India Infoline Weekly Wrap – August 13, 2010

 http://content.indiainfoline.com/wc/research/weeklywrap/IIWW_130810.pdf

Fw: Investor's Eye: Update - SBI (PT revised to Rs3,115); Special - Q1FY2011 Pharma earnings review

 

 

Investor's Eye [August 13, 2010]  Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE  State Bank of India Cluster: Apple Green Recommendation: Buy Price target: Rs3,115 Current market price: Rs2,850 Price target revised to Rs3,115 Result highlights Bottom line beats expectations: For Q1FY2011 State Bank of India (SBI) reported a net profit of Rs2,914.2 crore, up 25.1% year on year (yoy). The outperformance can be traced to a higher than expected top line and contained opex (due to write-back of excess wage hike provision. Meanwhile gross slippages were high leading to a 6.6% sequential increase in the gross non-performing assets (GNPAs).  NIM expands sequentially: The reported net interest margin (NIM) stood at 3.18% up 22 basis points sequentially. The improvement in the NIM was led by an improvement in the cost of deposits due to a superior current account and savings account (CASA) ratio coupled with a higher deployment rate.  Higher slippages: The gross slippages during the quarter stood high at Rs4,081 crore of which around Rs574 crore was realised as non-performing assets (NPAs) after the expiry of the agri debt waiver scheme. The management expects incremental slippages to come off going forward. PCR improves: The provision coverage ratio (PCR) improved by 247 basis points sequentially to 60.7% (including the technical write-offs). Considering the extension of the deadline to September 2011, the bank should be able to reach the stipulation of 70%.  Strong advances growth: In Q1FY2011, SBI?s advances grew by a strong 20.7% yoy to Rs663,828 crore. The growth in the advances was led by a growth in the large corporate and retail segments. During the quarter the bank disbursed around Rs7,000 crore to telecommunications (telecom) companies. Meanwhile, the deposits grew at a much slower pace of 6.8% yoy, implying a 165-basis-point sequential expansion in the deployment rate. The slow growth in deposits was due to the bank?s efforts to reduce the bulk deposits. The CASA deposits grew by a strong 32% yoy, leading to an 84-basis-point sequential increase in the CASA ratio to 47.5%.  Maintain Buy with revised price target of Rs3,115: SBI has reported a robust Q1FY2011 performance led by a strong growth in advances, expansion in margins and lower operating expenses. Although the asset quality concerns persisted during the quarter with gross slippages higher than that in the previous quarters, yet it is likely that the same shall improve going forward as the bank booked all NPAs arising out of the agri debt waiver scheme during Q1FY2011. We maintain our positive stance on the bank in view of its increasing CASA base, improved cost-to-income ratio and expanding NIM. At the current market price of Rs2,850 the stock trades at 11.9x its FY2012E earnings per share (EPS), 5.9x its FY2012E pre-provisioning profit (PPP) and 2.1x its FY2012E book value (BV). We maintain our Buy recommendation on the stock with a revised price target of Rs3,115.  SHAREKHAN SPECIAL Q1FY2011 Pharma earnings review  Most pharmaceutical companies under Sharekhan?s coverage reported a strong Q1FY2011 led by a robust performance in the export business (one-time exclusive revenue in Sun Pharmaceuticals [Sun Pharma] and Glenmark Pharmaceuticals [Glenmark]) and no major extraordinary items (limited foreign exchange [forex] losses). Select geographies like Russia, Germany and France grappled under the adverse currency movements. We expect a revival in the export formulation business on the back of an increased focus on branded and niche products, and huge abbreviated new drug application (ANDA) pipeline, particularly for companies like Sun Pharma, Lupin and Glenmark in FY2011. The domestic formulation business resumed normalcy in this quarter and the buoyant growth witnessed in the quarter was partially on a low base of the corresponding quarter of the last year (Q1FY2010). We expect a similar robust growth trend in Q2FY2011 as well as across FY2011 due to a low base throughout the previous fiscal. The operating profit margin (OPM) of all the pharmaceutical companies under Sharekhan?s coverage has been pretty strong led by a better product mix (improved gross margins).  Improving balance sheet and working capital cycle has been the mantra of the quarter. Most companies under our coverage showed a positive bias towards de-risking their balance sheets as the interest costs declined by 32.6% year on year (yoy) during the quarter. The mid-caps continue to outperform with another strong quarter. Our result picks, Glenmark, Lupin and Sun Pharma, delivered a strong growth as compared to their peers. We expect Glenmark and Ipca Laboratories (Ipca) to perform well considering their inexpensive valuations and the steady nature of their core business. However, a slow ramp-up in the key products and a delay in product approvals could act as dampeners for Lupin in the near term.   Click here to read report: Investor's Eye Attention:  As per SEBI guidelines, clients who want to transact in the Futures & Options segment are required to submit proof of Financial Details. Kindly contact the nearest Sharekhan branch for more information or check the pop-up banner on our website, www.sharekhan.com.

Regards, The Sharekhan Research Team myaccount@sharekhan.com  Manage your newsletter subscriptions

 

Mcnally Bharat - Board recommends Dividend
McNally Bharat Engineering Company Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 13, 2010, inter alia, has recommended a dividend of 15% (i.e. Rs. 1.50 per Share) for the year ended March 31, 2010, subject to the approval of the members.

