Technicals: ABB, Siemens, Opto Circuits, Voltamp Transformers, Aditya Birla Nuvo, Andhra Bank, :: Business Line

Oil India, Voltamp Transformers, reports by Kotak Sec PDF links

PDF link - Hindustan Dorr Oliver, Voltamp Transformers, SCI :::Kotak Sec,

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

http://www.kotaksecurities.com/pdf/dmb/MorningInsight16022012.pdf



HINDUSTAN DORR-OLIVER LTD (HDO)
RECOMMENDATION: REDUCE
TARGET  PRICE:  RS.35
FY13E P/E: 11.1X


VOLTAMP LTD
 RECOMMENDATION: REDUCE
TARGET  PRICE:  RS.519
FY13E P/E: 11.8X


SHIPPING CORPORATION OF  INDIA
RECOMMENDATION: SELL
TARGET  PRICE:  RS.60
FY13E P/E: 58.5X

Accumulate VOLTAMP; TARGET PRICE: RS.540 :Kotak Sec,

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


VOLTAMP LTD
PRICE: RS.499 RECOMMENDATION: ACCUMULATE
TARGET PRICE: RS.540 FY13E P/E: 9.8X
Voltamp numbers are in line with our expectations. The Transformer
manufacturing sector has been going through a continued phase of margin
pressure and subdued demand conditions. In general working capital cycle
has gone up thus constraining cash flow. The distress in the industry is
likely to persist in the near-to-medium term given moderating investments
in power and industrial sector. We maintain Accumulate on the stock.

Voltamp Transformers Marginally below; Maintain earnings and Hold ::Emkay

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

Voltamp Transformers

Marginally below; Maintain earnings and Hold

HOLD

CMP: Rs 500                                       Target Price: Rs 491

---

n     PAT of Rs94mn (flat qoq and yoy) is below estimate due to both lower dispatch (revenues Rs1.35bn vs estimated Rs1.41bn) and EBITDA margins (9.2% vs. est. of 10.6%).

n     Order book at Rs4.4bn (7938MVA) is up 1% yoy. Order inflows are healthy at Rs1.5bn, up 5% yoy and 53% qoq. However, mgmt continues to highlight competition in the sector.

n     Has built in 10%/11% EBITDA margins in FY12E/FY13E. Considering - (1) 1H margins are at 9.3%, (2) healthy order inflows and (3) 2H is normally better - we retain our estimate.

n     Might see continued pressure in nos. for 2-3 qtrs. But looking at Voltamp’s track record, do not see significant downside in stock which is trading at near 1yr fwd book. Maintain ‘Hold’          

Voltamp Transformers - Don’t see significant margin downside from FY11 levels::Emkay

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

Voltamp Transformers

Don’t see significant margin downside from FY11 levels

HOLD

CMP: Rs 575                                        Target Price: Rs 656

---

n     Q411 PAT of Rs190mn, in line despite lower revenues, due to better margins on execution of high margin orders. Volumes disappoint, realization improves on higher raw material costs

n     FY11 margins at 12.7% - do not see significant downside from here and expect FY12E margins at 12% - earnings growth from now on to be driven by volume growth.

n     Expect strong volume growth H2FY12E onwards (Q4 inflows at Rs2bn, up 17% yoy) and 15% volume growth in FY12E (low base, pent up demand and power capacity additions).

n     Cut FY12E EPS by 9% (lower volume); trading at 4.4xFY13E EV/EBITDA in line with industry; Triggers -yoy volume growth & no margin fall; Maintain Hold - with positive bias         

VoltampTransformers, : management meeting key highlights: Kotak Sec

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


VOLTAMP TRANSFORMERS LTD
PRICE: RS.551 RECOMMENDATION: BUY
TARGET  PRICE:  RS.712
FY12E P/E: 10X
q Pricing continues to remain under pressure in the transformer market.
EBITDA margins sharply lower in 9M FY11. Management indicated that
further downside in margins cannot be ruled out in view of firm commodity prices and no let-up in competition intensity.
q Capital engagement has increased and the company is cautious on order
intake.
q However, contrary to ongoing pain in the industry, taking note of the
price correction, we maintain BUY. We have made downward revision to
earnings in FY11 and FY12. Consequently, we arrive at a DCF based price
target Rs.712 (Rs.893 earlier), thus valuing the stock at 12.9x FY12 earnings. Company remains debt-free and estimated cash surplus of Rs 130
per share.

