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Kapil Bharti

Kapil Bharti

City: Jhansi


Last Login: 02:05 PM - 10 Apr , 2010

Reply for: Confirming the mobile number on mudraa

Kapil Bharti at 10:17 PM - Aug 27, 2009 ( )

Their is link on the left side.

New Thread: For tommorow.any calls???

Kapil at 11:54 PM - May 04, 2009 ( )

hi guys any intraday calls for tommorow

New Thread: How much steam has left in the market??

Kapil at 11:34 PM - May 04, 2009 ( )

What do u feel guys...

Reply for: BEWARE FROM HACKERS

Kapil at 08:32 PM - May 04, 2009 ( )

delete cache of your computer .. that may be a problem... go to tools menu and internet options there delete cached pages...

New Thread: I think I can also post messages....

Kapil at 08:29 PM - May 04, 2009 ( )

hi sir..
if this message is throgh that means i can also post messages...

Reply for: KNR Constructions

Kapil at 09:51 PM - Jan 25, 2008 ( )

Hey are you people going for this IPO???

Reply for:

Kapil at 07:48 PM - Jan 23, 2008 ( )

so one thing is sure those who are destined to reach higher scale will surely reach there.. whatever are the market sentiments...

Reply for: Don't bet on IT this quarter

Kapil at 08:23 PM - Oct 06, 2007 ( )

Higher wage bills (on account salary hikes and new employee additions) and lower employee utilisation rate are expected to pull down the average net profit growth of frontline IT companies in the second quarter (July-September).

According to estimates by key brokerage houses, average quarterly net profit of the top five IT companies is expected to be 1.7% lower compared with the previous quarter (April-June). This, despite the fact that quarterly revenues have risen at an average 3% during the period under consideration.

While the growing strength of the rupee has been scaring away prospective investors in IT companies, analysts point out that the rupee has little to do with the sluggish performance of these companies during the latest quarter. While the rupee breached the psychological 40-mark to the dollar last month, it did not rise much in second quarter compared with the previous quarter. Consequently, companies that had entered into forward transactions as a hedge against the rising rupee did not gain much from these transactions. That has also contributed to the slackness in their bottomlines.

Moving forward, the strength of the rupee and the slowing down of the US economy will remain the two major challenges for the sector. “Indian IT companies have a huge exposure to the banking, financial services, insurance (BFSI) vertical. The subprime crisis may affect the discretionary spending which accounts for 20% of the total IT spend by clients,” says Sushil Finance analyst Parikshit Kandpal.

However, he sees this as a temporary shock as a slowdown in the US could prompt more companies there to increase outsourcing to India in a bid to cut costs. IT shares have underperformed during the recent rally as investors expect margins to be under pressure because of strengthening rupee. These shares have been on a downtrend since March this year as the dollar began to weaken against the rupee.

The rupee gained 7.5% to the dollar during April-June and another 1.9% in the following quarter. “Expect September 2007 to be a quarter with strong sequential revenue growth, but unexciting profit growth,” says Merrill Lynch in its preview note on the sector.

At the operating level, brokerage firms expect a mixed scenario across companies. Companies like TCS and Infosys, which declared a wage hike in the previous quarter, are likely to show higher sequential growth in operating profit for the September quarter. This is on account of absorption of salary hikes.

On the other hand, Satyam, Wipro and HCL Technologies are expected to report subdued operating profit since these companies have undertaken salary hikes in the second quarter. For instance, Wipro has given an offshore salary hike between 12% and 14%. “This will impact our operating margin by 160 basis points. Despite this, our broad call is that we will keep our margins flat,” said Wipro IT business CFO KR Lakshminarayana while talking to ET in August.

Analysts are not too hopeful about companies raising their earnings guidance for the current financial year, especially since a recession appears to be looming over the US economy. “Given the economic uncertainty, we believe it is unrealistic to expect Infosys and Satyam to tweak their annual dollar revenue guidance by more than 3%,” says Merrill Lynch.

Citigroup Global Markets too shares the similar view. “Upgrades in earnings per share (EPS) guidance will not be significant in our view due to further rupee appreciation of 2% since the previous guidance.”
Name: Hindustan Organic Chemicals Limited
BSE:500449
NSE:HOCL
Website: www.hocl.gov.in/index.asp
Current Mkt Price: Rs. 64.70 (as on 30/9/2007)
Target : Rs. 225 (18- 24 months)

Business Profile

Hindustan Organic Chemicals Limited (HOC) was set up by the Government of India in 1960 with the objective of attaining self-reliance in basic organic chemical needs. In fact this was the first endeavor to indigenise manufacture of basic chemicals and to reduce country's dependence on import of vital organic chemicals. HOC, started as small chemical unit, has today acquired the status of a multiunit company with two fast growing units and one subsidiary unit. The Company has achieved turnover of about Rs. 4500 million in 1999-2000.

