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Contents
United Bank of India Q2FY11 result estimates
The bank NII is likely to grow by a strong 46.6% benefiting from low base. However lower trading gains as compare to last year and accelerated provisioning will moderate Net profit growth. Low provision cover and slippages would be the key things to watch out.
NTPC Q2FY11E Result Estimates (Results on 26th Oct)
Numbers to be strong yoy mainly due to 1480MW of projects becoming commercially operational since 30th Sep 2009. Expect 3.4% YoY growth in gross generation to 52,110mn Units mainly driven by increase in generation from new plants. Revenue growth of 18% YoY and 250bps YoY improvement in EBITDA margins - to be driven by higher interest and depreciation recovery in revenues. However, the same would be off-set below EBITDA & therefore APAT (Rs21.5bn) to grow at 15% YoY. Key things to watch - (1) commentary on status & commissioning schedule of capacity addition, (2) progress in coal mining and coal mine acquisitions, (3) update on gas supplies, (4) update on NTPC-BHEL JV & (5) UI income.
Emco Q2FY11 Results First Cut: Problem continues…
n Revenues increased by 44% yoy to Rs2.9bn versus expectations of Rs2.7bn.
n EBITDA loss stood at Rs274mn versus expectations of positive Rs214mn.
n EBITDA margins stood at negative 9.4%.
n Loss after tax reported was Rs286mn.
n Though the volume details and business wise break up is not available as of now but we believe that these losses are an impact of huge cost overruns.
n EPS for the quarter stands at (-) Rs4.6/Share. Our FY11E/FY12E estimate is Rs0.2/Rs4.7which would be revised significantly post concall (scheduled for Monday 25th October 2010).
n We maintain our Negative (REDUCE rating) view on the stock. We will come out with a detailed note…
Corporation Bank Q2FY11 Result Update; Better than expectations; BUY; Target: Rs860
n CRPBK’s Q2FY11 NII/PAT at Rs7.2bn/Rs3.5bn better than expected driven by 33% yoy growth in advances and 38bps yoy expansion in NIMs to 2.6%.
n Though slippages at 1.0% annualized higher than 0.8% in FY10, still better than industry average.
n The reported provision cover improved by 150bps to 63.6%, PCR as per RBI norms at 79%
n Valuations not unreasonable at 1.4x FY12E ABV. With maintain our BUY recommendation on stock with TP of Rs860 (1.6x FY12E ABV)
GSFC Q2FY11 Result Update; Upgraded price target and recommendation; Buy; Target: Rs 530
n Q2FY11 PAT growth of 168% to Rs 2.1 bn was ahead of estimates driven by strong results of fertiliser and chemicals
n Fertilisers EBIT tripled to Rs 1.8 bn on the back of NBS policy while chemicals EBIT doubled to Rs 1.3 bn due to favourable spread in caprolactum
n Upgrade FY11E/FY12E EPS by 60%/44%, price target by 43% to Rs 530 and recommendation from ACCUMULATE to BUY
n At our target price, stock trades at FY12E P/BV of 1.4x and EV/EBITDA of 3.8x - a discount of ~50% to other players
Wipro Q2FY11 Result Update; A ‘below par’ show, retain REDUCE; Target Price: Rs 420
n Revenues at US$ 1,273 mn (+5.8% QoQ) missed expectations (closer to lower end of co’s revenue guidance), pales in comparision to strong revenue show from Tier 1 peers
n Wipro’s credible margin show in the recent past also face pressure both on a/c of lower growth and supply strains (attrition at 23.5% is the highest amongst peers)
n Wipro’s below par revenue performance in our view on a/c of Wipro’s inherent client mining woes( refer section/table below) despite attempts for course correction here
n Cut FY11E/FY12E EPS by 2%/1% to Rs 21.1/23.1 as we tweak US$ revenues marginally/reset currency assumptions. Retain REDUCE with an unchanged price target of Rs420
Bank of India Q2FY11 Result Update; Slippages continue to remain higher; REDUCE; Target Price: Rs450
n BOI’s Q2FY11 NII at Rs17.8bn in line with expectations stable NIMs and 4.3% qoq growth in gross advances. PAT at Rs6.2bn on expected lines
n Slippages remain high at Rs8.2bn for the quarter; 1.8% annualised vs. 2.5% for FY10. We estimate FY11E slippage at Rs24bn
n The NPA profile still remains uncomfortable with net NPAs of 1.1% (13% NNPA/networth) and provision cover of 57.5%
n Expect to underperform peers with no significant discount in valuation despite lower asset quality. Valuations at 2.1x FY11E/1.7x FY12E ABV. Continue REDUCE rating
