Fw: Investor's Eye: Update - GlaxoSmithKline Consumer Healthcare (Annual report review); Viewpoint - Anil (Well placed to cash in on the potential opportunity)

 

 

Investor's Eye [March 27, 2012]  Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE GlaxoSmithKline Consumer Healthcare Cluster: Evergreen Recommendation: Buy Price target: Rs3,000 Current market price: Rs2,670 Annual report review Key points CY2011 performance - high teens growth: Glaxosmithkline Consumer Healthcare Ltd (GSK) posted a high-teen growth in its top line and bottom line during the year. The top line growth of 16.5% year on year (YoY) was driven by a mix of volume and value. The malted food drinks (MFD) segment (94% of total revenues) grew by 16.3% YoY, driven by an around 9% YoY volume growth. Horlicks, which is the company's flagship brand, grew by around 18% during the year. The biscuits portfolio had done exceptionally well with a growth of 30% in CY2011. Though the operating profit margin (OPM) declined by 51bps YoY (to 15.8%), the strong growth in the business' auxiliary income and interest income resulted in an 18.5% YoY growth in the bottom line. Cash conversion cycle improved further: The company's cash conversion cycle improved from negative 89 days in CY2010 to negative 100 days in CY2011, indicating an improvement in working capital management. The creditor days have increased from around 139 days in CY2010 to 154 days in CY2011. Hence despite an above 40% growth in loans and advances in the last couple of years, the company's ability to generate cash from operating activities has remained strong. We expect the cash conversion cycle to further improve in the coming years. Return ratios remain strong: The return ratios continued to improve with the return on net worth (RoNW) and return on capital employed (RoCE) up from 32.2% and 48.7% respectively in CY2010 to 33.8% and 51.7% in CY2011. Cheery dividend player: The company is known to be a cheery dividend payer in the fast moving consumer goods (FMCG) space. As anticipated the company has paid a dividend of Rs35 per share in CY2011 (350% of face value). The dividend payout ratio stood at 41% in CY2011, which has improved in comparison to its average dividend payout ratio of around 33%. With the profit after tax (PAT) growth likely to sustain at close to 20%, we expect the dividend pay out ratio to sustain at around 40% in the coming years. Maintain positive bias on stock: We have incorporated the CY2011 balance sheet numbers in our estimates and the same has not led to any major change in our earnings estimates. Considering the low penetration of the MFD category and GSK's strong presence in it, we believe the company is well poised to achieve a top line and bottom line growth of close to 20% each over CY2011-13. At the current market price the stock trades at 26.2x its CY2012E earnings per share (EPS) of Rs101.8 and 22.1x its CY2013E EPS of Rs121.1. We maintain our Buy recommendation on the stock with a price target of Rs3,000. VIEWPOINT Anil        Well placed to cash in on the potential opportunity Key points High growth potential for Indian starch industry compared to global average: The starch industry in India is at a nascent stage with the per capita consumption of starch in the country being the lowest at 1.3kg compared with 64.5kg in the USA and over 10kg in many comparable Asian countries. However, the same is likely to improve in the coming years, as starch finds diverse applications in the food and beverage, paper, pharmaceutical, textile and animal feed industries. Thus, with the rising demand for starch products from various industries, the Indian starch industry is expected to grow by around 15% per annum in the coming years.  Anil, largest player with wide product portfolio: Anil is one of the top three players in the domestic starch industry with an organised market share of close to 20%. However, in the high-margin value-added starch products it has a market share of 40-50%. Research and development (R&D) has played pivotal role in Anil's success, helping the company to gradually shift from a commodity product business to a business of value-added products. The company has reputed clients including players like ITC, Nestle India, Amway, Dabur, Heinze, Lupin, Arvind Mills and Raymond.  Robust track record with aggressive expansion plans: Anil has grown its revenues at a robust 31% compounded annual growth rate (CAGR) in the tough period of FY2008-11. The improving revenue mix in favour of value-added products has enabled it to double its operating profit margin (OPM) to 17.2% from less than 10% earlier, resulting in an exponential growth at 76.7% CAGR in its earnings during the three-year period. Going ahead, we expect Anil's revenues to grow at a CAGR of 25% over FY2011-14 and the increasing proportion of the value-added products would further boost the margins to around 19% in the next two years. To achieve the same, the company is expanding its manufacturing capacities to 1,000 tonne per day (tpd) in a phased manner, aims to launch new products and enhance its geographical reach to newer overseas markets.  Additional triggers-food processing park and land bank: The Anil group of companies received the approval from the ministry of food processing industries of India to set up a Mega Food Park project in Gujarat. The group will form a special purpose vehicle (SPV; a consortium of companies from the food processing, logistic and infrastructure businesses) in which Anil will have a majority stake of 40%. The group will bring in land of 87 acres (valued at around Rs25 crore) for its 40% stake in the SPV. Once the project is completed it will add tremendous value to the stock of Anil. The company's manufacturing facility is located at Bapunagar, Ahmedabad in an area covering 1.5 lakh square metre. In future the company could shift its manufacturing facility to a special economic zone / tax benefit zone, thereby unlocking value in terms of land bank (the Bapunagar land area is currently valued at Rs800-900 crore). Outlook and valuation: With the enhancing capacity, Anil is well poised to cash in on the opportunity created by the increasing demand for starch in the domestic market. With most of the starch consuming industries growing at a healthy rate we expect Anil's top line to grow at a CAGR of 25% over FY2011-14. Further, with an expected improvement in the OPM, the bottom line is expected to grow at a CAGR of 37.0% over FY2011-14. At the current market price the stock trades at 3.5x its FY2013E earnings per share (EPS) of Rs70.4 and 2.3x its FY2014E EPS of Rs106.1 (rough estimates). We see potential for a substantial upside in the stock over the next 12-24 months. Historically, the stock has traded at price/earnings (PE) multiple of 4-5x its one-year forward earnings. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the companies mentioned in the article.

