India Equity Analysis, Reports, Recommendations, Stock Tips and more!
Search Now
Recommendations
Sunday, August 14, 2005
Hindu Businessline Recommendations
BUY >> GHCL, Orient Abrasives, Bajaj Auto
HOLD >>
Hindustan Construction, National Aluminium, Rajasthan Spinning
Saturday, August 13, 2005
Sharekhan Special - Logon to Logistics
Log on to logistics
We believe companies like Container Corporation of India, Gateway Distriparks and Balmer Lawrie, three dominant players in the CFS and ICD business, are potential beneficiaries of the growth in the containerised cargo business. We are initiating coverage on all three companies and their respective earnings and valuation details are given in the following exhibit.
STOCK IDEA
Balmer Lawrie & Company
Cluster: Cannonball
Recommendation: Buy
Price target: Rs481
Current market price: Rs400
Taking long strides
Balmer Lawrie is a public sector undertaking (PSU) with a history spanning over 75 years. It has a diverse business portfolio, which spans both manufacturing and service businesses. But it is the company's service business that accounts for the dominant share (of 62.0%) of its revenue. Improved financial health and the robust performance of the logistic SBU are the key triggers for the re-rating of the stock. Balmer Lawrie's consolidated earnings will grow at a strong CAGR of 36.2% between FY2005 and FY2007, with consolidated earnings per share (EPS) of Rs47.3 in FY2007E. Considering the company's improving return ratios and strong earnings growth prospects, the stock is trading cheap at a price/earnings ratio (PER) of 8.5x FY2007E.
Container Corporation of India
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,450
Current market price: Rs1,100
On fast track
Container Corporation of India (Concor) moves international containerised cargo from ports to its inland container terminals (ICDs) throughout India in wagons, which are transported via the rail network owned by the Indian Railways (IR). In the light of Concor's sustainable business model coupled with stable earnings growth and high earnings visibility, we believe the valuations are fairly attractive and provide decent upside from current levels.
Gateway Distriparks
Cluster: Cannonball
Recommendation: Buy
Price target: Rs240
Current market price: Rs190
Gateway to growth
Gateway Distriparks Ltd (GDL) is the largest private sector player in the business of port related logistic support and services. GDL's new facility (covering 50 acre of land) will commence operations in Q3FY2007 and will be fully operational in FY2008 (when JNPT is likely to commence its fourth terminal). The new facility could handle around 240,000TEUs per annum which will take GDL's TEU handling capacity to 560,000TEUs, ie 1.75x its FY2007 capacity. Hence with this kind of capacity in place GDL's growth trajectory is likely to maintain its upward momentum. We believe the stock's valuations are attractive and recommend a Buy on GDL with a price target of Rs240.
Sharekhan - Tata Tea
Tata Tea
Cluster: Apple Green
Recommendation: Buy
Price target: Rs1,040
Current market price: Rs789
Nicely brewed
- Tata Tea Ltd (TTL) is transforming itself from just a bulk tea player to a branded/packaged tea player.
- With various TTL brands acquiring strong recognition and respectable market share, we believe that the transformation strategy adopted by TTL is well on track.
- TTL is further derisking its business model by exiting/restructuring its bulk tea manufacturing portfolio.
- Though the transformation strategy is not reflected in the company's profit numbers, the company's profitability in the future will be driven by the better revenue mix, cost cutting and lower interest burden.
- The derisked business model makes us believe that the stock's current valuation is cheap compared to that of its peers in the branded fast moving consumer goods (FMCG) business.
- At the current market price of Rs789 the stock is trading at 13.2x its FY2007E earnings per share (EPS) and at 8.0x its FY2007E enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA). We recommend a Buy on the stock with a price target of Rs1,040
Thursday, August 11, 2005
Sharekhan - Ultratech
UltraTech Cement
Cluster: Ugly Duckling
Recommendation: Buy
Price target: Rs490
Current market price: Rs384
Ultra-profitable
Key points
- Cement prices in the country have risen in the past one year and are expected to remain buoyant owing to a rising demand, depleting surplus supply and slow-down in capacity addition.
- We expect UltraTech Cement Ltd (UCL), which has the highest leverage to cement prices, to benefit the most from the continued uptrend in cement prices.
- UCL's freight costs are high mainly due to the long lead distance for its cement markets. We believe that the synergies with Grasim would help it in reducing its freight costs and in improving its margins.
- UCL has lined up a capital expenditure (capex) plan of Rs1,003 crore over the next two years; this includes a Rs540-crore, 92-megawatt (MW) thermal power plant for captive use. This shall reduce its dependence on grid power and lower its power cost.
- The construction boom in the Middle-East has increased the export prices of cement and clinker by 59% year on year to US$43 FOB and US$35 FOB respectively. Since around one-third of UCL's capacity is located near the Gujarat port we expect the company to be the prime beneficiary of the buoyancy in the export market.
- Driven by the firm cement prices, increased utilisation levels and the company's transformation into an efficient cement producer UCL's net profit is expected to grow at a healthy compounded annual growth rate (CAGR) of 76% over FY2005-07.
Tuesday, August 09, 2005
Update on IOC Cheating Case
I received a mail from one of the IOC Personnel asking for my Phone Number and Address which I have given. Let us see what comes out ofit.
Monday, August 08, 2005
Sunday, August 07, 2005
Cheating at IOC Outlet
This happened today - Aug 7th 2005. I wanted to fill some petrol and had gone to the IOC Outlet at Airport Road - Bangalore. I asked to fill up for 200 rupees.
When I was paying money to the other person there, I just turned away for a moment. Meanwhile, the guy who fills up the petrol - says - he filled up for 50 rupees - the LCD showing 50 rupees. I clearly saw that he hadn't filled up - he just says - he heard for 50 rupees and says - he will fill for 150 rupees. I told him I saw that no petrol was put in. He sheepishly didn't even argue and filled up for 200 rupees.
Actually, the same thing happened the last time I went to fill up the petrol at the same outlet - the exact same thing happened except that I did not notice whether he had filled up petrol for 50 rupees.
I posted a complaint at the IOC website. Keep a watch when you get your fuel filled next time.
Saturday, August 06, 2005
Subscribe to:
Posts (Atom)