Fw: Investor's Eye: Idea - CESC; Sector - Insurance, Retail

 

Investor's Eye [June 29, 2011]  Sharekhan www.sharekhan.com

Summary of Content STOCK IDEA CESC   Cluster: Ugly Duckling Recommendation: Buy Price target: Rs413 Current market price: Rs282 Integrated business at a discount Key points Integrated business model with strong cash generation from distribution business: CESC's presence in both generation and distribution business is an advantage given the emergence of erratic purchase of power by the state electricity boards (SEBs) due to their deteriorating financial health. The power distribution business in Kolkata is growing at a healthy rate and generates substantial free cash to fund CESC's expansion plans. CESC is doubling its generation capacity by FY2015 through addition of 600MW in Chandrapur and 600MW in Haldia. Further, 1,920MW of capacities are at an early development stage. Moreover, led by the deteriorating financials of the SEBs, the potential privatisation of the distribution business could open up opportunity for CESC.  Secured fuel supplies an added advantage: Besides coal linkage from Coal India, CESC has a secured supply of coal from two coal assets held by the promoters through ICML. Around 50% of the coal would be sourced from these mines and 30-40% of the requirement would come from the Coal India linkage; the balance 10% would be imported. CESC has a higher level of fuel security compared to most of its domestic peers which is a strong positive.  Retail turns profitable at store level; current price ignores the turnaround possibility: The retail business of CESC is currently burning significant cash at the operation level; however, we believe it is close to the end of the tunnel. The silver lining is that there are initial indications of a recovery as the business reported profits at the store level in all four quarters of FY2011. Further, backed by the current strategy of the management, we believe it could break even at the corporate level in the next three years against the management's ambitious time line of five to six quarters. Moreover, the cash generation from the monetisation of its spare land through the development of a 400,000-square-feet shopping mall in a prime area of Kolkata would partially negate the losses in the retail business.  Significant discount to peers, Buy: CESC is one of the cheapest utility stocks available in the Indian market. It trades at a discount to its book value and at a 60-70% discount to the average multiple of the comparable companies. One of the key reasons for the discounted valuations is the concerns related to the losses in the retail business that depress the return ratios at the consolidated level. However, we believe that the improving financial health of the retail business and the growing scale of the power generation and distribution business would positively affect the return ratios in future. We value per share of CESC at Rs536 (Kolkata utility business at Rs472 + the upcoming power generation assets at Rs48 + the property at Rs17 share). Further, we deduct Rs123 per share for the retail business to account for the latter's accumulated losses of Rs1,231 crore (over FY2008-11) and the estimated cumulative losses of around Rs316 crore to be incurred during FY2012-14 (before it turns profitable in FY2015) to arrive at a fair value of Rs413 for CESC. Hence, we recommend a Buy on CESC with a price target of Rs413. SECTOR UPDATE  Insurance   Hit by revised rules, product launch delays The annual premium equivalent (APE) for the life insurance industry declined in May 2011 by 15.6% year on year (YoY) but increased by 32.5% month on month (MoM) due to increased premium collection mainly in the single premium segment.   Retail Retail channel check exercise reveals volume downtrend In line with our expectation, all the retailers we spoke to confirmed on the fact that volume slowdown in the apparel category was evident in Q1FY2012. We believe that the abrupt price increase of 15-18% across all apparel brands coupled with inflation pressure restricted demand. We continue to be of the opinion that just within a couple of months, the consumer psyche would adjust towards the higher price points, resulting in a rebound in volume offtake. Looking at the mid- to long-term trend, optimism and increasing aspiration levels across consumption categories, we believe that all consumption plays are at an inflexion point, with the long term demand drivers intact. Thus, we maintain our long term bullish stance on the sector. From the point of view of large-cap stocks and in terms of valuations, we like Pantaloon. However, in the mid-cap retail space we continue to have a Buy rating on Provogue (a proxy to the retail real estate play) and KKCL (a player with a scalable business model and management) with a pedigree and a robust balance sheet. Click here to read report: Investor's Eye

Regards, The Sharekhan Research Team myaccount@sharekhan.com   www.sharekhan.com to manage your newsletter subscriptions

 

Fw: Merge the pay-in /pay-out date

 

