 18,735/5,633, while 18,449/5,541 is crucial support.
1) Infosys reported modest revenue growth of 3.2% qoq for 1QFY2012. EBITDA and margins declined due to wage hikes.
2) Guidance for 2QFY2012 revenue growth was lower than expected at 3.5-5% qoq. Annual revenue growth guidance was unchanged.
3) The analyst revised EPS estimates down and cut the target price to INR 3,200 due to macro concerns and muted guidance.
This document summarizes a derivative report from India Research dated July 13, 2011. Some key points:
- The Nifty futures open interest increased 0.51% while Minifty futures open interest rose 8.2% as the market closed at 5526.15.
- Implied volatility of at-the-money options increased from 18% to 19.75%. PCR-OI decreased from 1.20 to 1.15.
- Total open interest of the market is Rs. 125,816 crore and stock futures open interest is Rs. 33,500 crore.
- FII were net sellers of Rs. 969 crore in the cash market segment. Put-call
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Market Strategy july 2010
1. Market Strategy
July 2010
Angel Portfolio Going overweight on heavy metal
Sector Weightage(%) Stocks Ironically, having one of the largest iron-ore reserves in the world, India is
exporting iron ore at the rate of 100mn tonnes p.a. and importing steel at the
Auto & 7.0 Maruti, Fag rate of 12mn tonnes p.a. – clearly not an equilibrium state of affairs. This month’s
Ancillaries Bearings, strategy, therefore, focuses on an interesting confluence of events in the Indian
JK Tyres steel sector, which has thrown up highly profitable opportunities for some of the
Banking 28.0 SBI, Axis Bank, smaller steel companies, such as Electrosteel Castings, Godawari Power & Ispat
ICICI Bank, and Bhushan Steel.
HDFC Bank
FMCG 3.0 ITC Over the next two-three years, these companies are set to benefit from strong
volume growth and lucrative mine allocations. Operating margins are expected to
Hotels 3.0 Taj GVK
remain healthy due to favorable demand-supply dynamics, resulting from high
Infra & 16.0 L&T, Reliance Infra, domestic demand growth of over 10%, even as debt-strapped balance sheets of
Cap Goods Madhucon Projects, several larger players are acting as a deterrent to any indiscriminate expansion.
IVRCL Infra,
Jyoti Structures Integrated Indian steel players also enjoy a US $150/tonne low-cost advantage,
Media 2.0 Jagran Prakashan as compared to companies that are not iron-ore integrated, and can comfortably
Metals 9.0 Electrosteel Castings, tackle any threat of imports from countries such as China.
Hindalco, Godawari
Power, Bhushan Steel
Steel demand in India is expected to grow much faster than the
Oil & Gas 10.0 Reliance Industries
world’s average
Pharma 4.0 Dishman Pharma,
We expect steel consumption in India to grow at a 10% CAGR over the next five
Lupin years, as the country’s per-capita consumption (which is currently at 44kg) catches
Real Estate 3.0 Anant Raj Industries up with the global average of 190kg. Presently, with economic activity picking up,
Software 11.0 Infosys, TCS, steel consumption in India is rising faster than production, mainly led by robust
Tech Mahindra, demand from the housing, infrastructure and automobile sectors. In FY2010,
Mphasis Indian steel consumption grew by 7.6% to 56.3mn tonnes, and steel production
Telecom 4.0 Bharti Airtel grew only by 4.2%. In April 2010, Indian steel consumption continued to grow by
9.6% yoy to 4.14mn tonnes while steel production rose by just 5.3% yoy.
Top Picks
Company (Rs) CMP TP
High debt levels are putting a check on domestic capacity
expansion
Bharti Airtel 308 360
Despite having favorable operating costs, debt levels of domestic steel companies
ICICI Bank 872 1,145
are fairly high (1.8x Net Debt : Equity, excluding SAIL). In contrast to the cement
Maruti Suzuki 1,423 1,685 sector, where debt levels of companies are quite low (0.5x Net Debt : Equity), high
TCS 775 921 debt levels in the domestic steel sector are ensuring that companies do not
undertake any indiscriminate expansion. This is expected to keep demand-supply
Tech Mahindra 774 1,168 dynamics favorable for the sector over the next few years.
