Indian Stock Market

Bank of America has given a Buy rating on SUN TV Network.

Here is the excerpt from the Report.

Sun TV Network

Research: Bank of America

Rating: Buy

CMP: Rs 399

Bank of America retains ‘Buy’ rating on Sun TV Network with a target price of Rs 480. Sun TV (SNL) reported strong Q4 results with revenue growth of 42% y-o-y to Rs 390 crore, driven by about 45% y-o-y growth in advertisement and 57% growth in DTH lead subscription revenues. DTH revenues grew 90%. Q4 PAT grew 45% y-o-y to Rs 160 crore. FY10 PAT grew 41%. DTH revenues in FY10 grew 118% to Rs 180 crore. Advertisement revenues grew 40% to Rs 850 crore. Contribution from channels launched during the year i.e. comedy and kids, and strong focus on monetising inventory during off peak hours lead to strong growth. Bank of America forecasts strong 27% earnings CAGR over FY10-12E and retains ‘Buy’ rating given the view that regional markets are likely to grow faster than pan India and SNL is likely to benefit given its strong leadership position in the southern region, making it more resilient to an economic downturn versus peers.

Buy Venus Remedies – Pharma Sector – Small cap pick

About Venus Remedies:

Currently the stock is trading at Rs.265 per share. I expect the price to be in the range of Rs.350-400 in 1 year.

Chandigarh-based Venus Remedies is a major producer of oncological and cephalosporine injectable products. The company has de-risked its business model by having presence in the high growth therapeutic segments such as anti-infective, oncology, cardiology and neurology.

The company follows the strategy of forging marketing tie-ups with companies in India and abroad for specialty products. The company is also looking at contract manufacturing opportunities. It has filed many international patents for sophisticated formulations of anti-biotics and oncological therapeutics.

Last week, Venus launched world’s first once-a-day painkiller injectable in India. The company hopes to capture 10% market share in the early years of its launch and is already in talks with global pharma companies for out-licensing the product.

In March 2010, the company got Indian patent for one of its product Sulbactomax and has also filed patent for this product in another 50 countries including the US, Europe, Australia, Japan and Latin American countries.

Growth Strategy :

Registrations approved in 19 semi-regulated markets in 2008-09 are expected to drive the company’s prospects and profitability. Its launch of innovative products in India and other international geographies (through marketing alliances) will strengthen revenues.

Contract manufacturing opportunities with leading global brands are expected to yield attractive results. In-licensing initiatives are likely to reinforce our performance.

Financials :

The company’s net sales have grown at a compound annual growth rate (CAGR) of 55% over the past five years to Rs 310 crore in FY10. The net profits have grown at a CAGR of 62% to Rs 45 crore in FY10. The company has undergone a capex of Rs 200 crore over the past five years.

It has logged a strong performance for the first quarter ended March 2010. With 27% increase in net sales and 31% increase in net profit, the company has logged an improved performance sequentially.

Company Valuations:

The company has outperformed the Sensex and is currently valued at little over than its annual turnover. The stock is trading at a price-to-earnings multiple of 5.

These relatively lower valuations indicate the scope for the company’s stock to appreciate further as company continues to deliver growth. Investors looking at bottom-fishing in the small-cap space can consider this scrip.

Source: Economictimes.com

Buy Glenmark Pharma for Target Rs 728

Religare Research has maintained ‘buy’ on Glenmark Pharmaceuticals for a target price of Rs 728. The company has acquired seven pharmaceutical brands in Poland from Iceland-based Actavis and its affiliate Biovena for an undisclosed sum.

The acquisition will give Glenmark an entry point into Poland and apart from opening up newer geographies, it will allow the company to replicate its domestic product portfolio in the region.

Glenmark estimates sales of $15 million from the seven brands for 2008-09 with a 20 per cent growth in 2009-10.

Religare has valued the non-R&D business at 18x FY10E earnings, in line with peers, which yields a fair value of Rs 508 per share and the three lead molecules of Genmark’s NCE pipeline at Rs 220 per share. At the target price, the stock would trade at 21.7x FY09E and 17x FY10E earnings.