It was expected that indigenous manufacture of these chemical intermediates will give impetus to downstream industries resulting in setting up of chemical units and achieving self-sufficiency for the country in this area. This objective of setting up HOC has been achieved and at present more than 500 units based on HOC's products have been set up all over the country which have not only succeeded in meeting the goal of self-sufficiency but also entered the international markets earning precious foreign exchange by exporting chemicals, dyes and drugs.

Main Manufacturing Units of HOC comprises

·The Nitro Aromatic Complex at Rasayani in Raigad District (Maharashtra)

·Polyurethane System House at Rasayani

·The Phenol Complex at Kochi (Kerala)

·The Polytetrafluroethylene (PTFE) Complex (Subsidiary) at Rudraram, Hyderabad (Andhra Pradesh)

HOC provides Basic Organic Chemicals essential for Vital Industries. The main products manufactured by HOC are Phenol, Acetone, Nitrobenzene, Aniline, Nitrotoluenes, Chlorobenzenes and Nitrochlorobenzenes. The raw materials used by HOC are Benzene, Toluene, LPG, Methanol, Naphtha and Sulphur, majority of which come from petroleum refineries.

HOC provides the basic organic chemicals essential for vital industries like resins and laminates, dyes and dyes intermediates, drugs and pharmaceuticals, rubber chemicals, paints, pesticides and others, touching virtually facet of everyday life.

It also produces the versatile engineering plastic polytetrafluoroethylene (PTFE) through its subsidiary.

Recent Developments

The disinvestment procedure of government`s 32.61 per cent stake in Hindustan Organic Chemicals Ltd (HOCL) is expected to be completed soon. Six chemical and fertiliser companies have submitted their expression of interest (EoIs) which include

Chambal Fertilizers and Chemicals, Vam Organic Chemicals, Schenectady India, Atul Ltd, Deepak Fertilisers and Petrochemicals and Rashtriya Chemicals and Fertilisers.

State Trading Corporation of India hit 20% upper circuit of Rs 238.35 at 14:24 IST after it said that a board meeting will be held on 26 September 2007 to recommend issue of bonus shares.

The BSE Sensex, meanwhile, was up 94 points, or 0.61%, to 15,599 on a volatile trade.

On BSE, 2.3 lakh shares were traded in the counter. The scrip had an average daily volume of 18,649 shares in the past one quarter.

Shares of State Trading Corporation of India had hit a high of Rs 238.35, a record high for the scrip. It touched a low of Rs 199 so far during the day. The stock had touched a 52 week low of Rs 134 on 13 December 2006.

State Trading Corporation of India had outperformed the market over the last one month till 17 September 2007, rising 21.39% compared to the Sensex's return of 9.64%. It had also outperformed the market rising 23% compared to Sensex's rise of 8.46% in the past one quarter.

From a recent low of Rs 162.30 on 24 August 2007 the scrip rose 22.39% to Rs 198.65 on 17 September 2007.

The company's current equity is Rs 30 crore. Face value per share is Rs 10.

The current price of Rs 238.35 discounts Q1 June 2007 annualised EPS of Rs 23.08 by a PE multiple of 10.32.

State Trading Corporation of India announced during the market hours tody, 18 September 2007 that a meeting of the board of directors of the company will be held on 26 September 2007, to recommend bonus shares in a ratio of 1:1 .

State Trading Corporation of India (STC) is a premier international trading house owned by the Government of India. Having been set up in 1956, the corporation has developed vast expertise in handling bulk international trade. Though, dealing largely with the East European countries during the early years of its formation, today it trades with almost all the countries of the world.