Anant Raj 120 178
Exhibit: High Net Debt : Equity putting check on indiscriminate expansion
Dishman Pharma 212 279
(x)
Electrosteel Castings 48 72
2.0
Bhushan Steel 1,484 1,979
Jagran Prakashan 125 160 1.6
Godawari Power 225 322 1.2
FAG Bearings 595 712
0.8
Taj GVK 162 240
Greenply 193 291 0.4
JK Tyres 167 237 0.0
Note: Investment period – 12 Months Steel Sector * Cement Sector
BSE Sensex (17,834) and Price as on Net Debt : Equity
July 9, 2010 Source: Company, Angel Research. Note: Steel sector Net Debt : Equity excludes SAIL, for whom
major capacity additions are in any case expected post FY2012E
Please refer to important disclosures at the end of this report.
2. Market Strategy
China’s competitiveness reduced, with withdrawal of export
rebates and increased cost
During April–May 2010, India’s steel imports grew by 79% yoy to 1.79mn tonnes
(mainly from China), as Chinese export prices fell by ~US $100/tonne in May
2010. However, the Chinese government withdrew the 9% rebate on HRC and
13% rebate on CRC with effect from July 15, 2010, which led to an immediate
increase of US $30 in export prices. We believe the withdrawal of rebate would
lessen the import pressure on Indian steel companies as the competitiveness of
Chinese companies is reduced by ~US $50/tonne. Further, with iron ore and
coking coal prices increasing by 12–30% for 2QFY2011E, we believe steel prices
will find support at current levels.
Lasting low-cost advantage
With rising raw material costs, steel mills across the world are focusing on
integration. India is self-sufficient in iron ore and, in fact, exported nearly 100mn
tonnes of iron ore in FY2010. Integrated domestic steel players, including Tata
Steel and SAIL, are resilient to the volatility in iron ore cost and enjoy a cost
advantage of ~US $150/tonne as compared to companies that are not iron-ore
integrated.
Overweight on Metals
The icing on the cake is that due to the recent short-term correction in steel prices,
prices of these stocks have also come down, and they are now available at
attractive valuations. As a result, we have gone overweight on metal stocks in our
model portfolio, giving a weightage of 9.0% vis-à-vis the 7.8% weightage in the
BSE-100. We rate Electrosteel Castings, Godawari Power & Ispat and Bhushan
Steel amongst our top picks in the space, with strong upsides in the range of
35–50% over the next 12 months.
Valuation Snapshot
Company CMP Target Reco P/E (x) P/BV (x) EV/EBITDA (x) RoE (%) RoCE (%)
(Rs) Price (Rs) FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E FY11E FY12E
SAIL 194 - Neutral 12.5 11.6 2.1 1.9 8.0 7.3 18.2 17.0 17.2 16.9
Tata Steel 496 697 Buy 8.1 8.7 1.4 1.2 6.5 5.9 17.9 14.7 11.8 11.7
JSW Steel 1,082 1,360 Buy 10.0 8.4 1.8 1.5 6.7 5.3 22.1 21.3 15.0 16.7
Bhushan Steel 1,484 1,979 Buy 6.5 5.0 1.5 1.2 7.2 5.9 26.0 26.1 12.6 14.0
Electrosteel 48 72 Buy 7.3 7.1 0.9 0.8 5.6 4.9 14.2 13.1 11.9 12.3
Prakash Inds 181 232 Buy 8.2 5.5 1.3 1.0 5.7 4.3 19.7 23.2 16.6 18.7
Godawari Power 225 322 Buy 4.2 3.2 0.9 0.7 3.2 2.1 26.1 26.7 21.2 23.5
Monnet Ispat 498 534 Accumulate 11.1 7.7 1.5 1.3 9.6 7.8 14.8 17.6 11.7 12.7
Sarda Energy 268 290 Accumulate 7.6 6.1 1.4 1.1 5.5 4.1 19.4 20.2 15.1 16.5
Source: Company, Angel Research
July 2010 2
3. Market Strategy
New Investment Ideas
Polyplex Corporation (CMP: Rs.272/ TP: Rs.418/ Upside: 54%)
Polyplex Corporation (PCL) is one of the leading manufacturers of biaxially
oriented polyester (PET) films globally with manufacturing facilities in India,
Thailand and Turkey.
PCL recently forayed into the lucrative, high-growth BOPP and CPP segments with
a BOPP capacity of 35,000tpa in India as well as a new 10,000 tpa CPP plant in
Thailand. In PET films, PCL increased capacity in India by 155% in FY2010.
Overall, on the back of the company's capacity expansion moves, we expect it to
post 20% CAGR in consolidated sales over FY2010-12E.
