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Thermax acquires Danstoker – A European biomass boiler maker for Euro 30 mn
Thermax acquired Denmark based Danstoker A/S along with its subsidiary Omnical Kessel, Germany for Euro 29.5 mn. Danstoker (along with Omnical) is a manufacturer of biomass, oil & gas based boilers and heat recovery systems and products for a wide range of industries. Danstoker has manufacturing facilities in Denmark and Germany with marketing presence in UK, France and Russia. Its core products range from 200 to 100,000 kg of steam / hour and design pressures upto 86 bar. Danstoker is a profitable company with revenues of Euro 40 mn pa and employs 237 employees.
We believe that the acquisition will enhance Thermax’s packaged boiler product portfolio under the Cooling & Heating Business Unit. However, in absence of key earnings information of Danstoker, we are unable to determine the impact on the Thermax’s earnings – await clarity in the same to factor it in our earning estimates. At CMP the stock is trading at 27.5X FY11E and 22.1X FY12E consolidated earnings of Rs31.8 and Rs39.5 per share respectively. We have a BUY recommendation on Thermax.
GIPCL Q2FY11E Result Estimates (Results on 10th November)
We expect Q2FY11E to be strong on the back of very low base in Q2FY10 due to plant maintenance in the Q2FY10 quarter. We expect revenues to grow 7% yoy to Rs2.1bn. Expect 392bps YoY improvement low base) in EBITDA margins to lead to EBITDA growth of 27% yoy. APAT is expected to grow by 100% YoY to Rs249mn. Reported PAT to be higher due to Rs88mn income tax refund received last quarter. Key things to watch - (1) PLF of the plants, (2) update on new plant commercialization and (3) update on further expansion of 600MW.
Aurobindo Pharma Q2FY11 Result Update; Above estimates; Raise target price; BUY; Target: Rs1,581
n Aurobindo’s Q2FY11 performance was above estimates with a) Revenues at Rs10.4bn (est. Rs9.9bn), b) EBITDA at Rs2.5bn (est. Rs2.1bn), and c) APAT at Rs1.4bn (est. Rs1.1bn)
n Strong revenue growth was driven by 38% growth in formulation business, higher dossier income (Rs699mn vs. Rs400mn) and ramp-up in SEZ facility (full impact in Q3FY11)
n APAT (excl forex gain of Rs546mn net of tax), was up 35% to Rs1.4bn
n On account of strong performance, raise target price to Rs1,581 (earlier Rs1,242); Maintain Buy
PGCIL FPO Note; Core ROE of 22.5% offered at 1.5x; No brainer; subscribe; Price Band: Rs 85-90
n FY10 actual core ROE of 21.3% - (1)18.9% from regulated business, (2) 1.1% from STOA, (3) 1.3% from consultancy and (4) -1.7% reduced by deferred tax accounting
n Core ROE to increase by 1% to about 22.5% in next two years led by Short Term Open Access volumes; Potential of further 1% ROE upside if assume likely numbers on volumes
n FPO at 1.5xFY13E Book, cheap on absolute basis with core ROE of 22.5% and relative basis – NTPC core ROE at 24% (including 3% from UI) and P/BV at 2.1x
n Operating cash flow yield of 16% in FY12E; November 11 target of Rs128/Share; Sure Shot returns; Subscribe
Eicher Motor Q3CY10 Result Update; Margins to remain under pressure in short term; Not Rated
n EBIDTA margin disappoints at 7.2% (est. of 9.2%) due to lower topline (Rs 11.0bn vs est. Rs11.6bn) & higher staff cost. Lower other income impacts APAT ( Rs 387mn vs est. 675mn)
n Price increased by 2% to 4%in CVs to pass on the emission cost and some of the other cost pressures. Margins under pressure in the short term due to focus on HCVs
n Valued the stock on SOTP basis with TP of Rs 1,326 (current business – Rs 1,173, NPV of engine business – Rs 153).
n Was a preferred play in the CV space since last two quarters. Find valuations unattractive, post the strong outperformance
ICRA Q2FY11 Result Update; Robust results; raising to ACCUMULATE; Target: Rs1,550
n ICRA’s Q2FY11 results above expectations with operating revenue at Rs484mn and Adj. net profit at Rs141mn
n The revenue growth was driven by healthy growth in rating, consulting and professional services segment
n Operating margins expanded by 524bps yoy to 41.2% as the operating leverage played out partially with controlled costs
n We expect the 23% CAGR in core earnings over FY10-13E. Upgrade to ACCUMULATE with TP of Rs1,550, valuing at 16x FY13E EPS (now introduced) plus cash of Rs365/share
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