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4:04 AM
bullishmumbai
Elder Pharmaceuticals
Elder Pharmaceuticals RECOMMENDATION: BUY
Price: Rs. 416 Target Price: Rs.554
Elder Pharmaceuticals Ltd (Elder Pharma) is a Mumbai-based pharmaceutical company with prime focus on manufacturing and marketing of pharmaceutical brands in the domestic market. Traditionally, Elder Pharma has been a India centric pharma company but of late it has forayed into the regulated markets of Europe by acquiring a strategic 20% stake in Neutra Health PLC (an UK based neutraceutical company) and a 51% stake in Biomeda (one of the top 10 manufacturing and distribution company in Bulgeria). Simultaneously, it is penetrating deep into the semi-regulated and non-regulated markets.
In terms of therapy coverage, Elder Pharma maintains its leadership positioning in Women’s healthcare, wound care management and nutraceuticals. The brand positioning of the Elder Pharma can be seen from the fact that SHELCAL, CHYMORAL and ELDERVIT are leading brands in the Women’s healthcare, wound care management and nutraceuticals, respectively. It has a strong presence in the pain management, antiinfectives, dermatology and lifestyle disorders. It also has got strong foot hold in the domestic Fast Moving Heath Goods (FMHG) segment with brands like – Fair One, Tiger Balm, AM PM Mouthwash etc.
Driven by steady progress in the domestic formulations, more specifically the leading brands, Elder Pharma’s revenues and profit grew at a CAGR of 19.3% and 50% respectively over last five years upto FY07. Going forward, we estimate the revenues to grow at a CAGR of 18.3% during FY07-09E. We conservatively estimate margin expansion of 160 bps to 19.0% in FY09E largely driven by progressive shifting of manufacturing activity to excise free zone. As a result, we estimate 31.5% and 24.9% profit growth to Rs 647.10 mn and Rs 808.4 mn in FY08E and FY09E respectively.
At current price of Rs 416 the stock trades at a 9x EV/EBITDA of FY09E and trades at 10x EPS FY09E. We are initiating a coverage on Elder with a target price of Rs 554, based on our DCF valuations. At our target price the stock would be valued at 13x FY09E EPS and 11x its FY09E EV/EBITDA.
Elder Pharmaceuticals RECOMMENDATION: BUY
Price: Rs. 416 Target Price: Rs.554
Elder Pharmaceuticals Ltd (Elder Pharma) is a Mumbai-based pharmaceutical company with prime focus on manufacturing and marketing of pharmaceutical brands in the domestic market. Traditionally, Elder Pharma has been a India centric pharma company but of late it has forayed into the regulated markets of Europe by acquiring a strategic 20% stake in Neutra Health PLC (an UK based neutraceutical company) and a 51% stake in Biomeda (one of the top 10 manufacturing and distribution company in Bulgeria). Simultaneously, it is penetrating deep into the semi-regulated and non-regulated markets.
In terms of therapy coverage, Elder Pharma maintains its leadership positioning in Women’s healthcare, wound care management and nutraceuticals. The brand positioning of the Elder Pharma can be seen from the fact that SHELCAL, CHYMORAL and ELDERVIT are leading brands in the Women’s healthcare, wound care management and nutraceuticals, respectively. It has a strong presence in the pain management, antiinfectives, dermatology and lifestyle disorders. It also has got strong foot hold in the domestic Fast Moving Heath Goods (FMHG) segment with brands like – Fair One, Tiger Balm, AM PM Mouthwash etc.
Driven by steady progress in the domestic formulations, more specifically the leading brands, Elder Pharma’s revenues and profit grew at a CAGR of 19.3% and 50% respectively over last five years upto FY07. Going forward, we estimate the revenues to grow at a CAGR of 18.3% during FY07-09E. We conservatively estimate margin expansion of 160 bps to 19.0% in FY09E largely driven by progressive shifting of manufacturing activity to excise free zone. As a result, we estimate 31.5% and 24.9% profit growth to Rs 647.10 mn and Rs 808.4 mn in FY08E and FY09E respectively.
