SUBSCRIBE : Sharda Crop may give 30-40% returns in medium term: Emkay

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Sharda Cropchem IPO note by Emkay

Sharda cropchem is an agrochemical company with presence in global markets of EU, LATAM and NAFTA and has distinct asset light business model
Its strategy is to focus on product registration (technical / formulation / brands) while it depends on third party for sourcing of raw material and distribution to end customers

It has developed competencies to work in stringent regulatory environment and has basket of 1,200+ registered products which creates strong entry barriers

It enjoys high EBIDTA margins (~20%) and return ratios (RoCE of ~30%) which is comparable with industry peers while strong pipeline of registrations ensures growth

Issue priced at 12-13x P/E (FY14 EPS) is attractively valued. Expect 30-40% returns in the medium term, assign Subscribe

The Company is a leading exporter of agro chemical products globally with a large basket of registered products. The company has ~1,200 registrations across markets and regions. The company has been focusing on increasing its product registrations to drive faster growth across regions especially in the EU and LATAM countries. Stringent product registrations in agro chemicals are a key entry barrier.

The Company has an asset light business model as it does not have any manufacturing plants and relies on third party outsourcing to meet its requirements. It sources ~90% of its requirement from China and the balance 10% from India. The asset light model of the company provides flexibility to the model to switch between products based on the end customer demand.

On back of its unique asset light business model, the company enjoys high EBIDTA margins (18-20%) and PAT margins of 12-13%. The only investment required is for registration and to fund its working capital (mainly debtors) resulting into strong return ratios (RoCE of ~30%).

The company continues to focus on new registrations to drive revenue growth in the medium term. It aims to continue to invest ~Rs 800-900mn in new product registration with focus on increasing revenue share in the European markets.

The issue price of Rs 145-156 is priced at 12x-13x FY14 EPS which works out at ~50% discount to its peers. We believe that the issue is attractively priced and expect the stock to trade at 16-17x FY14 EPS which provides an upside of 30-40%, ascribe a Subscribe rating.



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Asian Paints In Consonance; Maintain BUY : Emkay

n Change in its brand look signifies establishment of a closer
rapport with customers, while acquisition of Sleek Group
(51%) depicts metamorphosis into a home décor company
n Product mix, improved distribution, new product launches,
international operations and high dividend payout – Key
positives
n Low volume growth, margin offsets & cautious outlook on
business – Key negatives
n Emkay forecasts for APL with UVG of 7-9% and 170 bps yoy
expansion in Ebidta margins in consonance with management
commentary. Retain BUY
‘Changing the Look, Transforming the Outlook’ says Annual Report 2013
Annual Report 2013 marks major changes and transformation in business outlook. Asian
Paints has changed its brand look by unveiling a new corporate brand entity, signifying its
intent to establish a closer rapport with its customers. With its recent foray into the home
improvement segment through acquisition of a 51% stake in Sleek Group, it is
metamorphosing itself into a home décor company, depicting transformation in business.
Product mix, improved improvement, new product launches, international
operations and higher dividend payout – Key positives
§ Richer product mix led by premium interior and exterior emulsions paints. Interior
emulsions growth was driven by Royale and its variants, while Apex Ultima in exterior
emulsions saw strong growth, led by higher ad spends and marketing activations.
§ Value growth of 12.7% in standalone operations was supported by price increases
(5.1% price hike in FY13).
§ Lower inflation in most of the raw materials led to gross margin expansion of 180bps yoy
to 42.2% in standalone operations.
§ Continues to augment distribution network; installs 2900 Colour Worlds and total
installations reaching 24,000 in India. APL increases Colour Idea stores to 100 in FY13.
§ Launched ‘Smart Care’ range of water proofing and crack building, which received
excellent response. Also, enhanced focus on wood finish by launching products in key
wood finish market in collaboration with Renner of Italy.
§ Despite the turbulence in Middle East and slowdown in Caribbean & Asia, the global
operations posted a healthy revenue growth of 23% yoy to Rs14.2bn, with a constant
currency growth of 13% yoy and APAT growth of 45% yoy to Rs 1bn.
§ Commissioned its 7th decorative plant with initial installed capacity of 300,000 KL in
Khandala. Also expanded capacities in Rohtak plant by 50,000 KL p.a. to 200,000 KL
p.a. and added 240,00 KL p.a. globally.
§ Consolidated capex spends at Rs 6.4bn in FY13. Despite this, APL generated free cash
flows of Rs 5.5bn vs Rs 1.6bn in FY12.
§ Dividend payout increases to 43% in FY13 versus average of 40% in last 3 year. Higher
dividend payout exuberates confidence on future cash generation.

