Sharekhan Investor's Eye: Update - M&M (Upgraded to Buy), BASF (PT revised to Rs586), Punj Lloyd (Downgraded to Reduce)

Summary of Contents

STOCK UPDATE  Mahindra & Mahindra Cluster: Apple Green Recommendation: Buy Price target: Rs756 Current market price: Rs654 Upgraded to Buy Result highlights Mahindra and Mahindra (M&M)?s Q3FY2011 total income grew by 36.1% year on year (YoY), the growth was marginally higher than our expectations. The top line growth was driven by a strong performance from the automotive and farm equipment segments. The automotive business? realisations grew 0.5% quarter on quarter (QoQ) due to an improved product mix. Tractor realisations, however, dropped by 1.7% sequentially. Its raw material-sales ratio in Q3FY2011 increased by 200 basis points QoQ as cost inflation was felt across the board. Similarly, the 27% year-on-year (Y-o-Y) jump in the other expenses was sharper than expected. The staff cost, however, moderated with just a 5.3% Y-o-Y growth. Consequently, the operating profit margin (OPM) improved by 20 basis points YoY but was lower by 140 basis points QoQ in a seasonally weak quarter.  The Q3FY2011 adjusted profit after tax (PAT) came in line with our expectations due to a higher other income. The reported PAT was much higher as it included Rs117 crore of exceptional gains (Rs82.2 crore adjusted for tax) owing to the stake sale in Owens Corning India.  The Q3FY2011 consolidated total income grew by 20.9% YoY while the consolidated PAT grew by 57.4% YoY. The consolidated numbers include 48.2% of Tech Mahindra?s stake in Q3FY2011 as against 100% in Q3FY2010. We expect the FY2012 automotive volumes (including pick-ups) to grow by 17% and the tractor volumes to rise by 12%. We are marginally increasing our stand-alone FY2012 earnings per share (EPS) estimate by 2%, assuming a better performance from the tractor business.  Our sum-of-the-parts (SOTP) valuation target for M&M is revised to Rs756 per share (we are reducing the core business? multiple to 12x FY2012E earnings citing higher ownership risks and Rs128 per share as the value of the subsidiaries). Though the ownership concerns remain a risk, the company has been able to maintain margins in an inflationary scenario. Given the recent sharp correction in the stock price, we upgrade the stock to Buy. BASF India Cluster: Ugly Duckling Recommendation: Hold Price target: Rs586 Current market price: Rs513 Price target revised to Rs586 Result highlights Bottom line significantly below expectations: BASF India?s stand-alone Q3FY2011 net profit came in at Rs23.7 crore, up 110% year on year (YoY) but significantly below our estimate of Rs43.7 crore mainly due to the lower than expected operating profit margin (OPM). The Q3FY2011 results however are not strictly comparable with those of Q3FY2010, as the quarter under review includes the financials of the merged Ciba India. Top line jumps on consolidation with Ciba India: The total income for the quarter was up by 140.4% YoY to Rs702 crore, driven by a 2.1x 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 company reported a new business segment (functional solutions) with revenues of Rs123 crore. The agricultural solutions and plastics businesses also logged in a good show with the revenue up by 55% and 230% YoY respectively. OPM deteriorates: The operating profit declined by 18.5% YoY to Rs19.2 crore in the quarter, due to an around 534-basis-point contraction in the OPM to 2.7% (versus our expectation of 11% for the quarter). The OPM contraction was a result of the amalgamation with Ciba India, which enjoys lower margins than BASF India, and also on account of a decline in the margins of the agricultural solutions and plastics businesses. Net income up by 110% YoY: Despite a decline in the operating profit, the company reported a 110% YoY increase in its net income, purely on account of the benefit in taxes accrued by carrying forward of losses from BASF Coatings India Pvt Ltd (BCIN) and BASF Polyurethanes India Limited (BPIL). However, the growth in the net income was limited due to higher depreciation and interest expenses during the quarter.  Bombay High Court approved scheme of amalgamation of BCIN, BCCIPL and BPIL: During the quarter, the Bombay High Court has approved the amalgamation of BCIN, BASF Construction Chemicals (India) Pvt Ltd (BCCIPL) and BPIL with BASF India vide its order dated January 14, 2011. Accordingly, BCIN, BCCIPL and BPIL have been merged with the company with effect from April 01, 2010. Additionally the amalgamation would result in an increase in the share capital to Rs43.29 crore from Rs40.7 crore, thus implying an equity dilution of around 6%. However, we have not factored in the same in our assumptions due to lack of availability of financial details for BCIN and BCCIPL. Maintain Hold with revised price target of Rs586: BASF India reported a strong top-line growth, which was above our expectations. But the company?s performance at the operating level was disappointing mainly due to negative margins in its agriculture solutions and plastics businesses. We have revised our earnings estimates for FY2011 and FY2012 to factor in the steep decline in the OPM in Q3FY2011 