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Thursday, May 17, 2012
Markets may see a slightly higher start
The Indian markets are expected to begin the session on a positive note tracking supportive Asian markets. SGX Nifty is trading 19.50 points higher. Events for the day: Results: Bajaj Auto, Bajaj Holdings & Investment, Jaypee Infratech, Jaiprakash Power Ventures, United Breweries. Headlines for the day: Federal Bank launches debit cards for HNIs. SpiceJet may deploy Q400 planes in north India. 3 striking AI pilots resume duty, stir continues on day 9.
Speciality Restaurants IPO Analysis
Speciality Restaurants, promoted by Mr. Anjan Chtterjee and Suchanda Chatterjee, is a fine dining operator with 49 Company owned and operated restaurants, 20 Franchisee and 13 confectionary outlets spread across 20 cities in India and one in Bangladesh. The promoters had launched the network in 1992 under the name Only Fish (later renamed to Oh! Calcutta). First Mainland China restaurant was launched in 1994. Most of tits restaurants located in Metros and Tier 1 cities and it continues to expand its operations in these places and opportunistically in Tier II cities. In future it seeks to expand mainly through ownership and opportunistically through franchising on a Franchisee Owned Company Operated (FOCO) model across India as well as certain international destinations. The FOCO model allows it to enter and operate in markets, which it may not otherwise exploit particularly in to the Tier II cities. Also, the majority of its restaurants are located in western India, which has the highest proportion of people dining out regularly. The Company's flagship brand Mainland China serves Chinese cuisine in a standalone fine dining setting. Chinese is one of most popular foreign cuisines in India. The Company has 36 Mainland China restaurants across India as well as one in Bangladesh. Notably, the revenues contribution from Mainland China is steadily improving from 53.27% in FY'09 to 61.23% in FY'11. It believes that maintaining and enhancing the Mainland China brand is important for maintaining competitive advantage. Also, the brand Oh! Calcutta encompassed seven restaurants across India as well one in Bangladesh. This brand features a range of cuisines from the east India city of kolkata, including the Bengali, Nawabi, British and continental cuisines served in a fine dining setting. The other restaurant brands it owns are Sigree, Flame & Grill, Haka, Just Biryani, KIBBEH, Kix, Machaan, Shack as well the confectionary brand Sweet Bengal. It has consistently improved its revenues and earnings with expanding network of restaurants. The Company increased owned and operated 30 restaurants as on 31st March 2008 to 45 as of 31st March 2011 and further to 49 as of February 29th 2012. Also, the franchise based restaurants from one as of 31st March 2008 increased to 18 as of 31st March 2011 and further to 20 as of February 29th 2011. The revenues increased by 34% to Rs 173.16 crore in FY'11. The Revenue split across the brands in FY'11 was: Mainland China (60.3%) followed by the Oh! Calcutta (12.3%), Sigree (9.5%), Flame & Gril (5.1%), Machaan (4.1%), Haka (3.8%) and others (4.9%). The restaurants in western India has contributed 39% of revenues in FY'11 and 41% of revenues for the nine months ended December 2011. Also, number of guests served were at 2.59 million for FY'11 and 2.09 million in nine months ended December 2011 with an average 7313 and 8127 guests per day respectively. The major portion of proceeds (around Rs 131.60 crore) is proposed to be utilized for opening of 45 New Restaurants for next three fiscal years FY'13, FY'14 and FY'15. Of this, Rs 92.27 crore is planned to be spent towards interior and equipment costs. In addition, Rs 15.1 crore is proposed to be utilised for the development of food plaza in Rajarhat, kolkata, West Bengal. Going forward, The company plans to maintain a tight basket of brands with a focus on Mainland China brand, while targeting a few new market segments. It may introduce new products to adapt to dining trends, shifts in guest spending and tastes and nutrition preferences. Strengths: It has well recognized brands Mainland China and Oh! Calcutta brands with experience of over 17 years. Diversified business model with Mainland China (offers authentic Chinese cuisine), Oh! Calcutta (diverse traditional cuisines), Sigree (authentic Indian cuisine), Flames&Grill (serves Kebabs), Machaan (traditional Indian dishes & children dishes) etc. "Asset light model" as all the restaurant properties are leased. The strong process established over the past 12 years for the quality control, brand standards, operations monitoring and food and service audits. Presence in key strategic locations Weaknesses: The fine dining sector of the restaurant industry is highly fragmented and competitive. The slowdown in the economy could impact the business. Rising property rentals Valuation: Over the last three years (FY08-11), the company's revenues have increased at a CAGR of 27% and reported net profit at a CAGR of 47%. The revenues increased by 34% to Rs 173.16 crore in FY'11. OPM increased to 22% (improved by 150 bps YoY). Accordingly there was robust 44% growth in operating profit to Rs 38.15 crore. There was sharp rise in other income (100%) and marginal decline in interest cost (3%), partly offset by the increase in depreciation (25%). Eventually, PBT grew by 69% to Rs 24.08 crore. After the rise in effective tax rate by 130 bps to 33.5%, there was 66% growth in PAT to Rs 16.02 crore. After adjusting for prior period items, adjusted PAT increased 40% to Rs 15.63 crore. For the nine months ended December 2011, Revenues stood at Rs 149.70 crore with OPM of 20.9%, PAT was Rs 15.02 crore for the same period. At the issue price of Rs 146-155, the P/E works out 43-45 times the FY'11 EPS Rs 3.4 (on post-IPO equity). There is no comparable listed player focused on fine dining. However fine dining is part of Food Service sector of which Jubilant Foodworks is a listed player trading at FY 2011 P/E of 103. Jubilant Food's brand, business model and prospects are more robust than that of Speciality Restaurants. Due to rising urbanization and nuclear families, growing young population, growing number of working women, increasing preference for dining out/ eating outside food and changing food habits away from traditional food, the Food service sector offers excellent growth potential. But there is scarcity of listed stocks in this sector. Hence valuations of such stocks will remain high.