The company is also available at inexpensive valuation of 0.6x FY2010E P/BV,
while its peers Jindal Poly and Ester Industries are trading between 0.9-1.1x
FY2010E P/BV. PCL holds 70% stake in its listed Thailand subsidiary Polyplex
Thailand (PTL), which has a market cap of Rs950cr and is available at FY2010E
P/BV. However, PCL has a market cap of Rs426cr or 0.6x FY2010E P/BV, which is
at more than 55% discount to PTL's market cap and at a discount of nearly 36% to
PCL's 70% stake in PTL, which works out to around Rs665cr.
Over the past five years, PCL has traded in the range of 0.3-0.7x one year forward
P/BV, and is currently trading at 0.5x FY2012E P/BV. Considering the 46% CAGR
in earnings over FY10-12E, we value PCL at the upper band (0.7x) FY2012E P/BV.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,581 18.5 129 81.0 17.1 3.4 0.53 2.5 0.5
FY2012E 1,733 19.0 154 96.4 17.4 2.8 0.45 1.7 0.3
Alembic (CMP: Rs.56/ TP: Rs.74/ Upside: 32%)
Alembic has announced de-merger of its Pharma business (comprises its domestic
formulation, international generic and API businesses) into a separate company
named Alembic Pharma.
With this, Alembic plans to insulate its relatively high-margin Pharma business
from the loss-making Pen-G business (API facility at Vadodara). Alembic also plans
to develop its 70 acre land asset going forward.
We believe that de-merger of the company into two - Alembic and Alembic
Pharma - is a long term positive as it unlocks value for both the businesses and
paves the way to rope in future investors.
We recommend Buy on the stock valuing Alembic on a SOTP basis with a fair
value of Rs74 ascribing Rs47 per share to Alembic Pharma at 10x FY2012E EPS,
valuing Alembic’s 29.2% stake in Alembic Pharma at 20% discount to Rs11 per
share, Alembic’s API business at Rs5 per share and valuing Land bank at Rs11 per
share.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,315 12.4 74.5 5.6 18.8 10.0 1.7 7.0 0.9
FY2012E 1,478 12.0 87.0 6.5 19.0 8.6 1.5 6.2 0.7
Note: Alembic estimates currently includes the demerged pharma business
July 2010 3
5. Market Strategy
Top Picks
Large Caps
Bharti Airtel (CMP: Rs.308/ TP: Rs.360/ Upside:30%)
Bharti continues to maintain its leadership status in customer and revenue market
share helped by strong subscriber addition (33.7mn in FY2010) and high ARPU of
Rs253 (Industry average of Rs164).
The competition (price war) is unlikely to further intensify as the cost of operation
for the new players is high and unsustainable. We believe that Bharti with high
EBIDTA/minute of Rs 0.16 is relatively placed better than peers.
Valuations for Zain are perceived as expensive but would still be value accretive on
account of financial leverage from the Leveraged Buy Out structuring of the deal.
Bharti bagged 3G spectrum in 13 circles with an estimated outlay of Rs12,295cr,
which would cover 65% of its subscriber base and 69% of its revenues; this would
stress the company’s Debt position and impact Earnings by 3%.
Bharti is currently trading at 12.4x FY2012E EPS, a significant discount to its
historical average of 26.0x and FY2012E Sensex P/E of 13.8x and hence we
maintain a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 42,773 35.3 8,350 22.0 18.6 14.0 2.4 7.8 2.8
FY2012E 47,328 35.6 9,449 24.9 17.9 12.4 2.1 6.9 2.4
ICICI Bank (CMP: Rs.872/ TP: Rs.1,145/ Upside: 31%)
The Bank is well-positioned to gain market share on the back of substantial branch
expansion (substantial 1508 branches added since 3QFY2008, including entire
branch network of BoR) as well as strong Capital Adequacy at 19.4% (Tier-I at
14.2%).
Net Interest Margins of the Bank are expected to sustain on the back of increase in
CASA ratio to 42% in FY2010 from 29% in FY2009.
On the back of an improving economic environment, NPA losses are expected to
start declining. The Bank has also done lower restructuring of loans than PSU
Banks (10% of Net Worth v/s 40%+ for most PSU Banks).
The stock is trading at attractive valuations of 1.7x FY2012E P/ABV. Hence, we
maintain a Buy on the stock.
