Dishman Pharmaceuticals & Chemicals (DISH.BO) Mixed Bag  Citi Research

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Dishman Pharmaceuticals & Chemicals
(DISH.BO)
Mixed Bag
 Mixed Bag — Rising input costs & inferior product mix offset benefits of a pickup in
revenues & recurring PAT missed our estimate by c9%. While growth trends are
encouraging, profitability is yet to improve to the same extent. At 5xFY13E, valuations
are attractive - if the company is able to sustain growth & improve profitability, there
would be good scope for a re-rating.
 Growth Encouraging — Revenues at Rs2.7bn were higher than expected (Rs2.5bn).
Growth (+27% YoY) was driven by the Marketable Molecules (MM) biz (+93% YoY -
Benzethonium supplies led) & Carbogen Amcis (CA) (+12%YoY, +42%QoQ). Overall,
the CRAMS biz registered single digit growth (+5% YoY, +6% QoQ), with the India
based biz staying muted.
 EBITDA margin improves but less than expected — Sharp increase in input costs
(RM/sales: +1,063 bps YoY, +563 QoQ) & an inferior product mix (high growth in MM)
were offset by lower staff cost (-3% QoQ, CA restructuring benefit) & other expenses
(excl forex) – leading to higher EBITDA margin (17.6%, +152 bps YoY). This was
however lower than our expectation of 20%. Recurring net income (+26% YoY) was
c9% lower that expected.
 New Contracts/Initiatives Update — ) The China facility (HiPo) has been put on the
block now – delay in getting GMP certification for a foreign player like DISH could hurt
viability of the plant. DISH expects to garner cUS$25m+ & repay debt (Net D/E ~1.0);
2) Abbott contract value: US$135m over CY12-CY14 – now sole supplier of
Eprosartan; 3) CA restructuring benefits accruing now - Oct month sales & EBITDA:
c8m CHF & c1m CHF resp vs. monthly run rate of c5m CHF & 0.2m CHF in 1HFY12.
 Earnings Call Takeaways — 1) Onco facility in India has started supplying
gemcitabine & 2 more products; 2) Inventory: Rs2.9bn, Receivables: Rs1.6bn; 3) Gross
d ebt: Rs9.7bn – c70% forex debt; 4) Most subs have seen higher profitability.

Telecom: Analyzing market share: Spectrum, legacy, execution, brand, timing ::Kotak Sec

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Telecom
India
Analyzing market share: Spectrum, legacy, execution, brand, timing. We analyze
the revenue market share of Indian wireless names to get a broad picture of market
share determinants. Even as spectrum holdings (quality/quantity) and legacy (first-mover
advantage) emerge as key determinants, disadvantages on both these counts can be
overcome through good execution, as seen in a few instances. We reiterate our
constructive stance on incumbents Bharti and Idea with an ADD rating on both

Buy Alembic Pharmaceuticals:: “Erstwhile Alembic is now a pure pharma play”:: LKP

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Investment Rationale
 The recent demerger of the erstwhile Alembic into Alembic and Alembic Pharma has positioned the latter as a pure pharma play, helping it to focus on its growth momentum and we believe that this `12bn enterprise trading at 4.8xFY'13E earnings offers good value in the pharma space.
 The `7bn domestic formulation franchise is today no longer just driven by its leadership in the Macrolide segment of antibiotics but by life style segments growing at rates faster than the category growth.
 Domestic branded portfolio enjoys good brand equity with prescribers and its three macrolide brands figure among the Top100 brands with even its brands like Zeet and Wikoryl from the mature cough and cold segment figuring among the Top300 brands.
 APL’s `2bn formulation exports to regulated markets, which contributes around 21% to the total revenues is gaining traction with 41 ANDA filings and 56 DMF filings and is expected to make additional contribution to its revenue basket with gradual approval in products.
 As a part of ongoing restructuring, APL is aggressively ramping up its capacity in order to cater the increasing demand for drugs in the regulated markets. It will invest `1 bn in a new drugs facility, which will not only boost the productive capacity of the pharma major but will also soar up its revenue basket.
 We expect APL to end this fiscal with revenues of `14.5bn and a net profit of `1.2bn and forecast a 30% growth in profits next fiscal which would be driven by a slightly muted revenue growth of 16% and aided by a lower debt and interest outgo.
Valuation
Alembic Pharmaceuticals is now a pure pharma play with strong foothold in the domestic formulation business and increased focus on regulated markets. The formulation business is expected to escalate at a higher pace and revenues from the US generic market are expected to scale up on the back of product approvals going forward. The company to its credentials has 41 ANDA filings and 56 DMF filings.
APL trades at 6.3xFY'12E and 4.8xFY'13E earnings and we recommend a BUY with a one year price target of `75. Good earnings visibility and reasonable valuations support our investment argument.