and our revised earnings per share (EPS) now stand at Rs35.5 for FY2011 and Rs45.1 for FY2012. At the current market price, the stock trades at 11.4x its FY2012E EPS and 1.9x FY2012E book value (BV). We maintain our Hold recommendation on the stock with a price target of Rs586 (now valued at 13x its FY2012E EPS). Punj Lloyd Cluster: Apple Green Recommendation: Reduce Price target: Under review Current market price: Rs69 Downgraded to Reduce Result highlights Disappointment continues: Punj Llyod Ltd (PLL) has disappointed yet again by posting a consolidated net loss of Rs62.1 crore as against our and the Street?s expectations of profit. The performance of the company was disappointing primarily on account of a sharp decline in the net revenue and poor operating profit margin (OPM). The revenue declined by 27.8% year on year (YoY) to Rs2,093.6 crore on account of the slow execution of its Libyan projects, which form as high as 35% of the total order book of the company, and several other projects that are in the initial stage. In addition, contraction in the margin due to lower revenue booking and absorption of fixed cost dented the earnings of the company. Libyan orders continue to dampen: The execution of the Libyan orders has been delayed significantly due to a delay in getting master plans and the advances on the projects which has hit the earnings in the last few quarters, as the Libyan orders form around 35% of the company?s order book. Work on three of these five projects began in Q2FY2011 but because of the slower execution, it could not reach the threshold limit to book the revenue. PLL has booked about $20 million so far on the orders worth $750 million. However, now the master plans are getting released in a phased manner and the company has received 15% advances on all the five projects. Thus, the management expects execution to scale up in FY2012 gradually. Margins on these projects are as high as 14%. OPM contracts sharply: The OPM of the company contracted by 364 basis points on a year-on-year (Y-o-Y) and 448 basis points on a quarter-on-quarter (Q-o-Q) basis to just 3.4%, which is much below our estimate and also below the guidance given by the management post-Q2FY2011 results. The key reason behind the margin contraction was the absorption of the fixed cost in case of the slow-moving Libyan orders and power projects that have not reached the revenue booking threshold limit. Further, in case of the new orders bagged in the last three to four months, the company had started mobilising resources but the revenue booking could not take place. Consequently, the operating profit dropped by 65.3% YoY to Rs70.6 crore. However, the management is confident of achieving the targetted OPM of 9% in the coming couple of quarters as the revenue booking from the Libyan projects and the new orders gain momentum. Further, the margins on the ex-Libyan orders are in the range of 8-9%.  Downgrading estimates: We are downgrading our profit after tax (PAT) estimate for FY2011 to a loss of Rs58 crore as in M9FY2011 itself the company has booked a loss of Rs69 crore. Further, we are downgrading our FY2012 estimates as the execution of the company?s Libyan orders will pick up only gradually in FY2012 and the execution risk remains high. We also introduce our FY2013 earnings estimate in this note.  However, Q3 saw strong order inflow: The only positive thing about the quarter was that the order inflow that was muted in H1FY2011 picked up very well in the third quarter as the company bagged nearly Rs4,370 crore worth of orders in this period, taking the total inflow during the nine months of FY2011 to Rs9,300 crore. With the strengthening of the order inflow during the third quarter the order book of the company now stands at Rs27,780 crore (which is 2.6x its FY2010 revenue). However, the key challenge remains the execution of the order book.  Downgraded to Reduce: At the current market price, the stock is trading at 12.4x FY2012E earning per share (EPS). PLL is present in some of the high-growth sectors (infrastructure, petrochemicals etc), which are expected to receive heavy investment in the coming years. However, the order execution for the company has been a major challenge in the recent past and the company has been disappointing again and again for the last few quarters on the earnings front. PLL needs to ramp up its execution significantly in order to return to the growth path. Though the management has guided for a pick-up in execution in FY2012, the pick-up will take place in a gradual manner and hence the pain might continue for a few quarters more. Further, due to sedate execution, the number of working capital days has deteriorated to 186 days as compared to 122 days in FY2010. Thus, we change our recommendation from Hold to Reduce as PLL would still take a few more quarters to improve the execution of orders and we believe the current price already captures that. However, the uncertainty prevails over pending litigations and more cost overruns/liquidation damages which the company might face on other projects due to delayed execution. Hence we put our price target under review. Click here to read report: Investor's Eye

