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India Equity Research Reports, IPO and Stock News
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Indian Cement Sector: From a trot to a canter; ACC, Grasim, Shree our top picks [Chockalingam Narayanan]
Rising inquiries for cement purchases could result in a demand uptick a good 3-6 months ahead of our previous expectations. With the pace of new capacity additions slowing, utilisations are set to move to c85%+ during peak season -- read pricing power shifting to producers. Risk-reward appears favourable for our new top picks – ACC (non-consensus), Grasim and Shree -- as they are trading closer to their replacement value, especially at a time when capital costs are rising and the sector could see a turnaround in some regions over the next 12 months.
HDFC: Company meeting takeaways: stable spreads and growth [Manish Shukla]
The key takeaway from our meeting with HDFC management is that a well diversified liabilities mix is its core strength; this continues to differentiate HDFC from its peers. The company is confident in growing loans at 18-20% in FY12E, with volumes in non-metro areas partly off-setting the moderation in metro areas. HDFC carries excess provisions on its balance sheet; hence, there will not be any material impact of the recent change in NPL provision norms by NHB. We maintain a Buy rating with a target price of INR805.
Lupin: Approval for its generic OC portfolio commences in US [Abhay Shanbhag]
Lupin announced approval for its first generic Oral Contraceptive (OC) - 0.35mg norethindrone, which are equivalent to Watson’s NOR-QD. Lupin will be the 4th generic after Teva (approved in Oct’02) and Glenmark (Apr’10) in this USD 52m market (for year ending Jun’12). Lupin was guiding for this product approval in end CY10 based on the average approval time for a generic by FDA of 22months (m) in CY08. However the average approval time has increased to 31m in CY10. Assuming that Lupin filed for this generic along with the bulk drug (see table below for DMF filings), the approval time also comes to ~31months.
Metals & Mining: NMDC ramp up to alleviate iron ore supply concerns [Anuj Singla]
The iron ore supply constraint in Karnataka seems to be easing with media reports highligting faster than expected ramp up at NMDC's mines (~10mtpa) and commencement of sale from piled up iron ore inventory at various mines in the state (~18mtpa). Though cost escalation remains a key concern with the reserve price in the first iron ore e-auction (concluded on 14 Sept'11) at a significant premium to the market price, we believe that the consensus seems to be factoring a much adverse scenario on both pricing and availability of ore for Karnataka based steelmakers including JSW Steel (Buy, TP: INR840/share).
US Daily Economic Notes: Let's do the Twist! [Jospeh LaVorgna]
In light of tepid economic data, including a near-stall among both nonfarm payrolls and retail sales, we expect policymakers to adopt a somewhat more negative assessment of the economy as well as pursue additional policy accommodation in today’s FOMC statement. We believe the Committee is likely to support further easing in the form of some sort of “Operation Twist”-like maneuver, either active or passive, whereby the Open Market Desk of the New York Fed extends the maturity of its portfolio.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian Cement Sector: From a trot to a canter; ACC, Grasim, Shree our top picks [Chockalingam Narayanan]
Rising inquiries for cement purchases could result in a demand uptick a good 3-6 months ahead of our previous expectations. With the pace of new capacity additions slowing, utilisations are set to move to c85%+ during peak season -- read pricing power shifting to producers. Risk-reward appears favourable for our new top picks – ACC (non-consensus), Grasim and Shree -- as they are trading closer to their replacement value, especially at a time when capital costs are rising and the sector could see a turnaround in some regions over the next 12 months.
HDFC: Company meeting takeaways: stable spreads and growth [Manish Shukla]
The key takeaway from our meeting with HDFC management is that a well diversified liabilities mix is its core strength; this continues to differentiate HDFC from its peers. The company is confident in growing loans at 18-20% in FY12E, with volumes in non-metro areas partly off-setting the moderation in metro areas. HDFC carries excess provisions on its balance sheet; hence, there will not be any material impact of the recent change in NPL provision norms by NHB. We maintain a Buy rating with a target price of INR805.
Lupin: Approval for its generic OC portfolio commences in US [Abhay Shanbhag]
Lupin announced approval for its first generic Oral Contraceptive (OC) - 0.35mg norethindrone, which are equivalent to Watson’s NOR-QD. Lupin will be the 4th generic after Teva (approved in Oct’02) and Glenmark (Apr’10) in this USD 52m market (for year ending Jun’12). Lupin was guiding for this product approval in end CY10 based on the average approval time for a generic by FDA of 22months (m) in CY08. However the average approval time has increased to 31m in CY10. Assuming that Lupin filed for this generic along with the bulk drug (see table below for DMF filings), the approval time also comes to ~31months.
Metals & Mining: NMDC ramp up to alleviate iron ore supply concerns [Anuj Singla]
The iron ore supply constraint in Karnataka seems to be easing with media reports highligting faster than expected ramp up at NMDC's mines (~10mtpa) and commencement of sale from piled up iron ore inventory at various mines in the state (~18mtpa). Though cost escalation remains a key concern with the reserve price in the first iron ore e-auction (concluded on 14 Sept'11) at a significant premium to the market price, we believe that the consensus seems to be factoring a much adverse scenario on both pricing and availability of ore for Karnataka based steelmakers including JSW Steel (Buy, TP: INR840/share).
US Daily Economic Notes: Let's do the Twist! [Jospeh LaVorgna]
In light of tepid economic data, including a near-stall among both nonfarm payrolls and retail sales, we expect policymakers to adopt a somewhat more negative assessment of the economy as well as pursue additional policy accommodation in today’s FOMC statement. We believe the Committee is likely to support further easing in the form of some sort of “Operation Twist”-like maneuver, either active or passive, whereby the Open Market Desk of the New York Fed extends the maturity of its portfolio.
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