Dear Customer, The Exchange has decided to merge the pay-in /pay-out date for settlement numbers 2011124 & 2011125 [NSE] and 1112064 & 1112065 [BSE] as there would be no pay-in/ pay-out activities on July 01, 2011 on account of Annual Closing of RBI. Settlement No. From To Pay In Sale against Receivables Availability 2011123 29-Jun-2011 29-Jun-2011 04-July-2011 Yes 2011124 30-Jun-2011 30-Jun-2011 05-July-2011 No 2011125 01-Jul-2011 01-Jul-2011 05-July-2011 Yes Deliveries taken in settlement number 2011124, will not be available for selling in settlement number 2011125 as the Pay-in for both the settlements are on Jul 05, 2011. Settlement No. From To Pay In Sale against Receivables Availability 1112063 29-Jun-2011 29-Jun-2011 04-July-2011 Yes 1112064 30-Jun-2011 30-Jun-2011 05-July-2011 No 1112065 01-Jul-2011 01-Jul-2011 05-July-2011 Yes Deliveries taken in settlement number 1112064, will not be available for selling in settlement number 1112065 as the Pay-in for both the settlements are on Jul 05, 2011. Kindly feel free to call us on 1800 22 7500/ 022 - 6115 1111 / (Local STD Code) 3970 7500 in case of clarifications. Warm Regards Team Sharekhan

Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai - 400 042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos. BSE Cash-INB011073351; F&O-INF011073351; NSE - INB/INF231073330; CD - INE231073330; MCX Stock Exchange: CD - INE261073330; United Stock Exchange: CD - INE271073350; DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; PMS INP000000662; Mutual Fund: ARN 20669. Commodity trading through Sharekhan Commodities Pvt. Ltd.: MCX-10080; (MCX/TCM/CORP/0425); NCDEX -00132; (NCDEX/TCM/CORP/0142); for any complaints email at igc@sharekhan.com ; Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and Do's & Don'ts by NCDEX, and the T & C on www.sharekhan.com before investing.

Fw: Investor's Eye: Update - Max India, Telecom; MF - Sharekhan's top SIP fund picks

 

Investor's Eye [June 21, 2011]  Sharekhan www.sharekhan.com

Summary of Content STOCK UPDATE Max India  Cluster: Emerging Star Recommendation: Buy Price target: Rs234 Current market price: Rs173 Stake buy-out supports our valuation for Max Healthcare  Max India has decided to buy out 16.37% stake in its subsidiary, Max Healthcare, for Rs140 crore (at Rs29.4 per share). After the stake purchase Max India's stake in Max Healthcare will increase to around 91.84% while the remaining stake will be held by International Finance Corporation (3.1%) and overseas corporate bodies. Based on the proposed deal, the valuation of the Max Healthcare would be around Rs855 crore, which is slightly higher than our estimated value of Rs780 crore for the company.  Further, according to media reports Max India is planning to rope in a strategic partner to pick up a significant minority stake in the healthcare arm at a considerable premium. Even after considering some premium for the strategic stake we believe the proposed deal could result in further upside to our assigned valuation for Max India's healthcare business. We maintain our Buy rating on the stock with a sum-of-the-parts (SOTP) based price target of Rs234. SECTOR UPDATE Telecommunications  May net additions down 14.2% MoM, Idea reports steepest fall In May 2011 the all-India GSM operators (excluding Reliance Communications [Rel Com] and Tata Teleservices [Tata Tele]) added 9.53 million SIM cards, taking the overall base to approximately 590 million from 581 million in April this year. That is approximately a 1.6% increase over the April number. We believe that the overall weakness in the April net additions to a certain extent speaks of the moderating trend in the subscriber addition with the mobile penetration level remaining high (the all-India wireless penetration as on April stood at 69.2%, as per the TRAI). MUTUAL GAINS Sharekhan's top SIP fund picks We have identified the best equity scheme for SIP investment based on three parameters: Minimum corpus as indicated by at least 10% of the average category-corpus, the past performance as indicated by one, three and five year returns and risk returns ratios namely Sharpe, Information and Sortino.  Sharpe indicates risk-adjusted returns, giving the returns earned in excess of the risk-free rate for each unit of the risk taken. The Sharpe ratio is also indicative of the consistency of the returns as it takes into account the volatility in the returns as measured by the standard deviation.  Information ratio is one of the most important tools in active fund management. It is the ratio of active return (the return over the index return) to active risk annualised. A higher Information ratio indicates better fund manger.  Sortino ratio is similar to Sharpe ratio, except it uses downside deviation. The upward volatility as measured by Sharpe ratio does not lead to losses. It is the downward volatility that leads to losses; hence the use of which doesn't discriminate between up and down volatility. So, higher the Sortino ratio, higher would be the effective return over a period of time. Click here to read report: Investor's Eye

