BPCL, Coal India, ENIL, Glaxo, Pfizer, Sun TV, Tata Steel, Ashok Leyland, Aurobindo Pharma, BPCL, SBI, Eicher Motors, Nestle

BPCL, Coal India, ENIL, Glaxo, Pfizer, Sun TV, Tata Steel, Ashok Leyland, Aurobindo Pharma, BPCL, SBI, Eicher Motors, Nestle 

Pfizer

Pfizer

Pfizer

Pfizer

Pfizer

If the last few quarters saw Pfizer's earnings under pressure as it grappled with the integration of Wyeth and the addition of field force, the coming quarters promise to turn that around significantly. Focus on branded generics, market expansion initiatives, strong product portfolio and expected increase in field force productivity promise a smoother sojourn for Pfizer.

Pfizer

Pfizer

Pfizer

Pfizer

Pfizer - BUY

We recommend a buy in Pfizer from a short-term perspective. It is clearly evident from the charts of Pfizer that it was on a long-term downtrend from its 52-week high of Rs 850 (recorded on December 31, 2007) to late September low of Rs 513. However, the stock found support around Rs 525 and it reversed direction. This stock’s reversal has been supported by a positive divergence in the daily relative strength index. The stock gained six per cent accompanied by high v olume on September 30, forming a bullish engulfing candlestick pattern.

Subsequently, on October 1, the stock breached the long-term down trendline as well as its 50-day moving average, with above average volume. The daily relative strength index is on the brink of entering in to the bullish zone from the neutral region.

The moving average convergence and divergence is signalling a buy. We are bullish on the counter from a short-term perspective. We expect the stock to move up until it hits our price target of Rs 637 in the approaching trading sessions. Traders with short-term perspective can buy the stock while maintaining a stop-loss at Rs 548.

Motilal Oswal, Titan Industries,Sun TV Network, Pfizer

Motilal Oswal, Titan Industries,Sun TV Network, Pfizer

Market Strategy, Areva T&D, Pfizer India, Sunil Hi tech Engineers

Market Strategy, Areva T&D, Pfizer India, Sunil Hi tech Engineers

Pfizer

Pfizer

Today's Pick - Pfizer

We recommend a buy in Pfizer from a short-term perspective. From the chart, we see that it had been on a medium-term downtrend from December 2007 high of Rs 850 to mid-February low of Rs 587. However, the stock’s medium-term downtrend got arrested at around Rs 600 more recently and the stock reversed the direction. The positive divergence in the daily momentum indicator supports the stock’s reversal trend. The daily momentum indicator has entered the neutral region from the bearish zone. We see that the current upmove has breached the medium-term down trendline. We also notice a crossover in the daily moving average convergence divergence, which indicates establishment of bullishness. Our short-term outlook for the stock is bullish. We expect the stock’s ongoing rally to continue to our target price of Rs 700 in the short-term. Investors with a short-term perspective can buy the stock while keeping the stop loss at Rs 587 levels.

Via BL

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Pfizer India

Pfizer India

Prabhudas Lilladher - Pfizer

Prabhudas Lilladher report on Pfizer:

Sluggish sales growth

For Q2 FY07 (ending May ’07), Pfizer has reported a 1% yoy dip in net sales -from Rs 1.67 billion to Rs 1.65 billion. The dip is attributed to supply-related issues regarding its major product, Corex. Moreover, the company is in the process of divesting its consumer healthcare (CHC) business in favor of Johnson & Johnson (J&J) in line with the global transfer of its CHC business to J&J, and hence the uncertainty about the divestment. The pharmaceutical business slipped 4% yoy whereas the animal healthcare (AHC) segment has reported a 21% sales growth. The clinical development services grew a marginal 1%.

Margins under pressure

During the quarter the operating margin slipped 60bp—from 22% to 21.4%—due to the rise in ‘other expenses’. ‘Other expenses’ climbed 130bp—from 25% to 26.3% of net sales—due to lower sales growth. Material cost rose by 50bp—from 37.8% to 38.3% of net sales—with the change in product mix and higher sales of AHC products. Personnel expenses declined by 120bp—from 15.2% to 14%—due to the ongoing VRS.

Higher ‘other income’

The company has reported a 60% rise in ‘other income’—from Rs 109 million to Rs 174million—due to the rise in treasury income (Rs 90 million during the quarter). Pfizer has completed the sale of the Chandigarh property, and profited by Rs 2.74 billion. With this higher ‘other income’, the EBIDTA margin has improved, by 340bp—from 28.5% to 31.9%.

Capital gain

The company paid Rs 462 million as capital gains tax from the sale of the Chandigarh property and therefore the net inflow is Rs 2.28 billion. With this inflow, the company’s treasury income is likely to rise by over Rs 50 million per quarter.

Net profit improved

Net profit before extraordinary items grew 10%—from Rs 298 million to Rs 329 million—due to higher ‘other income’. Net profit after EO items also went up—from Rs 238 million to Rs 2,578 million—from the high inflow due to the sale of the Chandigarh property.