K S Oils Ltd: Disclosures under Reg. 7(1) of SEBI (SAST) Regulations, 1997

Siva Trade Consultancy Pvt Ltd has submitted the disclosure under Regulation 7(1) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Panacea Biotec Ltd: Limited Review for the quarter ended Dec 31, 2010

Panacea Biotec Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.Read More

Tecpro Systems Ltd: Financial Results for Dec 31, 2010

Tecpro Systems Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Madhusudan Securities Ltd: Outcome of Board Meeting

Madhusudan Securities Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2011, inter alia, has considered and approved the following:

1. The Board has decided to Convene an Extra ordinary General Meeting (EGM) on March 15, 2011 to obtain the shareholders' approval to the following:

a. To alter the Capital Clause in the Memorandum of Association to increase authorized share capital of the Company from Rs. 5 crore to 15 crore.

b. To consider issue of shares or any other instruments or securities to HNI's, financial Institutions, FII's, MFs, etc. on a preferential basis or through a QIP, or any other mode.

c. To issue 6,142,857 Equity Shares of Rs. 10/- each at a premium as per SEBI Guidelines to Primus Retail Private Ltd inconsideration of acquisition of Brand Weekender under the Business Transfer Agreement dated February 04, 2011.

2. The Board has decided to alter the Objects clause, through postal ballot, by shifting the following Existing clause in Other Objects into the Main Objects the Company:

5. "to manufacture, export, import, sell and deal in readymade or made to measure garments of all kinds and types and in particular shirts, bush shirts, trousers, night dresses, swimming dresses, sleeping suits, dressing gowns, children's wear, men's wear, handkerchief, ladies' wear, coats, sports shirts, Jackets and underwear from cotton, silk wool, terrylene, terry cotton, synthetic fibers and making mixtures thereof and from all other textiles".

3. The Board has recorded notices received from the Shareholders under regulation 13(1), 13(3), 13(4) & 7(1).

Tantia Constructions Ltd: Notice of Postal Ballot

Tantia Constructions Ltd has informed BSE that the members of the Company will consider to approve the resolution by way of Postal Ballot.Read More

EPC Industrie Ltd: Financial Results for Dec 31, 2010

EPC Industrie Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

UCO Bank: Limited Review for the quarter ended Dec 31, 2010

UCO Bank has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.
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Mahindra & Mahindra Ltd: Outcome of Board Meeting

Mahindra & Mahindra Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2010, has agreed to enter into a Share Subscription and Shareholders Agreement with EPC Industrie Ltd ("EPC"), the Promoters of EPC and others.

Pursuant to the above Agreements, the Company would subscribe to 65,58,065 fully paid Equity Shares of the face value of Rs. 10 each of EPC, on a preferential basis, at a price of Rs.66.10 per share constituting 38% of the enhanced share capital of EPC.

The above proposal is subject to satisfaction of various conditions, which inter alia include obtaining of necessary approvals from the shareholders of EPC in accordance with section 81 (1A) of the Companies Act, 1956 and the Regulations prescribed under Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and EPC obtaining in-principal approval of the Bombay Stock Exchange Ltd for listing of the Equity Shares to be issued vide Preferential allotment.

