| What's Inside |
| Results |
| Jet Airways: Higher-than-expected losses due to increased fuel costs; no respite in sight, cut rating to SELL from REDUCE |
| · | Higher-than-expected losses due to increased fuel costs and low international seat factors | | · | Outlook remains bleak with continued strength in fuel prices, domestic overcapacity and start-up nature of international operations | | · | Jet Lite's FY2008 performance improves over a low base; turnaround to test management's execution skills | | · | Cut target price to Rs450; and rating to SELL from REDUCE earlier | |
| United Breweries: Margin expansion in a difficult year but rich valuations do not offer upsides |
| · | 4QFY08 profits higher than expected due to fixed cost savings, but input cost pressures remain | | · | JV operations as per expectations, awaiting more clarity post Heineken acquisition of S&N stake | | · | Reduce target price to Rs 160 (Rs 169 earlier) and maintain REDUCE rating | |
| PSL: 4QFY08 results below estimates; revise estimates for recent order flow; maintain BUY |
| · | 4QFY08 results - revenues and PAT below estimates due to lower EBITDA margin | | · | Revise FY2009E and FY2010E earnings estimates upwards by 19% and 26% for higher volumes and better realizations | | · | Revise volume assumptions for recent order flows and pricing assumptions in line with current market trends | | · | Maintain target price at Rs500 and BUY rating; increase WACC assumption to 13% | |
| Change in Recommendation |
| Hindalco: Rights issue to fund Novelis acquisition; balance funding may prove costly - cut target price to Rs150; lower rating to REDUCE |
| · | Hindalco will raise Rs50 bn through a rights issue to fund the Novelis bridge loan of US$3 bn - balance to be funded through treasury and debt | | · | We reduce our target multiple to factor in lower global valuations for non-ferrous companies - we now value both aluminum and copper business at 6X FY2010E EBITDA | | · | Reduce target price to Rs150/share (Rs215/share earlier) factoring lower multiple, dilution on account of rights issue | |
| Updates |
| Economy: Growth to trim on RBI's strong signal; but inflation is destined to stay high |
| · | RBI hikes CRR by 50 bps to 8.75, repo rate by 50 bps to 8.5%; we expect CRR at 9.25% and repo rate at 8.75% during the year | | · | CRR hike to mop up nearly Rs200 bn of primary liquidity; repo rate hike to increase cost of borrowed funds | | · | Tightening to slow aggregate demand; revise our real GDP growth projection to 7.9% from 8.2% for FY2009E | | · | Inflation likely to stay in double digits till 3QFY09; but preemptive tightening to help contain second round impact of fuel-price-led inflation | |
| Cement: Crude oil linked inflation woes to impact profitability of cement companies |
| · | Average realizations for FY2009 reduced by Rs5-7/bag | | · | Higher freight costs on account of revised fuel prices | | · | Steep correction in valuation multiples, ahead of margin correction | |
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