Investment positives

Pfizer has employed a contract field force of 100 people in three states to promote its mature products. It is widening its geographical reach to cover class II and class III cities. This is likely to generate additional sales and improve top-line growth.

To raise top line growth, it is focusing on the institution and hospital segments and the retail segment.

To improve sales and profitability as well to expand therapeutic coverage, the company is looking at domestic acquisitions.

Its new launch, Lyrica, is doing well in the domestic market. It is likely to be a future growth driver for the company.

Financials and Valuations

We expect Rs 3 billion from the sale of CHC business to J & J in FY07. Net inflow after capital gains tax is likely to be Rs 2.66 billion. With this, Pfizer can look at acquisitions aggressively. We expect a 13% reduction in net sales in FY07—from Rs 6.89 billion to Rs 6.04 billion, due to it’s divesting its CHC business, which accounts for about 22% of the company’s revenue. We expect an 11% rise in sales in FY08—from Rs 6.04 billion to Rs 6.73 billion. We expect the operating margin to inch up from 24% in FY06 to 24.4% in FY07 due to the reduced material cost as well as from operational efficiencies. We expect net profit (after EO items) to shoot up—from Rs 1.06 billion in FY06 to Rs 5.91 billion in FY07—and then slip to Rs 1.35 billion in FY08. Management has guided to double-digit sales growth and the maintaining of the EBIDTA margin after the transfer of the CHC business. The CMP of Rs 804 discounts the FY07E EPS of Rs 38.4 by 21x and the FY08E EPS of Rs 48.6 by 16.5x. We are positive on the long-term prospects of the company.

Pfizer, UTV

Pfizer: Selloff blues

Pfizer’s key pharmaceutical businesses posted a lacklustre performance in the quarter ended May 31, 2007, owing to supply-related issues of a product, according to senior company executive.

Furthermore, sales in its consumer healthcare business were sluggish on a y-o-y basis in the last quarter over uncertainties as this division is expected to be divested shortly.

Consequently, its operating profit (including service income) declined 3.5 per cent y-o-y to Rs 41.1 crore in the previous quarter and the total operational income reduced 1.3 per cent to Rs 170.55 crore. The pharma major’s operating profit margin also came down 60 basis points y-o-y to 24.1 per cent in the March 2007 quarter.

However, the company had executed the sale deed related to its Chandigarh property in the last quarter which boosted its other income.

It realised a profit of Rs 273.69 crore from the on property sale, which enabled its profit before exceptional items and taxation jumping 473.8 per cent y-o-y to Rs 323.3 crore. The stock rose almost 2 per cent to Rs 826 on Thursday.

Though not strictly comparable, in the February 2007 quarter the company’s operating profit margin had fallen 147 basis points y-o-y to 26.6 per cent owing to reduced sales in its consumer healthcare business.

In the May 2007 quarter, the company’s segment revenues in its pharma division declined 3.65 per cent y-o-y to Rs 146.78 crore.

The US parent had earlier announced that it had sold its worldwide consumer healthcare business to Johnson & Johnson and Pfizer India was also expected to exit from this business soon.

For the Indian arm, analysts said, this business was contributing 21.8 per cent of the company’s total revenues in the year ended November 2006. With lukewarm results, the Pfizer stock has underperformed the market over the past year.

Without considering the transfer of the consumer healthcare business and the Chandigarh property sale, the Pfizer India stock trades at 24 times estimated November 2007 earnings, and is not expensive.

UTV: Action-packed

The film business of UTV Software has been valued at $309 million (Rs 1,250 crore) with the shares of the company’s film subsidiary, UTV Motion Pictures, which is listed on the Alternate Investment Market (AIM) of the London Stock Exchange.

The shares have been placed at $2.9 per share and the company has raised $77.33 million for 25 per cent of the equity.

UTV is an integrated player in the entertainment sector and produces and distributes films, makes television content and has forayed into the gaming industry by picking up a controlling stake in India Gaming and Ignition.

Moreover, the company is betting big on the broadcasting space and may launch a dozen channels in various genres, starting from the third quarter of the financial year 2008.

That could result in a dilution in the equity of UTV Broadcasting, as a considerable amount of capital - estimated around Rs 600 crore — will be needed.

Revenues in the financial year 2008 could double from Rs 174 crore, reported in financial year 2007, with several films and television content in the pipeline and also from the contribution from gaming industry.

The operating margin too could improve from 6.15 per cent achieved last year, driven by a strong growth in the top line. However, the commitments to the movie business are relatively high compared with the size of the company.

Moreover, start-up costs and execution risks for the channel business could also be taken into account given the competition in the space though the company will attempt to share the risk either with financial or strategic investors.

The stock has run up by over 60 per cent since the March quarter. At the current price of Rs 507, the stock trades at about 41 times estimated financial year 2008 earnings and prices in most of the initiatives being taken.

Sun TV, Pfizer, TVS Motors, Banking

Sun TV, Pfizer, TVS Motors, Banking

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