Fw: Sharekhan Mutual Fund Finder - January 2014

 

Sharekhan Mutual Fund Finder  [November 27, 2013] Sharekhan www.sharekhan.com

Summary of Contents   Top equity picks Top SIP picks SIP calculator Crorepati calculator Fund of the month: Reliance Equity Fund Performance of debt funds and ETFs Sharekhan Mutual Fund Finder Click here to read report: Mutual Fund Finder

Regards, The Sharekhan Research Team

 

Fw: Company Report - Tata Communications - BUY

 

Tata Communications: Gaining ground - BUY CMP Rs294, Target Rs340, Upside 15.8% We interacted with Tata Communications (Tcom) to get its views on voice and data businesses. Company expects wholesale voice (95% ILD) growth of mid to high single digit though it has grown at 12-13% outpacing industry run rate. In wholesale voice, the focus is more on free cash flows rather than EBIDTA margins (which are likely to be 8-8.5% on average) with FY13 FCF of US$120mn. On the data side, historically the business has grown at 15% which can be the trend line along with 20% margin. Notably, if one adjusts for the new initiatives (like ATMs), data margins have much higher potential. Neotel has turned around at EBIT level since Q4 FY13 and Tcom remains in discussion with Vodacom to sell its entire stake in the South African arm; if successful, the deal would remove a key overhang on consolidated profitability. Capex intensity is set to decline as large cable builds are behind which would support cash flows. We tweak our estima! tes and base on an improved outlook upgrade the stock to BUY with revised 9-12mth target of Rs340.

Click here for the detailed report on the same.

Warm Regards, Amar Ambani

Fw: Sharekhan's top SIP fund picks

 

 

Mutual Gains [December 10, 2013] Sharekhan www.sharekhan.com

Summary of Contents     MUTUAL GAINS < /font> Sharekhan's top SIP fund picks Large-cap funds Multi-cap funds ICICI Prudential Focused Bluechip Equity Fund - Ret SBI Magnum Global Fund SBI Magnum Bluechip Fund ICICI Prudential Discovery Fund Tata Pure Equity Fund - Plan A Quantum Long-Term Equity Fund Franklin India Bluechip SBI Magnum Multiplier Plus 93 Kotak 50 Tata Equity Opportunities Fund - Plan A BSE Sensex BSE 500 Mid-cap funds Tax saving funds SBI Magnum Mid-cap Fund BNP Paribas Tax Advantage Plan Franklin India Prima Fund SBI Magnum Tax Gain Scheme 93 HDFC Mid-cap Opportunities Fund Tata Tax Saving Fund - Plan A SBI Emerg Buss Fund DWS Tax Saving Fund IDFC Sterling Equity Fund  - Reg HDFC Tax Saver BSE Mid-cap CNX Nifty Fund focus Franklin India Bluechip Fund - Growth Click here to read report: SIP fund picks

 

Fw: Stock Idea - Sun TV Network (Sun rises in the south)

 

 

Stock Idea [December 03, 2013]  Sharekhan www.sharekhan.com

Summary of Contents   STOCK IDEA Sun TV Network Recommendation: Buy Price target: Rs515 Current market price: Rs367 Sun rises in the south  Key points Dominant force, undisputed leader of south India: Sun TV Network (Sun TV) is the undisputed leader in the south Indian entertainment market (Tamil Nadu, Andhra Pradesh, Karnataka and Kerala), India's biggest regional entertainment market with strong viewership market share in the regional broadcasting market (Tamil Nadu: 68%, Andhra Pradesh: 38%, Karnataka: 41%). With 32 out of the total 66 TV channels present in the market, a leading viewership share (it is the leader in three out of the four markets) and a 30% market share of the total south Indian advertisement market, Sun TV enjoys a dominant position in the south Indian broadcasting market. On the other hand, its premium positioning and low-cost de-risked business model have helped the company to maintain a very healthy operating profit margin (OPM) corridor of 70%, EBIT margin of 51% and dividend pay-out of more than 50%.  Digitisation benefits yet to accrue, huge upside potential: Among the key stakeholders of the TV industry, TV broadcasters are expected to be the prime beneficiaries of the mandatory digitisation process initiated by the government. The broadcasters would benefit from higher subscription revenues as the declaration of the increase in the number of subscribers would happen at the least incremental capital expenditure (capex). With the government likely to speed up the process of digitisation in Chennai and the smooth transition in the other key markets (Bengaluru, Hyderabad, Coimbatore, Mysore and Vishakhapatnam) under phase-II, the subscriber base is estimated at 4.77 million. The actual benefits are likely to be seen beyond FY2015 with almost a six-fold increase in the ARPU of the cable subscribers from Rs4 currently to Rs15-20 (post-DAS regime). The full DAS regime will provide incremental potential upside of around Rs650-750 crore to the subscription revenues, driven by (a) an improvement in subscriber reporting (under-reporting is rampant currently); (b) a four- to five-fold increase in the ARPU from the current levels; and (c) an increase in broadcasters' ARPU share with an improvement in subscriber reporting.  Healthy earnings with strong return ratios: We expect Sun TV to deliver a 16% compound average growth rate (CAGR) in the stand-alone top line over FY2013-16, led by a 20% CAGR in the subscription revenues (ex full impact of the digital addressable system [DAS] regime) and an 11% CAGR in advertisement revenues. We have built a margin decline of 140 basis points over FY2013-16 and expect the net income to grow at a CAGR of 15% over FY2013-16. We expect the return on equity (RoE) to improve to 28% by FY2016 and the dividend pay-out to remain healthy at around 53% of the consolidated net income. In our estimates, we have not incorporated the full potential upside from the DAS regime and the profit, if any, from the company's Indian Premier League (IPL) franchisee in FY2015.  Valuation-deserves re-rating, illuminating future prospects: Given the potential improvement in the operating environment in view of the huge upside potential from the DAS regime and a gradual uptick in the advertisement spending, the future prospects for Sun TV, which has a dominant market position and integrated business model with presence over broadcasting, movies and radio, seem to be favourable. On the other hand, despite a change in the political regime and increasing competition, Sun TV has managed to remain the leader in its key market which allays the fear that the company may be losing its dominant position. At the current market price of Rs367, the stock trades at 18.2x, 15.5x and 13.4x based on the earnings estimates for FY2014, FY2015 and FY2016 respectively. At the current levels, the stock is trading at a discount of around 35% to its historical one-year forward price-earning ratio (PER) and that of 33% to Zee Entertainment Enterprises Ltd (ZEEL; which is much higher than the three-year average discount of 16%). Sun TV enjoys an industry-leading margin profile, leadership position in its key market, strong dividend pay-out, and healthy balance sheet and return ratios. Hence, it deserves a much better valuation. We value Sun TV at 21.5x FY2015E earnings, our target multiple is based on a 25% discount to ZEEL. We initiate coverage on Sun TV with a Buy rating and price target of Rs515. Click here to read report: Stock Idea   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.