At current price of Rs 416 the stock trades at a 9x EV/EBITDA of FY09E and trades at 10x EPS FY09E. We are initiating a coverage on Elder with a target price of Rs 554, based on our DCF valuations. At our target price the stock would be valued at 13x FY09E EPS and 11x its FY09E EV/EBITDA.
Posted in
1:24 AM
bullishmumbai
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Posted in
1:33 AM
bullishmumbai
Medium term -Buy
DLF Tgt:890
AHLCON 524448
30% DIV
Tgt:92
ALBERT DAVID 524075
Tgt:124
TVS MOTOR
Tgt:75
CIPLA
Tgt:200
OMAX
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IDEA
Tgt:160
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RAIN CLANCING
Tgt:55
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SHRIRAM CITY UNION FINANCE
Tgt:340
Tgt:340
TORRENT PHARMA
Tgt:260
SHIVANY OIL
Tgt:480
Tgt:480
RNRL
Tgt:135
Tgt:135
NTPC
Tgt:222
Tgt:222
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Above 290
Tgt:350-500
Above 290
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Posted in
1:23 AM
bullishmumbai
23/09/2007
Buy Punj Lloyd, says Sukhani
Technical Analyst, Sudarshan Sukhani is of the view that investor can buy Punj Lloyd. Sukhani
told CNBC-TV18, "I am fond of the construction stocks so an infrastructure, so Punj Lloyd would
be a very favorable pick for investor just buy it and hold it." He further added, "Reliance Energy
has run
up, but for an investor that should not worry."
Indian Hotels has target of Rs 200: Gaurang Shah
Gaurang Shah of Geojit Financial Services is of the view that Indian Hotels has target of Rs 200.
Shah told CNBC-TV18, "On Indian Hotels Company I have a target of Rs 200-200 plus from a longterm
perspective and the rationale behind choosing this stock is it has one of the largest hotel
chains in India, having presence in the luxury, leisure and business and now they are venturing
in to hotel segment. They have continued to give excellent results and aggressively they are
expanding their room counts and their take over of Ritz Carlton in Boston and the another take
over they completed was Hotel Campton Place in San Francisco."
He further added, "Going forward they are also planning some new projects and implementation
in Pukhet and Cape Town with JVs and I feel that will expand their presence in the US market,
which is supposed to be the key market over there. We have a buy report on this company. I
personally do not hold any shares but my clients might be holding the some positions."
Buy Omnitech Infosolution, tgt Rs 222: Emkay
Emkay research is bullsih on Omnitech Infosolution and has maintained buy rating on the
stock with target price of Rs222
Buy Alphageo, target Rs 569: India Infoline
Buy Corporation Bank has target of Rs 450: Mohindar
Buy PTC, says Bose S/L:84
Buy Dish TV, Says Sethi
Vikas Sethi , MD of Sethi Finmart is of the view that Dish TV is a strong buy at current level
Sethi told CNBC-TV18, "Dish TV today is currently trading at around Rs 76 levels and the stock
has recently seen a substantial correction from its highs of Rs 140 levels. It’s a Zee Group
company in the DTH space and has a subscriber base of around 2.1 million. And the company is
though to break even and is expected to turn profitable only by FY2010. Its subscriber base is
expected to be growing annually and more than 25% per annum and that too for at least five
years or so. With the government’s initiatives in making DTH compulsory for major towns and
cities across the country I see significant growth opportunities for the stock in the future and I
would recommend it as a strong buy at these levels".
BUY
Accumulate Sakthi Sugar with Stoploss - 80 for 100-105-110 targets,
you can expect 15-20 % from here in coming days
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Delivery
1:19 AM
bullishmumbai
Buy Ashok Lyland Tgt:44
Buy Bata India Tgt:200
Buy Maercatorlines Tgt:75-84
Buy Indian Hotels Tgt:200++
Buy Omnitech Infosolution Tgt: 222
Buy Sakthi Sugar Tgt:100-105-110
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Idea Tgt:152
12:08 AM
bullishmumbai
21/09/2007
...........................................................................................................