Ipca Laboratories Q2FY11 Result Update; In-line; maintain Buy; Target Price: Rs336
n Despite strong revenue growth operating performance was impacted due to higher staff and other expenses
n Strong revenue growth was driven by 29% growth in domestic formulation business and 27% growth in the exports formulations business
n Addition in the field force has impacted short term profitability but long term growth visibility remains intact
n Maintain earning estimates and Buy rating with a target of Rs336
Piramal Healthcare Q2FY11 Result Update; Await further clarity; maintain Hold; Target Price: Rs 531
n Piramal’s Q2FY11 performance was disappointing with a) Revenue of Rs7.5bn (down 25%), and b) EBIDTA loss of Rs128mn
n Poor performance was driven by de-growth in the formulations, CRAMS and the critical care business
n Company has announced the buyback of 20% equity @Rs600 per share
n Utilization of cash will remain a key; maintain Hold
TNPL Q2FY11 Result Update; Upgrade price target, maintain BUY; Target Price: Rs 200
n Q2FY11 results were in line with estimates with revenues of Rs 3 bn (+10%yoy) and APAT of Rs 408mn (+45%yoy)
n EBITDA margins improved by 70bps to 31.6% driven by 9% increase in realisation
n We upgrade our FY11E/FY12E EPS estimates by 17%/4% on account of higher realisations
n Upgrade price target by 40% based on 8x FY12 EPS. At target price stock trades at FY12 P/BV of 1.3x, EV/EBITDA 5.1x
n Dealer Comments
The markets started the day’s session on a positive note with almost 75 odd point’s upward gap but soon gave up the initial gains led by weak to subdued trading by the Asian counterparts in the morning trades. Investors in world markets were cautious ahead of the outcome of the G20 meetings. Post good opening markets languished in a very range bound movement for most part of the day. But heavy profit booking in the last hour of trades dragged the markets down heavily with major selling been witnessed in realty, metal, capital goods and select banking and auto stocks. On a weekly basis both Sensex and Nifty closed flat with a marginal positive bias while Midcap index gained 1.1% and Smallcap index gained 0.9% respectively. On a weekly basis among the sectoral indices Oil & Gas gained 2.7%, Healthcare gained 2.5% and Capital Goods gained 1% while Metal index lost 2.7% and Realty index lost 2.2% each respectively. The overall traded volumes were lower compared to the earlier day by almost 6% and were at Rs 1618 bn. While delivery based volumes were higher compared to the earlier day at 43.5% of the total traded turnover. Among the Fund activities FII’s were net buyers to the tune of Rs 9.75 bn while Domestic Funds were net also buyers to the tune of Rs 1.79 bn respectively on 21st October 2010. While on 22nd October 2010, FII’s bought shares worth Rs. 5.84 bn in cash segment (provisional) while in the F&O segment they were net buyers to the tune of Rs 5.20 bn whereas Domestic Funds also bought shares worth Rs. 3.27 bn (provisional).
n Technical Comments
Selling pressure at higher levels
Profit booking stepped in on Friday after a rally of 119 points on previous day – Nifty below the 6100 level. The sell-off in metal, FMCG, capital goods, realty, auto and select private financial companies' shares along with Wipro, ONGC and Bharti weighed on the markets in second half of trade. Moreover, Nifty saw a slide in today’s session after facing resistance at the 100-HSMA, which indicates that the expanded flat pattern just got completed and downtrend has again resumed. Also the momentum cycles indicates that the target of 5830 will be witnessed soon.
BSE IT
BSE IT has bounces back after taking support at the 20-daily simple moving average. Moreover, today’s spurt was also supported by the formation of a bullish gap. Hence, we feel that still the index can heighten upto 6400 level in the near future.
n Results Today
Adani Power | Amara Raja Batt. | Aventis Pharma | Bayer Crop Sci. | Crompton Greaves | EID Parry |
Glodyne Techno. | Hind. Unilever | Hind.Oil Explor. | Idea Cellular | JSW Holdings | Lak. Mach. Works |
MadrasCement | Mahindra Holiday | MundraPort | P & G Hygiene | Petronet LNG | Rolta India |
Rural Elec.Corp. | Tata Tele. Mah. | Titan Inds. | United Bank (I) |
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