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NATIONAL HYDRO POWER CORPORATION
CMP: 25
Target: 40 in 6 months
National Hydro Power Corporation, an entity of Government of India, is
country’s largest hydro power producer.
NHPC is currently having an installed capacity of more than 5,300 MW
and has a cash surplus of over Rs 4,000 crore.
It raked in a profit of Rs 2,166.67 crore in FY 2011
The state-run major is engaged in the construction of 10 projects at
various locations in the country, going to have an additional
capacity of 4,502 MW.
It plans to increase the capacity to over 10,000 MW by end of 2012.
The coal price is expected to rise by 2012, which will result in
increase in power price by 20%. This will further boost the profit
margin of NHPC to a large extent.
Spanning on Government’s increasing emphasis on hydro power and NHPC’s
strong hold, we recommend a BUY on NHPC at CMP 25 to target 40 in 6
months, 75 in 18 months.
TATA TELESERVICES LTD
CMP: 21
Target: 30 in 3 months
Tata Teleservices Limited spearheads the Tata Group's presence in the
telecom sector. The Tata Group includes over 90 companies, over
395,000 employees worldwide and more than 3.5 million shareholders.
It launched mobile operations in January 2005 under the brand name
Tata Indicom and today enjoys a pan-India presence through existing
operations in all of India's 22 telecom Circles.
Tata Teleservices Limited also has a significant presence in the GSM
space, through its joint venture with NTT DOCOMO of Japan, and offers
differentiated products and services under the Tata DOCOMO brand name.
Today, Tata Teleservices Ltd, along with Tata Teleservices
(Maharashtra) Ltd, serves over 85 million customers in more than
450,000 towns and villages across the country.
Tata Teleservices saw a whooping rise in its sale rising by 39% to Rs.
3128.24 cr in FY 11.
The company, by improving its revenue model and deeper market
penetration, turned into a profit making one, by giving Net profit of
Rs 49.90 crore in FY11 vs net loss Rs 298 crore in FY10.
A per the latest news by telecom tribunal TDSAT, Tata Teleservices is
entitled 2G GSM spectrum in Delhi on priority basis compare to its
peers Idea, Unitech and Videocon.
Going forward we expect the company to maintain quarterly addition of
0.5 million subscriber in FY12, which signifies an addition of 20
million subscribers in a year.
We expect the upgrade to 3G to boost average revenue per user, premium
services may take time to pick up in a price sensitive market such as
India. Increase usage of broadband service on photon device driving
key metrics upwards. The overall performance of the company looks
encouraging.
We estimate the top line to grow at 6.1 % CAGR over FY11-13E. At CMP
of 21 we have a BUY rating on the stock with the target price of 30.
TATA COMMUNICATION
CMP: 217
Target: 250 in 4 months
Tata Communications Limited along with its global subsidiaries (Tata
Communications) is a leading global provider of the new world of
communications managed network connectivity, hosted data center,
communications solutions and business transformation services to
global and Indian enterprises & service providers as well as,
broadband and content services to Indian consumers. The Tata Global
Network encompasses one of the most advanced and largest submarine
cable networks, a Tier-1 IP network, connectivity to more than 200
countries across 400 PoPs and more than one million square feet data
center space. Tata Communications serves its customers from its
offices in 80 cities in 40 countries worldwide. It has strategic
investments in operators in South Africa (Neotel), Sri Lanka (Tata
Communications Lanka Limited) and Nepal (United Telecom Limited). The
number one global international wholesale voice operator and number
one provider of International Long Distance, Enterprise Data and
Internet Services in India, the company was named "Best Wholesale
Carrier" at the World Communications Awards and was named the "Best
Pan-Asian Wholesale Provider".
Tata Communications consolidated results for the year ended on March
31, 2011. Consolidated revenues increased by 8% to Rs 11,932 crores
(about USD 2.6 billion) from Rs.11,026crores (about USD 2.3 billion)
in the previous year. The company’s operating profit (EBITDA) was up
21% at Rs 1,226 crores for 2010-11 as against Rs 1,012 crores for the
previous year.
Tcom has made conscious efforts to diversify from its core wholesale
voice business and tap the higher margin managed services and cloud
business. The company also announced the international launch of
InstaCompute, its cloud infrastructure and application services
offering. Tata Communications signed a significant international voice
sourcing agreement with Videotron, one of Canada’s largest
communications companies.
With Internet users increasing by more than 500% all across the globe
and Tata Comm being the global leader in providing internet
facilities, we see tremendous demand and growth for Tata in near
future.