TimeTechnoInitiatingCoverage.pdf

Inox-RU4QFY2008-110608.pdf Research Reports: Inox Leisure

pitti laminations.pdf Pitti laminations

Great Eastern Shipping

cmp: Rs 387.05

target price: Rs 460

Enam Securities has initiated coverage on Great Eastern Shipping with an ‘outperformer’ rating as it feels that the company’s net asset value (NAV) ‘could provide an upside surprise going ahead’ as ‘tanker asset prices are expected to improve in FY09’. Due to the hyper-cyclical nature of the shipping industry, the brokerage has used the traditional NAV-based methodology. “At estimated NAV of Rs 541 per share for Q4FY08, the stock is currently trading at 31% discount, which is marginally lower than mid-cycle median of 29% discount,” says the report. Another comforting factor is that most global shipping companies are currently quoting in the range of 22% discount to 15% premium to NAV, it adds. Enam feels that the company’s young fleet profile (11.2 years) and a lower proportion of single hull vessels provides downside protection and deserves a lower discount to NAV, if not valued at par. The target price of Rs 460 is based on a discount of 15% to NAV, at the lower end of the range for its global peers

Mundra Port and SEZ
CMP: Rs642.20
Target Price: Rs 571

Batlivala & Karani has initiated coverage on Mundra Port and SEZ with an ‘underperformer’ rating due to its location and draft advantage, apart from factors like surging port traffic and the company’s industrial SEZ. “The participation of non-major ports (like Mundra Ports) would be critical to achieve the required capacity to handle around 1,000 million tonnes of total port traffic by 2012,” says the report. The report also highlights the point that Mundra Port has one of the deepest drafts available. “The deepest draft enables Mundra to accommodate large vessels, which brings along the concomitant economies of scale advantage to the customer,” adds the report. The company also intends to develop around 32,250 acres of land surrounding Mundra Port. “The company has in its possession 18,500 acres, out of which 6,750 has been notified as an SEZ. The balance land is under various stages of acquisition,” says the brokerage. Mundra Port has strategic stakes in Dahej Port, where Adani (Dahej) is building a solid cargo terminal of 15 million tonnes capacity, along with Petronet LNG

GMR Infrastructure
CMP: Rs 144.55
Target Price: Rs 187

Citi has initiated coverage on GMR Infrastructure with a ‘buy’ rating as the company gets ready to bid for road, hydropower and power transmission projects. The brokerage feels that GMR Infrastructure is ‘looking to emerge as an infrastructure developer across geographies’. According to Citi’s estimates, airports and related real estate comprise 47% of GMR’s value, other real estate 19%, power plants 18% and roads 5%. It expects GMR’s earnings to grow at 51% CAGR over FY08E-11E on the back of a 37% growth in revenues. The company also has around $1 billion in cash, it adds. In a note to its clients, the company notes that the GMR Infra intends to sublease 250 acres of land at the Delhi airport and upfront, a major portion of rental revenues as interest-free deposit. Incidentally, this has come under some debate, as AAI would lose around 46% revenue share on the deposits. “While the final structure is still uncertain, we assume GMR upfronts 25% in the form of deposits. A no-deposit structure would imply a 6% lower target price,” adds the report.

Emkay Research has maintained buy rating on Yes Bank with a price target of Rs 260 in its April 10, 2008 research report. “The Bank reported strong set of numbers for 4QFY08, partially allaying the concerns on its exposure to Forex derivatives. The bank has reported Rs 645 mn of net profit for Q4 FY08, far ahead of research firm expectations of Rs 558 mn.

“We remain upbeat on Yes Bank’s business model of knowledge expertise and robust balance between fund and non-fund based services. The entry into new businesses which are relatively less capital intensive will add further value to the bank.”

Bilpower Ltd, engaged in manufacturing allied equipments for the power engineering sector, is pursuing ambitious expansion plans through organic and inorganic routes. According to the company management, this will help consolidate the company’s fundamentals.

The company is into the business of transformer lamination, motor stamping machines, manufacturing and repair of transformers and EPC contracts for laying transmission and distribution lines.

The Rs 60-crore Wada greenfield project in Maharashtra is fast coming up. Spread across 73,624 square meters, the plant will manufacture motor stampings, for which cold rolled non-grained oriented electrical steel forms a key component.

“The first phase of the project is already complete at an investment of Rs 35 crore and production is expected to commence from April. We have funded the project through internal accruals only,” said Ajay Parekh, manager- finance.

Ashok Bansal, director-finance, said, “we import two most important and rare raw material ingredients CRNGO (used in motor stamping) and CRGO (used in lamination division), enjoying good sources at the global level.”

Bilpower is also planning another greenfield project at Wada in Thane, for the manufacture of EHV power transformers, at a cost of Rs 45 crore.

The plant would have capacity of 5,000 mva to 6,000 mva, and would be set up by subsidiary Tarapur Transformers. The company has already acquired 15 acres of land for the project.

Tarapur is also involved in refurbishing and upgrading transformers up to 315 mva at its Boisar Unit – I in Maharashtra.