Emkay: Trading Today Apr 4, 2013

Trading Today (April 04, 2013)

From Our Technical Desk From The Dealing Desk Market Outlook: The markets gave off from the day’s high and ended in red. All the major sectoral indices ended in red, Realty and Metal counters being the worst hit. Nifty: Nifty gave off from the day’s high and ended in red. The 200 DMA at 5653 will act as an immediate support for Nifty. The double top formation at 5773 on the daily chart has bearish implications. A close above 5773 will further extend the rally up to 5820/5850 levels. However long term trend is negative until Nifty closes above 5900 and every rise shall be used to cut long positions. Support: Major support level 5620/5600. Investment Ideas CRISIL @ Rs. 946 (Target Price: Rs. 1050) Trading Ideas Positive bias – Mcdowell (Target 2080) and SBI (Target 2200). Traders maintain stop loss accordingly. Statistical Data Derivatives Update Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today

Trading Today (March 06, 2013):: Emkay

Trading Today (March 06, 2013)

From Our Technical Desk From The Dealing Desk Market Outlook: The markets ended in green on account of huge buying seen in the heavy weight stocks like LT, Reliance Inds., Tata steel etc. All the major sectoral indices ended in green Metal and Realty counters being the highest gainers. Nifty: The markets opened with an upside gap, traded firmly throughout the day and ended in green. The double bottom formation at 5674 will act as a very strong support for Nifty. The daily chart of Nifty suggests a positive divergence which signifies that Nifty might witness some recovery up to 5850/5880 levels. However positive development can be seen only if Nifty closes above 5900/5920 levels until then expect selling pressure to continue at higher levels. Support: Major support level 5750/5720. Investment Ideas Wockhardt @ Rs. 1912 (Target Price: Rs. 2200) Trading Ideas Negative bias – Titan (Target 235), Bajaj Auto (Target 1880) and Cipla (Target 330). Traders maintain stop loss accordingly. Statistical Data Derivatives Update Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today

Maruti Suzuki India Decent quarter; maintain HOLD on fair valuations:: Emkay

n Q3 operating performance ~5% ahead of estimates
n Management outlook on volumes continues to remain very
bearish - expects 6-7% volumes growth in FY14
n Has begun hedging FY14 Yen exposure at favorable rates
n Retain HOLD on fair valuations - downside risk to volumes
offsetting upside risk to margins from a favorable currency
n We retain est and TP of Rs 1700, based on 14xFY15E EPS of
Rs 122 – stock trading at 15.6x/13.1x FY14/FY15 earnings
Decent show in Q3
MSIL reported a decent show in Q3FY13 beating our/consensus EBITDA estimates by
5%/3%. Net revenue at Rs 112 bn (+42% YoY, +35% QoQ) beat estimates by 2% on
better-than-expected realizations (+12.9% YoY, +3.1% QoQ). Export of the Ertiga CKD
kits continued to aid export realizations. EBITDA Margin came in at 8.0%, marginally
ahead, driven by better mix resulting in lower avg. discounts (Rs 12,100/car in Q3 vs Rs
14,750/car in Q2). Lower discounts were a function of resumption in production of the
Swift & Dzire post the labour strike ended. Net profit was in-line with expectations at Rs
5.01 bn (+144% YoY, +120% QoQ).
Volume outlook pessimistic; currency to be the saviour this time
MSIL management has been guiding for an FY14 volume growth of 6-7% - as against
this most street expectation including ours is in the range of 14-17% (Emkay est. at
17%). Our dealer interactions still do not point out to any pick up in demand for cars and
the new diesel policy could risk the diesel driven growth the industry has been seeing in
recent times. We see downside risk to our volume growth estimates.
Nonetheless, currency has moved very favorably for MSIL in the last one quarter
because of which we have already raised our margin estimates in the recent past,
despite lackluster volume growth and continued high discounting. 1% depreciation in the
Yen positively impacts our earnings estimates by ~2.5%. At present Yen-INR stands at
0.59 vs our base case assumption of 0.64. We see the downside risk to our volume
growth estimates more than offset by the currency benefits the company could see.
Maintain HOLD on fair valuations
We maintain our HOLD rating on the stock primarily because we believe that the stock
price adequately discounts the fundamentals and further upgrades are likely only if
currency continues to hover at current levels. We factor in volume of 1.4mn/1.6mn units
in FY14/FY15 implying a growth rate of 17%/16%. We have retained our margin
assumption at 9.5% currently and would review upgrading from forex benefits if the Yen
depreciates further or continue to hover at current level. We retain estimates and TP of
Rs 1700, based on 14xFY15E EPS of Rs 122 – stock trading at 15.6x/13.1x FY14/FY15
earnings

