Aurobindo Pharma, BGR Energy Systems, India Autos, Nestle, Onmobile Global

Aurobindo Pharma, BGR Energy Systems, India Autos, Nestle, Onmobile Global

Aurobindo Pharma

Aurobindo Pharma

Aurobindo Pharma

We recommend a sell in the stock of Aurobindo Pharma from a short-term perspective. It is perceptible from the charts of the stock that it has been on a long-term uptrend from November 2008 low of Rs 101.6. It was on an intermediate-term uptrend from July low of Rs 406 till its October high of Rs 891. However, triggered by the negative divergence displayed in the daily relative strength index (RSI) and moving average convergence and divergence indicator (MACD), the stock’s direction has reversed. On October 29, it tumbled 5 per cent penetrating a key support at Rs 810 as well as intermediate-term up trendline, reinforcing its downtrend. Moreover, the weekly RSI has also displays negative divergence and is declining from the overbought territory. We are bearish on the stock from a short-term perspective. We anticipate it to decline further until it hits our price target of Rs 695 in the approaching sessions. Traders with a short-term perspective can sell the stock while maintaining a stop-loss at Rs 815.

via BL

Aurobhindo Pharma

Aurobhindo Pharma

Aurobindo Pharma to acquire Trident Life Sciences

Aurobindo Pharma Ltd. announced that its Board of Directors has approved the proposal to acquire 100% stake of Trident Life Sciences Ltd., subject to suitable agreements being executed between the parties for the same and conditions customary to dosing of the transaction. TLSL was incorporated in 2004 and has well established Clinical Research Organizations (CRO). It is in the process of implementing a liquid injectables facility in the Medak district near Hyderabad. The management of TLSL with an intention to focus on its core business of CRO has demerged the CRO business into a separate company. Post demerger, TLSL is left with the Injectables business. The facility specializes in manufacture of general injectable range of formulation products, including glass vials for lyophilized sterile powder and liquids, ampoules, pre filled syringes and blow filled seals. The facility shall be acquired at its book value as on June 30, which is being the least of the valuation arrived by the financial advisors.

Aurobhindo Pharma

Aurobhindo Pharma

Today's Pick - Aurobindo Pharma

We recommend a buy in Aurobindo Pharma from a short-term perspective. Form the stock’s life high of Rs 820 (touched in July 2007) Aurobindo Pharma has been on a long-term downtrend as is evident form the charts. However, the stock halted at the long-term support level of Rs 300 a month ago and has been moving sideways above this level since then.

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On February 29, the stock surged higher gaining more than Rs 19 or 6 per cent with more than average volumes . Prolonged positive divergence in the daily momentum indicator had supported the recent up move. The daily momentum indicator is rising in the neutral region towards the bullish zone while the weekly momentum indicator is featuring in the oversold region. The moving average convergence divergence is steadily rising towards the positive territory. The stock is trading well above the 21-day moving average.

Our short-term outlook for the stock is bullish and we expect the stock to make a dash to our target price level of Rs 375 in the forthcoming days. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 298.

Via Businessline

Moldtek Technologies, TV18, Aurobhindo Pharma

Mold-Tek Technologies
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs215
Current market price: Rs155

Unlocking value

Key points

• KPO business growing exponentially: Mold-Tek Technologies (MTT) has gained the critical size and required expertise in the niche area of structural engineering KPO services. The size of the opportunity in this space is huge and the company has taken inorganic initiatives to move up the value chain and establish presence in the key overseas markets. Consequently, we expect its KPO business to grow at a CAGR of around 160% over the next three years.
• Expanding the plastic packaging service business: In the recent past, the company invested in modernisation and expansion of its manufacturing units in the plastic packaging business. It also bagged orders from large and reputed clients in the oil & lubricant business, further consolidating its leadership position in the segment. The plastic packaging business is likely to grow at a CAGR of over 20% in the three-year period FY2007-10.
• Unlocking value in KPO business: The company has filed an application for the de-merger of its two businesses into separate entities. We believe this would result in the re-rating of the KPO business that is not only growing at an exponential rate but also enjoys much higher margins. We value the KPO business alone at Rs189 per share.
• Attractive valuations: With its revenues and earnings expected to grow at CAGR of 31% and 66% respectively over FY2007-10, MTT is attractively valued at 7.6x FY2009 and 5.3x FY2010 estimated earnings (as the existing combined entity). Taking into account the de-merger ratio also (holders of 100 existing shares to get 72 shares of the plastic company and 28 shares of the KPO company), the KPO business alone is valued at Rs189 per share. We recommend a Buy call on MTT with a price target of Rs215.

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STOCK UPDATE

Aurobindo Pharma
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs914
Current market price: Rs527

Aurobindo enters Omnicef market
Aurobindo Pharma (Aurobindo) has received approval from the US Food and Drug Administration to manufacture and market the oral suspension form of Cefdinir 125mg/ml and 250mg/ml in the USA. Cefdinir is the generic version of Abbott Laboratories' (Abbot) blockbuster product Omnicef in the USA, having a market size in excess of $850 million. Approximately $533 million of this comes from the suspension form of the product, which is used to treat a variety of ear, sinus, nose, throat and skin infections.