ING Dividend Yield Fund: Invest ::Business Line

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Investors can accumulate units in this fund through a systematic investment plan.

With market volatilities here to stay for some more time, investors can consider adding dividend yield funds to their portfolios.

These funds are known to contain declines better than pure diversified funds during market corrections. ING Dividend Yield Fund, given its track record of consistent performance and well-diversified portfolio, makes a good investment candidate here.

While peer funds such as Birla Sun Life Dividend Yield Plus and UTI Dividend Yield are also promising, ING Dividend has fared better during both market corrections and upsides.

The fund has also consistently beaten its benchmark BSE 200 over one-, three- and five-year time-frames. Investors can accumulate units in this fund through a systematic investment plan (SIP).

SUITABILITY

While dividend yield funds typically do well during periods of volatility and market correction, their performance during secular bull runs doesn't compare favourably against diversified funds.

In the case of ING Dividend too, the performance (as against diversified peers) has been better during corrective phases. Investors may, therefore, limit exposure to this fund and use it as a diversifier.

Performance: ING Dividend Yield has delivered minus 16 per cent, 35 per cent and 14 per cent over a one, three and five-year periods, respectively.

This is largely in line with peer funds. But what makes ING Dividend more attractive is its relatively better show during periods of market ups and downs. For instance, during periods of market falls, such as the ones in 2008 and now, the fund managed to limit its losses better than its benchmark (and most peers).

But at the same time, it has managed to fare reasonably well during market rallies too — from March 2009 lows to the end of the year — the fund put up about 140 per cent returns on the table, beating not just its benchmark but peers as well.

ING Dividend Yield Fund typically includes stocks that yield dividend above the dividend yield of the Nifty and enjoy good liquidity. While this shrinks the fund's universe of stocks considerably, having a small asset base has given it the required manoeuvrability.

Portfolio: The fund is well diversified with around 39 stocks. Its top five holdings account for 25 per cent of its portfolio, while the top three sectors make up about 35 per cent. In terms of investment strategy, though the fund had in the past maintained a consistent mix between large and mid-cap stocks, it has now upped its weight on the former.

Large-cap exposure in its October 2011 portfolio stands at about 74 per cent now as against 62 per cent six months ago. The higher large-cap exposure may help cap the downside to the fund's NAV in the event of a market decline.

Financials, auto and energy make up its top three sectors. The fund currently holds about 11 per cent of its assets as cash and equivalents.

Buy MADHUCON PROJECTS : TARGET PRICE: RS.110 : Kotak Sec

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


MADHUCON PROJECTS LTD (MPL)
PRICE: RS.60 RECOMMENDATION: BUY
TARGET PRICE: RS.110 FY13E P/E: 9.0X
q Revenue growth of the company during Q2FY12 was better than our estimates
and stood at 18% YoY.
q Operating margins were better than our estimates due to higher execution
of power projects.
q Net profit was impacted by higher interest outgo as well as higher tax
rate.
q We thus tweak our FY12 estimates to factor in increased borrowings and
roll forward our valuations on FY13. We arrive at a revised price target of
Rs 110 (Rs 130 earlier) and continue to maintain BUY on the company
based on its valuations. Any delays seen in raising funds at the subsidiary
level may impact financial closure of its projects which may adversely
impact revenue growth.