Fw: Investor's Eye: Update - Aditya Birla Nuvo (Bullishness continues), Provogue India (Price target revised to Rs35)

 

 

Investor's Eye [March 26, 2012]  Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE Aditya Birla Nuvo Cluster: Apple Green Recommendation: Buy Price target: Rs1,050 Current market price: Rs951 Bullishness continues We continue to like the strong positioning that Aditya Birla Nuvo's businesses enjoy in their respective fields. The company is amongst the top five players in the insurance, asset management, telecommunications (telecom; Idea Cellular-the fastest growing telecom company; the third in ranking) and apparels (Madura Garments with its marquee brands, consistent and resilient growth, and profitable set-up) businesses. Given its presence in diverse businesses, we value Aditya Birla Nuvo on an SOTP basis, assigning a piecemeal value to each of its businesses and then adjusting the same with the company's consolidated debt to arrive at a price target. Thus, our price target for the stock is Rs1,050 and we maintain our Buy rating on the stock. Provogue India Cluster: Ugly Duckling Recommendation: Buy Price target: Rs35 Current market price: Rs16 Price target revised to Rs35 The event - Provogue India shares get re-listed on the exchanges with demerged status Provogue India (Provogue)'s shares that had got temporarily suspended from trading for the demerger process got listed today on the bourses at Rs17 per share.  As per the scheme of demerger every shareholder holding 1 share of Provogue has received 1 share of Prozone Capital Shopping Centers Ltd (PCSCL; face value Rs2). The face value of Provogue shares has got reduced from Rs2 to Rs1. The capital structure for both, Provogue (the demerged entity that got listed today which now only holds the core retail business) and PCSCL (which will hold all the real estate business and assets) has been illustrated below in a table. Shares of PCSCL will get relisted after it files for the same, which may take one to three months. Our fair value for Prozone works out to Rs27 per share. Based on the auditor's statement, Rs207 crore of the net book value of approximately Rs714 crore has been transferred into the demerged entity (PCSCL). Thus the pre acquisition based on this statement works out in a ratio of 29% (207/714) for PCSCL and 71% for Provogue. Post restructuring, our revised target price for Provogue is Rs35; Maintain Buy: Post restructuring Provogue now holds only the core retail assets that include brand sales- Provogue along with export sales, ie those which were part of standalone financials. Thus our standalone financials and estimates for Provogue remain intact. We expect a decline in FY2012 profits while we expect FY2013 to witness strong recovery with a 26% growth in earnings. Valuing branded business and the export business of Provogue with a blended price earning ratio (PER) at 10x FY2013, we arrive at a target price of Rs35 for Provogue. Thus our revised target price for Provogue now stands at Rs35 and we maintain our Buy rating. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the companies mentioned in the article.