Regards, The Sharekhan Research Team myaccount@sharekhan.com   www.sharekhan.com to manage your newsletter subscriptions

 

**[investwise]** CRISIL Equity Research releases Quarterly update [1 Attachment]

 

[Attachment(s) from arun varghese included below]

 

Attached please find the quarterly update released by CRISIL Equity Research.

 

MSP Steel and Power Ltd - Quarterly update Q4FY11

Fundamental Grade     : 2/5

Valuation Grade          : 5/5

Fair Value                    : Rs 75

CMP                            : Rs 45

For detailed downloads of CRISIL's Independence Equity Research (IER) reports (Initiation + Quarterly), visit www.ier.co.in

CRISIL Fundamental Grade	Assessment
5/5	Excellent fundamentals
4/5	Superior fundamentals
3/5	Good fundamentals
2/5	Moderate fundamentals
1/5	Poor fundamentals

 

CRISIL Valuation Grade	Assessment
5/5	Strong upside (>25% from CMP)
4/5	Upside ( 10-25% from CMP
3/5	Align ( +-10% from CMP
2/5	Downside (negative 10-25% from CMP)
1/5	Strong downside (<-25%from CMP)

 

CRISIL IER reports provide a Fundamental Grading and a Valuation Grading of a company, presented in the form of a proprietary CRISIL Fundamental and Valuation (CFV) matrix. The Fundamental Grading is based on an analysis of the business and industry prospects, financial performance and outlook, management quality and corporate governance of a company vis-à-vis other listed companies in India. The Valuation Grading provides current assessment of the fair value of the company's stock.

 

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Fw: Sharekhan's top SIP fund picks

 

 

Mutual Gains [June 21, 2011]  Sharekhan www.sharekhan.com

Summary of Contents MUTUAL GAINS Sharekhan's top SIP fund picks We have identified the best equity scheme for SIP investment based on three parameters: Minimum corpus as indicated by at least 10% of the average category-corpus, the past performance as indicated by one, three and five year returns and risk returns ratios namely Sharpe, Information and Sortino.  Sharpe indicates risk-adjusted returns, giving the returns earned in excess of the risk-free rate for each unit of the risk taken. The Sharpe ratio is also indicative of the consistency of the returns as it takes into account the volatility in the returns as measured by the standard deviation.  Information ratio is one of the most important tools in active fund management. It is the ratio of active return (the return over the index return) to active risk annualised. A higher Information ratio indicates better fund manger.  Sortino ratio is similar to Sharpe ratio, except it uses downside deviation. The upward volatility as measured by Sharpe ratio does not lead to losses. It is the downward volatility that leads to losses; hence the use of which doesn't discriminate between up and down volatility. So, higher the Sortino ratio, higher would be the effective return over a period of time. Click here to read report: Mutual Gains   Regards, The Sharekhan Research Team myaccount@sharekhan.com

Fw: Discontinuation of Futures and Options Contracts in the security TV18

 