Government holds 91.02% stake in the company

Net profit of State Trading Corporation of India rose 85.93% to Rs 17.31 crore on 93.95% rise in sales to Rs 2769.96 crore in Q1 June 2007 over Q1 June 2006

 

 
India growth story to continue, despite odds: Rakesh Jhunjhunwala
 
Super broker Rakesh Jhunjhunwala (left) sounded optimistic while talking about the Indian market weighed against its US counterpart at a recent meeting organised by Shailesh J Mehta School of Management, IIT, Bombay. While analysing the Indian market weighed against its US counterpart, Jhunjhunwala quoted the former US Federal Reserve Chairman Alan Greenspan: "History has not dealt kindly with the aftermath of protracted periods of low-risk premiums." The super broker feels the going will get tough for the Indian markets for the next few months. This is sad, he said as India has all the ingredients that markets value.
 
 
'India growth story will be sustained'
 
During his 45-minute presentation, Jhunjhunwala made an irrefutable case for sustaining the India growth story.
 
US slowdown may affect Indian market only for short term, he assured, adding, "India will have favourable asset allocation outcome in the long-run."
 
Enormous wealth was created over the last five years because opportunities in India have grown manifold, Jhunjhunwala stated. Admitting that gains were going to be moderate in future unlike the manifold rise over the last few years, he advised investors to be realistic in their expectations.
 
The super broker took the cue from Warren Buffett's words: "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well."
 
"Blindly following stock picks by big investors is not a wise thing to do," he warned investors. "I don't think the government is necessarily interested in hurting growth. The government is interested in growth with controlled inflation."
 
 
 
'America has 3.22 million Indians'
"There are 3.22 million Indians in America. Out of which, Jhunjhunwala said, 38 per cent are doctors, 12 per cent scientists, 36 per cent are NASA employees.
Dwelling on the statistics a bit more, Jhunjhunwala said that 34 per cent of Microsoft employees, 28 per cent of IBM employees, 17 per cent of INTEL staff and 13 per cent of XEROX employees are Indians. Indians, therefore, do have substantial contribution towards US growth.
The impact of the current credit crisis in the US will lead to a slowdown in the US economy, and that is bound to affect world equity markets, "India, however, may benefit," argued Jhunjhunwala, "but only after an intermittent transition period."
 
 
India vs US market by Rakesh Jhunjhunwala
Jhunjhunwala believes that India has all the ingredients that the stock markets value and hold in high regard. Just as cheap credit in the US fuelled its growth, (one must refer to the graph on the left hand side), India owes its progress to the following factors:
  • Efficient capital allocation
  • Sustained earnings expansion driven by growth and productivity
  • 8 per cent+ real GDP growth + 4 per cent + Inflation = 12 per cent + Nominal GDP growth
  • Corporates to grow faster than unorganised sector
  • Operating and financial leverage to kick in
  • Corporate earnings to grow at more than 18 per cent
  • Favourable framework for equity investing
  • Rising savings, yet low equity ownership -- significant potential
  • Corporate governance
  • Transparency
  • Effective regulation
  • Electronic trading
  • Dematerialisation
  • Tax paradise for equity investing under the STT regime
  • 'India's biggest asset: A large pool of skilled people'

    Why would India benefit against these odds, one wonders. Jhunjhunwala cited the following reasons:

  • A large pool of skilled people,
  • Favourable demographics,
  • Domestic consumption-led growth,
  • Increased productivity.
  • Corporate sector growing faster than the unorganized sector.
  • The withdrawal of reservations for small scale industry may result in the closing down of small firms, but it will also benefit the larger companies.
  • New Thread: Patni Computer Services to touch a target of Rs 660

    Kapil at 06:53 PM - Sep 12, 2007 ( )

    MUMBAI: Brokerage firm Anand Rathi expects Patni Computer Services to touch a target of Rs 660 in two-three
    months time. Biocon has started to show strength on daily and weekly graphs, trading above all moving averages.

    Biocon has started to show strength on daily and weekly graphs, trading above all moving averages. The up move in the stock is supported by volumes indicating the undertone in the stock has turned bullish.

     
     

    On the monthly chart, the scrip is showing signs of gaining further momentum. Its inclusion in the futures and options segment, effective September 6, will further add liquidity.

     
     

    Based on the chart pattern developed to date, one may buy this scrip with a stop loss of Rs 439 and an upward target of around Rs 543, from a medium term (2-3 months) perspective.

    The firm expects Patni Computer Services to touch a target of Rs 660 in two-three months time. It has suggested buying the stock between Rs 500-510.

     
     

    "On the monthly chart, the scrip is showing signs of gaining further upward momentum. Based on the chart pattern, one may buy this scrip with a stop loss of Rs 470," it added.