Buy VOLTAMP LTD : target Rs873: Kotak Sec

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


VOLTAMP LTD
 RECOMMENDATION: BUY
TARGET PRICE: RS.873
FY11E P/E: 10.1X
Voltamp's third quarter numbers are in line with expectations. The results
highlight continued slackness in demand for electrical equipment as well as
prevalent margin pressure in marketplace.
The transformer market has been reeling under oversupply as demand is yet
to recover to the pre credit-crisis levels while several players have added
capacity. The problem is compounded by instances of clients delaying taking
delivery of the product.
We rate Voltamp as our preferred stock within the midcap transformer
space in view of debt-free, cash surplus of Rs 147 per share and superior
management quality. Thus, despite the pricing pressures, we recommend
BUY with a revised target price of Rs.873 (Rs.954 earlier)

VOLTAMP TRANSFORMERS Disappointment continues: Edelweiss

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


VOLTAMP TRANSFORMERS
Disappointment continues


􀂄 Subdued quarter; margins nosedive
Voltamp Transformers’ (VAMP) Q3FY11 revenues were in line with our estimates.
At INR 1,336 mn, revenues declined 7.5% Y-o-Y as volumes dropped 22% Y-o-Y
and 6% Q-o-Q. Realisation, however, improved 19% Y-o-Y and 15% Q-o-Q as
the company passes on higher input costs. During the quarter, EBITDA declined
55.8% Y-o-Y, to INR 145 mn. Rising commodity prices has hit the company’s
input costs, resulting in a sharp fall in EBITDA margins to 10.8% (down
1,185bps Y-o-Y). The raw material cost increased 6.7% Y-o-Y (up 1,128bps Y-o-
Y, to 84.8% of sales). In terms of PAT, the company reported de-growth of
46.9% Y-o-Y to INR 128 mn, in line with estimates. The company’s current order
backlog declined 11.4% Y-o-Y to INR 3,720 mn (6,472 mva), 0.7x FY10
revenues, thus indicating lower order inflows of INR 676 mn during the quarter.

VOLTAMP: Pricing continues to remain under pressure:: Kotak Sec

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


VOLTAMP LTD
PRICE: RS.701
RECOMMENDATION: BUY
TARGET PRICE: RS.954
FY11E P/E: 12X

q Pricing continues to remain under pressure in the transformer market.
May take a few quarters for recovery.
q Capital engagement has increased and the company is cautious on order
intake.
q However, contrary to ongoing pain in the industry, taking note of the
price correction, we upgrade stock to BUY. Our DCF model supports a unchanged
price target of Rs 954, thus valuing the stock at 13.8x FY12 earnings.
Company remains debt-free and estimated cash surplus of Rs 140
per share.

VOLTAMP TRANSFORMERS Margins under pressure:: Edelweiss

Visit http://indiaer.blogspot.com/ for complete details �� ��


􀂄 Subdued revenue growth; margins slip further
Voltamp Transformers’ (VAMP) Q2FY11 earnings were significantly below our and
consensus estimates. At INR 93.2 mn, PAT declined 45.7% Y-o-Y on the back of
poor operating performance. During the quarter, EBITDA declined 37.1% Y-o-Y
to INR 125 mn. Rising commodity prices has hit the company’s input costs,
resulting in a sharp fall in EBITDA margins to 10.1% (down 782bps Y-o-Y), its
lowest level in the past 17 quarters. The raw material cost increased 27.4% Y-o-
Y (up 1,026bps Y-o-Y to 84.1% of sales) even as lower other expenses (down
272bps Y-o-Y to 2.6% of sales) helped curb further fall. In terms of revenue, the
company reported a growth of 11.8% Y-o-Y to INR 1,243 mn, in line with
estimates as volumes improved 12.6% Y-o-Y and 23.8% Q-o-Q. Realisation,
however, was flat Y-o-Y while it dipped 15.6% sequentially. The company’s
current order backlog stands at INR 4.38 bn which is 0.8x FY10 revenues.
􀂄 Volume improves; realisation flat
Realisation during the quarter, at INR 526K/MVA, was flat Y-o-Y. However, Q-o-
Q, it declined 15.9%. Volume for the quarter, at 2,363 MVA, improved both Y-o-
Y as well as sequentially by 12.6% and 23.8%, respectively.
􀂄 Revising down estimates
With rising commodities prices, VAMP’s margins have been hit adversely. Also,
the small transformer industry continues to reel under over-capacity scenario,
which we expect to stay for the next few quarters. We expect the company’s
capacity utilization to reach peak levels during H2FY12 as the T&D spending
scenario is expected to improve. Given the pressure on margins and lower
utilization levels, we have cut our EBITDA margin estimate by 391bps and
305bps for FY11 and FY12, respectively. Accordingly, the earnings are revised
down 22.9% and 19.8% for FY11E and FY12E, respectively.
􀂄 Outlook and valuations: Cautious; maintain ‘HOLD’
Rising commodity prices have started to impact VAMP’s margins. Also, we expect
the company’s capacity utilisation to remain under pressure on the back of
increased capacity. On our revised estimates of INR 65.6 and INR 74.6, the
stock is trading at P/E of 13.4x and 11.7x FY11E and FY12E, respectively. We
maintain ‘HOLD’ on the stock. We downgrade our rating on the stock to ‘Sector
Underperformer’ from ‘Sector Performer’ on relative returns basis.