Acknit Inds - Board to consider Dividend 
Acknit Industries Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on August 20, 2010 to consider and take on records the audited statements of Accounts for the year ended March 31, 20l0 alongwith the Reports of the Directors and Auditors thereon and also to consider and recommend Dividend, if any.

Ankur Drugs - Board to consider Dividend
Ankur Drugs and Pharma Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held September 01, 2010, inter alia, to discuss the following transactions :
1. To fix date, time and place for AGM.

India Gelatine - Board recommends Dividend
India Gelatine & Chemicals Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 11, 2010, inter alia, has recommended Dividend of Rs. 2.00 per share of Rs. 10/- each for the year March 31, 2010.

Fwd: Elliot Wave tips BUY ROYALE MANOR HOTELS LTD (BSE Code : 526640) CMP Target 35/-

 

BUY  ROYALE MANOR HOTELS LTD (BSE Code : 526640) CMP Target 35/-

Accumulate slowly Royale Manor Hotels Ltd (BSE Code : 526640)at 20/- to 21/-Levels. with Target of 35/- to 65/- levels. Royale Manor Hotel is Ahmadabad based Hotel stock. Good profit making company EPS 2/- for 2009-10 and Hotel is in Good Location.

Recently invested  in the Equity Shares of National Hotels Ltd., an unlisted Company having 5 star hotel at Jodhpur, Rajasthan.

Stock like BHAGWATI BANQUETS & HOTELS LTD. this stock zoom from 43/- to 150/- Recently. Same Operator in Royale Manor Hotels Ltd Soon will zoom to 45/- to 65/- levels. Happy invest for 3 Months time will get 100% to 200% Return.

 

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TULIVE - Board to consider Bonus Issue
Tulive Developers Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on August 13, 2010, inter-alia, to consider the following:
1. To approve the unaudited quarterly financial results for the quarter ended June 30, 2010 ...

D&H Welding - Board to consider Dividend

D&H Welding Electrodes India Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held August 17, 2010, to take on record Audited Financial Results for the Financial Year ended on March 31, 2010 and also to consider the recommendation of dividend for the Financial Year 2009-2010, if any.

Bhoruka Alum - Shareholders and Creditors to approve Scheme of Amalgamation

Bhoruka Aluminium Ltd has informed BSE that by an order made on July 30, 2010, a meeting of Equity Shareholders & Un-Secured Creditor will be held on September 01, 2010, for the purpose of considering, and if thought fit, approving, with or without modification, the Scheme of Amalgamation proposed to be made between the Transferor Company Bhoruka Agro Green Ltd and the Applicant Company, Bhoruka Aluminium Ltd and their respective ...

Patni Computer - Fixes Record Date for Special Interim Dividend

Patni Computer Systems Ltd has informed BSE that August 31, 2010 has been fixed as the Record Date for the purpose of payment of a special interim dividend of Rs. 63/- per equity share of Rs. 2/- each (Rupees Sixty Three Only per Equity Share).

MGF - Board to consider Dividend

Motor & General Finance Ltd has informed BSE that a meeting of the Board of Directors of the Company will be held on August 19, 2010, to consider and approve the Audited Accounts for the year ended March 31, 2010 along with declaration of dividend, if any. The Board will also consider convening of Annual General Meeting and other related matters.

Bank of Rajasthan - Updates on Scheme of Amalgamation

Bank of Rajasthan Ltd has informed BSE that the Reserve Bank of India vide their Order dated August 12, 2010 has approved the scheme of amalgamation under the provisions of section 44A of the Banking Regulation Act, 1949.
1. The effective date of amalgamation is close of business hours on August 12, 2010. ...

Patni Computer - Board declared Special Interim Dividend

Patni Computer Systems Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 13, 2010, has declared a special interim dividend of Rs. 63/- per equity share of Rs. 2/- each (Rupees Sixty Three Only per Equity Share).

Hindustan Oil - Fixes Record Date for Interim Dividend

Hindustan Oil Exploration Company Ltd has informed BSE that August 24, 2010 has been fixed as Record Date for the purpose of entitlement of interim dividend.

Munjal Auto - Board recommends Dividend

Munjal Auto Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 12, 2010, inter alia, has declared 50% dividend (Rs. 5 per share) on Face Value of Rs.10 each for the F.Y. 2009-10.

Aptech - Board Recommends Dividend

Aptech Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 12, 2010, inter alia, have recommended dividend for the 15 months period ended March 31, 2010 @ Rs. 1 per share. The total amount dividend payable shall be Rs. 4.83 crores.

ICICI Bank - Approval of Merger

ICICI Bank Ltd has informed BSE that Reserve Bank of India has approved the scheme of amalgamation of Bank of Rajasthan Ltd with ICICI Bank with effect from the close of business on August 12, 2010.

source: bseindia.com

**[investwise]** Balmer Lawrie-Strong BUY, FY10 EPS Rs 71, Cum Dividend Rs 23/Share [1 Attachment]

 

[Attachment(s) from Maverick included below]

FYI Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.   Nothing in this article is, or should be construed as, investment advice.

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Attachment(s) from Maverick

1 of 1 File(s)

BalmerLawrie-Q1FY11.pdf

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