Angel Broking: Infy preview, SAIL and United Phosphorus News Updates

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


United Phosphorus announces conversion of FCCB
United Phosphorus (UPL) has announced conversion of outstanding FCCB’s into equity. Of
the total outstanding FCCB’s worth US $80mn, FCCB’s worth US $78mn have been
converted into equity, while the balance worth US $2mn have been redeemed. At `160, the
stock is trading at attractive valuations of 10.5x FY2012E EPS. We maintain a Buy on the
stock, with a Target Price of `198.

3QFY2011 Result Previews
Infosys Technologies
Infosys Technologies (Infy) is set to announce its 3QFY2011 results today. We expect Infy to
report stellar performance, with revenues coming at US $1,626mn v/s US $1,496mn in
2QFY2011, up 8.7% qoq. Revenue growth is expected to come on the back of strong volume
growth of 7.1% qoq with higher offshore mix and cross-currency positive impact of 1.3%. In
rupee terms, revenues are expected to increase by 5.0% to `7,292cr v/s `6,947cr in
2QFY2011, a lower growth against dollar revenues as the rupee appreciated 3.5% qoq
against the USD. EBITDA margin is expected to decline by 40bp to 32.9% due to the impact
of mid-year promotions in October 2010. Thus, PAT is expected at `1,815cr v/s `1,737cr in
2QFY2011, up 4.5% qoq.
Key points to watch out for include: a) Any revision in USD revenue growth guidance, which
we expect to scale up from 24–25% to 27–28% yoy for FY2011on the back of buoyant
demand, and b) management’s commentary on the nature as well as quantum of client
budgets for CY2011 with any possibility of an uptick in pricing, which could lead to re-rating
of the sector. We remain positive on the stock with an Accumulate rating and Target Price of
`3,563.

SAIL
SAIL is slated to announce its 3QFY2011 result today. The company’s top-line is expected to
grow by 11.6% yoy to `10,825cr. On the operating front, SAIL is expected to report a 931bp
contraction in operating margins to 17.3% on account of higher costs. Thus, we expect net
profit to decline by 28.4% yoy to `1,200cr. We maintain an Accumulate on the stock, with a
Target Price of `198.