Buy Lupin; Target : Rs 530 ::ICICI Securities

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


P r o d u c t   l a u n c h  e s   t o   h o l d   k e y …
Lupin’s Q2FY12 results were in line with our expectations. Revenues
increased by 23.6% YoY to | 1772.4 crore in line with our expectation of |
1774 crore, driven by healthy growth in the domestic formulation
business and licensing income (~| 97 crore) from Medicis Pharma.
Excluding licensing income, base revenues grew ~17% YoY to | 1677
crore in line with our expectation. It launched six products in the US and
11 products in the domestic market during the quarter. EBITDA margins
increased 200 bps to 22.8% YoY on the back of higher licensing income.
Excluding the impact on licensing  income, EBITDA margins declined ~
200 bps on the back of price erosion in Lotrel and spurt in the employee
cost. Higher taxation of 21.6% compared to 10.9% in Q2FY11 restricted
net profit growth to 24.1% at | 266.7 crore in line with our expectation of
| 257 crore. We maintain our BUY rating on the stock.
ƒ Acquires Japan based I’rom Pharmaceuticals
The company acquired a 100%  stake in Japan based I’rom
Pharmaceuticals (IP), a subsidiary of I’rom Holdings, through its
Japanese subsidiary Kyowa Pharmaceuticals. IP had sales of JPY
5361 million in FY11. IP is a strong player in injectables in the
Japanese market.
ƒ Plans to launch 3-4 OC drugs in US market in H2FY12
Sales from the US market grew 15.2% to ~ | 552 crore on the back
of 19% growth in the branded business and 14% growth in the
generic business. It is planning to launch six to seven products in
the second half, which includes three to four OCs.
V a l u a t i o n
The stock is currently trading at  ~20x FY12E EPS of | 23.6 and ~17x
FY13E EPS of | 27.9. We expect sales, EBITDA and profits to grow at a
CAGR of 20%, 22% and 22% in FY10-13E, respectively. Once again the
well thought geographical mix has done wonders for the company albeit
with some margin pinch. With new launches, including some FTFs, on the
cards, we expect Lupin to maintain the growth momentum. We are
maintaining our target price of | 530 1.e 19x FY13E EPS of | 27.9.

Jaiprakash Associates | Annual Report Analysis :: Edelweiss

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Jaiprakash Associates’ (JPA) FY11 annual report highlights that revenue
and profitability surged on back of the real estate/ infrastructure
segment; however, this also led to an increase in debtors exceeding six
months. Profit on sale of shares in subsidiary and charging of redemption
premium on NCDs/FCCBs through reserves resulted in higher reported
profitability. With significant committed capex of ~ INR 503 bn and high
debt‐equity at 4.1x, we believe asset/ treasury share monetisation and
equity dilution hold the key for funding future capex.
Revenue jump driven by real estate/ infra segment…
• JPA revenue and EBIDTA surged from INR 65.2 bn and INR 21.9 bn, respectively, in
FY10 to INR 112.6 bn and INR 47.3 bn, respectively, in FY11. The jump was
primarily on back of real estate/ infrastructure segment revenue catapulting from
INR 6.8 bn in FY10 to INR 42.8 bn in FY11.
… However, cash flow remained subdued
• Cash flow from operations post interest remained subdued at negative INR 0.4 bn
despite a reported PBT of INR 30.9 bn.
• Debtors exceeding six months jumped significantly from INR 4.2 bn in FY10 to INR
17.0 bn in FY11
Redemption premium on NCDs/ FCCB kept off P&L
• During FY11, JPA charged redemption premium of INR 2.9 bn (9.4% of PBT) on
debentures directly through reserves (refer page 3 for details).
• As at FY11 end, the company has outstanding two tranches of FCCB of INR 25.1 bn,
also, JPVL, a subsidiary had outstanding FCCB of INR8.9 bn. The redemption
premium has been charged to reserves; had the company charged the same
through P&L on YTM basis, PBT for the year would have been lower by INR 2.0 bn
(6.5% of PBT).
• Total interest cost incurred for FY11 stood at INR 42.3 bn (excl. redemption on
FCCB/ NCDs), of which INR 25.6 has been capitalised.
Jaypee Infratech IPO boosts profit / networth
• During FY11, Jaypee Infratech (JPI), a subsidiary, had made a IPO by issuing 222.9
mn equity shares of INR 10 each at a premium of INR 92/ share.JPA sold 60 mn
equity shares of JPI in the IPO and recognised a profit of INR 5.1 bn (16.5% of PBT).
• Capital reserve during FY11 increased by INR 6.3 bn which we believe is primarily
on account of deemed divesture gains of JPI IPO.