Television Eighteen India
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs571
Current market price: Rs469

TV18 to launch a business daily
Mirroring our expectations, TV18 has announced entering the business daily space. The company has entered into a 50:50 joint venture with Jagran Prakashan for launching a Hindi business newspaper. The duo would also launch business dailies in other Indian languages. TV18 has aggressively entered print media by acquiring Infomedia India, which provided it a platform for entry and expansion in the print space. TV18 recently announced acquisition of Infomedia India a leading publisher of special interest magazines and Yellow Pages (for details refer our update "TV18 acquires Infomedia" dated December 12, 2007). The company further forged a partnership with Forbes Media, a leading global business publisher to launch a business magazine in January 2008 (refer our update "TV18 partners Forbes").

Aurobhindo Pharma

Aurobhindo Pharma

Aurobhindo Pharma, Earnings Preview

Aurobhindo Pharma, Earnings Preview

Sharekhan Investor's Eye dated June 05, 2007

ICI India
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs581
Current market price: Rs520

Price target revised to Rs581

Result highlights

• The net revenues grew by 5.7% year on year (yoy) to Rs201 crore despite the discontinuation of the surfactant businesses (Uniqema).
• The sales from the continuing businesses (ie paints and chemicals) have shown a growth of 23%. The paint business grew by 26% yoy to Rs170 crore. The continued chemical business grew by 13% yoy to Rs31 crore.
• The profit before interest and tax (PBIT) from the continued businesses grew by 51% in the quarter under review on the back of improved PBIT margin of both the businesses. The PBIT in the paint business grew by 67% yoy with a 170-basis-point expansion in the margin. The PBIT in the residual chemical business grew by 11.5% yoy with an 20-basis-point expansion in the margin.
• The overall operating profit (including all businesses) dropped by 10% yoy with a 150-basis-point contraction in the operating profit margin (OPM).
• With a higher other income (due to a dividend income of Rs31 crore) and stable depreciation, the net profit grew by 20% yoy to Rs12.7 crore.
• ICI India's Q4FY2007 net profit (adjusted for extraordinary items and taxes) at Rs12.7 crore was slightly below our expectations. The net profit grew by 20% yoy.
• The company has announced that it would be utilising Rs210 crore to buy back its own shares from the minority shareholders at a price not exceeding Rs575 per share through market operations.
• Taking into account the sell-off of Quest International and the auto refinish business, we are also introducing our FY2009 numbers. At the current market price of Rs520, the stock trades at 18x its FY2008E EPS of Rs29 and 15.7x its FY2009E EPS of Rs33. In view of the cash per share of Rs202 and 21x FY2008 core earnings per share (EPS) of Rs18, we have revised upward our price target to Rs581. We maintain our Buy recommendation on the stock.

Aurobindo Pharma
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs914
Current market price: Rs725

USFDA approvals enrich earnings visibility

Result highlights

• Aurobindo Pharma has received the approval from the US Food and Drug Administration (USFDA) for oral suspensions of its antibiotic Cefpodoxime proxetil in 50mg/5ml and 100mg/5ml strengths.
• Cefpodoxime proxetil is the generic version of Pharmacia Upjohn's brand Vantin. It is an oral third generation Cephalosporin antibiotic.
• The size of the branded market for Cefpodoxime proxetil suspension is about $20 million and the patent of the product expired a few years ago. This is a critical product and just two competitors, including the innovator and Ranbaxy Laboratories, are there in the market.
• Aurobindo Pharma is the proven leader in this segment in several markets in the world. So anticipating a 20% market share and a 20% price erosion, the product can add annual revenue of $3.2 million and profit of $0.64million. That would translate into incremental earnings per share (EPS) of Rs0.43.
• Aurobindo Pharma with 82 abbreviated new drug applications (ANDAs), 110 drug master files (DMFs) and 11 USFDA-approved facilities is well positioned to exploit the generic opportunity going forward. Further, its expansion into Europe and emerging markets, and the likely incremental revenue flow from its largest approved anti-retroviral product basket would fuel its revenue growth and margin expansion in future.
• At the current market price of Rs725, the stock is trading at 15.8x its FY2008E and 12.6x its FY2009E earnings. In anticipation of the ramp-up in the formulation exports (particularly to the USA) we maintain our Buy recommendation, with a one-year price target of Rs914.

Sharekhan Investor's Eye dated June 05, 2007

Kotak - Aurobhindo Pharma

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HDFC Sec - Aurobindo

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Motilal Oswal - Reports

Colgate Palmolive

BL Kashyap

Aurobhindo Pharma

Gokaldas Exports

GAIL

BPCL

The deluge continues :) - Thanks Ramesh