www.angelbroking.com Market Outlook August 13, 2012 Dealer’s Diary Indian markets are expected to open negative, tracing negative opening trades in the SGX Nifty and the major Asian indices. The US markets moved modestly lower in early trading on Friday due to disappointing Chinese trade data for July which showed China’s trade surplus narrowed during the month as growth rates for both exports and imports fell below estimates, thus leading to renewed concerns about the outlook for the global economy. A report released by China's General Administration of Customs showed that Chinese exports grew by just 1% yoy in July 2012, decelerating from the 11.3% growth reported for June 2012, while imports rose at a slower rate in July 2012, up 4.7% compared to the 6.3% increase in June 2012. Also, the US Labor Department recently released a report showed an unexpected decrease of 0.6% in import prices in the month of July 2012 after tumbling by 2.4% in June 2012. The major European markets have also moved to the downside on Friday on the back of weak Chinese trade data. Meanwhile, Indian shares ended a choppy session on Friday with the rupee trading weak, tracking the ailing euro, and global cues remaining lackluster in the wake of dismal Chinese trade data. Markets Today The trend deciding level for the day is 17,540 / 5,315 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,608 – 17,659 / 5,336 – 5,351 levels. However, if NIFTY trades below 17,540 / 5,315 levels for the first half-an-hour of trade then it may correct up to 17,489 – 17,421 / 5,300 – 5,279 levels. Indices S2 S1 PIVOT R1 R2 SENSEX 17,421 17,489 17,540 17,608 17,659 NIFTY 5,279 5,300 5,315 5,336 5,351 News Analysis Bosch to temporarily suspend manufacturing operations at its plants Supreme Court denies PNGRB to enquire into IGL’s books of accounts Work on Dholera special investment region to start within a year Electrosteel Castings’ associate, Electrosteel Steels reports 1QFY2013 results 1QFY2013 Result Reviews- ONGC, SBI, Sun Pharma, Glaxo Pharma, RCom, Bharat Forge, Ashoka Buildcon, Godawari Power, CCCL, Madhucon Projects, Hitachi Home. 1QFY2013 Result Previews- Coal India, Tata Steel, Bosch, NMDC, India Cem. Refer detailed news analysis on the following page Net Inflows (August 9, 2012) ` cr Purch Sales Net MTD YTD FII 2,231 1,914 317 3,867 57,147 MFs 551 801 (250) (513) (8,592) FII Derivatives (August 10, 2012) ` cr Purch Sales Net Open Interest Index Futures 1,059 1,080 (21) 15,745 Stock Futures 1,381 2,006 (625) 24,645 Gainers / Losers Gainers Losers Company Price (`) chg (%) Company Price (`) chg (%) Amtek Auto 96 11.5 JPINFRATEC 50 (7.2) Jain Irrigation 84 5.0 SBI 1,888 (4.3) Tech Mahindra 800 5.0 Power Finance 183 (4.2) Indraprastha Gas 252 4.9 Ranbaxy Lab 483 (3.7) Shree Cement 3,199 3.6 GMR Infra 22 (3.4) Domestic Indices Chg (%) (Pts) (Close) BSE Sensex (0.0) (3.1) 17,558 Nifty (0.1) (2.6) 5,320 MID CAP 0.0 1.5 6,100 SMALL CAP (0.3) (18.9) 6,550 BSE HC (0.2) (15.9) 7,292 BSE PSU (0.8) (60.0) 7,084 BANKEX (0.9) (102.1) 11,889 AUTO (1.2) (115.9) 9,367 METAL 0.1 9.2 10,521 OIL & GAS 0.3 22.2 8,310 BSE IT 1.3 73.0 5,542 Global Indices Chg (%) (Pts) (Close) Dow Jones 0.3 42.8 13,208 NASDAQ 0.1 2.2 3,021 FTSE (0.1) (4.4) 5,847 Nikkei (1.0) (87.2) 8,891 Hang Seng (0.7) (133.4) 20,136 Straits Times 0.1 2.0 3,054 Shanghai Com (0.2) (5.3) 2,169 Indian ADRs Chg (%) (Pts) (Close) INFY 0.5 0.2 $41.8 WIT 1.0 0.1 $8.2 IBN (0.1) (0.1) $34.9 HDB 0.7 0.3 $35.6 Advances / Declines BSE NSE Advances 1,182 580 Declines 1,577 898 Unchanged 129 88 Volumes (` cr) BSE 2,192 NSE 10,499
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Market Outlook August 13, 2012
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Market Outlook August 13, 2012