Market may open higher on firm Asian stocks
The market may edge higher in early trade tracking mostly higher Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 33 points at the opening bell. Bajaj Auto announces FY 2012 results today, 17 May 2012. Marico said after market hours on Wednesday that it has allotted a total of 2.94 crore equity shares at Rs 170 per share on preferential basis to Indivest Pte., an affiliate of Government of Singapore Investment Corporation, and Baring India Private Equity Fund III Listed Investments. Indivest Pte was allotted 2.2 crore shares and Baring India Private Equity Fund III Listed Investments was allotted 73.52 lakh shares.
Tuesday, May 15, 2012
NTPC hits 52-week low after slashing capacity addition target
NTPC fell 2.87% to Rs 143.60 at 15:25 IST on BSE, with the stock extending 5-day 5.49% slide triggered by the state-run power generation firm slashing its capacity addition target for the next five years. Meanwhile, the BSE Sensex was up 99.87 points or 0.62% to 16,315.71. On BSE, 4.61 lakh shares were traded in the counter as against average daily volume of 1.50 lakh shares in the past one quarter. The stock hit a low of Rs 142.60 so far during the day, which is a 52-week low for the counter. The stock hit a high of Rs 147.45 so far during the day. The stock had hit a 52-week high of Rs 192.30 on 8 July 2011.
BSE Bulk Deals to Watch - May 15 2012
Deal Date Scrip Code Company Client Name Deal Type * Quantity Price ** 15/5/2012 524412 Aarey Drugs JBSHARES & STOCKS LTD B 114996 21.56 15/5/2012 524412 Aarey Drugs JBSHARES & STOCKS LTD S 123531 20.20 15/5/2012 511706 Action Fin SOMYA TRADERS PVT LTD B 51000 37.00 15/5/2012 530581 Ekam Leasing GAJRAJ JAIN S 57800 33.00 15/5/2012 524830 Elder Health M.PRASAD & CO LTD B 26221 102.45 15/5/2012 524830 Elder Health NIRMALA SHASHIKUMAR SAVADEKAR S 21000 101.50 15/5/2012 500142 FGP UNIVERSAL INDUSTRIAL FUND LIMITED B 225000 2.62
NSE Bulk Deals to Watch - May 15 2012
Date,Symbol,Security Name,Client Name,Buy/Sell,Quantity Traded,Trade Price / Wght. Avg. Price,Remarks 15-MAY-2012,ORCHIDCHEM,Orchid Chemicals Ltd.,CPR CAPITAL SERVICES LTD.,BUY,660802,126.48,- 15-MAY-2012,ORCHIDCHEM,Orchid Chemicals Ltd.,QUADEYE SECURITIES PRIVATE LIMITED,BUY,596770,125.47,- 15-MAY-2012,RSSOFTWARE,R. S. Software (I) Ltd.,VIKAS SUBHASH CHANDWANI,BUY,65220,69.16,- 15-MAY-2012,SHILPAMED,Shilpa Medicare Ltd,TANO MAURITIUS INDIA FVCI II,BUY,200000,245.00,- 15-MAY-2012,ORCHIDCHEM,Orchid Chemicals Ltd.,CPR CAPITAL SERVICES LTD.,SELL,606802,126.67,- 15-MAY-2012,ORCHIDCHEM,Orchid Chemicals Ltd.,QUADEYE SECURITIES PRIVATE LIMITED,SELL,596770,125.52,- 15-MAY-2012,RSSOFTWARE,R. S. Software (I) Ltd.,VIKAS SUBHASH CHANDWANI,SELL,65220,69.16,-
L&T jumps after decent revenue and order flow guidance for FY 2013
Key benchmark indices snapped five-day losing streak as market sentiment improved after data showed foreign institutional investors (FIIs) bought shares for the third day in a row on Monday, 14 May 2012. The barometer index, BSE Sensex, jumped 112.41 points or 0.69%, off close to 40 points from the day's high and up about 205 points from the day's low. The market breadth, indicating the overall health of the market, turned positive from negative in late trade. Index heavyweight Reliance Industries (RIL) was flat for the day after seeing intraday volatility. Indian stocks today, 15 May 2012, snapped 5-day losing streak. From a recent high of 16,912.71 on 7 May 2012, the BSE Sensex had declined 696.87 points or 4.12% in five trading sessions to 16,215.84 on Monday, 14 May 2012. The Sensex has declined 990.56 points or 5.71% in May 2012 so far (till 15 May 2012). The Sensex has gained 873.33 points or 5.65% in calendar 2012 so far (till 15 May 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,192.39 points or 7.87%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,803.45 points or 14.65%.
