Update On Shirpur Gold Refinery Ltd - Sharekhan

Key points

* Volatility in performance weighs down the stock:

Shirpur Gold Refinery, part of Essel Group, has shown volatility in its financial performance lately. The investments made in backward integration and setting up subsidiaries is yet to yield desired results while the refining margins on gold has b

5/07/2017 12:15:36 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Tata Steel Ltd For Target Rs.581.00 - Motilal Oswal

FCF generation after seven years

Raising TP; upgrading to Neutral

Structural improvements

Tata Steel’s (TATA) business is structurally improving with (1) exit from weak businesses of long products and specialty businesses in the UK, (2) persistence to de-risk the British Pens

5/07/2017 12:06:54 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold Ipca Laboratories Ltd For Target Rs.480.00 - Emkay

Normalcy restored but long climb back to growth

Result highlights

* Even though Q4 a seasonally weak quarter, overall results lower than expected with big miss on EBITDA and net income

* FY18 could be a volatile year with India business impacted on account of GST led disruption, on the other hand IP

5/07/2017 11:58:08 AM | Posted in Broking Firm Views - Long Term Report read full news
Update On Sundram Fasteners Ltd - Sharekhan

Key points

* Marked improvement in financial performance in FY2017; robust performance to continue for Q1FY2018:

Sundram Fasteners (SFL) has reported a stellar operating performance for FY2017 registering an earnings growth of 40% at the consolidated level. Earnings growth was primarily driven by improved mar

5/07/2017 11:53:19 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Jindal Steel and Power Ltd For Target Rs.184.00 - Motilal Oswal

Strong steel volume growth to drive turnaround

Angul expansion on track; Maintain Buy

Capacity expansion in steel at Angul to drive strong volumes growth

* Steel mill expansion at Angul is progressing well, and once completed, JSP’s India steel capacity would increase from ~5

5/07/2017 11:48:57 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy KNR Construction Ltd For Target Rs.240.00 - Emkay

Execution momentum intact

Result highlights

* KNRC’s Q4FY17 standalone revenue jumped 63% YoY to Rs.4.8bn vs. our expectation of Rs.3.5bn. Hence, EBITDA of Rs722mn (EBITDA margin of 15%) and APAT of Rs524mn was well ahead of estimates.

* KNRC’s debt levels remain comfortable with gross d

5/07/2017 11:42:34 AM | Posted in Broking Firm Views - Long Term Report read full news
Update On L&T Finance Holdings Ltd - Sharekhan

Key points

Improving return ratios with additional rerating triggers:

LT finance Holding has gained ~65% since past 6 months on the back of impressive performance during the past few quarters. However, we retain our positive stance on the stock on the back of improving return on equity (sequential impr

5/07/2017 11:33:19 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy JSW Steel Ltd For Target Rs.280.00 - Motilal Oswal

Tested, proven low-cost growth to double stock price

Operating cost to decline by INR1,000/t; Reiterating Buy

 

Leveraging its existing infra and expertise to grow at low cost

JSW Steel (JSTL) is the largest Indian steel producer and fastest growing steel company in

5/07/2017 11:26:27 AM | Posted in Broking Firm Views - Long Term Report read full news
Sell Steel Authority of India Ltd For Target Rs.49.00 - Emkay

In line performance!

* Revenue came in line with our estimate at Rs142bn, up 11% YoY and 13% QoQ, primarily driven by better realization at Rs 41,306/tn (+23%/+8% YoY/QoQ) while sales volume stood at 3.45 mt (-10%/+3% YoY/QoQ) vs our expectations of 3.48 mt.

* EBITDA loss came in at Rs 2.6 bn (vs our estimate of Rs 2.7 bn loss). EBITDA/ tonne

5/07/2017 11:19:33 AM | Posted in Broking Firm Views - Long Term Report read full news
Buy Apar Industries Ltd For Target Rs.1,077.00 - Emkay

Product mix and GST to reap in benefits from FY19; Maintain BUY

* Apar reported a strong Q4FY17 earning growth which surpassed our estimate. While revenues declined 3.7% YoY to Rs13.0 bn; EBITDA went up 12.1% YoY to Rs1.1 bn and APAT increased 29.5% YoY to Rs478 mn during the quarter

* Revenue declined across the conductors by 20.4% YoY to Rs

4/07/2017 2:16:43 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Hero MotoCorp Ltd For Target Rs.3,690.00 - Motilal Oswal

Focusing on new products for market share gain

Spells out micro market strategy for ramping up exports

HMCL’s FY17 annual report highlights the company’s efforts to maintain market leadership in the domestic market – new product launches, customer engagement, and electric vehicle (EV) strategy. Also, it sp

4/07/2017 2:11:44 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Orient Refractories Ltd For Target Rs.183.00 - Emkay

Demonetization impacted performance; capex to accelerate growth

* Orient Refractories Ltd (ORIENT) positively surprised on EBITDA and PAT margin despite lower than expected performance on revenue front. During the quarter, Top-line, EBITDA, and PAT went-up 4.1%/3.4%/8.6% Y/Y, respectively.

* Export (Rev Contr. 20%) grew-by 14% Y/Y and domesti

4/07/2017 2:05:37 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Deepak Fertilisers And Petrochemicals Corporation Ltd For Target Rs.351.00 - Emkay

Chemical segment drives profitability; Maintain Buy

* Chemical segment revenues increased 30% yoy to Rs9bn (beat our estimate of Rs6.8bn) while the segment’s EBIT jumped 57% yoy to Rs1.2bn (marginally ahead of our estimate of Rs1.1bn). Margins improved by 235bps yoy to 13.3% (lower than our estimate of 16%)

* Fertiliser revenues dropped

4/07/2017 1:53:03 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy ONGC Ltd For Target Rs.195.00 - Motilal Oswal

Lowering crude oil price estimates

Stock price correction provides an opportunity to buy

Crude oil prices decline despite production cut extension

* On 25 May 2017, OPEC and non-OPEC countries agreed to extend oil production cut until March 2018 in a bid to boost oil prices.