The proposed preferential issue accompanied with change in control of EPC will trigger the provisions of Chapter III of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ("Takeover Code"). The Company would be making an Open Offer under the Takeover Code to the shareholders of EPC for 20% of the enhanced share capital of EPC as per the terms of Takeover Code.

Upon completion of preferential allotment and open offer, the Company would be acquiring management and control of EPC and would be classified as Promoter of EPC and the existing Promoters would be classified as public shareholders.Read More

Tecpro Systems Ltd: Outcome of Board Meeting

Tecpro Systems Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2011, has approved the scheme of amalgamation of Microbase Infosolution Pvt Ltd, a wholly-owned subsidiary of the Company with the Company.

Navkar Builders Ltd: Financial Results for Dec 31, 2010

Navkar Builders Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

WPIL Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

Asutosh Enterprises Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Kerala Ayurveda Ltd: Banaras Hindu University ('BHU') enters into collaboration with Kerala Ayurveda Ltd under Public-Private Partnership ('PPP') Model

Kerala Ayurveda Ltd has informed BSE regarding a press release dated February 09, 2011 titled "Banaras Hindu University ('BHU') enters into collaboration with Kerala Ayurveda Ltd under Public-Private Partnership ('PPP') Model"Read More

Nivedita Mercantile & Financing Ltd : Disclosures under Reg.13(6) of SEBI (Prohibition of Insider Trading) Regulations, 1992

Nivedita Mercantile & Financing Ltd has submitted the disclosure under Regulation 13(6) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 to BSE:Read More

Jenson & Nicholson (India) Ltd: Limited Review for the quarter ended Dec 31, 2010

Jenson & Nicholson (India) Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.Read More

Aurobindo Pharma Ltd: Limited Review for the quarter ended Dec 31, 2010

Aurobindo Pharma Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.
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Comfort Intech Ltd: Financial Results for Dec 31, 2010

Comfort Intech Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Tilaknagar Industries Ltd: Financial Results for Dec 31, 2010

Tilaknagar Industries Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Garg Furnace Ltd: Limited Review for the quarter ended Dec 31, 2010

Garg Furnace Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.
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CyberTech Systems and Software Ltd: Financial Results for Dec 31, 2010

CyberTech Systems and Software Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

EPC Industrie Ltd: Outcome of Board Meeting

EPC Industrie Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2011, has

1. entering into a Share Subscription and a Shareholders' Agreement with Mahindra & Mahindra Ltd ("M&M") the Promoters of the Company and others.

2. Issuance of 65,58,065 fully paid-up Equity Shares of the face value Rs 10 each to M&M, on a preferential basis, at a price of Rs 66.10 per share, constituting 38% of the enhanced share capital of the Company. The proposed issue is in accordance with sec 81(1A) of the Companies Act, 1956 and the Regulations prescribed under Chapter VII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

3. Adoption of new set of Articles of Association in supersession and substitution of the existing Articles of Association of the Company.

4. To convene an Extraordinary General Meeting of the Company on March 09, 2011 for seeking the consent of the Members for the above preferential issue of shares and adopting new set of Articles of Association of the Company.

The proposed preferential issue accompanied with change in control of the Company will trigger the provisions of Chapter III of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 ("Takeover Code"). M&M would be making an Open Offer under the Takeover Code to the shareholders of the Company for 20% of the enhanced share capital of the Company as per the terms of Takeover Code.

Upon completion of preferential allotment and open offer, M&M would be acquiring management and control of the Company and would be classified as Promoter of the Company and the existing Promoters would be classified as public shareholders.Read More

Vinyl Chemicals (India) Ltd: Financial Results for Dec 31, 2010

Vinyl Chemicals (India) Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Moser Baer India Ltd: Grant of Options to employees

Moser Baer India Ltd has informed BSE that, in terms of the ESOP scheme and the SEBI (Ernp1oyees Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, the Compensation Committee of the Board of Directors held on February 09, 2011, has granted new options to emp1oyee of the Company in terms of its ESOP Scheme - 2009

The terms of ESOP scheme - 2009 are as follows:

1. The maximum number of shares covered by such options - 34,000 option.
2. Exercise Price -
(a) Normal Allocation at Rs 46.30 per option.
(b) Special Allocation - 50% of the Options at Rs 125 per Option and Remaining 50% of the Options at Rs. 170 per Option
3. Requirements of Vesting and maximum period of vesting - The vesting period ranges from 1 year to 4 years.
4. Exercise Period - 7 years from the date of grants of options.