Dealer’s Diary Indian markets are expected to open negative, tracing negative opening trades in the SGX Nifty and the major Asian indices. The US markets moved modestly lower in early trading on Friday due to disappointing Chinese trade data for July which showed China’s trade surplus narrowed during the month as growth rates for both exports and imports fell below estimates, thus leading to renewed concerns about the outlook for the global economy. A report released by China's General Administration of Customs showed that Chinese exports grew by just 1% yoy in July 2012, decelerating from the 11.3% growth reported for June 2012, while imports rose at a slower rate in July 2012, up 4.7% compared to the 6.3% increase in June 2012. Also, the US Labor Department recently released a report showed an unexpected decrease of 0.6% in import prices in the month of July 2012 after tumbling by 2.4% in June 2012. The major European markets have also moved to the downside on Friday on the back of weak Chinese trade data.
Meanwhile, Indian shares ended a choppy session on Friday with the rupee trading weak, tracking the ailing euro, and global cues remaining lackluster in the wake of dismal Chinese trade data.
Markets Today The trend deciding level for the day is 17,540 / 5,315 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 17,608 – 17,659 / 5,336 – 5,351 levels. However, if NIFTY trades below 17,540 / 5,315 levels for the first half-an-hour of trade then it may correct up to 17,489 – 17,421 / 5,300 – 5,279 levels.
Indices S2 S1 PIVOT R1 R2
SENSEX 17,421 17,489 17,540 17,608 17,659
NIFTY 5,279 5,300 5,315 5,336 5,351
News Analysis Bosch to temporarily suspend manufacturing operations at its plants Supreme Court denies PNGRB to enquire into IGL’s books of accounts Work on Dholera special investment region to start within a year Electrosteel Castings’ associate, Electrosteel Steels reports 1QFY2013 results 1QFY2013 Result Reviews- ONGC, SBI, Sun Pharma, Glaxo Pharma, RCom,
1QFY2013 Result Previews- Coal India, Tata Steel, Bosch, NMDC, India Cem. Refer detailed news analysis on the following page
Net Inflows (August 9, 2012) ` cr Purch Sales Net MTD YTD
FII 2,231 1,914 317 3,867 57,147
MFs 551 801 (250) (513) (8,592)
FII Derivatives (August 10, 2012) ` cr Purch Sales Net Open Interest
Index Futures 1,059 1,080 (21) 15,745
Stock Futures 1,381 2,006 (625) 24,645
Gainers / Losers Gainers Losers
Company Price (`) chg (%) Company Price (`) chg (%)
Amtek Auto 96 11.5 JPINFRATEC 50 (7.2)
Jain Irrigation 84 5.0 SBI 1,888 (4.3)
Tech Mahindra 800 5.0 Power Finance 183 (4.2)
Indraprastha Gas 252 4.9 Ranbaxy Lab 483 (3.7)
Shree Cement 3,199 3.6 GMR Infra 22 (3.4)
Domestic Indices Chg (%) (Pts) (Close)
BSE Sensex (0.0) (3.1) 17,558
Nifty (0.1) (2.6) 5,320
MID CAP 0.0 1.5 6,100
SMALL CAP (0.3) (18.9) 6,550
BSE HC (0.2) (15.9) 7,292
BSE PSU (0.8) (60.0) 7,084
BANKEX (0.9) (102.1) 11,889
AUTO (1.2) (115.9) 9,367
METAL 0.1 9.2 10,521
OIL & GAS 0.3 22.2 8,310
BSE IT 1.3 73.0 5,542
Global Indices Chg (%) (Pts) (Close)
Dow Jones 0.3 42.8 13,208
NASDAQ 0.1 2.2 3,021
FTSE (0.1) (4.4) 5,847
Nikkei (1.0) (87.2) 8,891
Hang Seng (0.7) (133.4) 20,136
Straits Times 0.1 2.0 3,054
Shanghai Com (0.2) (5.3) 2,169
Indian ADRs Chg (%) (Pts) (Close)
INFY 0.5 0.2 $41.8
WIT 1.0 0.1 $8.2
IBN (0.1) (0.1) $34.9
HDB 0.7 0.3 $35.6
Advances / Declines BSE NSE
Advances 1,182 580
Declines 1,577 898
Unchanged 129 88
Volumes (` cr)
BSE 2,192
NSE 10,499
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Market Outlook August 13, 2012
Bosch to temporarily suspend manufacturing operations at its plants Bosch (BOS) has announced to temporarily suspend manufacturing at its plants (partial/full) during August 2012 in order to avoid unnecessary buildup of inventory and align the production as per the market demand. The domestic automobile industry which is the primary driver of company’s revenue, have witnessed a slowdown in demand recently due to sluggish economic growth, increasing fuel prices and weak consumer sentiments.