Tata Communication got approval from Supreme Court for sale of a part
of 774 acres of land in Maharashtra which belonged to VSNL (Tata
Communication). This will be accounted in the sheets of Tata
Communication.
We believe the stock is a good opportunity point as long term drivers
are intact asaddressable market opportunity leaves tremendous scope
for expansion stock may go up by 40%.
The company's trailing 12-month (TTM) EPS was at Rs 5.62 per share.
(Mar, 2011). The stock's price-to-earnings (P/E) ratio was 37.71. The
latest book value of the company is Rs 261.09 per share.
However, we expect impact on revenues and EBIDTA our FY12/13 estimates
9.2 % of upside.
We recommend ‘BUY’ on the stock at CMP 217 with a target price of Rs…
250 ...
BUY RURAL ELECTRIFICATION CORPORATION LIMITED (REC)
CMP: 216; Target: 300
Rural Electrification Corporation Limited (REC), under Ministry of
Power, was incorporated on July 25, 1969 under the Companies Act 1956.
REC a listed Public Sector Enterprise Government of India with a net
worth of Rs. 11,080 Crore as on 31.03.10.
REC provides loan assistance to SEBs/State Power Utilities for
investments in rural electrification schemes through its Corporate
Office located at New Delhi and 17 field units (Project Offices),
which are located in most of the States.
Rural Electrification Corporation (REC)'s net profit rose 28.4% to Rs
2569.92 crore on 26.7% increase in total income to Rs 8495.26 crore in
the year ended March 2011 over the year ended March 2010.
Following the rumors that media has spread about REC, its Finance
Director HD Khunteta have cleared up Tamil Nadu issue's rumors in the
following interview to CNBC. Tamil Nadu electricity board is a
Government entity and the Government will take the responsibility to
pay REC the due amount if the board fails. In no ways will the Tamil
Nadu board be defaulted by REC. REC is receiving regular interest on
due date by the board.
For 2011-12, we expect REC’s loan growth to stabilise around 25 per
cent, led by slowing disbursements and higher competition. Its
disbursements are estimated to grow by 20 per cent, with some cushion
from undisbursed loans of over Rs 100,000 crore.
We have a ‘BUY’ rating on the stock at CMP of 216 due to REC’s robust
long-term business outlook and valuations. Also to post compounded
earnings growth of 25 per cent and average return on equity (RoE) of
22 per cent over 2011-12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
NATIONAL HYDRO POWER CORPORATION
CMP: 25
Target: 40 in 6 months
National Hydro Power Corporation, an entity of Government of India, is
country’s largest hydro power producer.
NHPC is currently having an installed capacity of more than 5,300 MW
and has a cash surplus of over Rs 4,000 crore.
It raked in a profit of Rs 2,166.67 crore in FY 2011
The state-run major is engaged in the construction of 10 projects at
various locations in the country, going to have an additional
capacity of 4,502 MW.
It plans to increase the capacity to over 10,000 MW by end of 2012.
The coal price is expected to rise by 2012, which will result in
increase in power price by 20%. This will further boost the profit
margin of NHPC to a large extent.
Spanning on Government’s increasing emphasis on hydro power and NHPC’s
strong hold, we recommend a BUY on NHPC at CMP 25 to target 40 in 6
months, 75 in 18 months.
TATA TELESERVICES LTD
CMP: 21
Target: 30 in 3 months
Tata Teleservices Limited spearheads the Tata Group's presence in the
telecom sector. The Tata Group includes over 90 companies, over
395,000 employees worldwide and more than 3.5 million shareholders.
It launched mobile operations in January 2005 under the brand name
Tata Indicom and today enjoys a pan-India presence through existing
operations in all of India's 22 telecom Circles.
Tata Teleservices Limited also has a significant presence in the GSM
space, through its joint venture with NTT DOCOMO of Japan, and offers
differentiated products and services under the Tata DOCOMO brand name.
Today, Tata Teleservices Ltd, along with Tata Teleservices
(Maharashtra) Ltd, serves over 85 million customers in more than
450,000 towns and villages across the country.
Tata Teleservices saw a whooping rise in its sale rising by 39% to Rs.
3128.24 cr in FY 11.
The company, by improving its revenue model and deeper market
penetration, turned into a profit making one, by giving Net profit of
Rs 49.90 crore in FY11 vs net loss Rs 298 crore in FY10.
A per the latest news by telecom tribunal TDSAT, Tata Teleservices is
entitled 2G GSM spectrum in Delhi on priority basis compare to its
peers Idea, Unitech and Videocon.
Going forward we expect the company to maintain quarterly addition of
0.5 million subscriber in FY12, which signifies an addition of 20
million subscribers in a year.
