Investment Advice for Stocks (Share), MF and Personal Finance » Broker tips

Rashtriya Chemicals and Fertilizers Ltd – RCF – IDBI Capital

free stock tips — Wed, 28 Jul 2010 10:35:19 +0000

RCF is one of the leading producers of Fertilizers in India and was incorporated in 1978 with the reorganization of the erstwhile Fertilizer Corporation of India. Looking at the highertime frame chart we find that prices since Feb 10 have been undergoing some good accumulation, forming a pattern along the way.

Tracing back a bit we find that prices with their razor sharp rise in Jan 10,managed to complete an inverted Head and Shoulders pattern and broke out from it. However being unable to meet the target prices fizzled out from the rally and hence

later slipped into the aforementioned pattern formation. Interestingly, this pattern has been building atop the neckline of the H&S pattern, forming a kind of base on base pattern.With two crucial patterns in progress and with momentum supporting the formation, we recommend buying now for target 134-36 / 165.

Rashtriya Chemicals and Fertilizers Ltd – RCF – IDBI Capital is a post from: Indian Stock Market Tips

Zydus Wellness –Hold- Sharekhan

free stock tips — Fri, 23 Jul 2010 10:01:00 +0000

The net sales grew by 36.1% year on year (yoy) to Rs87.3 crore (ahead of our expectation of Rs80.2 crore) on the back of the strong performance of the company’s pillar brands (Sugar Free, Everyuth and Nutralite) and the new variants recently launched.

Sugar Free continues to dominate the market while the Everyuth range of products (Golden Glow peel off mask, face scrubs and face washes) maintained their respective market share during the quarter. The Menz range of skin care products continued to gain new grounds. Also, Nutralite (substitute for butter) registered a good performance in the retail as well as the institutional segment.

The company’s other expenses stood at Rs46.0 crore in Q1FY2011 as against our expectation of Rs32.1 crore for the quarter. Of the total other expenses, the advertisement cost stood at Rs30 crore during the quarter. The advertisement cost grew by 36.4% yoy on account of higher ad-spends and promotional activities towards the existing products and the launch of new products/variants during the quarter. Also, the other expenses (excluding the advertisement expenses) grew by 25.0% y-o-y during the quarter.

Thus, the operating profit margin (OPM) stood at 11.6% in Q1FY2011 as against our expectation of 24.1%. The operating profit grew by 46.1% y-o-y to Rs10.2 crore (lower than our expectation of Rs19.3 crore), in line with the higher sales growth during the quarter. Consequently, the adjusted net profit stood at Rs7.7crore as against our expectation of Rs13.5 crore for the quarter. We have slightly tinkered our estimates upwards to factor in the higher than expected top line growth.

The company has maintained its thrust on enhancing its product portfolio with the launch of new products/variants and expanding its reach through increased distribution. Thus, we expect the strong growth momentum to continue in the coming quarters. Also, along with the strong top line growth, the lowering of the tax rate due to the commencement of the new facility (in the tax-free zone Baddi) as per schedule will result in a strong growth in the bottom line. Thus, we expect the company’s bottom line to grow at a compounded annual growth rate (CAGR) of 43.1% over FY2010-12.

Zydus Wellness, with its strong product portfolio and presence in niche segment, is expected to achieve a strong earnings growth that will be ahead of the growth of fast moving consumer goods (FMCG) peers. The FMCG sector, on an average, is currently trading at 22x its FY2012 earnings and we believe with its strong earnings growth potential Zydus Wellness should command valuations in line with that of its FMCG peers.

Thus, valuing the stock at 22x its FY2012E EPS of Rs24.5, our revised price target stands at Rs538. At our price target the stock will trade at comfortable valuation of 0.5x price earnings growth (PEG). However, we maintain our HOLD recommendation on the stock due to the limited upside from the current levels. At the current market price the stock trades at 29x its FY2011E EPS of Rs16.8 and 19.9x its FY2012E EPS of Rs24.5.