“The first phase of the EHV power transformers project will be tentatively commissioned by the end of 2008. It is being funded through internal accruals and term loans while we have plans to go for a follow-on public offer for the second phase,” said Chairman Suresh Kumar Choudhary.

Bilpower is also in talks with other companies for a probable buyout to expand capacities. For its transformer lamination business, which has plants in Baroda, Silvassa, Kanchad and Uttaranchal, it recently tied up with Sun Trans. Pvt. Ltd. based in Sivassa. This has resulted in capacity expansion of 4,500 mtc to 16,500 mtc.

“We are exploring all the options of inorganic growth in our all business verticals. We are at advanced stage of negotiations with several companies,” said Bansal, but did not elaborate further.

Industry talk has it Bilpower may be looking to acquire Kolkata-based Adhunik Metaliks’ tower division.

The company is now concentrating on bidding for EPC contracts. So far the company has applied for tenders in North India but has not been successful.

According to Ashish Bhagra, CEO, Bilpower, the company plans to increasingly focus on such contracts.

The company posted a net profit of Rs 6.62 crore on a total income of Rs 87.32 crore for third quarter ended Dec 31, 2007. For the nine month period ended December, the net profit was Rs 17.04 crore and total income Rs 224.03 crore. This translates to a 24 per cent jump in bottomline quarter-on-quarter and 32 per cent surge for the nine months.

In India, it has a clientele of 40, the big ones being Suzlon, Voltamp Transformers, Viswanath Projects, Accurate Transformers, Crompton Greaves, Alstom, BHEL, NTPC.

The company also has considerable overseas presence.

Today on BSE, Bilpower shares were at Rs 166.95, down 2.68 per cent from Tuesday’s close. The 52-week high for the stock was Rs 374, touched on Jan 2 this year, and the low Rs 138.05 seen on Mar 28, 2007

Said Bansal, “investors will certainly reap the benefits of the expansion plans in long run if they stay invested.”

Giving a technical perspective on the scrip, Sachin Chavan, a Mumbai based analyst said, “the scrip has good support at Rs 140. Big investors are looking for it. Under stable conditions, the share price can move up to Rs 225-230 in a couple of months.”

Emkay research has maintained buy rating on Hindustan Construction Company HCC with target price of Rs 260 in its January 22, 2008 report. “We believe that the company is on a strong growth trajectory and with more clarity emerging in the real estate business; the company looks to set to unlock value for the shareholders. We value the company on a SoTP based valuation of Rs 260 / share assigning a value of Rs 148 / share to the core construction business (15xFY10E), Rs109 / share to the real estate business and Rs 3/ share for the BOT projects. We maintain our ‘BUY’ recommendation,” says Emkay report.

Angel Broking has recommended buy rating on Tech Mahindra with a price target of Rs 1222 in its January 24, 2008 report. “During 3QFY2008, Tech Mahindra recorded a strong 8.1% qoq growth in its consolidated Topline. On a standalone basis, the growth stood at 6.1% qoq. Going ahead, we expect Tech Mahindra to record a 32.6% CAGR growth in Topline and a 106.2% CAGR growth in Bottomline over FY2007-10E. EBITDA Margins to trend downwards and fall to 20% by FY2010E v/s over 25% in FY2007. At the CMP, the stock trades at 8.5x FY2010E EPS. These valuations are fairly attractive and even considering a slowdown or recession in the US, the current consolidation and uncertainty in the global TEM market, Rupee appreciation as also a possible higher tax rate post FY2009, the stock still offers room for upside. We recommend a buy on the stock, with a 12-month target price of Rs1,222. However, given the current negative sentiment towards the sector, stock price out-performance seems unlikely in the short-term and investors will need to be patient if they are considering exposure to the sector, according to Angel Broking report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Buy RELIANCE Industries

CMP : 2900.RS

Target: 4000.RS

6-12 Months

Why should you Buy ?

* Refinery Expansion

* Retail Drive

* Oil and Gas Exploration

* Reliance Petroleum Valuation

* Acquisitions

* SEZ Plans

Probable Steps to Increase Share Price by RIL :

* Bonus

* Reliance Retail IPO

* Reliance Petroleum Valuation Increase

* Acquisitions

Reliance Industries must be held by everybody though the price appears stretched.

Buy Reliance Petroleum @ 225.RS , Target: 300.RS

Buy Reliance Petroleum at present price of 225.RS  .Target of 300.RS Could be attained in 3 months.

Price Refining Margins from REL PET could be higher than RIL.

2008-2009 is going to be the First Full Year of Operations.