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3QFY2011 Result Previews
Bajaj Auto
Bajaj Auto is slated to announce its 3QFY2011 results. We expect the company’s top line to
grow by 25% yoy to `3,951cr on account of 17% yoy growth in volumes. On the operating
front, EBITDA margin is expected to decline by 202bp yoy to 19.9% due to higher rawmaterial
costs. However, the bottom line is expected to witness 25% yoy growth to `596cr.
The stock rating is under review.
HCL Technologies
HCL Technologies is set to announce its 2QFY2011 numbers. We expect the company to
post revenue of US $869mn with 8.1% qoq growth on the back of volume growth of 6.1%
and 7.6% qoq in core software and infrastructure management services, respectively, along
with cross-currency benefit of 1.7% qoq. In INR terms, revenue is expected to grow by 5.1%
qoq to `3,898cr. EBITDA margin is expected to increase by 37bp qoq to 16.6% due to
cross-currency benefit and productivity gains. PAT is expected to come in at `360cr.
The company is expected to be the outperformer in Tier-I IT pack in terms of volume growth
because of its strong deal pipeline spanning across higher value-chain services.
The company is one of our preferred picks in the IT sector. At the CMP of `489, the stock is
trading at 15.5x FY2012 EPS of `31.5. We maintain Accumulate on the stock with a
Target Price of `515.
Orchid
Orchid Chemicals and Pharmaceuticals Ltd. (Orchid) is likely to announce its 3QFY2011
results. We expect net sales to register 2% yoy growth to `315cr (`308.8cr). OPM is expected
to expand by 305bp to 19% (16%). Net profit is expected at `35.5cr (loss of `16.8cr). We
currently have a Neutral recommendation on Orchid and would review it post the result and
management interaction.
Infotech Enterprises
Infotech Enterprises is expected to report its 3QFY2011 numbers. The company’s revenue is
expected to grow at 8.0% qoq to US $68.6mn. This robust growth is expected on the back of
strong volume growth momentum of 10% qoq in EMI. EBITDA margins are expected to
expand by 80bp to 16.3%. PAT is expected to grow at 14.7% to `38cr. We maintain our
Accumulate view on the stock with a Target Price of `184.
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