Forwarding you the Weekly Review dated 06.05.2013. Kindly click on the following link to view the Report.
06 May 2013
Angel Broking - Multiple Scrips - Result Updates
Forwarding you the Multiple Scrip’s Result Updates. Kindly click on the following links to view the report.
FII & DII trading activity on NSE, BSE and MCX-SX 06-05-2013
| Category | Buy | Sell | Net | |
| Value | Value | Value | ||
| FII | 2402.72 | 1505.26 | 897.46 | |
| DII | 622.05 | 1162.88 | -540.83 | |
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FII DERIVATIVES STATISTICS FOR 06-May-2013
| FII DERIVATIVES STATISTICS FOR 06-May-2013 | |||||||
| 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 | 42012 | 1256.90 | 27813 | 834.95 | 429283 | 12854.60 | 421.94 |
| INDEX OPTIONS | 312709 | 9294.73 | 340875 | 10123.42 | 1661733 | 49680.86 | -828.69 |
| STOCK FUTURES | 54354 | 1572.62 | 58514 | 1687.14 | 891703 | 25227.49 | -114.53 |
| STOCK OPTIONS | 44679 | 1281.81 | 47768 | 1380.59 | 85482 | 2480.10 | -98.78 |
| Total | -620.06 | ||||||
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FY14E Rajasthan exit guidance maintained at 200-215,000bpd Cairn:: Centrum
FY14E Rajasthan exit guidance maintained at 200-215,000bpd
Cairn’s Rajasthan crude production in Q4 remained largely flat sequentially at 168,594bpd while revenues jumped due to higher realisations. Operating performance was weaker than our expectations due to higher exploration write offs (primarily due to a dry well in Sri Lanka). However, marginal forex losses and lower tax rate benefitted the bottom line.
Rajasthan crude attracts lower discount in FY13: Although the management indicated crude discount of 10-15% for FY13, Rajasthan crude fetched only 10.7% discount with net realisation of US$98.3/bbl. Sequential improvement in avg. crude realisations at US$100.6/bbl against US$96.2/bbl in Q3 led to 2.0% QoQ jump in revenues at Rs43.6bn.
Rajasthan crude production remains flattish: Cairn’s Rajasthan crude production for Q4 averaged at 168,594bpd a tad lower than 169,977bpd in Q3 (FY13 average at 169,390bpd). Bhagyam production remained stagnant at about 22-23,000bpd and is likely to rise by H2FY14E. Cairn is yet to drill 15 wells as per the FDP and has received approval for drilling additional 15-18 wells to attain plateau production rate.
ICICI Bank - Buy Q4FY13 Result Update:: Centrum
Strong core performance continues
ICICI Bank’s Q4FY13 results revealed continuity in healthy core performance and bottomline growth – a result of NIM expansion and contained credit cost led by stable asset quality. Positive commentary/guidance: 10bps NIM expansion, 17% loan growth & healthy asset quality. We remain Buyers into the stock with a price objective of Rs1400 (Rs1190/share for core banking based on 1.8x Sep’14E + Rs210/share for subsidiaries).
Global NIM inches up to 3.3%: NII grew by a strong 22.5% YoY to Rs38bn led by 25bps sequential expansion in NIM and 14.4% credit growth. Notably, domestic NIM expanded by around 23bps QoQ to 3.7% as easing in cost of funds helped more than offset marginally lower blended yields. Excess liquidity continued to suppress international NIM, though management expects NIM to normalise (to 1.4%) in forthcoming quarters. In line, the bank has guided for 10bps expansion in NIM during FY14.
Loan growth moderates to 14.4%: Domestic loan growth stood healthy at 18% YoY during Q4FY13 while overseas loan growth (5.6% YoY) remained weak and hence contained overall loan growth at 14.4% YoY. The domestic loan book growth was primarily driven by corporate (30% YoY) and retail (11% YoY) – based on revised segment classification. Given the weak credit growth in overseas and retail segments, utilisation of unavailed sanctions in the absence of a new project pipeline represents a major risk to the bank’s ability to grow its loan book (FY14 guidance of 17% growth).
Hindustan Zinc Ltd - Buy Q4FY13 Result Update:: Centrum
Mining expansions to provide volume fillip
Hindustan Zinc’s (HZL) Q4FY13 earnings were well ahead of our estimates on the back of higher concentrate sales, better integrated metal volumes and lower tax rate. EBITDA stood at ~Rs21.2bn with higher than expected margin of 55%, driven by strong metal-in-concentrate (MIC) production (up 16.6% YoY at 260kt) and zinc concentrate sales of 61kt. The company gave a strong guidance of 1 MT MIC zinc-lead production in FY14E, up 15% from 870 kt in FY13. We have lowered our EBITDA estimates on account of a cut in realization assumptions. Maintain Buy on strong fundamentals and cheap valuations (currently trading at 3.5x FY14E EV/EBITDA).
