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Markets extend fall
The Indian stock market continued to fall during the week, marked by volatile
sessions, with the Sensex and Nifty losing 2.1% each. The market ended the
week on a negative note, following concerns on high inflation and the
ongoing Egypt crisis. Food inflation continued to remain high at 17.1%,
compared to 15.6% in the previous week. BSE mid-cap and small-cap indices
underperformed compared to large-cap indices during the week, falling
2.4% and 2.5%, respectively. On the sectoral front, the BSE FMCG was the
biggest loser, falling 6.4%, followed by the BSE Realty index, down 3.5%.
However, the BSE Metal index outperformed the others, gaining 0.7%.
Margins pressure and Egypt crisis drag FMCG index
The BSE FMCG index underperformed the Sensex by losing 6.5% during the
week. Heavyweight ITC (weightage of 51.7%) led the fall, losing 9.2% over
the week, despite strong 3QFY2011 results. Amongst our universe, Colgate,
Nestle, Marico and GCPL shed their gains by 4-12%, impacted by 3QFY2011
results, which saw shaving off their gross margins on account of
raw-material price inflation. Moreover, the ongoing Egypt crisis acted as a
further dampener to FMCG stocks. Dabur and GSKCHL outperformed the FMCG
index by gaining 1.3% and 3%, respectively, while HUL remained flat.
Inside This Weekly
DB Corp - Event Update: DB Corp has announced its entry into Maharashtra
with a Marathi daily, while postponing its entry into Bihar till the end of
FY2012. While we have not factored the launch into our numbers as we
await more details, we are confident on management's track record of
successful new launches. We maintain Buy on the stock with a Target Price
of `358, based on 21x FY2013E earnings.
J&K Bank - 3QFY2011 Result Update: For 3QFY2011, J&K Bank registered
healthy net profit growth of 19.9% yoy to `168cr, above our estimates of
`121cr, primarily on account of lower-than-estimated provisioning expenses.
We were conservatively penciling in higher NPA provisions to create a margin
of safety considering the political disturbances in J&K during 9MFY2011.
We maintain Buy on the stock with a Target Price of `987.
Maruti Suzuki - 3QFY2011 Result Update: Maruti Suzuki reported its
3QFY2011 results, which were marginally below our estimates largely due
to adverse product mix, drop in average net realisation and one-time
expenses related to employee costs. We have revised our earnings estimates
marginally downwards to factor in lower-than-expected performance during
3QFY2011. Owing to the recent correction in the stock price, we recommend
Buy on the stock.
NTPC - 3QFY2011 Result Update: NTPC's 3QFY2011 top line grew by
19.3% yoy to `13,964cr, aided primarily by higher fuel costs, which led to
higher tariffs. Operating profit grew by 10.5% yoy to `4,300cr. Adjusted net
profit increased by 11.0% yoy to `2,319cr, aided by higher PAF leading to
higher incentives. We maintain Buy on the stock with a Target Price of `230.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Markets extend fall
The Indian stock market continued to fall during the week, marked by volatile
sessions, with the Sensex and Nifty losing 2.1% each. The market ended the
week on a negative note, following concerns on high inflation and the
ongoing Egypt crisis. Food inflation continued to remain high at 17.1%,
compared to 15.6% in the previous week. BSE mid-cap and small-cap indices
underperformed compared to large-cap indices during the week, falling
2.4% and 2.5%, respectively. On the sectoral front, the BSE FMCG was the
biggest loser, falling 6.4%, followed by the BSE Realty index, down 3.5%.
However, the BSE Metal index outperformed the others, gaining 0.7%.
Margins pressure and Egypt crisis drag FMCG index
The BSE FMCG index underperformed the Sensex by losing 6.5% during the
week. Heavyweight ITC (weightage of 51.7%) led the fall, losing 9.2% over
the week, despite strong 3QFY2011 results. Amongst our universe, Colgate,
Nestle, Marico and GCPL shed their gains by 4-12%, impacted by 3QFY2011
results, which saw shaving off their gross margins on account of
raw-material price inflation. Moreover, the ongoing Egypt crisis acted as a
further dampener to FMCG stocks. Dabur and GSKCHL outperformed the FMCG
index by gaining 1.3% and 3%, respectively, while HUL remained flat.
Inside This Weekly
DB Corp - Event Update: DB Corp has announced its entry into Maharashtra
with a Marathi daily, while postponing its entry into Bihar till the end of
FY2012. While we have not factored the launch into our numbers as we
await more details, we are confident on management's track record of
successful new launches. We maintain Buy on the stock with a Target Price
of `358, based on 21x FY2013E earnings.
J&K Bank - 3QFY2011 Result Update: For 3QFY2011, J&K Bank registered
healthy net profit growth of 19.9% yoy to `168cr, above our estimates of
`121cr, primarily on account of lower-than-estimated provisioning expenses.
We were conservatively penciling in higher NPA provisions to create a margin
of safety considering the political disturbances in J&K during 9MFY2011.
We maintain Buy on the stock with a Target Price of `987.
Maruti Suzuki - 3QFY2011 Result Update: Maruti Suzuki reported its
3QFY2011 results, which were marginally below our estimates largely due
to adverse product mix, drop in average net realisation and one-time
expenses related to employee costs. We have revised our earnings estimates
marginally downwards to factor in lower-than-expected performance during
3QFY2011. Owing to the recent correction in the stock price, we recommend
Buy on the stock.
NTPC - 3QFY2011 Result Update: NTPC's 3QFY2011 top line grew by
19.3% yoy to `13,964cr, aided primarily by higher fuel costs, which led to
higher tariffs. Operating profit grew by 10.5% yoy to `4,300cr. Adjusted net
profit increased by 11.0% yoy to `2,319cr, aided by higher PAF leading to
higher incentives. We maintain Buy on the stock with a Target Price of `230.
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