Outlook: Amtek Auto, Wockhardt, Hindustan Zinc, L T Finance, Everest Industries, EID Parry :: Business Line :: Business Line

Technicals: Amtek Auto, Wockhardt, Hindustan Zinc, L T Finance, Everest Industries, EID Parry :: Business Line

Technicals:: EID Parry, Carborundum, Aries Agro, BGR Energy Systems, A2Z Maintenance, GAIL, Crisil :: Business Line

 

EID Parry (India) Ltd - A Sweet deal! BUY ::KRChoksey

Higher sugar prices & rising production to drive growth
EID parry on consolidated basis increased cane crushing at 65% CAGR over the period FY10-FY12 from 25 lac MT to 69 lac MT. Higher crushing during the said period was on account of addition of cane acreage for cultivation which enabled the company to increase days of operations from 198 in FY10 to 300 days in FY12. Further the company plans to crush 80 lac MT in FY13 and expect rise in crushing at 20-25% per annum. We expect increase in cane crushing at 17% CAGR over FY12-FY14. The company achieved higher sugar production at 53% CAGR over FY10-FY12 due to increased crushing. We expect sugar production to rise at 18% CAGR with recovery rate at little over 10% during FY12-FY14. The outlook for sugar price for FY13 looks to be at Rs 30-35/kg which will help the company post a healthy topline growth with higher volumes and improved realizations. We estimate revenues from sugar to grow at 26% CAGR over FY12-FY14 on account of increasing production coupled with higher realizations during the period.

Technicals: NIIT tech, Kaveri Seed, TTK Healthcare, Federal Bank, Navneet Publications, EID Parry, SRF, :Business Line

Please provide technical guidance on SRF and EID Parry both of which are currently trading at 52-week lows.

Ajit

SRF (Rs 199.7): You are right in stating that SRF is trading at a 52-week low. The stock is in a medium-term down-trend since the peak of Rs 444 recorded in November 2010. But it is halting at the key long-term support at Rs 200. This level occurs at 61.8 per cent retracement of the stock’s up-move from February 2009 low.

We can give the stock leeway up to Rs 180. That is long-term investors can hold the stock as long as it trades above Rs 180. But decline below this level will drag the stock to Rs 98 or even further to Rs 62.

Medium-term resistances for the stock would be at Rs 290, Rs 320 and Rs 350. The stock needs to record a strong close above Rs 350 to pave the way for a rally to Rs 444.

EID Parry (EIDP.BO, Buy, PT Rs368, 50% upside) UBS: India Mid-Caps TOP PICKS - September 2011

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• A leading Indian agricultural conglomerate with sugar, cogen,
distillation, bio-products and agri-input operations.
• Well positioned to take advantage of the sugar cycle, Sugar:
- South based: high yield, less sensitive politically
- Expansion and integration (cogen and distillery)
- Refining JV with Cargill: benefit from domestic/global trade
disparity
• FY12E - first full year of operations for the subsidiaries’ and
JV’s investments
• 63% stake in Coromandel International (CIL) - Benefit from
growing demand for agricultural nutrients and potential
sector deregulation
• Shareholding - Promoter 46%
• Valuation: SOTP method; value sugar business at Rs 113 per
share and CIL stake at Rs 255/share. Implied FY13E PE – 33.7x



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Buy EID Parry: Target Rs 290: Anand Rathi

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Company Description
E.I.D.-Parry (India) Limited is part of Murugappa group companies. It
is engaged in the manufacture and marketing of a range of products.
The Company operates in six segments: sugar, alcohol, power, bio
pesticides, nutraceuticals and others. The Company’s subsidiaries
include Parry Chemicals Limited, Parry America Inc., Coromandel
Bathware Limited, Coromandel International Limited, Parry
Infrastructure company Pvt. Ltd., Parrys Investments Limited, Parrys
Sugar Limited, Parry Phytoremedies Pvy. Ltd., CFL Mauritius
Limited, Coromandel Brasil Limitada and Sadashiva Sugars Limited.
In October 2009, the Company acquired 76% stake in Sadashiva
Sugars Limited.The Company operated six sugar plants spread
across South India of which four are in Tamil Nadu, one in
Puducherry and one in Karnataka.
~ The company is amongst the largest producers of sugar in the
country, with a crushing capacity of 17,500 TCD.
~ The Company has six sugar factories having a capacity to crush
19000 Tonnes of Cane per day, generate 85 MW of power and two
distilleries having a capacity of 135KLPD.
~ EID Parry would hold a minimum 65% equity stake in GMR
Industries. GMR Group would become a minority shareholder in the
company. Parry is one of the world's largest producers of neembased
bio products.
~ Co. has 50:50 JV with Cargill International has set up a 0.6 Million
Ton port based refinery in SEZ facility at Kakinada.
Concern
Part of Highly regulated Industry
GOI policies for sugar sector affect the company’s profitability.
Technical Outlook
EIDPARRY Cmp Rs.264 is making higher low and higher high and
the pattern would complete around Rs.289 which happens to be all
time high for the stock above which 10-15% upside can be possible.

UBS :: EID Parry (India) Results below estimates ; target Rs368

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UBS Investment Research
EID Parry (India)
Results below estimates
 
„ EID Q4FY11 PAT up 53.6% YoY, below our estimates
EID Parry (EID) reported Q4FY11 PAT at Rs1.6bn, up 53.6% supported by higher
Cogen and Bio-products results, higher other income (up 32.5% YoY), exceptional
gain of Rs221mn (profit on sale on investments) and deferred tax credit. Preexceptional PAT was up 43.4% YoY. Results disappointed due to higher raw

UBS: EID Parry (India) -Adverse weather dampen results

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UBS Investment Research
EID Parry (India)
Adverse weather dampen results
􀂄 Loss of Rs372m on limited crushing due to extended monsoons
EID Parry (EID) reported a loss of Rs372m in Q3 FY11, against a profit of
Rs341m in Q3 FY10. This was on extended monsoon, and crushing for less than
10 days in quarter. EID reported a loss of Rs817m in 9M FY11, as compared to
Rs1.0bn profit in 9M FY10. Refining JV was also not profitable, as production
started in Sept 10, and efficiency/operations will scale up gradually. Q3 is
seasonally weak and Q4 is the big quarter.

UBS- EID Parry: Initiate with a Buy on attractive valuation

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UBS Investment Research
EID Parry (India) 
Initiate with a Buy on attractive valuation 

„ A leading Indian agricultural firm with an increasingly integrated model
EID Parry (India) (EID) is a leading Indian agricultural conglomerate with sugar,
cogeneration, distillation, bio-products and agri-input operations. It has a 63%
stake in Coromandel International (CIL), which we think will benefit from growing
demand for agricultural nutrients and potential sector deregulation.