Zydus Wellness –Hold- Sharekhan is a post from: Indian Stock Market Tips

Thermax –Hold- Sharekhan

admin — Fri, 23 Jul 2010 07:58:00 +0000

Thermax’ Q1FY2011 results were above our expectations on almost all fronts due to a strong growth in its top line. The net income from the operations increased by 49% year-on-year (y-o-y) to Rs778.8 crore against our expectation of Rs634.2 crore due to a robust growth in both the energy and the environment division. The environment division continued to post an excellent performance with a 77.4% y-o-y growth in the sales (vs our expectation of an 11% sales growth). The energy division also posted a strong y-o-y growth of 44.6% in revenues to Rs606.6 crore.

The company reported an operating profit margin (OPM) of 12.2%, which was lower than our expectation of 13%, and an operating profit margin (OPM) of 12.8% of Q1FY2010. This was mainly due to a higher raw material cost as a percentage of sales–66.5% in Q1FY2011 as compared to 62% in Q1FY2010. Nonetheless, the operating profit increased by 39.2% y-o-y to Rs96 crore. Net profit jumps by 42.3%: Boosted by the other income and almost a nil interest charge the adjusted net profit jumped by 42.3% y-o-y to Rs66.2 crore, which was above our estimate of Rs56.8 crore.

The company’s current order backlog at the group level stands at Rs6,984 crore vs Rs3,426 crore at the end of Q3FY2010. At the stand-alone level, the order book stands at Rs6,330 crore. During the quarter, the company won a Rs580-crore order for setting up a 72MW gas-based combined cycle power plant. Currently, we have a HOLD rating on the stock. We will revisit our estimates and price target for the stock after a conference call with the management. At the current market price the stock trades at 26.6x FY2011 estimate and 21.7x FY2012 estimate.

Thermax –Hold- Sharekhan is a post from: Indian Stock Market Tips

Adani Group –Buy- Angel Securities

free stock tips — Thu, 22 Jul 2010 05:30:43 +0000

Adani Group is in the foray to buy Deccan Chargers for $280–300 mn, which is approximately 3 times the price that Deccan Chargers Sporting Ventures paid for the IPL team in 2008.

Deccan Chargers is 80% owned by Deccan Chronicle, which publishes Deccan Chronicle and Financial Chronicle, with the balance 20% held by leading media agency GroupM. We believe that this is the good time to sell a team as next player auctions (for IPL to be played in 2011) may drive up the cost of all franchisees.

Moreover, we have been highlighting in all our updates that Deccan Chronicle will be looking at value unlocking for its IPL team at the opportune moment. However, it is not clear if Deccan Chronicle will sell Deccan Chargers completely or reduce stake to become a minority shareholder. We maintain a BUY rating on the stock with a target price of Rs193.

Adani Group –Buy- Angel Securities is a post from: Indian Stock Market Tips

BASF India –Hold- Sharekhan

admin — Tue, 20 Jul 2010 07:37:00 +0000

BASF India’s stand-alone Q1FY2011 net profit came in at Rs48.9 crore, up 19% year-on-year (y-o-y). However the results are not strictly comparable due to consolidation of the financials of Ciba India.

The net sales for the quarter were up by 72.7% y-o-y to Rs659.84 crore, driven by a 1.6x year-on-year (y-o-y) rise in the revenue from the performance products business. The robust growth in the performance products business was largely due to the merger with Ciba India. The plastic division also logged in a good show with the revenue up by 60% y-o-y.

The operating profit grew at a slower pace than the top line, expanding by15.6% y-o-y to Rs79 crore in the quarter, due to around 590-basis-point contraction in the operating profit margin (OPM) to 12%. The OPM contraction was as a result of the amalgamation with Ciba India, which has lower margins than BASF India, as well as decline in the margins for the agricultural solutions business.

The interest charges remained largely flat on a y-o-y basis whereas the depreciation charges witnessed an uptick to Rs8.94 crore in the quarter as compared to Rs6.87 crore in the same quarter of the last year.

BASF India has reported a strong set of numbers for Q1FY2011 on the back of a healthy traction in demand across all its businesses. The OPM, however, witnessed some pressure as a result of the amalgamation of Ciba India with itself and lower margins for the agricultural solutions business. We have tweaked our earnings estimates for FY2011 and FY2012 to factor in the Q1FY2011 performance and our revised earnings per share (EPS) now stands at Rs31.7 for FY2011 and Rs41.8 for FY2012.