    New Thread: stock you can pick

    Kapil at 06:50 PM - Sep 12, 2007 ( )

    Motherson Sumi
    CMP: Rs 101.05
    Target Price: Rs 120

    Merrill Lynch has initiated coverage on Motherson Sumi Systems with a buy rating and price target of Rs 120 citing sustainable strength in earnings growth and new business ventures as among the key reasons. “We expect a 23%+ CAGR (compounded annual growth rate) in EPS (earnings per share) during FY07-FY10E (estimated) driven by 25% CAGR in revenue,” the investment bank said in a note to clients.

    “Expansion of rubber component business with the recent acquisition of Empire Rubber in Australia and beginning of commercial production of mobile phone plastics parts business in H2FY08 are the key growth drivers apart from the 22% CAGR in wiring harness revenue, in our view,” the note said.

    Transport Corp
    CMP: Rs 115.25
    Target Price: Rs 140

    SSKI Securities has initiated coverage on Transport Corporation of India (TCI) with a buy rating and price target of Rs 140. “TCI is currently trading at 12.8 times FY09 earnings and 7.4 times FY09 EV/EBITDA (enterprise value/earnings before interest, taxation, depreciation and amortisation), which we believe is attractive, considering the sharp earnings growth trajectory and steep discount to peers,” the institutional brokerage said. “Further, to emerge as one of the largest SCS (supply chain solutions) providers, TCI is also investing heavily into warehouses and trucks, which will enable TCI’s SCS revenues to grow at 55% CAGR over FY07-09E,” it said.

    ICICI Bank
    CMP: Rs 919
    Target Price: Rs 1,050

    While maintaining its buy rating on ICICI Bank, with a price target of Rs 1,050, CLSA said concerns about the private bank’s asset-quality were exaggerated. “Concerns about the bank’s rising gross non-performing loans (NPLs) are exaggerated given that most of the increase is due to the bank’s higher proportion of unsecured loans, which are priced for higher defaults and have ROE (adjusted for the high risk) of about 25%,” the French investment bank said. After factoring in the rise in provisions for NPLs, CLSA expects ICICI Bank’s net profit to grow 30% on an annual compounded basis till 2010.

    Hotel Leelaventure
    CMP: Rs 44.75
    Target Price: Rs 42

    ICICI Direct has initiated coverage on Hotel Leela with a hold rating and expects the stock to underperform its peers in the sector due to expensive valuation. “Given the delayed expansion plans and absence in major markets till 2010, we feel Leela’s current valuations have factored in the business growth till FY09,” the retail brokering house said.

    “Although Hotel Leela has undertaken expansion plans to New Delhi, Pune, Chennai and Hyderabad, the company is not expecting any of the fresh capacities to be operational before FY11. By 2010, the hotel sector should witness huge supplies coming in at major cities resulting in rationalisation of average room rates (ARRs) and cooling down of the occupancies,” it said.

    Phillips Carbon
    CMP: Rs 168.75
    Target Price: Rs 213

    Angel Broking has initiated coverage on Phillips Carbon Black with a buy recommendation and 12-month price target of Rs 213. “We expect PCBL to grow at a CAGR of 9.8% in topline (net sales) and 78.8% in bottomline (net profit) over FY2007-09E. Growth in bottomline will primarily be aided by contribution from the power division as it will reduce costs as
    well as provide additional source of revenue with 85-90% EBITDA margin (operating margins),” the broking house said in a note to clients. Angel estimates Phillips’ EPS in 2007-08 at Rs 21.7, as against Rs 9.4 in 2006-07. In 2008-09, the company’s EPS is expected to be Rs 26.6.

    New Thread: price target of companies

    Kapil at 06:47 PM - Sep 12, 2007 ( )


    Sr No
    Date
    House
    Scrip
    Target
    1
    10/9/2007
    Clasa
    ITC
    Target 200
    2
    10/9/2007
    Clasa
    HPCL
    Target 310
    3
    10/9/2007
    India Infoline
    Ceat Tyre
    Target of 230
    4
    10/9/2007
    India Infoline
    Hotel Lila 
    Buy Call
    5
    10/9/2007
    Kotak
    Numeric Power
    Target 615
    6
    10/9/2007
    Ubs
    Penisula  land
    Target 696
    7
    10/9/2007
    Ubs
    Sterlite ind
    Target of 775
    8
    10/9/2007
    Ubs
    Tata steel
    Target 875

    New Thread: fertilizer picks

    Kapil at 06:45 PM - Sep 12, 2007 ( )

    Please go through these four recommendations. I feel Reliance Energy and Kalyani Forge both being safe shares can be purchased on a dip while Deepak seems to be a good buy as Fertilizer sector is going to have a boom this year and next year.
     
