Ranbaxy Laboratories (Ranbaxy) reported loss of INR29bn during CY11, primarily due to provision for settlement with US Department of Justice (DoJ) and forex losses on currency options and loans. With depreciation in INR continuing in Q2CY12, forex losses are likely to continue. Cash conversion cycle improved purely on the back of high creditor days of 224 in CY11 (CY10: 174), but looks unsustainable.
12 June 2012
Annual Report Analysis - Ranbaxy Laboratories : Edelweiss, PDF link
Ranbaxy Laboratories (Ranbaxy) reported loss of INR29bn during CY11, primarily due to provision for settlement with US Department of Justice (DoJ) and forex losses on currency options and loans. With depreciation in INR continuing in Q2CY12, forex losses are likely to continue. Cash conversion cycle improved purely on the back of high creditor days of 224 in CY11 (CY10: 174), but looks unsustainable.
IIP - Industry stalls; monetary easing on the cards : Edelweiss, PDF link
Industrial activity barely grew (0.1% YoY) in April, against our expectation of 2.5%, largely reflecting a sharp contraction in capital goods. With this data, it is clear that uptick in activity seen during Nov2011-Feb2012 has not sustained. Investment slump is apparently leading the weakness in IIP, but consumer goods production is also gradually slowing on trend basis. More importantly, the forward looking intermediate goods also remain in contraction zone, foreshadowing continued weakness in overall industrial activity. Likely monetary easing by RBI in coming months could revive some business confidence. However, rate cuts have to be accompanied by government policy action, to bring about a turnaround in the investment cycle.
Regards,
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Natco Pharma: Risk-reward remains favourable JM Financial
Risk-reward remains favourable
Strong operating performance in FY12: Natco posted 15% sales growth for
FY12 at `5.2bn. During FY11, the company had divested one retail pharmacy
store in US (sales of $10mn). Excl the US retail sales, underlying sales were
stronger at 27%. EBITDA at `763mn was up 25% YoY while margins at 14.7%
were higher 120bps YoY. The margin increase was driven by better product
mix (lower US retail). Adjusted net profit at `596mn was up 2.8% YoY
primarily due to higher taxes (at 26.1%). Domestic oncology sales at `1.5bn
grew by 22% YoY driven by both volume and price increase.
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Edelweiss Technical Reflection (ETR) 12 June
Indian markets ended marginally lower on the back of strong profit taking at 5100 levels. Bullish cues from the Asian indices helped Nifty open with a gap up and print an intraday high of 5122 and consolidate in a tight range for the better part of the day. The final couple of hours saw the index crack down significantly driven by threats of an investment ratings downgrade by S&P that resulted in a break of the 21-hourly EMA support of 5049. Hourly momentum oscillators have rolled bearish, whereas immediate near-term oscillators are in overbought state calling for a correction in prices. Volumes were average in yesterday’s session and the breadth ended marginally in favour of advances. India VIX jumped to 25.02 levels, taking support at its 50-DEMA. Nifty has now retraced a little more than its 38.2% of the fall from 5630 to 4770 and is positioned to do 50% once a minor pullback is completed 4990 / 4950. Only a close below 4950 would signal a bearish reversal in the current set-up.
At the close of day, barring the IT index (+0.19%), all other indices slipped in the red led by Cap Goods (-1.64%), Healthcare (-1.34%) and Realty (-1.02%). The broader market indices on the other hand were mixed as the Mid-cap index lost 0.20% and the Small-cap index gained 0.21%.