Plant location Partial/full Dates of shutdown
Bangalore Partial 11, 13, 14, 25, 27
Nashik Partial 17 to 31
Jaipur Full 16, 17, 18, 27, 28, 29
The company has been suspending operations at its plants in a phased manner to align production in-line with the market demand since June 2012. It had earlier announced temporary shutdown at its Jaipur plant (from June 28 to June 30, 2012 and July 25 to August 4, 2012), Bangalore plant (from June 29 to June 30, 2012, from July 13 to July 14, 2012 and July 27 to July 30, 2012) and Nashik plant (July 30 to July 31, 2012). At the CMP of `8,865, the stock is trading at 19.3x CY2013E earnings, which is in-line with its historical average of 20x. Thus, we recommend Neutral rating on the stock. Supreme Court denies PNGRB to enquire into IGL’s books of accounts The Supreme Court (SC) has declined to permit the Petroleum and Natural Gas Regulatory Board (PNGRB) to proceed with its inquiry against Indraprastha Gas Ltd (IGL) and some other companies over determining network tariff and compression charges. However, the SC has sought IGL’s reply on the same before passing the final order. During June 2012, the Delhi High Court had ruled that the PNGRB did not have the power to fix any component of network tariff or compression charges for any entity having its own distribution network. We maintain our Neutral view on the stock. Work on Dholera special investment region to start within a year According to news reports, work on Dholera Special Investment Region will start within a year. The central government has approved `3,000cr to create basic infrastructure for the project. The planned project will be coming up 90Kms from Ahmedabad within the Delhi Mumbai Industrial Corridor (DMIC). The investment sectors identified for the project include Heavy engineering, Automobiles and ancillaries, electronics, Pharmaceuticals & biotechnology, agro and food processing and IT/ITES. Mahindra lifespaces had signed a MOU with the government of Gujarat. The MOU is for the development of 3,000acres of integrated business city along the lines of the existing Mahindra World City (MWC). We maintain BUY rating on MLIFE with a Target price of `396.