Higher concentrate sales surprises positively along with integrated metal volumes: Integrated volume share stood at 100% in zinc, 90% in lead and ~85% in silver and was a positive surprise. Zinc volumes remained at 1.8 lakh tonne, lower by ~4% YoY but surplus zinc concentrate sales stood at 61kt leading to smart growth in zinc sales. Lead volumes stood at 32.5kt, up QoQ by 8.3%. Silver volumes stood at 107 tonne, up by ~40% YoY. MIC production went up smartly to 260kt, up ~12% QoQ and 16.6% YoY.
Strong margins: EBITDA margin improved by 140bps YoY and stood at 55% on the back of surplus concentrate sales and higher integrated production in zinc, lead and silver. We however do not expect margins to sustain at Q4 level but settle down lower on account of lower realizations going ahead.
Oriental Bank of Commerce: No respite from loan impairment ::Kotak Sec
Oriental Bank of Commerce (OBC)
Banks/Financial Institutions
No respite from loan impairment. OBC delivered a weak performance with earnings
declining 8% yoy (28% yoy at PBT level) primarily on the back of high provisions. Loan
impairment was high on slippages (from power sector) and fresh restructuring. We
retain our REDUCE rating (TP reduced to `280 from `325 earlier) as we expect (1)
return ratios to remain weak factoring high provisions for loans and wage settlement
and (2) weak revenue growth to continue on the back of slower loan growth and
negligible NIM expansion.
Larsen & Toubro: Flurry of orders helps enhance visibility ::Kotak Sec
Larsen & Toubro (LT)
Industrials
Flurry of orders helps enhance visibility. Strong spurt of orders (Rs183 bn) in 4Q with
potential for 3 large additional orders (DFCC, O&G in ME, solar) enhance visibility. We
continue to build flat FY2014E inflows, balancing opportunities in power, DFC and overseas
with election-year hiccups. Margin remains key medium-term risk though relatively small
ME exposure and preeminent position in India can help sustain margins. Retain ADD on
the back of reasonable valuations on cautious estimates and strong core business returns.
Asset quality overhang remains a worry for Canara Bank :: Business Line
The RBI’s decision to refrain from a cut in cash reserve ratio (CRR) may signal disappointment for banking stocks. A cut, if it had materialised, may have lowered the cost of funds for banks which are facing margin pressures, from declining lending rates and still-high deposit rates. Challenges such as this may be particularly acute for banks such as Canara Bank, which have been growing at a slower rate than the industry. The time may be ripe to book profits on the stock.
Canara Bank has been witnessing loan growth that is below industry levels in recent times. In 2012-13, loan growth for the bank stood at four per cent far below the industry growth of 14 per cent.
While loan growth remains a concern, the bank has also seen relatively low deposit growth of 8.8 per cent during 2012-13. This has been partly on account of its conscious strategy to shed high cost deposits. From a contribution of 34 per cent in 2011-2012, the high cost deposits now constitute 15 per cent of the total deposits. While this should have aided margins on account of lower cost of funds, net interest margins (NIMs) declined in 2012-2013 by 11 basis points to 2.39 per cent.
This is due to sluggish growth in the low-cost current account savings account (CASA) deposits at eight per cent. Thus, the CASA ratio as per cent of deposits remains low at 25 per cent. The cost of funds continued to increase during 2012-13, offsetting the marginal increase in yields.
While the entire banking sector continues to face liquidity crunch, with a credit deposit ratio at 77 per cent, Canara Bank has a lower ratio of 68 per cent. This indicates the bank’s inability to significantly grow its loan book. It also maintains higher statutory liquidity ratio (SLR) investments. As of March 2013, the SLR as a per cent of deposits stood at 28.6 per cent, higher than the stipulated RBI’s level of 23 per cent. Asset quality overhang remains a main concern for the bank as well. Canara Bank’s gross non-performing assets deteriorated from 1.7 per cent to 2.6 per cent of loans in 2012-13. The restructured assets remain high at 7.5 per cent of the loans as of March 2013. The tier-I capital adequacy at 9.7 per, shows that Canara Bank will require further capital infusion in 2013-14, to meet Basel-III norms.
The stock trades at 0.7 times its one-year forward book value, which is lower than its historical average of 1.1 times. However, on a price to adjusted book basis (book value adjusted for net non performing assets) the stock trades at 0.9 times. Modest growth outlook and further delinquencies on loans make it a less preferred stock in the public sector space.
Bharti Airtel: 4QFY13 results - on balance, good performance ::Kotak Sec,
Bharti Airtel (BHARTI)
Telecom
4QFY13 results—on balance, good performance. Despite the modest revenue
growth, there were encouraging signs as the India/SA wireless business delivered robust
performance with 5.1% qoq minutes growth, 100 bps OPM expansion and acceleration
in data growth. Marginal decline in RPM can be termed disappointing. We expect Bharti
to benefit from consolidation in the industry that would drive sustained increase in RPM
and profitability. Retain ADD with 12-month forward target price of Rs350; Idea,
despite the recent run-up, remains our preferred pick in the sector.
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