Bullish Setups: CNXBANK, REC, HUVR, BPCL
Bearish Setups: DRRD, LICHF, INFO, HDFC, ACEM
Regards,
Edelweiss Research
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Stocks in News : 12 June: Edelweiss
Stocks in News
S&P hurls a BRIC, warns India may lose its rating (ET)
DLF sells hotel arm to Kolkata consortium for INR 5.67bn (ET)
Suzlon gets more time to repay $ 360-million FCCB (ET)
DoT plans uniform licence fee from July (ET)
RCOM moves Delhi court, seeks more spectrum ahead auction (ET)
EGoM may not cut reserve price; Panel has added a new clause stating that the objective of sale will be to maximize revenue proceeds (ET)
Srei Infra’s Russian JV to sell stake (DNA)
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BSE, Bulk deals, 12/6/2012
Deal Date | Scrip Code | Company | Client Name | Deal Type * | Quantity | Price ** | ||||
12/6/2012 | 530027 | Aadi Inds | RUSHABH SHAH | B | 76158 | 9.32 | ||||
12/6/2012 | 532664 | Amar Remedies | NIPPON INVESTMENT AND FINANCE COMPANY PRIVATE LIMITED | B | 140000 | 143.00 | ||||
12/6/2012 | 521131 | Anjani Dham Inds | PATEL KAPILABEN SOMABHAI | B | 60002 | 10.00 | ||||
12/6/2012 | 509026 | Artheon Fin | ASHISH SANTOSHKUMAR GANERIWAL | S | 26850 | 61.28 | ||||
12/6/2012 | 531795 | Atul Auto-$ | NAVODYA ENTERPRISES | B | 41608 | 165.60 | ||||
12/6/2012 | 511672 | Clarus Finance | GLOBAL INFRATECH & FINANCE LIMITED | B | 160694 | 22.75 | ||||
12/6/2012 | 511672 | Clarus Finance | GRD FINANCE PRIVATE LIMITED | B | 150000 | 22.84 | ||||
12/6/2012 | 533272 | Commercial Engineers | INDIA MAX INVESTMENT FUND LIMITED | S | 353525 | 72.03 | ||||
12/6/2012 | 511710 | Cubical Fin | RAJENDRA KUMAR GARG | B | 88000 | 21.93 | ||||
12/6/2012 | 531820 | Finalysis Cred | DHARMENDRA HARILAL BHOJAK | B | 29500 | 63.20 | ||||
12/6/2012 | 531820 | Finalysis Cred | SANJAY ATMARAM AGARWAL | S | 34000 | 63.20 | ||||
12/6/2012 | 531479 | Global Land Masters | MUKESH VEER GUPTA | S | 46200 | 9.22 | ||||
12/6/2012 | 519560 | Neha Intl | CLARUS FINANCE AND SECURITIES LIMITED | B | 260000 | 29.50 | ||||
12/6/2012 | 519560 | Neha Intl | LILYGOLD MERCHANTS PRIVATE LIMITED | S | 147522 | 29.50 | ||||
12/6/2012 | 534190 | Olympic Cards | SANJAY PRAVINBHAI SHAH | B | 100000 | 33.75 | ||||
12/6/2012 | 505525 | Parichay Invest | BINAL J MODI | S | 6170 | 161.92 | ||||
12/6/2012 | 505525 | Parichay Invest | SANJEEV BURMAN JHAVERI | S | 6000 | 162.79 | ||||
12/6/2012 | 505525 | Parichay Invest | JHAVERI SANJEEV BURMAN | S | 8653 | 162.89 | ||||
12/6/2012 | 524540 | Secunderabad Health | NASEEN TRADELINK PRIVATE LIMITED | S | 287387 | 11.54 | ||||
12/6/2012 | 511754 | Shalibhadra Fin | JIGNESHKUMAR HARSHVADAN GANDHI | B | 28974 | 58.14 | ||||
12/6/2012 | 590093 | TRIMURTHI DR | EAST WEST TRADELINK PVT LTD | B | 36321 | 18.86 | ||||
12/6/2012 | 590093 | TRIMURTHI DR | HARDIK RASHMIKANT PANCHAL | S | 38206 | 18.76 | ||||
12/6/2012 | 532311 | Tutis Tech-$ | SANTOSH MAHADEO JADHAV | S | 95000 | 11.62 | ||||
* B - Buy, S - Sell | ||||||||||
** = Weighted Average Trade Price / Trade Price |
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NSE, Bulk deals, 12-Jun-2012
Date | Symbol | Client Name | Buy / Sell | Quantity Traded | Wght. Avg. Price | Remarks | |
AMAR | Amar Remedies Limited | NIPPON INVESTMENT & FINANCE CO PVT LTD | BUY | 1,40,000 | 143.00 | - | |
ARSSINFRA | ARSS Infra Proj. Ltd | IFCI LTD. | SELL | 1,09,242 | 52.62 | - | |
HDIL | Housing Development and I | GENUINE STOCK BROKERS PVT LTD | BUY | 26,76,929 | 74.59 | - | |
HDIL | Housing Development and I | GENUINE STOCK BROKERS PVT LTD | SELL | 26,76,929 | 74.61 | - | |
HOTELRUGBY | Hotel Rugby Ltd. | RAJNIKANT BABULAL SHAH | SELL | 94,499 | 19.00 | - |
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Vivek Patil Weekly Technical Analysis: Week of 11th June 2012 -ICICI Sec PDF link
Sensex bounces 5% from the 80% retracement level to Dec-Feb rally.
India Inc's revenue growth slowest in over 2 years.
US job growth less than most pessimistic forecast.
Crisil lowers FY13 GDP growth forecast to 6.5%.
Monsoon arrives in India.
Services PMI rises to 3-month high.
Market awaits RBI policy to be announced of 18th Jun, expects rate cut.
PM promises big push to core projects to move towards 9% growth.
After 4 years, China cuts interest rate to fight slowdown.