Research Views; 2 November, 2010 :: Emkay

Visit http://indiaer.blogspot.com/ for complete details �� ��

n        Research Views

CTSH Sep’10 Results: Read through for Indian offshore techs

CTSH follows up with another solid performance raises full year outlook to ‘atleast 39%’

Cognizant (CTSH) reported revenues at US$ 1,217 mn (+10.1% QoQ, +42% YoY) , significantly ahead of consensus expectations of US$ 1,180 mn  and above co guidance of ‘atleast US$ 1,175 mn’. EBITDA margins came in at 20.9%, up ~10 bps sequentially. Cognizant’s Sep’10 sequential revenue growth is in line with peers Infosys (+10.2% QoQ) and TCS(+11.7% QoQ) and ahead of Wipro(+5.8% sequentially).  Growth was broad based across geographies (North America/Europe revenues up 8.9%/15% QoQ) while revenues from application development (+14.6% QoQ) grew faster than maintenance revenues (+6% QoQ) for the 3rd quarter in a row. 

Cognizant also raised it’s CY10 revenue guidance to ‘atleast US$ 4,550 mn’, implying ~39% YoY revenue growth V/s ~25% at the upper end for Infosys.  Cognizant’s Dec’10 revenue guidance of’ atleast US$ 1,270 mn’ (+4.4% QoQ) is in line compares with 3.4-4.4% sequential growth guidance by Infosys and 4.5-5.5% QoQ growth outlook by Wipro.

Positive commentary on demand, pricing

Cognizant management remained positive about demand (expects CY11 IT spending budgets to be up YoY despite concerns on macro environment), sees some uptick on pricing as client much more open to discussions). Co indicated during the call that although it expected M&A related spend to taper down in Q4CY10 now (V/s earlier expectations of Q3CY10), it was seeing continuations on spend on transformational projects/compliance related spends at financial services clients.

CTSH results validate the positive demand momentum for offshore IT

We believe that CTSH results reaffirm the positive demand momentum for Indian techs as reflected from the revenue growth seen at Tier 1’s as well as pick up on revenue growth for mid tier players in general. Cognizant has used the downturn to it’s advantage to close out revenue gap V/s Indian Tier I peers (revenue share gains in financial services names with some benefit from aggressive SG&A spends) however we see opportunity for Indian techs to catch up on revenue growth with Cognizant as we see higher growth in the areas of IMS, BPO and Enterprise Applications (India listed Tier 1’s on a stronger footing in these areas vis-a-vis Cognizant)

n        Research Update Included

Maruti Q2FY11 Result Update; Yen depreciation/price hike the key, downgrade to HOLD; Target Price: Rs 1,600

n    Results marginally below est. due to lower sales and higher tax rate. APAT at Rs 6.2bn (est. Rs 6.4bn). Adj EBIDT at Rs 9.9bn (es. -Rs 10.3bn), margins at 10.8% (est. 11.0%)

n    Yen depreciation/price hike crucial for margin upgrades/stock performance. Lower JPY/Re est. for FY12 to 1.85 (from 1.9). 2HFY11 margins to be lower by 70 bps due to currency

n    Upgrade FY11E/FY12E volumes est. by. 2.6% to 1.26mn/1.44mn units. Lower FY11E/FY12E EPS by 3.5% to Rs 85.7/Rs 98.Price hike not assumed, due to lack of intent

n    Downgrade rating to HOLD, however raise TP to Rs 1600 (up 10%) due to valuation upgrade (8.5x EV/EBIDTA) due to strong volume outlook and higher return ratios

Jaiprakash Associates Q2FY11 Result Update; Construction rebounds sharply-Numbers in line; ACCUMULATE; Target Price: Rs 150

n    JPA Q2FY11 numbers ahead of estimates at EBITDA level, 3X increase in deferred tax leads to in line PAT.  Topline growth of 62.3% - construction up 73%, cement up 43%

n    Construction segment rebounds sharply with 83% growth in EBIT, margins at ~21% (v/s ~7.3% in Q1FY11). Realty segment delivers a whopping 356% growth in EBIT

n    JPA is on strong growth path across all its segments- plans to reach a cement capacity of 37 mtpa by end FY12. Expect significant order accretion from New HPPs like lower Siang

n    Stock trades at 22.6X its FY12 standalone earnings and 7.6X EBIDTA. Maintain our earnings, ACCUMULATE rating and price target

