Fw: IPO Note - Shemaroo Entertainment Ltd

 

Shemaroo Entertainment Ltd: Subscribe Issue opens 16-Sep-14, Issue closes 18-Sep-14, Price band Rs155-170 Shemaroo Entertainment Ltd. (SEL) is one of India's largest Film and Entertainment Content House involved in content aggregation, distribution, production and post-production. Its content library spans over 2,900 titles of which over 700+ titles are perpetual rights (wholly owned) and the remaining 2,000+ titles are aggregate rights (partially owned). SEL's primary distribution channels are Broadcast Syndication (Satellite, Terrestrial and Cable TV), which generates over 50% of the Company's revenues, New Media (Mobile, IPTV, YouTube, etc), Home Video (VCD, DVD, Blu-ray) and Others (In-flight entertainment and overseas sales). SEL has posted strong revenue growth of 26.4% and maintained profitability in the last 4 years. Valuations for the company stands at 15.4x FY14 earnings (post issue diluted equity at lower price band), which we believe to be fair given how peers such as Eros International, JMD Telefilms, Media One and! Prime Focus are currently priced, based on FY14 earnings and their respective growth and risk characteristics. We recommend clients to subscribe to the issue in the price range of Rs155- Rs165 and further avail the 10% discount available to retail investors.

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Warm Regards, Amar Ambani

Fw: Idea Cellular: Renewed vigour - BUY

 

Annual Report Analysis: Idea Cellular: Renewed vigour - BUY Idea enters a crucial period over the next 12-18 months as it seeks to renew nine licenses in the crucial 900MHz band even as FY14 performance and recent fund raising gives us confidence about its renewal capabilities. Idea ticked all the right boxes in the year gone by with 18% revenue growth, ~480bps margin expansion and 100bps increase in revenue market share. Blended (2G+3G) data volumes increased ~112% in FY14 and even though pricing/MB declined, data share of non voice revenues grew 350bps yoy through the year (and a further 140bps in Q1 FY15). Operating cash flow jumped ~86% yoy on doubling of pretax profit and easing of working capital cycle. However spectrum purchases in Feb auctions plus FY14 capex led to negative free cash flow for the year; as a corollary net D/E inched up to 1.3x to provide for the deferred spectrum payment liability. Overall license renewals remain the key near term risk but we remain optimist on Id! ea's ability to fund spectrum purchases; retain BUY with unchanged 9-12mth target of Rs200.

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Warm Regards, Amar Ambani

Fw: Express Idea: Auto Component Sector; Call Success and Updates: Oil India, Lumax Auto

 

Express Idea: Auto Component Sector - Set to Zoom Indian auto sector after witnessing tough times in the past couple of years is set to see strong revival from H2 FY15. The key drivers for this growth include 1) improvement in consumer sentiment, 2) pause in diesel price hikes, 3) peaking out of interest rates, 4) pick up in industrial and infrastructure activity and finally 5) partial lifting of ban on mining activities. Internationally too, while developing economies in Africa, Middle East and rest of Asia continue to see strong growth, US is showing robust recovery and Europe is showing signs of stability. Such scenario, we believe, provides large business opportunities for Indian Auto Component manufacturers, which over the years have built a strong reputation with domestic OEMs and also globally. The large caps auto component players, on this premise, have seen a strong re-rating in the past few months leading to widening of valuation discount for small players. Here we pick three such stocks viz Banco Products, MM Forgings and Phoenix Lamps. Recommendation Summary Company CMP (Rs) Target (Rs) Upside Exit trigger* (Rs) Banco Products 155 190 22.6% 130 MM Forgings 447 540 20.8% 375 Phoenix Lamps 133 160 20.3% 110 Horizon: 1-3 months * Exit trigger is the price level below which investor should exit position

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Call Success & Update: Oil India Reco Price Rs600, Previous Target Price Rs650, New Target Price Rs720 We had recommended a BUY on Oil India in Q3 FY14 result update released on February 13, 2014 with a price target of Rs550. We extended the target to Rs600 in a call update released on May 14, 2014 and further to Rs650 in a call update released on May 19, 2014. The stock surpassed our target in today's trading session. We advise investors to hold on to their investments in the company as we remain bullish on its future prospects for a target of Rs720.

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Call Success: Lumax Auto Technologies Reco price Rs200, Call Closure price Rs245 We had recommended a BUY on Lumax Auto Technologies in an Express Idea released on Septermber 02, 2014 with a price target of Rs245. The stock surpassed our target in today's trading session yielding 22.5% return in three trading sessions.

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Warm Regards, Amar Ambani