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India Equity Research Reports, IPO and Stock News
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JSW Steel: JSW Steel secures 1.3mt of iron ore in third e-auction [Abhay
Laijawala]
JSTL secured 1.3mt of fines in the third iron ore e-auction conducted by MSTC, as
per Supreme Court directives. JSTL successfully bid for 54% of the total iron ore
on offer, up from 37% in the first e-auction. We believe this is likely to allow JSTL
to improve the utilization rates from 30-35% presently, as the plants begin to
receive supplies from the e-auction material. However, iron ore cost escalation
remains a key downside risk with every 1% increase impacting JSTL's earnings by
2%. We forecast EBITDA/t of US$146/t for FY12 and maintain Buy on the stock.
Petronet LNG Limited: LNG price rise to have limited impact on demand; Buy
[Harshad Katkar]
The rise in spot liquefied natural gas (LNG) prices in Asia has led to a 10%
correction in Petronet LNG’s (PLNG) stock price on concerns regarding sales
volumes. Our channel checks indicate that while there is demand contraction from
some bulk users, demand from other segments (such as city gas) still remain
robust. Also, PLNG has assured medium-term LNG supply of 1.5mmtpa until
1HFY13, when we expect LNG/fuel oil economics to improve. We reiterate PLNG
as our preferred pick due to growth in Indian natural gas consumption.
Health Care: How defensive are pharma exports? [Abhay Shanbhag]
In mid-Sep, Stada (mkt cap: €847m, Buy, CMP €14.4), top 3 German generic,
announced a write-down of €98m on Serbian wholesaler receivables. Despite
Serbia accounting for only ~6% of rev, this write-down (on DBe CY11 revenue &
PAT of € 1737m & €133m resp.) resulted in 40% fall in its stock price. Stada CEO
stated to Bloomberg (dated 4 Oct’11) that (a) it is now considering merger (b) as in
CY10, it plans to raise € 350m bonds. Its ST borrowing was € 282m in Dec’10 (€
491m in Dec’09) (c) will avoid wholesalers in Serbia.
Asia Economics Special: India's "Resilient" Balance of Payments [Taimur
Baig]
The Indian economy has been lately characterized by a persistent current account
deficit, driven by a widening trade deficit. The overall balance of payments position
has not been affected, however, as ample capital account flows have financed the
deficit comfortably. Data from first half of 2011 show similar trends, but there is a
risk that this resiliency could be challenged as growth slows and external risks
mount, which could exacerbate the outlook for the rupee.
Global Economic Perspectives: EMU's Stress Test [Peter Hooper]
EMU was designed as a "hard currency" union, in which countries would be liable
for their public debt and the central bank would exclusively focus on maintaining
the purchasing power of the currency. However, sharp declines in interest rates
and a weakening of EMU's fiscal policy framework led to over-borrowing by a
number of member countries. Problems in these countries to service their debt
has led to a severe crisis of EMU.
World Outlook: Growth recession with high uncertainty [Peter Hooper]
The global economy continues to struggle, with growth projected to remain
moderately below trend and employment drifting upward through next year. We
see GDP declining in the euro area over the next two quarters, expanding only
sluggishly in the US, recovering from tsunami depressed levels in Japan, and
dipping below a significantly higher trend rate of growth in emerging markets
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
JSW Steel: JSW Steel secures 1.3mt of iron ore in third e-auction [Abhay
Laijawala]
JSTL secured 1.3mt of fines in the third iron ore e-auction conducted by MSTC, as
per Supreme Court directives. JSTL successfully bid for 54% of the total iron ore
on offer, up from 37% in the first e-auction. We believe this is likely to allow JSTL
to improve the utilization rates from 30-35% presently, as the plants begin to
receive supplies from the e-auction material. However, iron ore cost escalation
remains a key downside risk with every 1% increase impacting JSTL's earnings by
2%. We forecast EBITDA/t of US$146/t for FY12 and maintain Buy on the stock.
Petronet LNG Limited: LNG price rise to have limited impact on demand; Buy
[Harshad Katkar]
The rise in spot liquefied natural gas (LNG) prices in Asia has led to a 10%
correction in Petronet LNG’s (PLNG) stock price on concerns regarding sales
volumes. Our channel checks indicate that while there is demand contraction from
some bulk users, demand from other segments (such as city gas) still remain
robust. Also, PLNG has assured medium-term LNG supply of 1.5mmtpa until
1HFY13, when we expect LNG/fuel oil economics to improve. We reiterate PLNG
as our preferred pick due to growth in Indian natural gas consumption.
Health Care: How defensive are pharma exports? [Abhay Shanbhag]
In mid-Sep, Stada (mkt cap: €847m, Buy, CMP €14.4), top 3 German generic,
announced a write-down of €98m on Serbian wholesaler receivables. Despite
Serbia accounting for only ~6% of rev, this write-down (on DBe CY11 revenue &
PAT of € 1737m & €133m resp.) resulted in 40% fall in its stock price. Stada CEO
stated to Bloomberg (dated 4 Oct’11) that (a) it is now considering merger (b) as in
CY10, it plans to raise € 350m bonds. Its ST borrowing was € 282m in Dec’10 (€
491m in Dec’09) (c) will avoid wholesalers in Serbia.
Asia Economics Special: India's "Resilient" Balance of Payments [Taimur
Baig]
The Indian economy has been lately characterized by a persistent current account
deficit, driven by a widening trade deficit. The overall balance of payments position
has not been affected, however, as ample capital account flows have financed the
deficit comfortably. Data from first half of 2011 show similar trends, but there is a
risk that this resiliency could be challenged as growth slows and external risks
mount, which could exacerbate the outlook for the rupee.
Global Economic Perspectives: EMU's Stress Test [Peter Hooper]
EMU was designed as a "hard currency" union, in which countries would be liable
for their public debt and the central bank would exclusively focus on maintaining
the purchasing power of the currency. However, sharp declines in interest rates
and a weakening of EMU's fiscal policy framework led to over-borrowing by a
number of member countries. Problems in these countries to service their debt
has led to a severe crisis of EMU.
World Outlook: Growth recession with high uncertainty [Peter Hooper]
The global economy continues to struggle, with growth projected to remain
moderately below trend and employment drifting upward through next year. We
see GDP declining in the euro area over the next two quarters, expanding only
sluggishly in the US, recovering from tsunami depressed levels in Japan, and
dipping below a significantly higher trend rate of growth in emerging markets
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