India Equity Research Reports, IPO and Stock News
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Maruti Suzuki Limited: The paradox of dominance [Srinivas Rao]
The changing revenue-mix in the 4W industry and competition activity are Maruti’s key challenges in the medium term. Its value-for-money positioning built on the pillars of low-cost-of-ownership and reliability may need to adapt as Indian consumers trade up. Our EPS cut is driven by a 7% reduction in FY12/13E volumes. However, the low valuation (13x FY12E EPS) and strong cash flows limit downside risk, hence our Hold recommendation. Mahindra (Buy, TP Rs 780) and Tata Motors (Buy, TP Rs 1365) are our preferred sector picks.
Idea Cellular: Salient features of High Court ruling against Idea [Srinivas Rao]
In a case relating to overlapping licenses & spectrum in six markets (circles), the Delhi High Court has ruled in favour of the Department of Telecom (DoT). Idea Cellular has indicated in a press release that it would appeal the judgement. The case relates to which arose due to the proposed amalgamation of Idea Cellular with Spice.
Reliance Industries: Niko reduces reserves and production estimates [Harshad Katkar]
Niko Resources, RIL's partner in KG D6 and NEC25 blocks with 10% participating interest, has released its annual information report for the yearended March 2011. As per the reserves evaluation by independent consultant Ryder Scott Company, Niko has revised down its India gas reserves (2P) by 18% to 1tcf and oil reserves (2P) by 82% to 209mmbbls. Niko has not given a block-wise break-up of reserves, but a significant part of this revision is likely to be on account of KGD6, where RIL holds a 90% stake (which will go down to 60% post the approval of the RIL-BP deal). If we assume that the entire reserves cut is on account of KG D6, it implies a reduction of 2.4tcf in 2P gas reserves in KG D6 which in turn would imply a 15mmscmd lower gas production for 12 years.
DLF: Asset monetisation to accelerate, but not aggressively [Abhay Shanbhag]
In last 2 years DLF divested INR 31bn assets - 68% of its proposed INR 45bn. In its May’11 call, it guided for this asset monetisation of ~INR 70bn over next 2-3 years. We expect these divestures in next 6m (a) its 70% stake in the 1.9msf IT SEZ at Pune and 0.6msf IT Park at Noida. These fully leased, but non-core assets, are part of larger campuses. With rental of ~INR 32/sf/m at Pune & ~INR 27/sf/m at Noida, add-on of ~10% for parking & fit-outs and 10% cap rate, project EV is ~INR 10bn. DLF’s 70% stake to yield post tax cash of ~INR 6.5bn. (b) Sale of a significant stake in high-end Aman Resorts (EV ~INR 18bn).
Commodities Quarterly: Cold Turkey Or Commodity Rebound [Michael Lewis]
Our A To Z view on all commodities from aluminum and zinc to oil and grains. Report includes a detailed demand supply analysis by commodity, Commodity forward curves (page 68) and our commodity forecasts by quarter (pages 70-71). We believe traditional long only commodity index strategies will start to perform strongly as the US and Chinese economies move out of the doldrums. However, for investors concerned toward disruption risk the DBLCI Apex has proved its ability to extract positive returns in both rising and falling price environments.
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