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FII & DII trading activity across NSE and BSE 12-06-2012
Category | Buy | Sell | Net |
Value | Value | Value | |
FII | 1423.32 | 1479.92 | -56.6 |
DII | 868.66 | 922.87 | -54.21 |
--
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FII DERIVATIVES STATISTICS FOR 12-Jun-2012
FII DERIVATIVES STATISTICS FOR 12-Jun-2012 | |||||||
BUY | SELL | OPEN INTEREST AT THE END OF THE DAY | |||||
No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | No. of contracts | Amt in Crores | ||
INDEX FUTURES | 65000 | 1627.60 | 64907 | 1631.10 | 370770 | 9338.57 | -3.50 |
INDEX OPTIONS | 771498 | 19276.62 | 748545 | 18703.52 | 1613169 | 41256.99 | 573.10 |
STOCK FUTURES | 42992 | 1039.23 | 52841 | 1289.15 | 933420 | 22898.81 | -249.92 |
STOCK OPTIONS | 48387 | 1274.30 | 48635 | 1283.23 | 48055 | 1245.67 | -8.93 |
Total | 310.75 |
--
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ICICI Bank - Annual report: Read across PSL, retail profit, restructuring; company update; Buy : Edelweiss, PDF link
ICICI Bank (ICICIBC IN, INR 827, Buy)
Our analysis of ICICI Bank’s (ICICI) FY12 annual report throws up following interesting insights with respect to increased PSL requirement, retail segment profitability, higher dividend income triggers, outstanding restructured pool disclosure etc. We maintain 17% CAGR in earnings over FY12-14E, expecting core ROA/RoE to come in at 1.7%/15%. The stock trades at attractive valuations of 1.3x FY13E core book. Maintain ‘BUY’.
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Wipro - Delayed decision making impacting growth; company update; Hold : Edelweiss, PDF link
Wipro (WPRO IN, INR 400, Hold)
We recently attended analyst meet of Wipro where the company’s CEO, Mr. T.K. Kurien, and vertical heads of BFSI and healthcare verticals made presentations highlighting emerging trends, challenges and the company’s response to address growth potential. From the meet, we infer that BFSI continues to remain challenging, while rest of the verticals continue to face delays related to decision making. At a P/E of 13.6x FY14E, we maintain ‘HOLD’
IndusInd Bank - Unleashing second leg of growth; initiating coverage; Buy : Edelweiss, PDF link
Having successfully completed Phase I of its growth strategy, the management team at Indusind Bank (IIB), led by Mr. Romesh Sobti, is ready with the Phase II line up. Driven by a network expansion-led CASA improvement and newer avenues of fee income, we expect the bank to deliver 25% CAGR in earnings (one of the highest in our universe) supported by best-in-class return ratios. We initiate coverage with ‘BUY’ with TP of INR380 (valuing at 3.2x FY13E book-15% discount to HDFC Bank).
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Prime Focus - Q4FY12 - Result update - Centrum
Prime Focus
Buy
Target Price: Rs95
CMP: Rs48
Upside: 100%
Value unlocking on cards
Strong revenue growth on the back of 2D-3D conversion helped the company post 53% YoY growth in revenues in FY12. Healthy operating margins at 30.3% following an increase in global sourcing boosted PAT by 22% during the year. We believe the strong order book in 3D conversion and high growth opportunity from PFT will drive revenues and margins going forward. With an opportunity to unlock value in its subsidiary, we expect the stock to re-rate from current levels. Maintain BUY
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eClerx Services - Near-term pain, long-term gain; visit note; Buy : Edelweiss, PDF link
We recently met the eClerx Services (eClerx) management for a business update and outlook going forward. While it stated that growth in H1FY13 could moderate due to delays in decision making, discussions with clients over longer time horizon indicate momentum will continue and growth is will pick up in H2FY13. We continue to prefer eClerx for its cost focused business model and expect it to post revenue CAGR of 20% over FY12-14E along with high ROE (over 40%) and a dividend payout of 50%. At P/E of 8.6x FY14E. Maintain ‘BUY’.
Why reading your insurance policy is important ::Business Line
If you disagree with any of the terms and conditions of your policy, you can return it within 15 days of receipt, stating the reasons for disagreement.
The first thing a life policyholder should do when the policy bond reaches him is to read the policy fully. All insurers advise the customer to read the policy and check the details therein and, should he find a mistake or error in it, to get it corrected immediately. A small lapse at this stage can create problems later.
Let us take the case of a policyholder who paid premiums through salary deductions. He called on the insurer to get his name corrected on the maturity claim cheque. He had hardly ever taken out his policy bond from its envelope in twenty five years, and had not noticed the error even while submitting it to the insurer along with the maturity claim papers.
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Opportunities round the corner for India Inc ::Business Line
India is on a sticky wicket. Challenges in the form of fiscal deficit, trade deficit, weakening rupee, balance of payment, hard interest rates, inflation and subsidies and so on, are threatening to derail the economy.