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Market Outlook August 13, 2012
Electrosteel Castings’ associate, Electrosteel Steels reports 1QFY2013 results Electrosteel Steels (ESL), an associate of Electrosteel Castings (ECL) reported an operating loss during 1QFY2013 as most of its integrated steel plants are yet to commission operations. ESL’s top-line stood at `12cr compared to `2cr in 1QFY2012 as it commenced partial operations at its plant (pig iron and DI pipes) during the quarter. However, it reported an operating loss of `10cr during the quarter. Depreciation and interest expenses stood at `14cr and `23cr respectively. Hence, it reported a loss at the PAT level of `46cr. We await results of ECL (expected to report results on August 14, 2012). Until then, we maintain our Buy rating on ECL with a target price of `22. Result Reviews
ONGC (CMP: `279/ TP: `321/ Upside: 15%) ONGC reported better-than-expected 1QFY2013 standalone results due to lower-than-expected subsidy burden. The company’s top line increased by 23.9% yoy to `20,084cr (slightly above our expectation of `19,478cr. The company shared a subsidy burden was `12,346cr in 1QFY2013 vs. `12,046cr of subsidy shared in 1QFY2012 and `14,170cr in 4QFY2012. ONGC’s crude oil net realization declined by 4.4% yoy to US$46.6/bbl. Oil production increased by 3.2% yoy to 6.54mn tonnes during 1QFY2013. EBITDA margin expanded by 230bp yoy to 57.7% and EBITDA increased by 24.0% yoy to `11,130cr. Reported net profit increased by 48.4% yoy to `6,077cr above our estimate of `5,382cr. The company has notified 10 discoveries during FY2013 including one major discovery (D1) off the west coast. D1’s Initial Oil in-place (IOIP) is expected to be 140mtoe. Currently D1 block is producing 12,500bopd. The company expects the production to reach 60,000bopd by January 2014. We maintain our Buy rating on the stock with a target price of `321. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
State Bank of India (CMP: `1,888/ TP: `2,270/ Upside: 20%) During 1QFY2013, SBI reported standalone net profit of `3,752cr as against `1,584cr in 1QFY2012, which was in line with our estimates. The operating income growth was however lower than our expectations which was negated by lower than estimated provisioning expenses (investment write-back of `521cr). We recommend a Buy rating on the stock.
Slippages surge up significantly: During 1QFY2013, the bank’s advances grew by 18.9% yoy, while deposits were up by 16.1% yoy. Domestic saving deposits growth was moderate at 13.4% yoy which coupled with 2.9% yoy decline in volatile
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Market Outlook August 13, 2012
domestic current account deposits lead to domestic CASA deposits growing at a modest pace of 10.1% yoy. The domestic NIMs for the bank were lower by 42bp qoq on account of interest rate reversals, lower lending rates (SME and agri rates lowered by 50-350bp eff. June 01, 2012), lower demand (seasonality effect) for short term working capital loans (substituted into lower yielding CPs) and higher cost of deposits during the quarter (up 29bp qoq to 6.2%). The performance on the fee income front was muted with other income excluding treasury declining by 2.6% yoy. The growth in CEB income was flat yoy, while dividend income was lower at `18cr compared to `228cr in 1QFY2012 (interim dividend from subsidiaries not taken this year). Forex income however remained strong, growing by 38.0% yoy during 1QFY2013. On the asset-quality front, the bank’s annualized slippage ratio for the quarter surged sharply to 5.0%, significantly higher than 2.3% witnessed in 4QFY2012. Almost 62.1% slippages were witnessed in the Corporate and SME segments. Amongst the corporate and SME segments slippages, major industries witnessing sequentially higher slippages were trading (`848cr vs. `56cr in 1QFY2012 and `396cr for entire FY2012) and infrastructure (`787cr in 1QFY2013 and `554cr in 4QFY2012) and engineering (`636cr vs. 112cr in 4QFY2012).
Outlook and valuation: At the CMP, the stock is trading at 1.2x FY2014E ABV (adjusting for value of subsidiaries 1.0x FY2014E ABV) vis-à-vis its historic range of 1.3–2.3x and median of 1.6x. Also, considering the bank’s dominant position and reach, high fee income and superior earnings quality, we recommend a Buy on the stock with a target price of `2,270. Y/E Op. Inc NIM PAT EPS ABV ROA ROE P/E P/ABV
Sun Pharma (CMP: `676/ TP: -/ Upside: - %) For 1QFY2013, Sun Pharma reported net sales of `2,658cr, up 62.5% yoy, mainly driven by exports. The company’s OPM expanded to 45.8% in 1QFY2013 from 33.5% in 1QFY2012. Also, the gross margin came in line at 81.1% from 75.1% in 1QFY2012. Net profit during the quarter reported 58.8% yoy growth to `796cr, higher than expectations, mainly on back of the higher sales growth and expansion in OPM. However, on account of rich valuation recommend a Neutral on the stock. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Glaxo Pharma (CMP: `2,105/ TP: - / Upside: - % ) For 2QCY2012, Glaxo Pharma reported net sales of `636cr, up 13.3% yoy, mainly driven by domestic formulations. The company’s OPM is expected to 31.0% in 2QCY2012 from 33.2% in 1QCY2012. Net profit during the quarter reported 7.3% yoy growth to `163cr. However, on account of rich valuation recommend a Neutral on the stock.