All other terms and conditions of the ESOP scheme 2009 remain unchanged.

Polaris Software Lab Ltd: Disclosures under Reg.13(6) of SEBI (Prohibition of Insider Trading) Regulations, 1992

Polaris Software Lab Ltd has submitted the disclosure under Regulation 13(6) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 to BSE:Read More

Andhra Cements Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

ISG Traders Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Nivedita Mercantile & Financing Ltd : Disclosures under Reg. 7(3) of SEBI (SAST) Regulations, 1997

Nivedita Mercantile & Financing Ltd has submitted the disclosure under Regulation 7(3) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Ruby Mills Ltd: Financial Results for Dec 31, 2010

Ruby Mills Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Navkar Builders Ltd: Outcome of Board Meeting

Navkar Builders Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2011, for approval to change of financial year end from June 30, 2011 to March 31, 2011 for current financial year 2010-11 onwards.

Stone India Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

ISG Trader Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

RCL Foods Ltd: Financial Results for Dec 31, 2010

RCL Foods Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Mayur Uniquoters Ltd: Limited Review for the quarter ended Dec 31, 2010

Mayur Uniquoters Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.Read More

NHPC Ltd: Limited Review for the quarter ended Dec 31, 2010

NHPC Ltd has informed BSE that the auditor's have conducted the limited review of the unaudited financial results for the quarter ended December 31, 2010.Read More

NR Agarwal Industries Ltd: Financial Results for Dec 31, 2010

NR Agarwal Industries Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Systematix Corporate Services Ltd: Result of Postal Ballot

Systematix Corporate Services Ltd has informed BSE about Result of Postal Ballot.Read More

Punj Lloyd Ltd: PL Engineering and GECI India to jointly offer Engineering Services in the Aerospace Sector

Punj Lloyd Ltd has informed BSE regarding a Press Release dated February 09, 2011 titled "PL Engineering and GECI India to jointly offer Engineering Services in the Aerospace Sector".Read More

EPC Industrie Ltd: Mahindra & Mahindra invests into EPC Industrie

EPC Industrie Ltd has informed BSE regarding a Press Release dated February 09, 2011 titled "Mahindra & Mahindra invests into EPC Industrie".Read More

Mahindra & Mahindra Ltd: Mahindra announces entry into Micro Irrigation Business

Mahindra & Mahindra Ltd has informed BSE regarding a press release dated February 09, 2011 titled "Mahindra announces entry into Micro Irrigation Business"Read More

Gujarat Pipavav Port Ltd: Updates

Gujarat Pipavav Port Ltd has informed BSE that the Company has entered into an Agreement with Gulf Petrochem India Private Limited wherein they intend to take on lease 90507 sq mtrs. of land at Pipavav Port to develop an initial tankage facility of 100,000 KL.

Duncans Industries Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

ISG Traders Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Britannia Industries Ltd: Results Press Release

Britannia Industries Ltd has informed BSE regarding a press release dated February 09, 2011 titled "Britannia Net Profit increases 28% in Q3"Read More

Britannia Industries Ltd: Financial Results for Dec 31, 2011

Britannia Industries Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2011.Read More

Nirma Ltd: Financial Results for Dec 31, 2010

Nirma Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

NRC Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

ISG Traders Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Man Infraconstruction Ltd: Financial Results for Dec 31, 2010

Man Infraconstruction Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Agre Developers Ltd: Consolidated Financial Results for Dec 31, 2010

Agre Developers Ltd has informed BSE about the Consolidated Financial Results for the Quarter ended December 31, 2010.Read More