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4/07/2017 1:46:59 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy ITC Ltd For Target Rs.380.00 - Sharekhan

Key points

* Event: CBEC removes excise and additional excise duty on cigarettes; will reduce the tax rate on cigarette by 5-6%:

The Central Board of Excise and Customs (CBEC) removed excise and additional excise duty (AED) on cigarettes, while the National Calamity Contingent Duty (NCCD) will continue to re

4/07/2017 1:31:27 PM | Posted in Broking Firm Views - Long Term Report read full news
Neutral Avenue Supermarts Ltd For Target Rs.804.00 - Motilal Oswal

Delivering value

Expect PAT CAGR of 41% over FY17-21

* Size of India’s retail sector stands at USD616bn with share of organized brick and mortar retail at USD55bn (9%). While overall retail is expected to grow at a CAGR of 11.7% to USD960b by 2020, organized brick and mortar retail is expected to grow at a faster CAGR of 20.2% to USD

4/07/2017 12:26:09 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Monte Carlo Fashions Ltd For Target Rs.550.00 - Emkay

Weak margins drag profitability

* Results below estimates; Revenue at Rs 956mn, up 48% yoy; EBITDA loss of Rs 96mn, impacted by weak gross margins and higher other expenses; Net loss of Rs 71mn, partially aided by higher other income

* Tactical discounting during the quarter has helped alleviate the inventory build-up. The company expects gro

4/07/2017 12:13:41 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Dynamatic Technologies Ltd For Target Rs.3,396.00 - Emkay

Muted performance

* Dynamatic Technologies (DYTC) operational performance was below our expectations. Revenues declined by 2.5% YoY. EBIDTAM declined by 330bps YoY and APAT declined by 86% YoY.

* While revenues in the hydraulics and aerospace segments increased by 3% and 15% YoY, it declined by 10% YoY in the automotive segment mainly impacte

3/07/2017 4:05:01 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Tech Mahindra Ltd For Target Rs.465.00 - Motilal Oswal

Steeper-than-anticipated challenges at the start of the year

Revenue headwinds to add to margin woes in 1Q

Following our interaction with Tech Mahindra (TECHM) management, we see the start of FY18 marred with challenges as revenue headwinds compound profitability stress. Key highlights:

 

3/07/2017 3:50:16 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Fortis Healthcare Ltd For Target Rs.240.00 - Motilal Oswal

Possibility of three-step value unlocking

* According to media reports, IHH Healthcare Bhd, Asia’s largest private hospital operator, may announce acquisition of a controlling stake in Fortis Healthcare Ltd (FORH) and SRL Diagnostics. In this note, we have evaluated the possibility of a three-step value unlocking in FORH: 1) IHH/private equity bu

3/07/2017 3:44:24 PM | Posted in Broking Firm Views - Long Term Report read full news
Hold NHPC Ltd For Target Rs.30.00 - Emkay

No asset capitalisation in FY18E; upgrade to HOLD on fair valuation

* For Q4FY17, PAT came in at Rs1.7bn which was significantly below our and consensus expectation of Rs3.9bn. This was primarily due to poor hydrology, leading to low rainfall and higher share of Secondary energy sale on YoY basis, resulting in low realisation.

* NHPC didn&rsq

3/07/2017 3:23:51 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Tata Power Company Ltd For Target Rs.68.00 - Motilal Oswal

Challenges remain, Trombay Unit-6 PPA at risk

Maintain Sell

We met Tata Power’s (TPWR) management and visited its Trombay power plant. Key highlights:

* Trombay visit: While Mumbai coal/RLNG-based generation assets are uncompetitive, their PPAs are likely to get extended for a

3/07/2017 2:55:45 PM | Posted in Broking Firm Views - Long Term Report read full news
Buy Berger Paints India Ltd For Target Rs.245.00 - Emkay

Steady performance amid challenges; Retain Hold

* Inline performance - Consolidated revenue at Rs11.1bn, up 8.2% yoy; EBITDA up 3.5% yoy to Rs 1.6bn; EBITDA margin at 13.8% (-70bps yoy); APAT at Rs1.1bn, +16% yoy

* Decorative volume growth at ~11%. Have gained marginal market share (0.1-0.2%) in FY17. General and Automotive business reported

3/07/2017 2:41:22 PM | Posted in Broking Firm Views - Long Term Report read full news
Update On Prabhat Dairy Ltd - Motilal Oswal

Solid institutional player

Moving toward consumer business

Incorporated in 1998 by the Nirmal family, Prabhat Dairy (Prabhat) is a fully integrated milk & dairy products company engaged in the sale of products to institutional and retail customers. The company sells specialty and comanufactured products to its institutio

3/07/2017 2:34:05 PM | Posted in Broking Firm Views - Long Term Report read full news
Sell Thermax Ltd For Target Rs.795.00 - Emkay

Recovery getting delayed

* Thermax (TMX) Q4FY17 operational performance was in-line with our expectations. While revenues reported flattish growth, EBIDTAM increased by 280bps YoY to 11.6%. APAT (before share of losses in JV) increased by 2% YoY.

* Order inflows declined by 23% YoY to Rs11.7bn while order backlog declined 15% YoY to Rs 40bn.

3/07/2017 2:27:08 PM | Posted in Broking Firm Views - Long Term Report read full news