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Kajaria Ceramics Q2FY11 Results Expectations - Net Sales Rs 2.1 bn, APAT Rs 131 mn
Kajaria Ceramics is expected to release their Q2FY11 numbers today i.e. October 12th, 2010.
Increased volumes due to commissioning of a vitrified tiles facility along with improved realisations are expected to result in 15% YoY growth in revenues to Rs 2.1 bn. Marginal decline of 40 bps is expected in EBITDA margins to 16% resulting in EBITDA of Rs 341 mn. Increased topline and lower interest cost is expected to result in 50% growth in PAT to Rs 131 mn resulting in AEPS of Rs 1.8.
For H1FY11, we expect the company to report 20% growth in revenues to Rs 4.1 bn. EBITDA margins however are likely to remain flat at 16% while aggregate AEPS for H1FY11 stands at Rs 3.3 over Rs 2.0 last year. For the full year FY11, we estimate EPS of Rs 6.7.
We have a BUY recommendation on the stock with a price target of Rs 91.
Emkaynomics; September 24, 2010; Fortnightly round up of key banking and economic indicators
n The growth in the non food credit has moved downwards to 19.1% for the week ended Sept. 24, 2010 and deposit mobilization inched down to 14.3%
n The CD ratio has moved upwards to 72.7% for the week ended Sept. 24, 2010
n Money supply growth has moved southward to 15.2% and the money multiplier grown to 5.0
n Call money rates as on Oct. 08, 2010 have risen by 30bps from last fortnight to 5.9%
n The spread between call money and reverse repo rates as on Oct. 08, 2010 stands at 90 bps
n Excess liquidity dried up and stood at `-146.7 bn. The repo balances stood at ~ `372 bn. and reverse repo at ~ `70 bn. for the week ended Sept. 24, 2010
n The spread between the long and short end OIS has been marginally inching up and stand at 55bps
Mahindra Satyam Re-initiating Coverage; Hard toil ahead; REDUCE; Target: Rs 81
n Reinitiate coverage on Mahindra Satyam(MS) with a REDUCE rating and a March’12 TP of Rs 81. We see hard toil ahead for the company as it tries to rebuild itself from the ashes.
n Mahindra Satyam faces numerous challenges in the form of a weaker competitive positioning, loss of vantage position in core areas of strength (refer section below)
n Forecast a strong 21% US$ rev CAGR over FY11E-13E (post a 6% YoY decline in FY11) along with improvement in OPM’s to 17.1% in FY12( V/s 8.3% in FY10 reported recently)
n Reinitiate with a REDUCE rating and a DCF based March’12 TP of Rs 81, (implying ~11.5x 1 yr fwd P/E, in line with mid tier peers). Valuations appear rich despite ~15% fall in ~2 weeks
JB Chemicals & Pharma Management Meet; Turnaround of domestic business to fuel growth; NOT RATED
n Russia/CIS business to act as JBCPL’s cash cow for funding its domestic expansion
n Higher thrust on the domestic business by way of increasing doctor coverage to contribute to top line as well as bottom line, going forward; Committed to grow domestic business by 3x in next 3-4 years
n Higher receivables in the Russia/CIS business not a concern as they are qualitatively sound
n 22-25% earnings CAGR over FY10-12E; Ideal candidate for re-rating
n Technical Comments
Below hourly averages
Nifty closed higher and maintained the 6100 level on the back of buying in metal, auto and oil companies’ shares. However, we still feel that this is just a relief rally as Nifty is still trading below its upward sloping trendline and also below its 20- and 50- hourly moving averages. Furthermore, there was also a negative crossover of 20- and 50- hourly moving averages in today’s session. Hence on the back of above observations we still feel that next round of selling will commence shortly.
BSE Oil & Gas:
BSE Oil & Gas sector has met our mentioned target of 10950 and still the momentum reading is showing strength and hence we are now increasing our targets to 11,200-level.
BSE Auto:
BSE Auto index has surpassed its 20- and 50-hourly moving averages. Also the momentum indicator has given a bullish crossover; hence we feel that this index can heighten upto 10,150 levels in the near future.
n Results Today
CMC | IndusInd Bank | Praj Inds. | Sintex Inds. |
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