Sensex ends in red on high inflation nos
The Indian markets were highly volatile in trade today and closed the session in the negative zone. The Sensex down by 77 points and the Nifty fell 21 points after disappointment from rise in inflation. Major Headlines: April Inflation at 7.23% versus 6.89% in March L&T Q4 cons net profit marginally up by 5% Adani Ports Q4 cons net profit at Rs1102.07 cr Adani Power hits 52-week low after Q4FY12 results JSW Steel Q4 net profit declines by 9.67% Indian Indices: The Indian equity benchmarks wiped out all of its morning session gains and closed the session with marginal losses. Monthly Inflation numbers announced came in higher-than -expected, which also weighed on the sentiments. Weak European markets also added to the woes. Major heavyweight draggers were - RIL, HDFC Bank, ICICI Bank, Tata Motors, ONGC, BHEL and HDFC. Today, Nifty futures stopped trading for around half an hour while trading in the cash markets continued normally. On the economic front, Inflation for April 2012 came in at 7.23% versus 6.89% seen in March 2012. April Inflation was higher than the consensus estimate Looking at the earnings front, Larsen & Toubro shot up by 5% as the company reported a better than expected growth of 31.6% year-on-year in its adjusted profit after tax of Rs1,920 crore for the fourth quarter of FY12. The stock closed the session 1.84% higher in trade today. Also the net profit of JSW Steel in Q4 slipped by 9.67% to Rs752.18 crore for the quarter ended March 2012. At end of the day stock was down by 1.20%. Adani Power hits 52-week low after announcing Q4FY12 results, as the company reported its Q4 net profit at Rs290.16 crore for the quarter ended March 31, 2012. Today stock was down by 3.56%. The Sensex closed at 16215, down by 77 points and the Nifty fell 21 points to close at 4908. Market sentiment: The market breadth stood in favour of declines. Of the 2821 stocks traded on the BSE, 1047 (37.11%) rose, 1657 (58.74%) fell and 117 (4.15%) stocks remained unchanged Sectoral & stock screening: Among the 13 sectoral indices, seven sectors closed in red, while remaining six closed in green. Top Gainers: BSE HC which gained by 0.78%, BSE IT rose 0.41%, BSE CD up 0.36%. Top Losers: BSE Oil & Gas which fell 1.69%, BSE Bankex dropped 1.61% and BSE Realty slipped 1.27%. Among 'A' group stocks, top three gainers were- Divis Lab which rose 7.31%, TTK Prestige up by 4.73% and Lupin surged 4.36%. Top three losers were- Astrazeneca Pharma which slipped 7.45%, Strides Arcolab declined 5.85%, and Aurbindo Pharma skid by 5.68%. Global Signals The Asian shares eased on Monday (May 14, 2012) as investors saw more reasons to cut risk after talks in Greece to form a new government failed. A German vote pointed to growing opposition to austerity steps and China took further steps to support its fragile growth. The European shares fell on Monday to a four-month low as Greece's political deadlock and signs of an economic slowdown in China hit riskier assets, and traders and investors said they would avoid European equities as they felt markets could tumble further. The US stock index futures pointed to a lower opening on the Wall Street on Monday, as the Dow Jones and Nasdaq 100 future are trading in negative
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