eClerx Services Inline show, inexpensive valuations drive upgrade:: Emkay

n eClerx’s Dec’12 qtr operating performance was inline with
expectations with a 5% QoQ US$ rev growth and ~190 bps
sequential increase in EBITDA margins to 39.1%
n Profits at Rs 490 mn (+94% QoQ) beat exp a tad (Emkay est
of Rs 464 mn) led by lower taxes. Strong traction in emerging
accounts continues, albeit on a low base
n Management indicates softness in co wide revenue growth
as client concentration related sluggishness continues to
daunt overall performance
n Moderate our rev est (16% growth V/s 19% earlier for FY14),
FY13/14E EPS remain unchanged. Inexpensive valuations at
~11/9x FY13/14E P/E drive ratings upgrade albeit BUY case
remains contingent on uptick in revenue growth trajectory
Inline operating performance, profit beat driven by lower taxes
eClerx reported revenues at US$ 31.3 mn (+5%QoQ) , inline with est (Emkay est US$
31.1 mn) with margins expanding by ~190 bps sequentially to 39.1% (V/s est of ~140
bps increase). However profits at Rs 490 mn (+94% QoQ) beat expectations (Emkay est
Rs 464 mn) driven largely by lower than expected taxes (16% V/s est of 22%).
Management indicated that strong revenue growth during the qtr was aided by certain
short term projects during the quarter with emerging accounts growing strongly by ~10%
QoQ (albeit on a low base). Headcount addition was weak at a net addition of 77 people
during the quarter and the lowest since Mar’09 quarter.
Management cites softness in revenue growth in near/medium term, high
client concentration/ challenges in some top clients impacting co
performance
eClerx management continues to guide for a soft revenue growth in the
near/medium term driven by challenges in at least a couple of top 5 clients in our
view. While eClerx has made the necessary sales investments through the past 12-
18 months to drive greater traction in the emerging accounts which has yielded
some positive results, the high client concentration and the related sluggishness
continues to impact overall revenue growth. In this context, it is worth highlighting
that the top 5 clients have grown by ~12% YoY in Dec’12 qtr V/s an impressive
30%+ until Dec’11 qtr.
Moderate FY14 rev est, inexpensive valuations drive ratings upgrade
While we moderate our revenue estimates for FY14 (build in a 16% US$ revenue growth
V/s 19% earlier), our FY13/14E earnings remain largely unchanged at ~Rs 56/69 driven
by Dec’12 qtr beat and higher other income in FY14. While an up tick in revenue
growth trajectory remains paramount to building in a strong BUY case,
inexpensive valuations at 11.4x/9.2x FY13/14E P/E along with 4% dividend yield
limit any case for sharp absolute downside in our view. Thereby, we upgrade our
ratings to ACCUMULATE (V/s HOLD earlier) with an unchanged TP of Rs 720 and
would recommend buying into any further stock weakness.

ICRA Margins continue to remain under pressure:: Emkay

ICRA’s Q3FY13 op. revenue at Rs652mn slightly below exp led
by lower than exp rev from BPA tech. With net loss of Rs10mn
in BPA, conso PAT was significantly lower at Rs125mn
n Rating revenue growth remain lower at 6%yoy as expected, as
poor credit offtake and sluggish bond market activity continue
to impact business
n Slower revenue growth with sharp deterioration in subsidiary’s
profitability taking toll on margins. Blended EBIDTA margin fell
to 25.5% from 39% in Q3FY13
n At CMP the stock trades at 27.1x/22.6x FY13E/14E EPS of
Rs52.9 and Rs63.5. Maintain HOLD with price target
maintained at Rs1300
Cost pressures in BPA impacted earnings growth
ICRA’s Q3FY13 operating revenues at Rs652mn, 20.3%yoy was slightly below
expectation, led by lower than expected revenue from its subsidiary, BPA technologies
(Rs81mn, -10%qoq). Revenue adjusted for BPA technologies which was acquired in
May 2012 would have been about Rs571mn, growth of just 5.3%yoy. Moreover with loss
of about Rs10mn in BPA technologies, consolidated net profit (adjusted for esop exp of
Rs10.2mn) came in significantly lower at Rs125mn, decline of 30%yoy. With consistently
higher opex in subsidiaries, consolidated EBIDTA margin came down further to 25.5%
from 39% in Q3FY12. As ICRA shifted almost its entire investment book to Fixed
Maturity Plans/short term debt funds of 12-18 months maturity in earlier quarters, other
income was also lower at Rs13mn

