Wednesday, 29 March 2017

DAILY MARKET WRAP UP
INDIAN ECONOMY IN A SWEET TINA SPOT

 “It’s the TINA factor sweetheart”, I quipped when my 12 year old was emphatic over her social science & biology grades. I explained that there was no other alternative for her than to study. “Really! You are funny Ma”. She has no idea that these days even stock market surges are being attributed to this renowned acronym, TINA (There Is No Alternative). Well Indian Stock markets are soaring these days and people i.e investors, hedge fund managers, brokerage houses, analysts are not finding any reason for it. How long can they keep giving UP election results as a reason for the REASONS why our NIFTY might touch 9300 in few months? So for most of them when the markets go up its ‘TINA’ and when the market goes down its TRUMP. And mind you both TINA & TRUMP are mutually exclusive.

Stock markets were once considered as barometer of economic prosperity & financial health of a country. But this theory has long been forgotten in the era of liquidity & uncertainty. As a result investors are more driven by sentiments & information flow within the market than by its fundamentals. With respect to India, there is no uncertainty left, so no reasoning left for upside risk for the economy. Analysts keep on harping on policy continuity on reforms and predicting 2019 general elections and even beyond that as if they were discussing some telecom company’s extension offer. Have the macro fundamentals just gone up after UP assembly elections or have we started using prism glasses. But the question remains, why the Indices are moving up without any backing from corporate earnings. I think most of us have forgotten what we learnt in our graduation days.  PEST.


PEST is nothing but Political, Economic, Social & Technological external factors that influence any company or industry. These factors are analyzed by any sane serious investor before putting his hard earned money in stocks or companies. And India has all these factors in the right place at the right time. So when the dollar seems to be confused about its own divergent economic & fiscal policies, Indian Rupee is gaining strength over the convergence of its socio-economic-political policies. Now for pragmatists who need facts, IIP for January was 2.7%, PMI above 50, controlled inflation at 3.65% within RBI limit, forex reserves have gone up to $367 billion, exports grew 17.50% in February which is a sixth consecutive rise this year and last but not the least GDP at 7.1% is the fastest growing in the world.  Now coming back to corporate earnings, growth is definitely not anemic but in single digits which is expected to rise in double digits by financial year 2018 and investors both domestic & foreign are betting on this growth as evident from FPI flows of Rs.22268 crore this month, highest since February 2013. Government is moving with GST implementation by July this year, NPA resolution policy next month and other land, labor and agricultural reforms. So foreign analysts are rightly calling us of being in a SWEET TINA SPOT. But I really love this word TINA, which I am planning to give it to my newborn niece. Yes, you guessed it right, I didn’t find any other name!!

Friday, 24 March 2017



HAVELLS INDIA LTD - Q3 FY17


HAVELLS INDIA LTD reported stable third quarter FY17 with PAT rising at 28% YOY despite demonetization. PAT stood at Rs. 1530 Mn against Rs. 1199 Mn corresponding period previous year. Sequential growth was reported at 5% in the current December quarter. Revenue was seen at Rs. 16221 Mn rising 13% YOY, though growth was slower at 4% sequentially. EBDITA was reported at Rs. 2194 Mn in Q3 FY17 against Rs. 1985 Mn corresponding quarter previous year, registering a double digit growth of 11% YOY. On quarterly basis, EBDITA declined 7% in the current Q3 FY17 as operating expenditure rose 15% YOY. Operating expenditure stood at Rs. 14592 Mn compared to Rs. 12731 Mn corresponding quarter previous year. Other Income too played it’s part and  jumped 2 times YOY buttressing company’s bottom-line in the current quarter. Other Income was reported at Rs. 264 Mn compared to Rs. 134 Mn in Q3 FY16. Increase in other income is due to interest earned on funds received from Sylvania divestment. Havells India witnessed strong volume growth & demand in industrial cable & lighting divisions in the current quarter.  With double digit growth Net Profit Margin rose 105 bp YOY & 8 bp sequentially. One basis point is 1/100th of a percentage. EBDIA & Net Profit Margin stood at 13.52% & 9.43% in the current December quarter. The company is also focused on deleveraging itself as Net Debt has halved from Rs. 553 Mn in Q3 FY16 to Rs. 114 Mn in the current December quarter.  The company has current cash holdings of about Rs.14313 Mn as on 31st December 2016.Havells India Ltd with market cap of Rs. 282455 Mn is a leading FMEG company.  The products of the company range from industrial and domestic circuit protection switchgear, cables and wires, motors, fans, power capacitors, compact fluorescent lamps, luminaries for domestic, commercial and industrial applications, modular switches covering household, commercial and industrial electrical needs, water heater and domestic appliances.   The company has performed well despite a tough demonetization hit December quarter. The company has strong fundamentals and is poised for higher growth with its foray into consumer durables industry with Lloyd acquisition. We recommend BUY for the stock for medium & long term investment with PE multiple of 46.29 x FY17E & 37.14 x FY18E with a target price of Rs. 590.


Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Saturday, 18 March 2017


WHEELS INDIA LTD - Q3 FY17

Wheels India Ltd reported strong yearly growth in December quarter FY17. Revenue or Income From Operations rose 14% YOY from Rs. 4698 Mn to Rs. 5365 Mn in the current Q3 FY17. PAT jumped at a phenomenal growth rate of 121% YOY and stood at Rs. 132 Mn compared to Rs. 60 Mn in the current December quarter.  EBDITA stood at Rs. 450 Mn compared to Rs. 380 Mn in the same period previous year growing by 18% YOY. Quarterly growth was somber with Revenue & EBDITA declining 2% whereas Net Profit managed to rise 1% in the current December quarter. Operating Expenditure jumped 14% YOY from Rs. 4473 Mn to Rs. 5076 Mn in the current December quarter. On quarterly basis there was decline of 1.5% to cope with low revenue growth.  As a result EBDITA margin declined 2 basis points YOY and was reported at 8.39% in the current December quarter. Operating costs constitute 95% of total revenues. In addition to that, higher interest or Finance costs need to be curtailed and comprise 2% of Revenues or 88% of Net Profit. Net Profit Margin was reported at 2.46% jumping 119 basis points YOY compared to same period previous year. Sequentially there was a jump of 6 basis points. Other Income aided rising 73% YOY and was reported at Rs. 8.30 Mn compared to Rs. 4.80 Mn corresponding quarter previous year. QOQ, other Income jumped 20% in the current Q3 FY17.  

Wheels India is a leading manufacturer of steel wheels for passenger cars, utility vehicles, trucks, buses, tractors & construction equipment. Apart from wheels other divisions are air suspension, energy equipment & heavy engineering division. The wheels division contributes 50% of revenues for the company. Air suspension business has reported strong volume growth in the first nine months of the year. The company has a diversified base with over 30 customers spread globally such as Japan, Korea, US,  Brazil, China to name a few.

We recommend BUY for the stock for medium & long term investment with PE multiple of 25.80 x FY17E & 22.61 x FY18E with a target price of Rs. 1355.


Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.


The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Tuesday, 14 March 2017

DCB BANK LTD -Q3 FY17
DCB BANK LTD reported stellar third quarter results despite demonetization with PAT, NII, PBT, Advances & Deposits all growing in double digits. PAT for the December quarter stood at Rs. 513 Mn compared to Rs. 412 Mn same period previous year rising 25% YOY. Net Interest Income, difference between interest earned and expended was at Rs. 2095 Mn in the current quarter against Rs. 1605 Mn corresponding quarter previous year, expanding 31% YOY. Net Interest Margin reported at 3.95% seems to be stable in a demonetization hit quarter. NPA ratios have improved both yearly and sequentially in the current December quarter. Gross NPAs as a percentage of Gross Advances improved 43 basis points YOY at 1.55%. Net NPAs as a percentage of Net Advances was reported at 0.74% in the current Q3 FY17 against 1.12% same period previous year recovering 38 basis points YOY. One basis point is 0.01%. Provisions & contingencies increased 45% YOY at Rs. 305 Mn vis-à-vis Rs. 210 Mn in Q3 FY16. Double digit growth was visible in all business segments except corporate banking which contributes 12% to total revenues. Retail & Treasury rose 22% & 13% accounting 64% & 23% respectively in the current December quarter. Other banking business growing 2.5 times YOY was 1% of revenues. CASA ratio at 25.85% jumped 394 basis points YOY due to demonetization impact. CASA deposits increased from Rs. 32175 Mn in Q3 FY16 to Rs 48709 Mn in current December quarter, jump of 51% YOY. Other income or non interest revenue accounting 10% of the total income of the bank rose at 36% YOY at Rs. 641 Mn against Rs 472 Mn same period previous year. Deposits outpaced Advances moving at 34% yearly and 7% QOQ. Advances also grew at a healthy yearly rate of 24% though sequential growth was dismal at 1.03% in the current December quarter. Cost income ratio of bank improved to 59.42% in the current December FY17 against 60.07% corresponding quarter previous year.
 DCB Bank with high Net Interest Margin, stable NII and growing profitability is marching towards sustainable growth for long term. We recommend BUY with PE multiple of 22.41x FY17E & 19.06 x FY18E for medium and long term investment with a target price of Rs. 278.  

Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.


The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Monday, 13 March 2017


DEMONETIZATION CONUNDRUM: NO SURPRISES MITROON

Political pundits & financial analysts are a baffled lot these days. The number 324 was the last straw. Demonetization did what Jan Dhan Yojana couldn’t. Nobody cares what the GDP is and what rate India is going to grow in the next two years. Let that job be done by our esteemed international rating agencies and that is the only job left for them after 2008. If not for them Greece would not have made it to the Euro and the rest is history. Well before I get into politics or geo-politics, let me get to the core issue for what I am writing. DEMONETIZATION.

8TH November, the dreaded date when 86% of legal tender went out of circulation, our economists & analysts predicted the December quarter’s GDP as 6.5% or 6.7% or 6% depending on their level of pessimism covertly labeled as pragmatism. But what happened in the next 52 days could be added as another exception to the Law of Diminishing Marginal Utility. On 8th November 2016, even hard core misers went out to buy gold in kilos, medicines in thousands, fuel in kilo-liters and booked tickets for soothing far flung relatives. Even my 12 year old daughter took out her savings to contribute to the monthly family medicinal budget. So did economic activity cease, No! But there were economic disruptions which propelled digitalization into our lives seeping into India’s middle-class psyche and the aftermath was evident in Uttar Pradesh assembly elections.


Coming to the bone of contention, Indian GDP and how did it come out to be 7.1% for the third quarter of 2017. To make them understand, just wanted to do what my economic professor always loved to do, giving illustrations. So let’s assume that you give a Rs. 10 note to a 10 year old and explicate to him that this is the last time he would ever see or hold it as its going out of circulation the very next day. The Kid will obviously buy an ice-cream or a chocolate. This is what our Richie rich class, HNIs, traders and corporate did. They spent where they could and traded where they couldn’t as evident from higher sales numbers of SUVs and Utility vehicles of auto companies. As demonetization exercise started after festive season of Dussera & Diwali, the yearly held on discretionary expenditure was already done before the government’s due date. In addition to that government accelerated its expenditure in December quarter to make up for the lost economic activity. Companies across industries delivered huge stocks to their dealers who willing paid in advance propelling current accounts and helped CASA ratios of banking sector swell with liquidity and as a result companies showing normal sales for the December quarter. So where does the question arise of GDP getting impacted. You just need to get your calculations right. Now that the GDP numbers are out, our learned pessimist economists are waiting for the March quarter to unfold and prove them right. But before they could pronounce the next quarter GDP, Manufacturing PMI and Factory output have rebounded.  So what is left? Nothing just optimism which according to Henry Rollins, “Wears heavy boots and is loud” and we just heard it on 11th March 2017. Right!!! 

Friday, 10 March 2017

LAKSHMI VILAS BANK LTD RESEARCH REPORT - Q3 FY17

LAKSHMI VILAS BANK LTD Q3 FY17 - BUY
LAKSHMI VILAS BANK LTD reported strong third quarter results with PAT or Net Profit galloping at 70% growth rate YOY. PAT for the December quarter stood at Rs. 784 Mn compared to Rs. 461 Mn same period previous year. Sequential growth was equally strong at 21% in the current Q3 FY17. Net Interest Income, difference between interest earned and expended was at Rs. 1906 Mn in the current quarter against Rs. 1671 Mn corresponding quarter previous year, expanding 14% YOY. Net Interest Margin indicating core profitability of bank’s operations at 2.72% seems to be stable in a demonetization hit quarter. Gross NPAs as a percentage of Gross Advances edged up 96 basis points YOY at 2.78%, Net NPAs as a percentage of Net Advances was reported at 1.82% in the current Q3 FY17.  One basis point is 0.01%. Provisions & contingencies were curtailed at Rs. 481 Mn declining 23% QOQ and 17% yearly. Double digit growth was visible in treasury reporting Rs. 2695 Mn revenues rising 84% YOY. Both Retail & Corporate stood at Rs. 3766 Mn & Rs. 2308 Mn respectively growing 7% in the current quarter. CASA ratio at 21.42% jumped 484 basis points YOY due to demonetization impact. CASA deposits increased from Rs. 39683 Mn in Q3 FY16 to Rs 59435 Mn in current December quarter, jump of 50% YOY. Other income or non interest revenue accounting 17% of the total income of the bank rose at a whopping 117% YOY at Rs. 1502 Mn in current Q3 FY17 buffeting the Bank’s income in the demonetization hit quarter. Deposits outpaced Advances moving at 16% yearly and 4% QOQ. Advances also exhibited demonetization impact by growing negatively QOQ whereas on yearly basis, rise was 8.50% in the current December quarter. Cost income ratio of bank improved to 49.70% in the current December FY17 against 55.17% corresponding quarter previous year.
LVB has performed well with respect to NII & high profitability and is more focused on obtaining a high quality loan book, but robust expansion is the need of the hour to enter the next level of highly competitive Indian Private Sector Banking. LAKSHMI VILAS BANK with the market cap of Rs. 29584 Mn is a long term growth opportunity for retail investors. We recommend BUY for the stock for medium and long term investment with a target price of Rs. 225.




Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.


The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Wednesday, 8 March 2017

Tuesday, 7 March 2017

HINDALCO INDUSTRIES LTD (Standalone)- Q3 FY17


HINDALCO Industries Ltd reported another stellar performance with revenue growing at 14% & EBDITA jumping 64% YOY in the current December quarter. Profit After Tax was reported at Rs. 3205 Mn in current Q3 FY17 against Net Loss of Rs. 328 Mn same period previous year. Revenue or Income from Operations stood at Rs. 99148 Mn in the current quarter against Rs.87159 Mn in Q3 FY16. Revenue also witnessed stable 4% sequential growth in the current December quarter driven by increase in average realization for both Aluminium and Copper, along with weaker rupee and higher aluminium volumes. Aluminium & Copper revenues grew by 9% & 19% respectively in the current Q3 FY17. EBDITA was reported at Rs. 14052 Mn in Q3 FY17 against Rs. 8589 Mn corresponding quarter previous year. Other Income increased 20% yearly whereas on sequential basis there was a decline of 35%. Other Income was reported at Rs. 2200 Mn in the current Q3 FY17. Higher volumes, higher LME, rationalized cost structure due to benign input costs YOY, enhanced coal security and captive reserves led to EBDITA improving phenomenally by 432 bp at 14.17% in the current December quarter. Net Profit Margin was reported at 3.23% in Q3 FY17. Hindalco Industries Ltd receives 50% of its revenue from Aluminium segment which grew 9% YOY. Copper segment also contributed the same growing 19% YOY on account of higher copper realization but was partially negated by lower byproduct prices of Sulfuric acid and di ammonium phosphate. The company continues to focus on deleveraging itself and has made pre-payment of Rs. 34200 Mn in January 2017 against the outstanding project term loans.

Hindalco with market cap of Rs. 389211 Mn is the industry leader in the Indian Aluminium industry and is poised for higher growth with strong demand from power, transportation, housing & packaging sectors. In addition to that industries such as solar power, aerospace, defence, railways, metro & smart city projects offer long term growth opportunities to Indian Aluminium industry.  The company is focused on 3Cs, customer centricity, cost control and cash conservation which will lead to long term stability & profitability. We recommend BUY for the stock for medium & long term investment with PE multiple of 26.97 x FY17E & 24.15 x FY18E with a target price of Rs. 285.



























Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.


Monday, 6 March 2017

DREDGING CORPORATION OF INDIA LTD - BUY

Dredging Corporation of India Limited, or DCI, is engaged in the business of dredging which involves maintenance dredging, capital dredging, beach nourishment, land reclamation, shallow water dredging, Project Management consultancy and Marine construction. The company is a Mini Ratna category- I PSU with its head office at Visakhapatnam. The current market price of the company spiked up today in morning trade as government stake sale is speculated in the market. The company would definitely benefit from government selling its majority stake and DCI moving to the private sector (in-case of a majority stake sale).


The current Profit After Tax for the December quarter stood at Rs. 140 Mn against Net Loss of Rs. 196 Mn same period previous year. Income from Operations was reported at Rs. 1519 Mn in the current quarter compared to Rs. 1614 Mn corresponding quarter previous year. Though Income from Operations have declined 6% YOY, the company has reduced its operating cost 25% and finance cost by 5% YOY. It would be a win-win situation for both the government & the company as witnessed by the 10% intraday rise in the stock price. The government with stake of about 73% may get a sizeable chunk of its disinvestment target and DCI would benefit from privatization. Irrespective of disinvestment by the government, the stock is attractive for long term investment as DCI is the leader in the Dredging industry in India and would benefit from the government initiatives being undertaken with respect to various projects for inland waterways and increase in merchandise trade. We recommend BUY for the stock with a target price of Rs. 550 for medium & long term. 



Disclaimer                                       
                                      
The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.


The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.