Grasim Industries Q2FY11 Result Update; Net profit above estimates- EBIDTA disappoints; ACCUMULATE; Target Price: Rs 2,600

n    Grasims’s Q2FY11 net profit at Rs2.79bn (-5.2%yoy) ahead of estimates (led by high other income earned through dividends from subsidiaries). Core VSF EBIDTA below estimates

n    Revenue decline 1.3%qoq due to 1.2% fall in VSF realization and lower volumes due to plant shutdowns. EBITDA for the quarter at Rs2.64bn declined 22.1%yoy and 12.4%qoq

n    Expect VSF performance to improve in subsequent quarter driven by better realisations & pick up in volumes. Introducing earnings post de-merger of cement business

n    Upgrade price target to Rs2600 driven by upgrade in Ultratech’s Target price and growing VSF demand. Stock implying 44% holding co discount-Maintain ACCUMULATE

Voltamp Transformers Q2FY11 Result Update; Margins go down further; HOLD; Target Price: Rs 840

n    Competition led significant hit (780 bps yoy) in the EBITDA margins to 10.1%, resulted in PAT decline of 46% yoy 

n    Pricing visibility not there, margins to remain under pressure; annual report MDA hints towards much lower margins

n    Downgrade earnings by 21/19% for FY11E/12E driven by lower margin (-250bps) assumption (12/13% in FY11E/12E)

n    Valuations (EV) not cheap at 6.7x FY12E EBITDA (30% premium to peers); Maintain Hold, Reduce target to Rs839

Jagran Prakashan Q2FY11 Result Update; Slightly below estimates, Reiterate BUY; Target Price: Rs 155

n    PAT up 10.4% YoY to Rs555mn, below our estimate of Rs599mn due to lower than expected ad-revenue growth during the quarter

n    Advertisement revenue growth was at just 12.7% yoy impacted by floods, Ayodhya verdict and shift of festive season to Q3 in FY11 v/s Q2 in FY10

n    Ad-revenue growth fully led by realization growth - mix of yield improvement and rate hike

n    Retain EPS estimate of Rs 7.0 and Rs 8.6 for FY11E and FY12E respectively. Retain BUY rating with target Rs 155

Century Plyboards (India) Q2FY11 Result Update; Results above estimates. Maintain BUY; Target Price: Rs 80

n    Q2FY11 PAT at Rs420 mn ahead of expectations (Rs276 mn) - led by better than expected profitability of cement & Plywood division

n    Revenue (Rs3.41 bn) growth of +20.2%- aided by 36.1% growth in plywood & laminates (P&L) segment and 262% growth in Ferro alloys segment. Cement declines 5% yoy  

n    CPL commissions new CFS at Kolkata. 3X expansion in cement capacity by Q3FY12.  Kick-start of volume led growth in cement and CFS in FY12 to drive 23% earnings CAGR

n    Management examining proposal of de-merger of CPL into three entities-Valuations at PER of 7.4X FY12E earnings remain attractive. Maintain BUY with a target of Rs80

Godrej Consumer Products Q2FY11 Result Update; Led By Consolidation, Maintain Accumulate; Target Price: Rs 447

n    Godrej Consumer Products (GCPL) Q2FY11 performance exceeds expectation – APAT growth of 40% yoy to Rs1.3 bn

n    New drivers like GHPL and Megasari reported strong traction, erstwhile drivers Africa, UK and Standalone operations witness pressures

n    Upgrade growth assumptions for GHPL and Megasari, Downgrade growth assumptions for Keyline

n    Upgrade earnings by 7% for FY11E (Rs19.5/Share) and FY12E (Rs20.3/Share) – Maintain ‘ACCUMULATE’ rating with revised target price of Rs447/Share

Voltamp Transformers : Margins go down further: Emkay

Visit http://indiaer.blogspot.com/ for complete details �� ��

Voltamp Transformers

Margins go down further

HOLD

CMP: Rs 862                                       Target Price: Rs 840

---

n     Competition led significant hit (780 bps yoy) in the EBITDA margins to 10.1%, resulted in PAT decline of 46% yoy 

n     Pricing visibility not there, margins to remain under pressure; annual report MDA hints towards much lower margins

n     Downgrade earnings by 21/19% for FY11E/12E driven by lower margin (-250bps) assumption (12/13% in FY11E/12E)

n     Valuations (EV) not cheap at 6.7x FY12E EBITDA (30% premium to peers); Maintain Hold, Reduce target to Rs839