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

 

Fw: MT Educare LTD IPO: Issue Period - 27 Mar 2012 to 29 Mar 2012

 

IPO - MT Educare Limited
	Issue Period 27 Mar 2012 to 29 Mar 2012 Price Band Rs.74 - Rs.80 Lot Size 80 Equity share and multiple of 80 equity shares thereafter Issue Size Rs. 99 Crore IPO Rating 4/5 CRISIL Listing on BSE & NSE Issue allocation QIB - 50% | HNI - 15% | Retail - 35% Issue highlights (source: RHP) Company was incorporated as MT Educare Private Limited on August 19, 2006 at Mumbai as a private limited company under the Companies Act. Company provides coaching services to students in the secondary, higher secondary school and pursuing graduation degree in commerce, preparing for various competitive examinations and undertaking chartered accountancy examinations. Company has operations across the states of Maharashtra, Tamil Nadu, Karnataka and Gujarat, through 190 Coaching Centers in 106 locations, as on May 15, 2011. Company also provides management consultancy services to a coaching center in Dubai which includes providing coaching and administrative support services for secondary and higher secondary school curriculum of various education boards. Funds raised via fresh issue by the company will be used for partially financing the cost of construction of a PUC campus in Karnataka (including cost of acquisition of land), establishing new coaching centres at 20 locations and for general corporate purposes. Invest only after referring to final prospectus.
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); NSEL-12790; 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. 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.Disclaimer: Investments in equity is subject to market risks. You are advised to carefully read the red herring prospectus of the company go through all the Risk Factors mentioned in the offer document issued by the fore investing. The investment as mentioned in the document may not be suitable for all investors. Investors may take their own decisions based on their specific investment objectives and financial position and using such independent advisors, as they believe necessary.

Fw: Pre-Open IPO Session

 

Dear Customer, We write to inform you that pursuant to circulars CIR/MRD/DP/21/2010 dated July 15, 2010 and CIR/MRD/DP/32/2010 dated September 17, 2010 with respect to introduction of Call Auctions in Pre Open session, market timings for Equity, Futures & Option were changed from 9:00am to 9:15am. Taking the above into consideration and via circulars CIR/MRD/DP/ 01/2012 and CIR/MRD/DP/ 02/2012dated January 20, 2012 the Exchange has now decided to extend the Call Auction mechanism to IPO's (New and Relisted Scrips) on the first day of trading /re-commencement. Important things to know; What is Call Auction in Pre Open session for IPOs (New listing) and Re-listed Scrips? It is basically a mechanism to determine the Opening Price based on aggregated supply and demand for the underlying on the first day of trading/ re-commencement of trading. What are the timings for the Call Auction Pre Open session for IPOs (New listing) and Re-listed Scrips? The session would commence for 60 minutes between 9:00am and 10.00 am out of which order placement in the Pre Open session would be allowed for the first 45 minutes only. The rest of the time would be utilized for exchange related functions as illustrated in the indicative schedule mentioned below. Please Click here for detailed indicative schedule. Kindly feel free to contact our customer service department at 1800-22-7500 /39707500 or write us at myaccount@sharekhan.com in case of queries. Alternatively you could also get in touch with your nearest Sharekhan Branch 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: FD schemes from Housing Finance companies

 

 

Attractive FD schemes from Top Performing Housing Finance Companies with  sound track record.

 

Company Name	Min. Amount	Rate of Interest (%)							Additional Interest	Rating
		1 Year	400 Days	15 Months	20 Months	2 Years	33 Months	3 Years
DHFL AASHRAY Deposit - 400 Days	10000	-	10.75	-	-	-	-	-	0.50% additional for senior citizens	CARE (AA+) FD BWR FAAA
HDFC Ltd - Platinum Deposits	20000	-	-	10	-	-	10	-	0.25% additional for senior citizens	FAAA (CRISIL) MAAA (ICRA)
Gruh Finance	2000	9.50	-		-	9.75	-	10	0.25% additional for senior citizens	MAA+ (ICRA) FAA+ (CRISIL)
ICICI Home Finance	10000	9.25	-	9.50	9.50	-	-	-	0.25% additional for senior citizens	AAA(FD) CARE MAAA(ICRA)
LIC Housing Finance	10000	9.00	-	-	-	9.25	-	9.50	0.10% (upto Rs.50000/-) & 0.25% (Rs.51000/-& above) additional for senior citizens	FAAA (CRISIL)
PNB Housing Finance	20000	9.50	-	-	-	9.50	-	9.75	0.50% additional for senior citizens	FAA+ (CRISIL)

  

For further informations and application forms, kindly contact your nearest branch of Integrated.

 

For list of branches, please visit www.integratedindia.in

Regards,
Integrated Enterprises (India) Ltd.,