Y/E Op Inc. NIM PAT EPS ABV ROA ROE P/E P/ABV
March (Rs cr) (%) (Rs cr) (Rs) (Rs) (%) (%) (x) (x)
FY2011E 17,738 2.6 4,948.2 44.4 487 1.2 11.5 19.6 1.8
FY2012E 21,711 2.6 6,713.2 60.2 518 1.4 15.1 14.5 1.7
Maruti Suzuki (CMP: Rs.1,423/ TP: Rs.1,685/ Upside: 18%)
Given India's low car penetration (12 per 1,000 v/s 21 per 1,000 in China) and
with PPP-based per capita estimated to approach the empirically-observed
inflection point for car demand of US $5,000 over the next 4-5 years, we expect
13% CAGR in domestic volumes over FY2010-12E.
July 2010 5
6. Market Strategy
Maruti has a sizeable competitive advantage over foreign entrants due to its
widespread distribution network (2,767 service and 681 sales outlets).
Moreover, with Suzuki Japan making Maruti a manufacturing hub for small cars,
to cater to increasing global demand caused by rising fuel prices and stricter
emission standards, we estimate 18% CAGR in export volumes over FY2010-12E.
We believe attractive valuations of 13.5x FY2012E EPS, which provides an entry
point for investors looking to play the India consumer story.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 33,519 11.2 2,674 92.5 19.2 15.4 2.8 8.8 1.0
FY2012E 39,320 11.3 3,043 105.3 17.8 13.5 2.4 7.1 0.1
TCS (CMP: Rs.775/ TP: Rs.921/ Upside: 20%)
TCS continues to maintain its strong revenue growth and out performance led by
strong deal wins on the back of improving global macro-economic scenario.
Strong client addition, deal wins, robust hiring by IT companies, positive guidance
by peers and new services expansion highlights the improved business scenario
and revival in the overall IT spending.
TCS has displayed strong margin resilience with an improvement in profitability
(EBIDTA Margin improved from 25.8% in FY2009 to 28.9% in FY2010) despite
weak demand and declining pricing realisations. We have valued TCS at 22x on
FY2012E Earnings in line with our Target multiple for Infosys. Hence, we maintain
a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 33,351 28.7 7,413 37.9 31.9 20.4 6.0 15.2 4.3
FY2012E 38,821 28.2 8,200 41.9 29.8 18.5 5.1 12.9 3.6
Tech Mahindra (CMP: Rs.774/ TP: Rs.1,168/ Upside: 66%)
Restructuring deal with BT ensures compensatory volumes; Muted pricing terms
may enhance with an improvement in the client's financial health.
Sustained volume traction from non-BT clients (CQGR of 7.5% in last eight
quarters) continues to provide revenue growth momentum, margin improvement,
geographical diversification and reduced client concentration to the company.
Positive news flow from Satyam in the form of client retention, new deal wins and
favourable settlement with Upaid provides comfort on future business prospects.
The stock is trading at a substantial 65% discount (after deducting value of Satyam
stake) to Infosys on a 1-year forward P/E v/s a 5-year average discount of 20%
and 1x FY2012E EV/Sales (v/s Peer average of 3x). Hence, we maintain a Buy on
the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 4,989 24.0 763 58.3 24.9 13.3 2.8 5.4 1.3
FY2012E 5,704 23.0 876 67.0 22.0 11.6 2.2 4.3 1.0
July 2010 6
7. Market Strategy
Mid Caps
Anant Raj Industries (CMP: Rs.120/ TP: Rs.178/ Upside: 48%)
Almost all of ARIL's land bank (872 acres) is exclusively located in the NCR within
50km of Delhi, with approximately 525 acres in Delhi. This land bank has been
acquired at an historical average cost of Rs300/sq ft.
We expect ARIL's residential projects to drive its near-term operational visibility and
help register Rs600cr Profit over the next three years. ARIL recently launched two
residential projects in NCR; Kapashera (0.28mn sq. ft.) and Manesar (1mn sq. ft.)
for Rs5,000/sq. ft. and Rs2,500/sq. ft., respectively. Management has indicated
that it has entirely sold kapashera project and ~20% of Manesar project. Further,
ARIL has 70% pre-lease commitments at its Manesar IT Park, coupled with five
hotels getting operational by FY2011E, which will improve rental visibility.