Coromandel International Margins disappoint, upgrade to BUY:: Emkay

n Q3FY13 results disappointed on margins front. EBITDA
margins dipped to 5.3% (-390bps yoy & qoq), lowest since
implementation of NBS. PAT stood at Rs 684mn, -53% yoy
n Coro announced acquisition of Liberty Phosphate, leading
SSP player with ~1mn capacity & market share of 14%, at
deal price of Rs 241 / share valuing it at approx Rs 4bn
n Sharp drop in fertiliser volumes (-21% 9MFY13) and higher
inventories continues to affect profitability. However, we
believe volumes will pick up in FY14 on revival of demand
n With continued pressure on margins we are downgrading our
FY13/FY14 est by 27/20% to Rs 15.1/22.8 and target price to
Rs 320. However upgrade to BUY due to price correction
Margin dipped to 5.3% (-390bps yoy/qoq), lowest since NBS
Coromandel’s results disappointed on margins front. EBITDA margins dipped to 5.3%
(-390bps yoy & qoq), lowest since implementation of NBS. Though revenues at Rs
24.2bn, -5% yoy were ahead of est (of Rs 20.2bn) driven by higher volumes, EBITDA
came much lower at Rs 1.3bn, -45% yoy (est of Rs 1.9bn). Coromandel reported PAT at
Rs 684mn, -53% yoy lower than est of Rs 1bn.
Acquisition of Liberty Phosphate to strengthen its position in SSP
Coromandel has announced acquisition of Liberty Phospate, a leading SSP player with
capacity of 826,000 mtpa of SSP, 165,000 mtpa of NPK. Liberty is a leading SSP player
domestically with an established brand & strong distribution network with a market share
of 14% domestically. At acquisition price of Rs 241 / share (13% premium to closing
price of 24th Jan’13) valuing it at approx Rs 4bn, the deal is valued at EV/EBITDA of
4.2x, EV/Sales of 0.8x & P/E of 6.5x based on FY12 earnings. We believe valuations
are reasonable and it will strengthen Coromandel’s position in SSP.
Sluggish demand and higher inventory continues to affect margins
Sharp drop in complex fertiliser demand (industry vols down by ~21% ytd) and higher
inventory level in the system are putting pressure on margins and working capital.
Coromandel also witnessed 28% drop in sales volumes. However, we expect demand to
pick up from next year which is likely to boost company’s earnings.
Downgrade FY13/FY14 earnings, upgrade to BUY on sharp correction
On back of margin pressure and poor results, we have downgraded our FY13/FY14 est
by 27/20% to Rs 15.1/22.8. These est do not include consolidation of Liberty Phosphate.
Subsequently we have also revised our target price from Rs 340 to Rs 320 (14xFY14E)
and upgrade the stock to BUY from Accumulate on sharp correction in the stock price.
We expect softening in raw material prices and rebound in consumption will be key
driving factor for earnings growth.