Star Paper Mills Ltd: Disclosures under Reg. 7(1A) of SEBI (SAST) Regulations, 1997

ISG Traders Ltd has submitted the disclosure under Regulation 7(1A) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSE:Read More

Chandni Textiles Engineering Industries Ltd: Disclosures under Reg. 7(1) of SEBI (SAST) Regulations, 1997

Amrapali Capital and Finance Services Ltd has submitted the disclosure under Regulation 7(1) of SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 to BSERead More

Bombay Swadeshi Stores Ltd: Financial Results for Dec 31, 2010

Bombay Swadeshi Stores Ltd has informed BSE about the Financial Results for the Quarter ended December 31, 2010.Read More

Religare Mutual Fund - Religare Gold Exchange Traded Fund: Declaration of NAV

Religare Mutual Fund - Religare Gold Exchange Traded Fund has informed BSE regarding Net Asset Value (NAV) of Religare FMPs & ETFs.Read More

Bliss GVS Pharma Ltd: Disclosures under Reg.13(6) of SEBI (Prohibition of Insider Trading) Regulations, 1992

Bliss GVS Pharma Ltd has submitted the disclosure under Regulation 13(6) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 to BSE:Read More

Comfort Intech Ltd: Outcome of Board Meeting

Comfort Intech Ltd has informed BSE that the Board of Directors of the Company at its meeting held on February 09, 2011, has reviewed the routine operational activities of the Company and affirms their satisfaction over the operations of the Company.

Investor's Eye: Viewpoint - Jubilant FoodWorks (Near term margin pressure to persist); Special - Q3FY2011 FMCG review

Summary of Contents

VIEWPOINT Jubilant FoodWorks Near term margin pressure to persist, All eyes on strategic tie upJubilant Foodworks (Jubilant)?s Q3FY2011 revenue and earnings grew by 58% and 63% respectively on a year-on-year (Y-o-Y) basis while the same were higher than our estimates. The earnings for the quarter fell short of the Street?s expectation on account of margin pressure and higher tax outflow. The reported earnings were approximately at Rs19 crore (~11% lower than the Bloomberg consensus expectation). The revenue growth came on the back of strong same store sales growth (at 35.7%) coupled with a robust 25 new store additions during the quarter, taking the total store count to 364, across 87 cities. SHAREKHAN SPECIAL Q3FY2011 FMCG earnings review  Key points Q3FY2011 performance?profitability affected by surging input cost: As anticipated, the third quarter of FY2011 saw margin reduction for most of the fast moving consumer goods (FMCG) companies on account of a higher raw material cost and sustained higher advertisement spends during the quarter. The top line growth was a function of a better volume growth for the FMCG companies (except for Tata Global Beverages Ltd [TGBL]) while the price increases improved the overall value growth of these companies. ITC beats Street?s expectation: Amongst the FMCG stocks under Sharekhan?s coverage, ITC continues to beat the market?s expectation with a strong bottom line growth of 21.4% year on year (YoY) on the back of a strong performance by the cash cow cigarette business and a consistently better performance of the agri businesses during the quarter. On the back of the recent acquisitions GCPL achieved a 40% year-on-year (Y-o-Y) growth in the bottom line (the stand-alone business showed an improvement with the revenue growth back on track and the bottom line up 18% YoY). Despite a strong volume growth in the domestic consumer business, Hindustan Unilever Ltd (HUL) and Marico witnessed a subdued bottom line growth, as their profitability was affected by a higher raw material cost during the quarter. ITC remains top pick in FMCG space: In view of the strong earnings visibility and the expectation of a better performance across businesses, we maintain ITC our top pick in the large-cap FMCG space. With an above 25% compounded annual growth rate (CAGR) in the bottom line expected over FY2010-13 and a potential upside of 36% from the current levels, we like GCPL in the mid-cap FMCG space. Though TGBL is expected to achieve a mid single-digit earnings growth over FY2010-13, in view of the positive surprises from the recent strategic alliance with (PepsiCo and Kerala Ayurveda) and an upside of 32% from the current levels, we maintain our Buy recommendation on the stock.   Click here to read report: Investor's Eye