ARIL is trading at a 43% discount to its NAV. The stock is trading at 9.2x FY2012E
EPS and 0.9x FY2012E P/BV and hence we recommend a Buy on stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 342 93.5 276 8.8 7.3 13.7 1.0 8.9 8.4
FY2012E 610 90.4 411 13.1 9.9 9.2 0.9 6.2 5.6
Bhushan Steel (CMP: Rs.1484/ TP: Rs.1979/ Upside: 33%)
Bhushan Steel has extended its presence in the steel value chain with the
commissioning of its 1.9mn tonnes HR steel capacity at Orissa.
We expect BSL to register 26.2% CAGR in volumes over FY2010- 15E, on
completion of Phase-III expansion by October 2012, much higher than its peers,
who are expected to register volume growth of 10-14% CAGR.
Further EBITDA/tonne is expected to be at the higher end of the industry range (US
$325+) on account of adoption of BF-EAF technology and lower conversion costs
We recommend a BUY on the stock with a target price of Rs1,979, valuing the
stock at 6.5x FY2012E EV/EBITDA
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 6,290 37.5 968 228.0 26.0 6.5 1.5 7.2 2.7
FY2012E 7,131 41.1 1,259 296.4 26.1 5.0 1.2 5.9 2.4
Dishman Pharma (CMP: Rs.212/ TP: Rs.279/ Upside: 32%)
Dishman has incurred organic capex of Rs300cr in the last three years towards
expansion of existing facilities at its Bavla unit and building the China and HPAPI
facilities.
Post all these facilities coming on-stream FY2011E onwards, Dishman would
strengthen its ties with the Global Innovators leading to stable Revenue flow over
the long run.
July 2010 7
8. Market Strategy
Further, Revenues from the Abbott-Solvay contract, which constituted 13% of
FY2010 Sales, have also started normalizing. Also, the Carbogen Amics (41% of
FY2010 sales) is expected to witness an uptrend in FY2011. Overall, the company
has guided towards 20% growth in Top-line for FY2011E.
Dishman is currently trading at attractive valuations of 9.9x FY2012E Earnings.
Hence, we recommend a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,099 24.1 142 17.4 15.8 12.2 1.8 9.2 2.2
FY2012E 1,335 25.5 174 21.4 16.8 9.9 1.5 7.2 1.8
Electrosteel Castings (CMP: Rs.48/ TP: Rs.72/ Upside: 51%)
Electrosteel Castings (ECL) is venturing into steel-making through its subsidiary
Electrosteel Integrated (EIL), which is setting up a 2.2mn tonne steel plant expected
to be commissioned by FY2012E. Further, ECL plans to list EIL to raise ~Rs300cr,
which is likely to unlock value for ECL.
ECL's backward integration initiatives through allocation of coking coal mines are
expected to result in expansion of EBITDA Margin by 1,304bp over FY2009-12E.
The company is also awaiting final environmental clearance for its iron ore mine,
which will further lower costs, but has not been factored in our estimates.
We recommend a Buy on the stock, valuing the Core business at 7x FY2012E
FDEPS and its investments in the Steel business at 1x Book Value.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,706 26.2 246 6.5 14.2 7.3 0.9 5.6 1.5
FY2012E 1,818 28.0 254 6.7 13.1 7.1 0.8 4.9 1.4
Godawari Power & Ispat (CMP: Rs.225/ TP: Rs.322/ Upside: 43%)
Godawari Power commissioned 0.6mn tonne pellet plant in February 2010. We
expect GPIL to save ~Rs125cr from increasing iron ore production from its Ari
Dongri mines and its subsequent conversion into pellets. Further, the capacity of
the mine is expected to increase to 0.9mn tonne by FY2011E, not factored in our
estimates.
Currently, trial production is underway at the 0.6mn tonne pellet plant, which is
being set up in its 75% subsidiary Ardent Steel. It expects to start commercial
production by August 2010. We expect the plant to contribute Rs18cr and Rs52cr
to the company’s EBITDA in FY2011E and FY2012E, respectively.
The company has secured the necessary clearance for its Boria Tibu mine and
production is expected to start post monsoon. The mine has total reserves of
7.0mn tonne and iron ore of ~62% Fe content. The company expects to produce
~200,000 tonnes in FY2011E.