    Mangalore Chemicals & Fertilizers, Chambal, Nagarjuna are also good picks.
     
    Munjal Showa seems to be ok with medium risk factor.

    Reply for: MOSER BAER - A SHARE TO WATCH

    Kapil at 06:40 PM - Sep 12, 2007 ( )

    India fast emerging as a solar hub
        After IT and pharma, India is on course to emerge as a solar hub. The Centre's move to offer fiscal incentives to solar cell and photovoltaic (PV) manufacturers coupled with surge in global demand for renewable energy sources has triggered domestic and multi-national companies to set up shop here. Leading the pack is home-grown Moser Baer, followed by US-based Signet Solar and Solar Semiconductor. More are set to join. Moser Baer, a leading optical storage manufacturer, is in talks with the Andhra Pradesh government to acquire 100 acres in the Fab City — the chip-making hub. The company was among the first to set up a wholly-owned subsidiary - Moser Baer Photo Voltaic Limited — in 2005 to focus on the high-growth solar energy segment. It also plans to build an Rs 330 crore silicon PV manufacturing facility (near Delhi) and has tied up with Applied Materials Inc for technology transfer.

    Textile firms Arvind Mills and Celebrity Fashions had jumped on reports that the firms entered into an arrangement to develop exclusive brands for Reliance Retail.

    Arvind Mills was up 3.17% to Rs 53.65 on volume of 11.46 lakh shares on the BSE. Celebrity Fashions had soared 11.02% to Rs 70 on volume of 1.66 lakh shares on the BSE.

    The BSE Sensex was up 43.47 points, or 0.28% to 15641.09.

    Reports suggest that Reliance has forged such exclusive agreements with several leading apparel makers to offer huge assortment to the customers across different brands.

    Reliance Retail, which recently launched its first hypermart in Ahmedabad, plans to roll out over 500 hypermarts across the country by 2010. Its first hypermart offers around 95,000 products, including 25,000 varieties in apparel. Thus, the companies dishing out exclusive brands will get exceptionally huge volumes from the retailer.

    In the meantime, the National Stock Exchange of India has banned building fresh positions in Arvind Mills' derivatives contracts as the open interest crossed 95% of the position limit.

    Arvind Mills' net profit rose 25.7% to Rs 5.82 crore on a 21.3% increase in sales to Rs 510.33 crore in Q1 June 2007 over Q1 June 2006.

    Arvind Mills owns various brands like Flying Machine, Newport and Ruf & Tuf jeans and Excalibur shirts. The company services the entire domestic market besides exporting to neighboring countries.

    Celebrity Fashions reported a net loss of Rs 5.83 crore in Q1 June 2007 as against net profit of Rs 1.02 crore in Q1 June 2006. Sales moved up 8% to Rs 80.49 crore in Q1 June 2007 over Q1 June 2006.

    Celebrity Fashions designs, manufactures and sells men's garments. It not only caters to leading international brands, but also owns a domestic brand, Indian Terrain

    Textile firms Arvind Mills and Celebrity Fashions had jumped on reports that the firms entered into an arrangement to develop exclusive brands for Reliance Retail.

    Arvind Mills was up 3.17% to Rs 53.65 on volume of 11.46 lakh shares on the BSE. Celebrity Fashions had soared 11.02% to Rs 70 on volume of 1.66 lakh shares on the BSE.

    The BSE Sensex was up 43.47 points, or 0.28% to 15641.09.

    Reports suggest that Reliance has forged such exclusive agreements with several leading apparel makers to offer huge assortment to the customers across different brands.

    Reliance Retail, which recently launched its first hypermart in Ahmedabad, plans to roll out over 500 hypermarts across the country by 2010. Its first hypermart offers around 95,000 products, including 25,000 varieties in apparel. Thus, the companies dishing out exclusive brands will get exceptionally huge volumes from the retailer.

    In the meantime, the National Stock Exchange of India has banned building fresh positions in Arvind Mills' derivatives contracts as the open interest crossed 95% of the position limit.

    Arvind Mills' net profit rose 25.7% to Rs 5.82 crore on a 21.3% increase in sales to Rs 510.33 crore in Q1 June 2007 over Q1 June 2006.