Each passing day is also showing more evidence of potential sovereign debt crisis in Europe and US is still to recover fully from the economic downturn post sub-prime crisis of 2008. What does this imply for Indian firms? Can we expect any positive impact of the crisis on our economy?
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Sales Traders Commentary : 12 June: Edelweiss
On Monday, the domestic equity market settled flat with negative bias following sudden news of possibility of downgrade in India’s investment grade rating by S&P. Both Sensex and Nifty dipped 0.30% each. Selling was seen in capital goods, healthcare, realty, oil&gas and financial stocks.
While the Sensex closed at 16668, down 51 points, the Nifty slipped 15 points to end the day at 5054.
Major gainers were Tata Power Company (2.18%), Bajaj Auto (1.85%), Hindustan Unilever (1.58%), G A I L (India) (1.55%), Coal India (1.44%), and Sterlite Industries (India) (0.84%).
Major losers were Cipla (2.25%), Bharat Heavy Electricals (2.21%), Larsen & Toubro (1.99%), Jindal Steel & Power (1.93%), Tata Motors (1.40%), and Hero Motocorp (1.36%).
The Consumer Durables index jumped 0.99%. Major gainers were Titan Industries (0.99%), T T K Prestige (0.68%), Whirlpool Of India (0.44%), Rajesh Exports (0.39%) and Blue Star (0.18%).
The Capital Goods index slipped 1.64%. Major losers were BEML (2.52%), A I A Engineering (1.88%), Bharat Electronics (1.67%), Alstom Projects India (1.52%) and A B B (0.47%).
The HC index was down 1.34%. Major losers were Cipla (2.25%), Divis Laboratories (1.87%), Apollo Hospitals Enterprise (0.95%), Cadila Healthcare (0.86%) and Biocon (0.37%).
The Realty index was down 1.02%. Major losers were Prestige Estates Projects (5.77%), D B Realty (4.24%), Indiabulls Real Estate (2.84%), D L F (1.58%) and Godrej Properties (0.61%).
Major losers in the mid–cap space were A I A Engineering (1.88%), Alstom Projects India (1.52%), Aban Offshore (1.25%), A B G Shipyard (0.96%) and CORE Education and Technologies (0.73%).
Major gainers among small caps were Adhunik Metaliks (1.46%), Reliance MediaWorks (1.01%), Aanjaneya Lifecare (0.94%), Action Construction Equipment (0.52%) and A2Z Maintenance & Engineering Services (0.19%).
Globally, Asian indices ended on a higher note while European indices were trading in the green
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Macro & Markets - Risk-off continues : Edelweiss, PDF link
May witnessed risk-off trade globally, with equities, commodities, EM currencies, all falling sharply and bond yields in US and Germany hitting record lows. Synchronized downturn in global economy and escalation of European debt crisis were the key factors shaping the market performance. In India, equities slipped ~6%, led by lackluster portfolio flows. Meanwhile, earnings season was not so inspiring. While earnings growth was ahead of expectations, it was largely on the back of a few stocks. Further, revenue growth is slowing and more importantly, the downgrade cycle seems to be gaining pace, after a brief lull.
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Investment Focus: Cairn India - Buy :Business Line
Investors with a long-term perspective can consider buying the shares of oil exploration and production major Cairn India. Attractive valuations and good prospects for stepping up production support the recommendation. The stock of Cairn India has taken a beating in recent weeks, following the dip in the price of crude oil. Global economic nervousness has led to a fall in Brent crude price from nearly $120 a barrel at the end of April to around $100 now. Cairn India's output is priced at about 15 per cent discount to Brent. While the decline in the dollar price of its output negatively impacts Cairn, it is hedged to a good extent by the near 12 per cent strengthening of the dollar against the rupee since February. This should cushion the company's financials.
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Why your property may get pricier ::Business Line
In the sales agreement, companies are adding an escalation clause to offset increasing costs and protect margins.
If you have booked a flat and are still awaiting its possession, watch out for the cost-escalation clause in the property agreement.
Real estate companies are tweaking business strategies to build in the clause, besides working on faster project execution and timely deliveries as a measure to improve margins.
As the fourth quarter of the current fiscal was a mixed tiding with both the top lines and the bottom lines of most listed realtors nosediving in the wake of high borrowing costs and low demand, companies say such a clause will help them bite the cost bullet.
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PDF link : S&P report: Will #India Be The First BRIC Fallen Angel?
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12 June: Business News Tablet (click on link to read article) : IFCI Financial Services Limited
Business News Tablet (click on link to read article)
Economic Times
|
Business Standard
| |
Business Line
|
Mint
| |
Financial Express
|
Financial Chronicle
| |
(Click on link to view article)
Thanks and Regards
IFIN: IFCI Financial Services Limited
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