With earning expected to grow at a CAGR of 94.2% over FY2010-12E. We
maintain our Buy recommendation, valuing the stock at 3.5x FY2012E EV/EBITDA
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,084 25.6 150 53.6 26.1 4.2 0.9 3.2 0.8
FY2012E 1,265 26.1 198 70.9 26.7 3.2 0.7 2.1 0.5
July 2010 8
9. Market Strategy
Jagran Prakashan (CMP: Rs.125/ TP: Rs.160/ Upside: 25%)
Jagran (JPL) continues to post steady growth in revenues, primarily aided by
Advertisement revenues owing to its strong foothold in the Hindi belt and rising
color ad-inventory coupled with ad-rate hikes. Moreover, the Mid-Day deal (not
factored in our numbers) gives Jagran entry into the lucrative English markets thus,
filling the gap in its portfolio.
We expect JPL to sustain its operating margins at 30% levels for FY2011-12E, as
the company continues to benefit from benign newsprint prices (we have modeled
in ~10% rise in newsprint cost). Moreover, lower losses in JPL’s new initiatives and
higher operating leverage (as ad-rate hikes get absorbed), renders us optimism.
At the CMP of Rs125, Jagran is available at 15.8x FY2012E Earnings, which is
highly attractive given its 16% Earnings CAGR. The stock is attractive given its high
return ratios and strong leadership position. Moreover, Blackstone’s recent
investment of Rs225cr in the company’s promoter entity and strong Operating
Cash flows make Jagran well placed in terms of funding future growth. We
maintain a Buy on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,088 29.8 197 6.6 31.0 19.0 5.7 11.7 3.5
FY2012E 1,260 30.6 237 7.9 34.3 15.8 5.2 9.8 3.0
Small Caps
FAG Bearings (CMP: Rs.593/ TP: Rs.712/ Upside: 20%)
With increasing mechanisation, demand for bearings is expected to exceed overall
IIP growth in India. Consequently, the Industrial Segment (which accounts for
almost 50% of the Indian Bearings market) offers immense growth opportunity for
the Bearings industry.
Moreover, the Bearings Segment has a direct correlation with Auto Sector growth,
which is expected to grow at around 10% per annum over the next 2-3 years.
The stock is currently trading below its average historical valuations at 10x
CY2011E EPS and 1.6x CY2011E BV (v/s average of 2x 1-year forward BV).
Further, we believe that FAG Bearings scores well over its peers and is a good
long-term investment pick in view of its strong financials.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Dec (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
CY2010E 959 15.0 85 51.3 17.1 11.6 1.8 5.4 0.8
CY2011E 1,084 15.4 99 59.4 17.0 10.0 1.6 4.5 0.7
Greenply Industries (CMP: Rs.193/ TP: Rs.291/ Upside: 51%)
GIL is foraying into the lucrative, high-growth MDF market, with the largest MDF
plant in India (1,80,000m3/yr capacity), while continuing its strong expansion in
laminates (88% capacity expansion), that is estimated to drive 21% CAGR in sales
over FY2010-12E.
July 2010 9
10. Market Strategy
GIL has leading plywood and laminates brands, supported by ad-spend as high as
3.3% of total sales (around 10% of laminates sales). The company also has the
largest distribution network of over 15,000 dealers in industry. These advantages
underpin the strong RoE profile of the company's brand-driven business model
(21% over FY2010-12E).
The stock is trading at attractive valuations of 5.3x FY2012E EPS (as against its
historical range of 3.3-9.3x 1-year forward EPS). Hence, we recommend a Buy on
the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 1,088 14.0 57 23.5 18.4 8.2 1.4 5.4 0.8
FY2012E 1,279 15.0 88 36.4 22.8 5.3 1.1 4.2 0.6
JK Tyre & Industries (CMP: Rs.167/ TP: Rs.237/ Upside: 42%)
Given the shortage of radial tyres in the Trucks & Buses Segment, the company is
set to fully utilise its enhanced capacity, and that too at higher realisations (70% of
India's total truck/bus radial tyre production), driving strong earnings growth and
improving RoEs.
Further, the Tornel acquisition turned profitable in FY2010, aided by the
restructuring exercise implemented by the company.
The stock is available at attractive valuations of 3.5x FY2012E EPS and hence we
recommend a Buy.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 5,523 9.2 160 39.0 9.7 4.3 0.7 3.9 0.4
FY2012E 6,001 10.1 195 47.5 15.9 3.5 0.6 3.3 0.3
TajGVK Hotels (CMP: Rs.162/ TP: Rs.240/ Upside: 48%)
Robust growth in foreign tourist arrivals (10.8% growth during January to June
2010 v/s -9% in the corresponding period last year) and increased domestic tourist
activity is enabling hoteliers to overcome the tough phase witnessed in the recent
past.