Aban Offshore EBIDTA in line-Higher tax drag net profit:: Emkay

n 3Q13 EBIDTA at Rs4.9 bn (-2.6% yoy) came in line. Higher
tax rate @48% (vs estimate of 26%) drags APAT at Rs390 mn
(-46.6% yoy) below est (Rs689 mn)
n Refinance of INR debt of ~USD350 on track-see potential
saving of USD25 mn. USD140mn already done @ LIBOR+6%
bps implying ~8% savings. Balance by 1QFY14
n DD-2,4,5 contract/day rate renewal (though on track) delayed
by a quarter resulting in incremental revenues loss for
4QFY13 leading to cut in FY13E/14E EBIDTA estimate by -
3.5%/-1.7% while EPS est see higher cuts at -27%/-10%
n Contract renewals & debt refinance remains key triggers to
improve cash flow visibility & accelerate de-leveraging.
Possible QIP of up to USD100 mn leading to high dilution
could be a stock dampener. ACCUMULATE
Margins contract 420bps- However higher revenues lead to in line EBITDA
Aban’s Q3FY13 EBITDA at Rs4.87bn, -2.6% yoy came in line with estimates. However
despite higher than estimated revenues of Rs9.1bn, +5% yoy (vs est of Rs8.6bn)
margins at 53.6% (vs est of 57.7%), declined 420bps yoy. This was due to 1. Higher preoperating
expenses at the start of renewed contracts for Aban7, DD7 2. Rig DD-I
operated for just 15days during the quarter resulting in higher fixed costs with almost no
contribution to revenues. As a result total expenses increased 15.4% yoy resulting in
420bps contraction in margins.
Higher tax rate drags APAT below estimates
Despite in line EBITDA, APAT at Rs390mn, -46.6% yoy and -45.2% qoq , came in lower
than estimates of Rs690mn led by substantially higher tax rates at 41.5% resulted in
below estimated profit for the quarter. Tax expenses also included one time provisions
made by the company for withholding tax for earlier years. Reported net profit came in at
Rs291mn, -60.3% yoy and -41% qoq. Interest charges at Rs2.99bn increased +16.6%
yoy, due to higher coupon rate for Aban’s refinanced bond issues (1st Bond issued
refinance at coupon of 12% and 2nd bond redemption at 14.25% vs earlier 9.3%).
Refinance of INR debt of ~USD350 on track - USD 140mn INR debt already
refinanced, implying ~800bps savings
Aban’s plan to reduce interest costs by refinancing its high cost rupee term loan of Rs18
bn (~USD350mn with interest rate of 13-14%) with ECB (having interest rate of ~7-8%)
remains on track. Out of this sum, USD 140mn has already been refinanced at interest
rate of LIBOR +6%, Implying a saving of ~800 bps, higher than our expectations (we
were building in 650 bps saving). Company has got credit approval for another USD 95
mn (out of the remaining USD 210 mn) from domestic banks, and the documentation
work is going on currently while it is waiting for approvals for the remaining USD115mn
amount. The company is targeting potential saving of 700 bps annually leading to total
savings of USD25mn.

Reliance Power Excellent operating result; maintain Buy:: Emkay

n Reliance Power’s (RPWR) 3Q13 APAT of Rs2.6bn was better
than our estimates due to higher availability (103% vs. 93%
estimated) – Rosa PAT was Rs2b in 3Q vs. 1.4b in 2Q13
n Sasan UMPP remains on track to commission in FY13 itself.
Hinting at start of construction in Sasan II/Chitrangi in next
few months. Clarity likely post 4Q on Tilaiya and Butibori
n Triggers ahead - 1) Sasan 1st unit COD in Feb/Mar-13, 2)
construction at Chitrangi/ Sasan-II, 3) MERC approval to
Butibori PPA with Reliance Infrastructure, 4) Tilaiya land
acquisition & 5) Chhatrasal stage II forest clearance
n We maintain our earning estimates for FY13 and FY14. With
the stock trading at 1.2x FY15 book; we maintain Buy with a
longer term view & a PT of Rs140/sh. Earnings momentum to
start from FY15. Risk: no value from excess coal assets
Better than expected result on higher availability factor
RPWR’s 3Q13 APAT of Rs2.57bn (+26%yoy) was ahead our estimate of Rs2.47bn on
account of better than expected PAF (103%) and PLF (92%) at Rosa. More importantly,
the growth in profit was achieved even after c50% yoy drop in other income as the cash
was deployed in incremental capex. Rosa contributed to APAT by Rs2bn, taking the
ROE for 3Q13 to 10.6% vs. 7.5% during 2Q13 and 8.0% during 3Q12.
3Q13 highlights – Sasan UMPP on track for commissioning during FY13
During the conference call, the management highlighted several key developments
during the quarter, such as - (1) steam blowing completed at Sasan UMPP and the first
unit should be commissioned during Feb/Mar-13 itself; coal mining for the project
stabilized, (2) Stage I forest clearance received for Chhatrasal mines, (3) Land and other
infrastructure ready for the Chitrangi project and the work should start once there is
clarity on clearance, (4) Butibori plant should start generation from 1st April 2013 and
there are various options to sell power till Apr-14. The long-term PPA with Reliance Infra
to sell power on cost-plus basis is before the MERC.
Maintain Buy with a longer-term view, with various trigger in the near term
We believe the management has followed the prudent strategy of not accepting any fuel
risk and as the capacity ramp gather pace, earnings momentum should pick up from
FY15. We maintain our Buy rating and a PT of Rs140/sh. The likely triggers in the nearterm
include – (1) Sasan 1st unit COD in Feb/Mar-13, (2) MERC approval to Butibori
PPA with Reliance Infra and (3) Stage II forest clearance for the Chhatrasal coal block.
The key risk is inability to capture value from the excess coal reserves due to legal
hurdles.