Buy Idea Cellular; target of Rs 152: Merrill Lynch
...........................................................................................................
Buy Idea Cellular; target of Rs 152: Merrill Lynch
Merrill Lynch is bullish on Idea Cellular and has maintained a buy rating on the stock. Research firm expects a target price of Rs 152.
aMerrill Lynch research report on Idea Cellular
Roadshow takeaways focused on revenue leadership
Idea’s top management ( CEO and CFO) met with investors across Asia, last week. Investors acknowledged the Co’s recent strong performance and queries mostly centered on tower-sharing & spectrum availability. In the meetings Idea emphasized that its revenue leadership across its 7 established operations (barring Delhi) ranks on par with Bharti, based on available industry data. These 7 established circles account for approx40% of all-India wireless subs & approx 84% of Idea’s sub base. Idea expects to remain aggressive in its established circles.
Tower-sharing: beneficial but not easy; early for valuations
Idea highlighted consortium-led tower sharing & co-building of networks as potential routes to improve speed (to market) & spread (i.e. coverage). The Co feels that no single operator can expect to be only a landlord & said recent valuation pointers on tower companies may be a leap too far into the future. Technical challenges and people-issues, i.e. local/circle-wise decision-making, are some of the practical bottlenecks that need to be worked around.
Mumbai launch likely despite spectrum re-farming issues
Idea expects to launch Mumbai operations by end-FY08; the Co believes some spectrum may become available in Mumbai ahead of larger spectrum re-farming Negotiations between the telecom & defense ministries. Idea has acquired anchor sites and switch-locations in Mumbai, and expects to finalize vendors very soon. In Bihar, the Co’s preparations are in early stages as spectrum visibility is lower.
Strengthening execution track record to drive stock upside
We remain Buyers of Idea with a PO of Rs 152. Faster-than-expected break-even in new circles, launches of Mumbai ops, & sustained leadership in established ops present potential upside catalysts. We prefer the majors due to similar valuations.
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Posted in
1:58 AM
bullishmumbai
Buy Bharti Airtel, target Rs 1050: Citigroup
--------------------------------------------------------
Citigroup is bullish on Bharti Airtel and has recommended buy rating on the stock with a 12-month target price of Rs 1050.Citigroup research report on Bharti AirtelUnderperformance though understandable, is now overdoneTRAI released recommendations on Aug 28, potentially allowing easier spectrum access for new entrants. Not surprisingly, fear of higher competition has resulted in Bharti underperforming the Sensex by 11% and peers by 9% since. This appears overdone as our estimates factor in the ensuing competitive risks to a large extent, i.e., lower market share and sustained decline in rev/min.Estimates factor in higher competition anywayOur estimates factor in a 300- 400bps yoy decline in Bharti’s share of FY09 net adds. On an absolute level, FY09 net add estimate of 1.8m/month has little downside risk especially as Bharti/incumbents try and accelerate their rollout even further to beat the now more visible competition from new entrants (possibly in 2HFY09). This will be visible in continued acceleration in Bharti’s net adds over the next 6-9 months.Revenue/min may surpriseRecent interaction with the industry (Asia Telco Tour) indicate potential for rev/min to relatively stabilize vis-à-vis an estimated 16%pa decline in FY07-10E, which amply factors in increasing competition. Also, impact on capex from new recos (even if accepted fully) will be marginal.Spectrum delay and towerco to provide upsideNotification of TRAI's recos could get delayed as stakeholders debate and pursue legal options even as spectrum release by Defence continues to get delayed. Meanwhile, possibility of strategic/financial investment in Bharti's towerco in 3QFY08 will provide valuation benchmark (our est. at Rs160/share). Bharti remains our top pick.Investment strategyWe rate Bharti Buy/Low Risk (1L). We believe continued robust wireless market expansion and Bharti's ability to capture this growth profitably will be a recurring theme. We estimate FY07-10 earnings CAGR of 