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India Equity Research Reports, IPO and Stock News
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Larsen & Toubro Ltd: Deep pessimism creates buying opportunities [Manish
Saxena]
L&T’s Q2FY12 interim earnings beat most of the aggressive estimates, but the
stock fell 4% as management cut guidance on new order inflows and margins.
The post-results conference call queries focused mainly on how much more
guidance can be cut and if the best of the margins are now behind us. However,
the addressable pie of L&T's orders could rise by at least 20-25% from Q4FY12
and competitive intensity could decline. Falling commodity prices should help
margins and post a 25% 3m correction; we reiterate L&T as our top sector pick.
Axis Bank: 2Q: Strong margins offset higher provisioning [Manish Karwa]
With its 2QFY12 results, Axis Bank demonstrated its strong pricing power and its
focus on CASA deposits, which resulted in a 50 bps QoQ NIM expansion. We
expect the current high margins to persist in the current environment, which
should take care of likely higher slippages/provisions over the next few quarters.
Overall, the bank did well on growth, fees and opex, resulting in steady
profitability. The stock trades at 1.8x FY13E P/B with FY13E RoE of 20%. Maintain
Buy with an INR1,380 target price; it remains one of our top picks in the sector.
JSW Steel: Earnings surprise positively on lower than expected costs [Abhay
Laijawala]
JSW Steel India (standalone) reported a better than expected operating
performance in 2Q’FY12 with EBITDA of INR12.89bn (+39% YoY, -7% QoQ),
which was +24% ahead of DBe and 52% above consensus. The variance is
attributed primarily to a better than expected profitability (EBITDA/t at US$150 vs
DBe of US$130) as the sequential increase in operating cost/t (on account of
higher raw material costs) was much lower than DBe. We adjusted our estimatess
to factor in production loss due to iron ore constraints. Retain Buy on valuation.
Thermax: Interest rates a challenge, but can't forego demand [Anup Kulkarni]
Thermax’s post-result conference call should not have left anyone unhappy. The
majority of bears could go back saying that order inflow retreated by 10% yoy. For
a minority of bulls, such as Deutsche Bank’s infra team, Thermax management
effectively supported our cautious optimism on the sector turning around.
Idea Cellular Limited: 2QFY12: Good results reflect improving operating
environment [Srinivas Rao]
Idea's 2QFY12 operating results were robust and in line with expectations. Key
positives are a) strong revenue/min (Rs 0.427, +4% QOQ), and b) robust minutes
growth (106bn, +25% YoY).
Grasim: Is VSF demand seeing a faster recovery? [Chockalingam Narayanan]
Grasim reported better than expected standalone Q2FY12 results with a PAT of
INR 3.45bn (up 23% yoy). This was driven by better than expected operational
performance in the VSF division (EBIT at INR 2.8bn, up 15% yoy).
United Phosphorus Ltd: Rev. momentum does not drive margins, cut
estimates & TP [Abhay Shanbhag]
Despite being seasonally weak, UNTP’s 2Q were better than expectations. Key
positives include a robust 37% revenue growth partly driven by acquisitions and
hike in revenue guidance from 25% to 30%+ for the fiscal.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Larsen & Toubro Ltd: Deep pessimism creates buying opportunities [Manish
Saxena]
L&T’s Q2FY12 interim earnings beat most of the aggressive estimates, but the
stock fell 4% as management cut guidance on new order inflows and margins.
The post-results conference call queries focused mainly on how much more
guidance can be cut and if the best of the margins are now behind us. However,
the addressable pie of L&T's orders could rise by at least 20-25% from Q4FY12
and competitive intensity could decline. Falling commodity prices should help
margins and post a 25% 3m correction; we reiterate L&T as our top sector pick.
Axis Bank: 2Q: Strong margins offset higher provisioning [Manish Karwa]
With its 2QFY12 results, Axis Bank demonstrated its strong pricing power and its
focus on CASA deposits, which resulted in a 50 bps QoQ NIM expansion. We
expect the current high margins to persist in the current environment, which
should take care of likely higher slippages/provisions over the next few quarters.
Overall, the bank did well on growth, fees and opex, resulting in steady
profitability. The stock trades at 1.8x FY13E P/B with FY13E RoE of 20%. Maintain
Buy with an INR1,380 target price; it remains one of our top picks in the sector.
JSW Steel: Earnings surprise positively on lower than expected costs [Abhay
Laijawala]
JSW Steel India (standalone) reported a better than expected operating
performance in 2Q’FY12 with EBITDA of INR12.89bn (+39% YoY, -7% QoQ),
which was +24% ahead of DBe and 52% above consensus. The variance is
attributed primarily to a better than expected profitability (EBITDA/t at US$150 vs
DBe of US$130) as the sequential increase in operating cost/t (on account of
higher raw material costs) was much lower than DBe. We adjusted our estimatess
to factor in production loss due to iron ore constraints. Retain Buy on valuation.
Thermax: Interest rates a challenge, but can't forego demand [Anup Kulkarni]
Thermax’s post-result conference call should not have left anyone unhappy. The
majority of bears could go back saying that order inflow retreated by 10% yoy. For
a minority of bulls, such as Deutsche Bank’s infra team, Thermax management
effectively supported our cautious optimism on the sector turning around.
Idea Cellular Limited: 2QFY12: Good results reflect improving operating
environment [Srinivas Rao]
Idea's 2QFY12 operating results were robust and in line with expectations. Key
positives are a) strong revenue/min (Rs 0.427, +4% QOQ), and b) robust minutes
growth (106bn, +25% YoY).
Grasim: Is VSF demand seeing a faster recovery? [Chockalingam Narayanan]
Grasim reported better than expected standalone Q2FY12 results with a PAT of
INR 3.45bn (up 23% yoy). This was driven by better than expected operational
performance in the VSF division (EBIT at INR 2.8bn, up 15% yoy).
United Phosphorus Ltd: Rev. momentum does not drive margins, cut
estimates & TP [Abhay Shanbhag]
Despite being seasonally weak, UNTP’s 2Q were better than expectations. Key
positives include a robust 37% revenue growth partly driven by acquisitions and
hike in revenue guidance from 25% to 30%+ for the fiscal.
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