Trading Today (January 23, 2013): Emkay

Trading Today (January 23, 2013)

From Our Technical Desk From The Dealing Desk Market Outlook: The markets gave off from the day’s high and ended in red. All the major sectoral indices ended in red, FMCG and Realty sectors being the worst hit. Nifty: Nifty gave off from the day’s high and ended in red. The 20 DMA at 6015 will act as an immediate support for Nifty. Resistance is seen at 6080/6100 and a close above this level will further extend the rally up to 6180/6200 levels. First sign of weakness can be seen only if Nifty closes below 5900 until then expect consolidation to continue amid high volatility. Support: Major support level 6020/6000. Investment Ideas Cairn @ Rs. 332 (Target Price: Rs. 397) Trading Ideas Positive bias - SBIN (Target 2600), Jet Airways (Target 650), Mcdowell (Target1980), Century (Target 465) and Aurobindo Pharma (Target 210). Traders maintain stop loss accordingly. Statistical Data Derivatives Update Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today

Thanks & Regards, Emkay Equity Advisory | Emkay Global Financial Services Ltd

Oil and Gas Event Update; Big step towards small hikes, follow-up crucial:: Emkay

Event Update

(January 18, 2013)

Event Update

Oil & Gas Big step towards small hikes, follow-up crucial · Oil marketing companies (OMCs) allowed to increase diesel prices by 50 paise/litre per month. Govt increases LPG cylinder cap from 6 to 9 · Net annual savings of Rs228bn from diesel price hikes, free pricing for bulk sales and rise in LPG cylinder cap · Although we like ONGC/Oil India, we believe amongst these ONGC is the best play on pricing reforms given its size and consolidated production growth by FY15 · Within OMCs HPCL more leveraged to pricing reforms, though believe BPCL a safer bet given cushion from upstream valuations

Click here to read report: Event Update

Equities, in retail investor’s blind spot!: Business Head Retail at Emkay Global Financial Services: Business Line

Once considered to be an important wealth enhancer for retail investors, equity as an asset class, has been continuing to fall out of favour during the past couple of years!

In fact, an argument in favour of equities has no feet to stand on, considering the fact that the past five years absolute returns have been negative…while investment options such as property and gold, historically considered safe investments, have given multi-fold returns during the same period.

As a result of all this, the retail investor has ended up questioning the basic logic of wealth creation through long-term investments in equities.

Trading Today (October 19, 2012) ::Emkay

Trading Today (October 19, 2012)

From Our Technical Desk From The Dealing Desk Market Outlook: Markets ended in green on account of strong global cues. All the major sectoral indices ended in green, Realty and Banking counters being the highest gainers.  Nifty:       Nifty smartly recovered from the days low and ended in green. The 5 DMA at 5,689 will act as an immediate support for Nifty. Resistance is seen at 5,750 and major positive development can be seen only if Nifty closes above 5,750 levels. A close above this level will further extend the rally up to 5,820/5,850 levels. Support: Major support level 5,700/5,680. Investment Ideas Dhanuka Agritech CMP @ Rs. 130 (Target Price: Rs.150) Trading Ideas Positive bias - Strides Acrolab (Target 960), Shashun Pharma (Target 186) & Aurobindo Pharma (Target 180). Traders maintain stop loss accordingly. Statistical Data Derivatives Update Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today