32.7%, more than double the broader market. We believe that competitive pressures, though intense, will remain rational as low revenue yields and moderate EBITDA margins leave little room for disruptive pricing.Additionally, most regulatory concerns are behind us and 3G recommendations, though discomforting, cannot derail the growth path, in our view. Combined with strong brand presence and good corporate governance standards, Bharti appears a strong investment. The company has yet to realize the benefits of economies of scale, and we expect a slight strengthening of margins over next 2-3 years. We also expect the towerco hive-off (Bharti Infratel) to be a value accretive looking beyond the immediate impact on margins, given Bharti's stated intentions to be a minority stake owner in the towerco.ValuationOur 12-month forward target price of Rs1,050 is based on core DCF of Rs890 and a towerco option value of Rs157. The core DCF (as on March-08) is based on a WACC of 10.7%, a terminal growth rate of 4% and beta of 0.9. We prefer DCF as our primary valuation methodology because the wireless market will likely continue to see robust growth requiring upfront capex but should generate significant free cash beyond FY09-10E.Our target price (net of towerco value) represents a FY09E P/E of 20.4x, P/CEPS of 13.1x and EV/EBITDA of 11.5x. The imputed target P/E (net of towerco) of 26.3x FY08E is at 30% premium to the broad market P/E (20.0x FY08E at the higher end of our Sensex target of 16,000). This, we believe, is justified by above-average earnings growth, high return parameters, improved earnings visibility and relative insulation from macro risks.RisksOur quantitative risk-rating system, which tracks 260-day share price volatility, rates Bharti as Low Risk. We are comfortable attributing a Low Risk rating for the following reasons: 1) Bharti has a track record of profitability and execution; 2) the company's capex plans are fully funded; and 3) SingTel's strategic shareholding leaves us comfortable with execution issues and initiatives. Risks that could prevent the stock from reaching our target price include competition-led tariff pressures, un-remunerative capex, overall market downside, and slower-than-expected execution of the tower sharing initiative.
--------------------------------------------------------
Citigroup is bullish on Bharti Airtel and has recommended buy rating on the stock with a 12-month target price of Rs 1050.Citigroup research report on Bharti AirtelUnderperformance though understandable, is now overdoneTRAI released recommendations on Aug 28, potentially allowing easier spectrum access for new entrants. Not surprisingly, fear of higher competition has resulted in Bharti underperforming the Sensex by 11% and peers by 9% since. This appears overdone as our estimates factor in the ensuing competitive risks to a large extent, i.e., lower market share and sustained decline in rev/min.Estimates factor in higher competition anywayOur estimates factor in a 300- 400bps yoy decline in Bharti’s share of FY09 net adds. On an absolute level, FY09 net add estimate of 1.8m/month has little downside risk especially as Bharti/incumbents try and accelerate their rollout even further to beat the now more visible competition from new entrants (possibly in 2HFY09). This will be visible in continued acceleration in Bharti’s net adds over the next 6-9 months.Revenue/min may surpriseRecent interaction with the industry (Asia Telco Tour) indicate potential for rev/min to relatively stabilize vis-à-vis an estimated 16%pa decline in FY07-10E, which amply factors in increasing competition. Also, impact on capex from new recos (even if accepted fully) will be marginal.Spectrum delay and towerco to provide upsideNotification of TRAI's recos could get delayed as stakeholders debate and pursue legal options even as spectrum release by Defence continues to get delayed. Meanwhile, possibility of strategic/financial investment in Bharti's towerco in 3QFY08 will provide valuation benchmark (our est. at Rs160/share). Bharti remains our top pick.Investment strategyWe rate Bharti Buy/Low Risk (1L). We believe continued robust wireless market expansion and Bharti's ability to capture this growth profitably will be a recurring theme. We estimate FY07-10 earnings CAGR of 32.7%, more than double the broader market. We believe that competitive pressures, though intense, will remain