Discontinuation of Futures and Options Contracts in the security TV-18 - June 20, 2011 Dear Customer Kindly note that Television Eighteen India Limited has informed the Exchange that the 'Record Date - June 22, 2011' for the purpose of determining the entitlement of the equity shareholders of Television Eighteen India Limited (Discontinued Company) to receive, pursuant to the scheme in the below manner. Seventeen Fully Paid Equity Share in ibn18 (Resulting company) of the face value Rs. 2/- each for every Twenty Five Equity Share of Television Eighteen India Limited of Rs. 5/- each. Thirteen Fully Paid Equity Share in Network18 (Resulting company) of the face value of Rs.5/- each for every Hundred Equity Share of Rs. 5/- each held by the shareholders in TV18. Taking the same into consideration there would be the following adjustments carried out in the Futures and Options contracts in the security. All existing contracts of TV18 i.e. contracts with expiry dates June 30, 2011, July 28, 2011 and August 25, 2011 will expire on June 20, 2011 and shall be finally settled at the relevant settlement price. The settlement price to be reckoned for the purpose of final settlement of existing contracts shall be the closing price of TV-18 in the Capital Market segment of NSE, on June 20, 2011. No futures and options contracts will be available in the underlying TV-18 for trading from June 21, 2011 onwards. This is pursuant to NSE Circular No. 059/2011 dated June 15, 2011. Please click here to view the detailed circular. Regards Team Sharekhan

Registered Office: Sharekhan Limited, 10th Floor, Beta Building, Lodha iThink Techno Campus, Off. JVLR, Opp. Kanjurmarg Railway Station, Kanjurmarg (East), Mumbai - 400 042, Maharashtra. Tel: 022 - 61150000. Sharekhan Ltd.: SEBI Regn. Nos. BSE Cash-INB011073351; F&O-INF011073351; NSE - INB/INF231073330; CD - INE231073330; MCX Stock Exchange: CD - INE261073330; United Stock Exchange: CD - INE271073350; DP: NSDL-IN-DP-NSDL-233-2003; CDSL-IN-DP-CDSL-271-2004; PMS INP000000662; Mutual Fund: ARN 20669. Commodity trading through Sharekhan Commodities Pvt. Ltd.: MCX-10080; (MCX/TCM/CORP/0425); NCDEX -00132; (NCDEX/TCM/CORP/0142); for any complaints email at igc@sharekhan.com ; Disclaimer: Client should read the Risk Disclosure Document issued by SEBI & relevant exchanges and Do's & Don'ts by NCDEX, and the T & C on www.sharekhan.com before investing.

Fw: (Erratum) Investor's Eye: Pulse - Monetary policy review; Update - Raymond; MF - Top equity mutual fund picks

 

 

Investor's Eye [June 16, 2011] Please see the attachment for details Sharekhan www.sharekhan.com