At the current market price of Rs460, the stock trade at 11x its FY12E EPS and 2.9x FY12E book value (BV). We maintain our HOLD recommendation on the stock with a revised price target of Rs501.

BASF India –Hold- Sharekhan is a post from: Indian Stock Market Tips

Rallis India –Neutral- Angel Securities

admin — Tue, 20 Jul 2010 04:35:00 +0000

Rallis India declared its 1QFY2011 results, with revenue growth of 22% to Rs203 crore, which was ahead of our estimate of Rs193cr. However, EBITDA margins at 11.6% were below our estimates of 13%, hence overall profit came in at lower than the estimate.

Total reported PAT for the quarter came in at Rs14.8 crore against Rs9 crore (1QFY2010), growth of 57.5% y-o-y. We currently have a NEUTRAL rating on the stock, which would be revised post the management meet.

Rallis India –Neutral- Angel Securities is a post from: Indian Stock Market Tips

Axis Bank –Buy- Angel Securities

free stock tips — Tue, 13 Jul 2010 08:54:00 +0000

Axis Bank is exploring options to monetize its 4,200 automatic teller machines (ATMs). For an upfront payment, the bank may allow a third-party service provider to collect interchange fees from other banks to let customers use Axis Bank’s ATMs.

Thus, the bank will be able to move its ATM assets off its balance sheet and outsource the entire network’s management to service providers, paying them on a per-transaction basis. Request-for-proposals seeking solutions on how this can be accomplished have already been sent to 8–10 vendors, including Wincor-Diebold, Prizm Payment Services, AGS Infotech and NCR, as per reports.

Recently, the bank also entered into an agreement with Prizm Payment Services and AGS Infotech to set up and manage 5,000 ATMs on a purely variable model, enabling the bank to increase its ATM count to more than 9,000 within the next 18 months. At the CMP, the stock is currently trading at 2.4x FY2012E ABV. We maintain a BUY rating on the stock with a target price of Rs1,466.

Axis Bank –Buy- Angel Securities is a post from: Indian Stock Market Tips

Autoline Industries –Buy- India Infoline

free stock tips — Tue, 13 Jul 2010 07:21:08 +0000

After trading sideways for almost 10 months, the stock has given breakout from falling channel last week after the stock successfully managed to close above the upper range of channel corresponding at Rs136 with good volumes.

Such a breakout is likely to trigger positive momentum in the near term with upper range of resistance getting converted to support zone. Similar breakout is also seen in daily RSI oscillator as underlying strength in the counter has forced RSI to move above last six months of intermediate peaks.

We expect buying momentum in the counter to remain upbeat in coming week and hence advise buying stock in range of Rs143-146 with stop of Rs140 for target of Rs162

Autoline Industries –Buy- India Infoline is a post from: Indian Stock Market Tips

Godrej Consumers –Buy-India Infoline

free stock tips — Fri, 09 Jul 2010 10:03:00 +0000

The stock has been moving sideways and in a narrow range of Rs337-Rs350 for almost a couple of weeks after rallying sharply from Rs302 to Rs372.

As of now, the stock is successful in adhering to its 50% retracement support corresponding at Rs337 which earmarks inherent strength in the counter. After yesterday’s close above Rs348, RSI signaled a positive crossover along with bullish piercing line pattern on candlestick.

This dual confirmation is likely to trigger positive momentum in coming days. We advise buying stock above Rs350 with stop loss of Rs344 for target of Rs365.

Godrej Consumers –Buy-India Infoline is a post from: Indian Stock Market Tips

Bharti –Buy- Angel Securities

free stock tips — Fri, 09 Jul 2010 08:44:00 +0000

Bharti Airtel will invest $600 million in Nigeria’s mobile market following its takeover of Zain Telecom’s African business for around $10.7 billion.

There exists strong growth opportunity for Bharti in the country as currently the mobile phone customers in Nigeria use only 50 minutes of airtime a month whereas 450 minutes is obtainable in India. We believe this investment would be fruitful for Bharti in the long run. We maintain a BUY on the stock, with target price of Rs360.

Bharti –Buy- Angel Securities is a post from: Indian Stock Market Tips