Aban Offshore Triggers lined up - Upgrade to Accumulate:: Emkay

n 6 rigs due for renewal in FY13. Aban confident of contract
renewals and better pricing for 4 rigs. Revenue visibility
expected to improve to 96%/86% for FY13/14 with renewals
n Interest burden to come down as Aban plans repayment of
Rs10 bn of debt in FY13 and looking at refinancing INR debt
of ~Rs18bn leading to savings of Rs1 bn in interest cost
n Improved rig pricing and lower interest cost pressure to
improve cash flows driving increased pace of de-leveraging
of Aban’s stretched balance sheet
n Multiple triggers by way of renewal of rig contract and lower
interest cost to help stock out-performance. Reasonable
FY14E valuation at PER-3.5X, P/B-0.6 & EV/E-6.2X to provide
downside protection- Upgrade to ACCUMULATE- TP-Rs525

MindTree Retain positive view on inexpensive valuations:: Emkay

We met MindTree management recently. We present below the key
takeaways
n Strength in IT Svcs with good traction in Manufacturing and
BFSI. No untoward cancellations in PES recently with PES
expected to report seq growth in Sep’12 qtr
n Co maintains outlook of 11-14% rev growth for FY13 (4-6%
CQGR), however it remains hinged on closure of some large
deals. Street (including us) factoring in <11 growth="growth" p="p" rev="rev">n Company has hired ~250 freshers in Sep’12 qtr. Absorption of
fresher offers could get extended by 1-2 qtrs ( driven both by
lower than earlier est revenue growth/attrition coming down)
n Tweak FY13/14E EPS higher by 10/6% to Rs 76/81 on
currency resets. Roll over to FY15E EPS of ~Rs 88 leads raise
in TP to Rs 800(V/s Rs 730 earlier). BUY stays

Page Industries Walking on a Tight Rope:: Emkay

n Jockey’s growth story remains intact. Richer product mix,
product launches and capacity ramp ups to drive 19%
earnings CAGR over FY12-30E
n However, mix improvement from men’s innerwear to
women’s & sportswear to increase working capital days by
48% over FY12-30E, while asset turns to be capped at 7x
n At crossroads - Free cash flow insufficient to maintain
average payout of 55-60%. Page may have to increase debt
to retain dividend payout ‘OR’ reduce payout ratio
n De-rating inevitable- Only timing depends on company action
(payout reduction or maintenance). To pare Page’s premium
valuations despite strong growth. Initiate with a Sell

Trading Today (August 31, 2012) :Emkay

Trading Today (August 31, 2012)

From Our Technical Desk From The Dealing Desk Market Outlook:  The markets traded within a wide range amid high volatility and ended with modest gains.   Buying was seen in the Banking and Realty counters while Metal sector witnessed selling pressure.            Nifty: Nifty recovered smartly from the days low and ended with modest gains. The 50 DMA at 5,268 will continue to act as a support for Nifty. Nifty has lost almost 150 points in last four trading sessions and we might see some recovery from this level. The 5 DMA at 5,344 will act as an immediate resistance for Nifty. Positive development can be seen only if Nifty closes above 5,350 levels until then expect selling pressure to continue at higher levels. Support: Major support level 5,300/5,280. Investment Ideas CESC CMP @ 310 Trading Ideas No call initiated at this point of time. Statistical Data Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today

Thanks & Regards, Emkay Equity Advisory | Emkay Global Financial Services Ltd.

Trading Today (July 11, 2012) Emkay PDF link

Trading Today (July 11, 2012)

From Our Technical Desk From The Dealing Desk Market Outlook:  The markets ended on a strong note on account of strong global cues. All the major sectoral indices ended in green, FMCG and Auto counters being the highest gainers.     Nifty: The markets ended on a strong note on account of huge buying seen in the heavy weight stocks like Icici Bank, Axis Bank L&T etc. The 5 DMA at 5,315 will continue to act as an immediate support for Nifty. On the higher side resistance is seen at 5,360/5,380 levels where selling pressure is expected. A close above 5,380 will further extend the rally up to 5,420/5,450 levels.     Support: Major support level 5,330/5300. Investment Ideas Mind Tree CMP @ Rs.665 (Target Price: Rs.730) Trading Ideas Positive bias is in stocks like Lupin (Target 590), Wockhardt (Target 1000) and Tata Motors (Target 275). Traders maintain stop-loss accordingly. Statistical Data Derivatives Update Advance Decline Ratio Sector updates Exchange Volumes Implied Volatility for ATM Options Put Call Ratio for (Open Interest) FII - MF Activity World Markets Currency Click here to read report: Trading Today