Result Previews ITC, Sterlite Industries, GAIL, Union Bank, Jyoti Structures, Sadbhav Engineering:: Angel Broking,

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Result Previews
ITC
ITC is expected to announce its 2QFY2012 results. For the quarter, we expect ITC
to report 17.5% yoy growth in its top line to `5,948cr, impacted by strong growth
in its hotels, paperboards and packaging and cigarettes segments. ITC’s earnings
for the quarter are expected to grow by 18.5% yoy to `1,227.4cr, driven largely by
top-line growth. We expect OPM for the quarter to improve by 60bp yoy to 36%.
We remain Neutral on the stock.

Sterlite Industries
Sterlite Industries is slated to announce its 2QFY2012 results. The company’s top
line is expected to grow by 61.2% yoy to `9,726cr, mainly due to higher sales
volume and realization for its zinc business. The company’s EBITDA margin is
expected to improve by 340bp yoy to 27.8%. The company’s bottom line is
expected to grow by 60.5% yoy to `1,641cr. We maintain our Buy rating on the
stock with a target price of `158.


GAIL
GAIL is expected to announce its 2QFY2012 results. Transmission volumes for the
quarter are likely to stay flat qoq. We expect the company to report top-line growth
of 8.3% yoy to `8,779cr. Operating margin is expected to contract by 38bp yoy to
17.3%. On the bottom-line front, we expect GAIL to report growth of 3.3% yoy to
`954cr. We maintain our Buy recommendation on GAIL with a target price of
`508.

Union Bank of India
Union Bank of India is scheduled to announce its 2QFY2012 results. We expect
the bank to post muted 1.8% qoq and 5.4% yoy growth in NII to `1,619cr. Noninterest
income is expected to decline by 13.1% yoy to `443cr, primarily on
account of lower treasury gains. Pre-provision profit of the bank is expected to
decline by 2.2% yoy on account of relatively faster rise in operating expenses. On
account of substantially lower provisioning expenses (primarily due to high base
effect) and lower effective tax rate compared to 2QFY2011, net profit is expected
to register healthy 60.9% yoy growth to `488cr. At the CMP, the stock is trading at
valuations of 0.9x FY2013E ABV. We maintain our Buy recommendation on the
stock with a target price of `286.

Sadbhav Engineering
We expect Sadbhav Engineering (SEL) to post robust 48.0% growth to `386.1cr
(`260.9cr) on the top-line front, owing to pick-up in the execution of captive road
BOT projects. EBITDA margin is expected to witness a fall of 70bp yoy to 11.3%
(12.0%) on account of higher sub-contracting charges for the quarter. On the
earnings front, despite lower margins, the company is expected to post decent
growth of 22.9% yoy to `16.9cr (`13.7cr).
At current levels, the stock is trading at valuations of 12.6x FY2013E earnings and
2.0x FY2013E P/BV on a standalone basis. Based on a target P/E multiple of 9x
and valuing the company’s BOT arm on DCF basis, our SOTP-based target price
works out to `167. Hence, we maintain a Buy view on the stock.

Jyoti Structures
For 2QFY2012, we expect Jyoti Structures to report decent top-line growth of
14.0% yoy to `618.3cr. EBITDA margin is expected to come in at ~11.1%. Despite
the NCD issue, interest cost is expected to remain at elevated levels, resulting in
flat bottom-line growth. PAT is expected to come in at `25.2cr. Currently, we
maintain our Buy rating with a target price of `90.