We expect the upgrade to 3G to boost average revenue per user, premium
services may take time to pick up in a price sensitive market such as
India. Increase usage of broadband service on photon device driving
key metrics upwards. The overall performance of the company looks
encouraging.
We estimate the top line to grow at 6.1 % CAGR over FY11-13E. At CMP
of 21 we have a BUY rating on the stock with the target price of 30.
TATA COMMUNICATION
CMP: 217
Target: 250 in 4 months
Tata Communications Limited along with its global subsidiaries (Tata
Communications) is a leading global provider of the new world of
communications managed network connectivity, hosted data center,
communications solutions and business transformation services to
global and Indian enterprises & service providers as well as,
broadband and content services to Indian consumers. The Tata Global
Network encompasses one of the most advanced and largest submarine
cable networks, a Tier-1 IP network, connectivity to more than 200
countries across 400 PoPs and more than one million square feet data
center space. Tata Communications serves its customers from its
offices in 80 cities in 40 countries worldwide. It has strategic
investments in operators in South Africa (Neotel), Sri Lanka (Tata
Communications Lanka Limited) and Nepal (United Telecom Limited). The
number one global international wholesale voice operator and number
one provider of International Long Distance, Enterprise Data and
Internet Services in India, the company was named "Best Wholesale
Carrier" at the World Communications Awards and was named the "Best
Pan-Asian Wholesale Provider".
Tata Communications consolidated results for the year ended on March
31, 2011. Consolidated revenues increased by 8% to Rs 11,932 crores
(about USD 2.6 billion) from Rs.11,026crores (about USD 2.3 billion)
in the previous year. The company’s operating profit (EBITDA) was up
21% at Rs 1,226 crores for 2010-11 as against Rs 1,012 crores for the
previous year.
Tcom has made conscious efforts to diversify from its core wholesale
voice business and tap the higher margin managed services and cloud
business. The company also announced the international launch of
InstaCompute, its cloud infrastructure and application services
offering. Tata Communications signed a significant international voice
sourcing agreement with Videotron, one of Canada’s largest
communications companies.
With Internet users increasing by more than 500% all across the globe
and Tata Comm being the global leader in providing internet
facilities, we see tremendous demand and growth for Tata in near
future.
Tata Communication got approval from Supreme Court for sale of a part
of 774 acres of land in Maharashtra which belonged to VSNL (Tata
Communication). This will be accounted in the sheets of Tata
Communication.
We believe the stock is a good opportunity point as long term drivers
are intact asaddressable market opportunity leaves tremendous scope
for expansion stock may go up by 40%.
The company's trailing 12-month (TTM) EPS was at Rs 5.62 per share.
(Mar, 2011). The stock's price-to-earnings (P/E) ratio was 37.71. The
latest book value of the company is Rs 261.09 per share.
However, we expect impact on revenues and EBIDTA our FY12/13 estimates
9.2 % of upside.
We recommend ‘BUY’ on the stock at CMP 217 with a target price of Rs…
250 ...
BUY RURAL ELECTRIFICATION CORPORATION LIMITED (REC)
CMP: 216; Target: 300
Rural Electrification Corporation Limited (REC), under Ministry of
Power, was incorporated on July 25, 1969 under the Companies Act 1956.
REC a listed Public Sector Enterprise Government of India with a net
worth of Rs. 11,080 Crore as on 31.03.10.
REC provides loan assistance to SEBs/State Power Utilities for
investments in rural electrification schemes through its Corporate
Office located at New Delhi and 17 field units (Project Offices),
which are located in most of the States.
Rural Electrification Corporation (REC)'s net profit rose 28.4% to Rs
2569.92 crore on 26.7% increase in total income to Rs 8495.26 crore in
the year ended March 2011 over the year ended March 2010.
Following the rumors that media has spread about REC, its Finance
Director HD Khunteta have cleared up Tamil Nadu issue's rumors in the
following interview to CNBC. Tamil Nadu electricity board is a
Government entity and the Government will take the responsibility to
pay REC the due amount if the board fails. In no ways will the Tamil
Nadu board be defaulted by REC. REC is receiving regular interest on
due date by the board.
For 2011-12, we expect REC’s loan growth to stabilise around 25 per
cent, led by slowing disbursements and higher competition. Its
disbursements are estimated to grow by 20 per cent, with some cushion
from undisbursed loans of over Rs 100,000 crore.
We have a ‘BUY’ rating on the stock at CMP of 216 due to REC’s robust
long-term business outlook and valuations. Also to post compounded
earnings growth of 25 per cent and average return on equity (RoE) of
22 per cent over 2011-12.
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