rational as low revenue yields and moderate EBITDA margins leave little room for disruptive pricing.Additionally, most regulatory concerns are behind us and 3G recommendations, though discomforting, cannot derail the growth path, in our view. Combined with strong brand presence and good corporate governance standards, Bharti appears a strong investment. The company has yet to realize the benefits of economies of scale, and we expect a slight strengthening of margins over next 2-3 years. We also expect the towerco hive-off (Bharti Infratel) to be a value accretive looking beyond the immediate impact on margins, given Bharti's stated intentions to be a minority stake owner in the towerco.ValuationOur 12-month forward target price of Rs1,050 is based on core DCF of Rs890 and a towerco option value of Rs157. The core DCF (as on March-08) is based on a WACC of 10.7%, a terminal growth rate of 4% and beta of 0.9. We prefer DCF as our primary valuation methodology because the wireless market will likely continue to see robust growth requiring upfront capex but should generate significant free cash beyond FY09-10E.Our target price (net of towerco value) represents a FY09E P/E of 20.4x, P/CEPS of 13.1x and EV/EBITDA of 11.5x. The imputed target P/E (net of towerco) of 26.3x FY08E is at 30% premium to the broad market P/E (20.0x FY08E at the higher end of our Sensex target of 16,000). This, we believe, is justified by above-average earnings growth, high return parameters, improved earnings visibility and relative insulation from macro risks.RisksOur quantitative risk-rating system, which tracks 260-day share price volatility, rates Bharti as Low Risk. We are comfortable attributing a Low Risk rating for the following reasons: 1) Bharti has a track record of profitability and execution; 2) the company's capex plans are fully funded; and 3) SingTel's strategic shareholding leaves us comfortable with execution issues and initiatives. Risks that could prevent the stock from reaching our target price include competition-led tariff pressures, un-remunerative capex, overall market downside, and slower-than-expected execution of the tower sharing initiative.
Posted in
1:46 AM
bullishmumbai
18/09/2007
Buy Ashapura Minechem, target Rs 564: A.C.Mehta
Asit.C.Mehta research is bullish on Ashapura Minechem and has maintained buy rating on the stock with target pric of Rs 564.
A.C.Mehta research report on Ashapura Minechem
Investment Rationale
Growing demand for Bauxite from China:
The growing production capacity of alumina and aluminium in China creates strong demand for Bauxite. China is expected to produce 14 million tones in 2008E and 16 million tones of Aluminium in 2009E (1 tone aluminium requires minimum of 4 tones of Bauxite). Considering the estimated Aluminium production, Bauxite requirement for next two years FY08E and FY09E period is expected to be of 56 million and 64 million tones respectively. AML expects to sell 7 million tones of Bauxite in 2008E and 8.5 million tones in 2009E, of which export to China would be 5 million tones in 2008E and 6 million tones in 2009E. Bauxite sales is going to remain the growth driver for the company’s top line.
Value addition:
AML has been continuously moving ahead in chain of value added products for its frontline products Bauxite and Bentonite.Such Valued added products fetches better operating margins than its raw minerals.
Diversification Plans: Alumina Manufacturing:
AML is setting up a 1 million tones Alumina refinery at Kutch,Gujrat .Such investment is a 50:50 joint venture between AML and Chinese Company SAAL. Kaolin: AML has just entered into the business of Extracting Kaolin and has initiated its operation by acquiring mines in Kerala, which would have production capacity of 180000 tonnes.
Iron ore trading:
AML has expanded its operations by venturing into trading of iron ore. AML is expected to sell around 500000 tones in 2007- 08E and 600000 tones in 2008-09E Valuation and recommendations We expect the company to register a 2-year EPS CAGR of 39% till FY09. At CMP of Rs.384.00 the stock is trading at 6.50x FY08 & 5.44x FY09 earnings per share. We initiate coverage on Ashapura Minechem Limited with a BUY recommendation and price-objective of Rs.564 (implying a forward P/E multiple of 8x)
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Posted in
12:30 AM
bullishmumbai
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