Signs of improving demand are visible with occupancy rates staying above ~70%
since 3QFY2010 and Average Room Rates firming up in 1QFY2010.
Considering the revival in demand happening in business destinations like
Hyderabad and Chennai, where TAJGVK has presence, we expect the company to
be a significant beneficiary in the coming quarters.
Moreover, in comparison to its peers, the stock trades at attractive valuations of
Rs1cr FY2012E EV/Room and 13.3x FY2012E EPS. Hence, we recommend a Buy
on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (Rs cr) (%) (Rs cr) (Rs) (%) (x) (x) (x) (x)
FY2011E 298 40.6 56.2 9.0 17.7 18.1 3.0 9.6 3.9
FY2012E 342 42.8 76.3 12.2 20.3 13.3 2.5 7.5 3.2
July 2010 10
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Ratings (Returns): Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%) Reduce (-5% to -15%) Sell (< -15%)
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Research Team
Fundamental:
Sarabjit Kour Nangra VP-Research, Pharmaceutical sarabjit@angeltrade.com
Vaibhav Agrawal VP-Research, Banking vaibhav.agrawal@angeltrade.com
Vaishali Jajoo Automobile vaishali.jajoo@angeltrade.com
Shailesh Kanani Infrastructure, Real Estate shailesh.kanani@angeltrade.com
Anand Shah FMCG, Media anand.shah@angeltrade.com
Deepak Pareek Oil & Gas deepak.pareek@angeltrade.com
Sushant Dalmia Pharmaceutical sushant.dalmia@angeltrade.com
Rupesh Sankhe Cement, Power rupeshd.sankhe@angeltrade.com
Param Desai Real Estate, Logistics, Shipping paramv.desai@angeltrade.com
Sageraj Bariya Fertiliser, Mid-cap sageraj.bariya@angeltrade.com
Viraj Nadkarni Retail, Hotels, Mid-cap virajm.nadkarni@angeltrade.com
Paresh Jain Metals & Mining pareshn.jain@angeltrade.com
Amit Rane Banking amitn.rane@angeltrade.com
Jai Sharda Mid-cap jai.sharda@angeltrade.com
Sharan Lillaney Mid-cap sharanb.lillaney@angeltrade.com
Amit Vora Research Associate (Oil & Gas) amit.vora@angeltrade.com
V Srinivasan Research Associate (Cement, Power) v.srinivasan@angeltrade.com
Aniruddha Mate Research Associate (Infra, Real Estate) aniruddha.mate@angeltrade.com
Mihir Salot Research Associate (Logistics, Shipping) mihirr.salot@angeltrade.com
Chitrangda Kapur Research Associate (FMCG, Media) chitrangdar.kapur@angeltrade.com
Vibha Salvi Research Associate (IT, Telecom) vibhas.salvi@angeltrade.com
Pooja Jain Research Associate (Metals & Mining) pooja.j@angeltrade.com
Technicals:
Shardul Kulkarni Sr. Technical Analyst shardul.kulkarni@angeltrade.com
Mileen Vasudeo Technical Analyst vasudeo.kamalakant@angeltrade.com
Derivatives:
Siddarth Bhamre Head - Derivatives siddarth.bhamre@angeltrade.com
Jaya Agarwal Derivative Analyst jaya.agarwal@angeltrade.com
Institutional Sales Team:
Mayuresh Joshi VP - Institutional Sales mayuresh.joshi@angeltrade.com
Abhimanyu Sofat AVP - Institutional Sales abhimanyu.sofat@angeltrade.com
Nitesh Jalan Sr. Manager niteshk.jalan@angeltrade.com
Pranav Modi Sr. Manager pranavs.modi@angeltrade.com
Sandeep Jangir Sr. Manager sandeepp.jangir@angeltrade.com
Ganesh Iyer Sr. Manager ganeshb.Iyer@angeltrade.com
Jay Harsora Sr. Dealer jayr.harsora@angeltrade.com
Meenakshi Chavan Dealer meenakshis.chavan@angeltrade.com
Gaurang Tisani Dealer gaurangp.tisani@angeltrade.com
Production Team:
Bharathi Shetty Research Editor bharathi.shetty@angeltrade.com
Bharat Patil Production bharat.patil@angeltrade.com
Dilip Patel Production dilipm.patel@angeltrade.com
For Private Circulation Only.