In the Viewpoint report on Raymond on the page 4 of the Investor's Eye dated June 16, 2011, the chart titled "Branded vs Un-branded" erroneously shows the contribution of branded sales as 32% and that of unbranded sales as 68% in the company's revenue mix. The correct revenue mix is as follows: branded sales 68% and unbranded sales 32%. The error is regretted and has been rectified. Summary of Content PULSE TRACK Monetary policy review: RBI maintains hawkish stance, raises policy rates by 25 basis points VIEWPOINT Raymond Well placed to capitalise on domestic consumption play Strong brand, with dominant market share: Raymond is the oldest textile brand in India with a history spanning more than 85 years. Over the years through its quality focus approach and unique brand building initiatives (it has spent over Rs900 crore over the last ten years FY2002-11 over advertising the brand) the brand 'Raymond' has gained a unique mind share and brand recall amongst consumers. The testimony to the same is its market leadership status in the worsted fabric segment. Apart from the fabric segment, the brand Raymond also has its presence in the ready-to-wear (the apparel) segment. Besides the Raymond brand, the company possesses a bouquet of apparel brands (viz Park Avenue, Parx and ColorPlus) to name a few) that enjoy a leadership status in their respective categories. Robust distribution network, gaining strength day by day: Strong distribution is a key prerequisite for any consumer-led model and Raymond has created strong entry barriers for competitors in this regard. It has an enviable distribution set-up that is a blend of wholesalers, distributors, MBO touch points, exclusive brand outlets (EBO) and its own famous store brand, The Raymond Shop (TRS). The brand is present in more than 400 towns including class 1 to class 5 towns and cities, is retailed through an array of 1,600 MBOs and is present at over 18,000 touch points including the exclusive Raymond brands available in 739 own retail (590 TRS) stores and 149 exclusive brand stores. Since Raymond enjoys strong brand equity and recall, it has franchisees operating even out of tier-3, tier-4 and tier-5 cities.  Valuation and outlook: In FY2011, Raymond saw tremendous improvement in its financials with a strong top line growth of 22.3%. Further a strong turnaround in the business would lead to almost a three-fold increase in its profitability too. A branded play with a strong distribution franchisee, enhanced focus and operational earnings visibility, Raymond is trading at 10.4x our rough FY2013E earnings per share (EPS) of Rs37.1. This is attractive compared with the valuation of the other branded retail plays. Further, any development with regard to the Thane land (company possesses ~120 acres of land at the heart of Thane at Pokhran Road) in the form of either a joint development or a disposal would lead to value unlocking and provide significant cash to the company. On the wake of Raymond's penetration lead consumption play coupled with its strong brand equity and enchanced focus we are positive on the company. However, we do not have active rating and coverage on the stock. MUTUAL GAINS Sharekhan's top equity mutual fund picks Large-cap funds Mid-cap funds Multi-cap funds ICICI Prudential Focused Bluechip Equity IDFC Small & Midcap Equity ICICI Prudential Discovery Franklin India Bluechip HDFC Mid-Cap Opportunities Birla Sun Life Dividend Yield Plus Birla Sun Life Frontline Equity - Plan A DSP BlackRock Small and Midcap HDFC Equity Principal Large Cap IDFC Premier Equity Fund - Plan A Reliance Equity Opportunities Reliance Quant Plus Sundaram Select Midcap Mirae Asset India Opportunities Tax saving funds Thematic funds Balanced funds HDFC Taxsaver DSP BlackRock Natural Resources & New Energy HDFC Prudence Religare Tax Plan Birla Sun Life India GenNext HDFC Balanced Fidelity Tax Advantage UTI India Lifestyle Reliance RSF - Balanced ICICI Prudential Taxplan Fidelity India Special Situations Birla Sun Life 95 HDFC Long Term  Advantage HDFC Infrastructure Tata Balanced Fund Fund focus Principal Large Cap Fund IDFC Premier Equity Fund - Plan A Click here to read report: Investor's Eye

Regards, The Sharekhan Research Team myaccount@sharekhan.com   www.sharekhan.com to manage your newsletter subscriptions

 

Fw: Sharekhan's top equity mutual fund picks

 

Mutual Gains [June 16, 2011]  Sharekhan www.sharekhan.com

Summary of Contents MUTUAL GAINS Sharekhan's top equity mutual fund picks Large-cap funds Mid-cap funds Multi-cap funds ICICI Prudential Focused Bluechip Equity IDFC Small & Midcap Equity ICICI Prudential Discovery Franklin India Bluechip HDFC Mid-Cap Opportunities Birla Sun Life Dividend Yield Plus Birla Sun Life Frontline Equity - Plan A DSP BlackRock Small and Midcap HDFC Equity Principal Large Cap IDFC Premier Equity Fund - Plan A Reliance Equity Opportunities Reliance Quant Plus Sundaram Select Midcap Mirae Asset India Opportunities Tax saving funds Thematic funds Balanced funds HDFC Taxsaver DSP BlackRock Natural Resources & New Energy HDFC Prudence Religare Tax Plan Birla Sun Life India GenNext HDFC Balanced Fidelity Tax Advantage UTI India Lifestyle Reliance RSF - Balanced ICICI Prudential Taxplan Fidelity India Special Situations Birla Sun Life 95 HDFC Long Term  Advantage HDFC Infrastructure Tata Balanced Fund Fund focus Principal Large Cap Fund IDFC Premier Equity Fund - Plan A   Click here to read report: Top equity mutual fund picks   Regards, The Sharekhan Research Team myaccount@sharekhan.com

Fw: Daring Derivatives: Bulls retreat

Daring Derivatives [For June 16, 2011] Sharekhan www.sharekhan.com

Summary of Contents   DARING DERIVATIVES Derivatives Summary Nifty (June) futures? premium over spot Nifty reduced from 15.30 to 3.10 points and around 5.57 lakh shares were added in open interest. Total open interest in the market was Rs130,571 crore and Rs154 crore were reduced in open interest. Nifty call options added 24.44 lakh shares in open interest, whereas put options underwent a reduction of 24.35 lakh shares in open interest. Click here to read report: Daring Derivatives