    Arvind Mills owns various brands like Flying Machine, Newport and Ruf & Tuf jeans and Excalibur shirts. The company services the entire domestic market besides exporting to neighboring countries.

    Celebrity Fashions reported a net loss of Rs 5.83 crore in Q1 June 2007 as against net profit of Rs 1.02 crore in Q1 June 2006. Sales moved up 8% to Rs 80.49 crore in Q1 June 2007 over Q1 June 2006.

    Celebrity Fashions designs, manufactures and sells men's garments. It not only caters to leading international brands, but also owns a domestic brand, Indian Terrain

    New Thread: Continued decline in key M&HCV segment

    Kapil at 08:32 PM - Sep 08, 2007 ( )

    Continued decline in key M&HCV segment

    Key points

    • Tata Motors' overall sales for the month stood at 45,144 vehicles. The overall sales declined slightly by 0.4% on year-on-year basis. 
    • The commercial vehicle sales grew by 1.6% to 23,431 vehicles. The sales growth was driven by strong sales of light commercial vehicles (LCVs), which grew by 23% year on year on the back of its new launches Magic and Winger. The medium and heavy commercial vehicles (M&HCV) sales declined by 13.6% to 11,625 vehicles as the low demand continued in the segment. Our channel checks also reveal that the lower demand for M&HCV vehicles (particularly in the 12-16-tonne segment) led to a greater inventory creation in the system. Consequently, to fuel the growth the company has been offering attractive discounts of almost 4-6%.
    • Lower cargo availability during the monsoons caused the truck rentals to fall by about 1.5-2% on an average during the month. The lower cargo availability also led to a sharp decline in the round trips for truck operators, which is affecting their profitability slightly. The situation is expected to improve from the next month with the start of the festive season.
    • The passenger vehicle sales remained weak and declined by 5% in August to 16,620 vehicles. Indica sales dropped by 4% while Sumo and Safari sales dropped by 12% during the month. The lack of new product offerings has been the prime reason for the decline in the sales. The company has been offering discounts on most of its products and the discounts are likely to continue in September as well.
    • The exports remained stable and grew by 8% in August to 5,093 vehicles.
    • At the current market price of Rs691, the stock discounts its FY2009E consolidated earnings by 10.6x and is available at an enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 5.3x. We maintain our Buy recommendation on the stock with a price target of Rs792.

    New Thread: Annual report review

    Kapil at 08:28 PM - Sep 08, 2007 ( )

    Annual report review

    Key points

    • Gross sales of Bharat Electronics Ltd (BEL) grew by 11.8% in FY2007 on the back of a healthy growth in the civilian segment whereas the defence business remained stagnant during the year. The earnings growth of 23.2% was aided by a jump of 65.6% in the other income component and a decline in the interest outgo. In terms of balance sheet, the huge jump in the sundry debtors resulted in a lower than expected growth in the free cash on its books.
    • The order backlog at the beginning of the year stood at a record level of Rs9,130 crore of which Rs3,969 crore is executable in the current fiscal. The company has agreed to a revenue target of Rs4,725 crore for FY2008.
    • BEL is gearing itself to meet the increasing competition through the roll-out of new products (leveraging its research capabilities) and tie-ups with suitable partners (domestic and foreign vendors). During the year, the company signed agreements with leading global defence vendors including Lockheed Martin, Boeing, Northrop Grumman and CASA.
    • At the current market price the stock trades at 13.7x FY2008 and 11.2x FY2009 earnings estimates (adjusted for the estimated free cash on its books). We maintain our Buy call on the stock with a price target of Rs1,975.

    Reply for: Getting branded

    Kapil at 08:27 PM - Sep 08, 2007 ( )