Subdued TDR Sales; Free Cash Flow Remains Positive for HDIL :: Nirmal Bang

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Subdued TDR Sales; Free Cash Flow Remains Positive
HDIL’s 2QFY12 profits were below our and consensus expectations by 29.7%
and 19.2% respectively on account of lower TDR (transfer of development rights)
volume, as it reported 0.27mn sq ft of TDR sales against our estimate of 0.50mn
sq ft. Delay in government approvals and a challenging macro environment hurt
new project launch/contracted sales and thereby TDR sales. We lower our
FY12E and FY13E profit estimates by 16.2% and 15.5%, respectively, to factor in
lower TDR sales and the delay in revenue booking from existing projects.
However, we believe the concerns are well factored in and the 46% correction in
stock price over the past four months versus 8% in the Sensex provides a good
buying opportunity, with the stock trading at 0.3x P/BV. We maintain our Buy
rating on the stock with a revised TP of Rs113 (Rs142 earlier).
Lower TDR sales dent profitability: HDIL reported revenue growth of 15.4% YoY
(down 13.9% QoQ), largely driven by FSI sales (Rs2.9bn) from its Guru Ashish
(Goregaon) project. The TDR market remained weak following the slowdown in new
project launch in Mumbai due to delay in approvals, resulting in a 57% QoQ decline in
TDR revenue (Rs700mn). HDIL sold 0.27mn sq ft of TDRs at Rs2,545/sq ft in 2QFY12
as against 0.65mn sq ft at Rs2,500/sq ft in 1QFY12. EBITDA margin was largely in line
with our expectation. The 1,543bps YoY drop in OPM is on account of the product mix
skewed towards FSI sales. Tax rate was 26.1% in 2QFY12 versus 15.3% in 2QFY11
because of higher tax paid on FSI sales, which attracted full tax rate as against MAT
rate for TDR sales. Hence, PAT declined 24.4% YoY to Rs1,486mn against our
estimate of Rs2,114mn and consensus estimate of Rs1,839mn.
Balance Sheet remains strong: HDIL’s net D/E ratio fell from 0.43x in FY11 to 0.40x
in 2QFY12, thanks to FSI sales. We expect net D/E ratio to go down further to 0.31x in
FY13E as HDIL mops up remaining Rs9bn of cash via FSI sales at Goregaon and
Andheri projects by March 2012, ongoing FSI sales at Vasai/Virar and sales generated
from new launches. Over the past three quarters, HDIL turned operating cash flow
positive and generated Rs4,198mn free operating cash flow in 1HFY12 as against Rs
22bn of negative free cash flow generated over FY09-11.
Outlook: We expect regulatory issues to get resolved in Mumbai when the
Maharashtra government comes out with its definitive FSI policy that will expedite the
approval process and thereby improve new launches. We expect HDIL’s competitive
pricing strategy to attract demand and thereby improve contracted sales. At the CMP,
HDIL trades at 3.5x P/E, 0.3x P/BV and at 43% discount to our one-year forward NAV.