    Getting branded

    Key points

    • In FY2007 the consolidated net sales of Tata Tea Ltd (TTL) grew by 29.6% year on year (yoy) to Rs4,024.9 crore. The growth was mainly driven by higher branded sales across the business and the inclusion of revenue of Rs558 crore from new acquisitions. The organic growth in FY2007 was 11.5%. Branded sales now constitute around 89% of the total sales compared with 85% in FY2006.
    • TTL reported a 24.6% year-on-year (y-o-y) jump in its consolidated net profit (adjusted for extraordinary items) to Rs366.2 crore. 
    • In the domestic market, the company reported a top line growth of 9% to Rs1,054 crore in FY2007. The branded business (which constitutes 80% of the sales) continued with its impressive performance during the year, registering a 9% growth in volume and a 12% rise in value compared with that in the last year.
    • For the same period, the turnover of the Tetley group (a 77.7% British subsidiary of TTL) was Rs2,298 crore, which was 13% higher than that in the previous year. The organic growth was 8.5% which includes the benefits of exchange transactions. For FY2007 the profit after tax (PAT) of Tetley was lower by 12% at Rs130 crore as against Rs147 crore in FY2006. The PAT was lower mainly on account of an interest charge incurred due to the acquisition of Energy Brands Inc., USA (EBI).
    • During the year the company acquired a 25% shareholding in EBI, commonly known as Glaceau®, for US$677 million (enterprise value of EBI was estimated at US$2.2 billion). Subsequently, TTL has agreed to sell its stake in EBI for an approximate consideration of $1 billion to the Coca Cola Company. This transaction is expected to result in a pre-tax profit of approximately $415 million.
    • TTL also acquired a 15% stake in Mount Everest Mineral Water (MEMW), the owner of the Himalayan brand, by subscribing to a preferential issue at a price of Rs140 per share. It will purchase another 9.15% stake in MEMW from the latter's current promoters at the same price. The company would also make an open offer to acquire an additional stake of up to 20% in MEMW at Rs140 per share This acquisition makes TTL a complete beverage company, having presence in all the verticals, ie tea, coffee and water.
    • TTL is selling North Indian Plantation Operations (NIPO), which includes 24 tea estates in northern India, to a new company called Amalgamated Plantation Pvt Ltd (APPL). The sale would be effective from April 1, 2007. We believe that this move is in line with TTL's overall strategy to focus on packaged and specialty tea.
    • We believe the company is poised to become a strong player in the beverage market by penetrating new geographies through the inorganic route as well as by gaining presence in every segment of the beverage industry. On the valuation front, the TTL stock looks attractive at 11x its FY2009E diluted consolidated earnings per share (EPS) when compared with its peers in the fast moving consumer goods (FMCG) sector, especially when with the sale of NIPO, TTL has become a pure branded FMCG play. We maintain our Buy recommendation on the stock with a price target of Rs970.

    New Thread: Price target revised to Rs300

    Kapil at 08:26 PM - Sep 08, 2007 ( )

    Price target revised to Rs300 

    Key points

    • With a revised capital expenditure (capex) plan of 14 million metric tonne (MMT) by the end of FY2009, India Cements will emerge as one of the top five cement players in India in terms of capacity. The company will witness a robust volume growth of 23% over FY2007-09. 
    • South India is expected to witness a strong cement demand in the next couple of years due to heightened industrial activity and upcoming government projects.
    • The company received the Madras High Court's approval for merger of Visaka Cements in Q1FY2008.
    • For Q1FY2008, the combined turnover of the company stood at Rs701 crore. The turnover was much in line with our expectations. Backed by higher realisations, the operating profit margin (OPM) improved by 400 basis points year on year (yoy) to 38%, whereas the earnings before interest, tax, depreciation and amortisation (EBITDA) per tonne stood at Rs1,150. Consequently, the profit before tax (PBT) stood higher at Rs215 crore beating our expectation of Rs200 crore for the same.
    • In the last couple of months, the cement retail price have touched Rs280 per bag in certain regions and the dealers expect it to touch Rs300 per bag in the coming months. Considering the rise in prices, we are upgrading our estimates by 33.9% for FY2008 and 32.5% for FY2009.
    • The company's strategy of augmenting its capacity through the brownfield route at a lower capital cost will enhance the company's return on capital employed (RoCE) going forward. The Lower capital cost coupled with higher profitability will put the company's financials in an enviable position.
    • Healthy financials, a leadership position in the South and a lower promoter stake make the company a potential target for acquisition. Whether the promoters will sell their stake is a question that time will answer but in case that happens we believe the acquirer will have to pay a hefty premium to the company as it will directly make them the market leader in the South.
    • We expect the earnings of the company to grow at a compounded annual growth rate (CAGR) of 27% over FY2007-09 on an enhanced equity capital of Rs260 crore. At the current market price of Rs263, the stock is currently trading at 9.5x its FY2009E earnings per share (EPS) and at an enterprise value (EV)/EBITDA of 5.1x. Considering all these aspects, we maintain our positive outlook on the stock with a revised price target of Rs300.
    Threads by Kapil Bharti
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    1 to 43 of 43<< Previous Next >>

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