Y/E Sales OPM PAT EPS RoE P/E P/BV EV/EBITDA EV/Sales
Reliance Communication (CMP: `55 / TP: - / Upside: -)
Reliance Communication reported decent set of results for 1QFY2013. The company’s top-line remained flat qoq at `5,319. Average revenue per user declined by 2.0% qoq to `0.43/min, inline with expectations. EBITDA margin grew by 30bp qoq to 31.0%. PAT came in at `162cr, aided by tax write backs. We maintain our Neutral view on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 22,125 31.9 925 4.5 2.5 12.2 0.3 6.1 2.0
FY2014E 23,734 32.0 1,207 5.8 3.1 9.3 0.3 5.1 1.6
Bharat Forge (CMP: `312/ TP: `358 / Upside: 15%) Bharat Forge (BHFC) reported lower-than-expected results for 1QFY2013 led by weak demand in the domestic automotive market and sharp increase in interest cost. Standalone revenue posted a 9.2% yoy (down 4.2% qoq) growth to `936cr led by 14.1% yoy (7% qoq) increase in net average realization on the back of rupee depreciation and superior product-mix. Total volume in tonnage terms declined 3.2% yoy (10.4% qoq) to 51, 288MT due to a 12% yoy decline in domestic medium and heavy commercial vehicle volumes (MHCV). Led by weakness in the domestic MHCV sales, domestic revenues declined 5.6% yoy (15.2% qoq). However, export revenues recorded a robust growth of 30.7% yoy (8.9% qoq) on the back of strong demand in commercial vehicle (CV) market in US, continued traction in non-auto segment in US and Europe and due to rupee depreciation. Non-auto segment revenues grew by 16.4% yoy drive by strong momentum across sectors. On the operating front, margins improved 84bp yoy (down 57bp qoq) to 25.1% which was in-line with our estimates owing to better product-mix and decline in raw-material expenses. Hence operating profit grew 13% yoy (down 6.3% qoq) to `235cr. Net profit however registered 8% yoy growth to `105cr, 12.4% below our
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Market Outlook August 13, 2012
estimates, on account of 75.6% yoy (59% qoq) jump in interest expense. Other income on the other hand grew 72.7% yoy (93% qoq) which partially negated the impact of higher finance cost. At `312, the stock is trading at 10.6x FY2014E earnings. We maintain Buy on the stock with a revised target price of `358. Y/E Sales OPM PAT EPS RoE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 7,004 16.2 483 20.8 20.3 13.1 2.5 6.3 1.0
FY2014E 7,985 16.4 595 25.6 21.2 10.6 2.1 5.1 0.8
Ashoka Buildcon (CMP: `255 / TP: `273 / Upside: 7%) For 1QFY2013, Ashoka Buildcon Ltd (ABL) reported a good set of numbers, broadly in line with our estimates. ABL’s top line witnessed a healthy growth of 19.8% to `466cr marginally higher than our estimate of `453cr. On the EBITDAM front, ABL’s margins came at 22.0%, a dip of 210bp yoy and in line with our estimate of 22.1%. At the earnings front as well, ABL reported decent growth of 27.4% to `41cr. As per media reports ABL is in advanced talks with Macquarie SBI Infrastructure Fund to sell 35% stake in its road subsidiary for `800cr. The deal if goes through would value the subsidiary at `2,300cr. This deal would be a big positive for ABL as funding for its road BOT projects has been a major overhang on the stock. Further owing to the sharp spike in share its price we recommend Accumulate on the stock with target price of `273. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Godawari Power and Ispat (CMP: `124/ TP: -/ Upside: -) Godawari Power and Ispat (GPIL) reported its 1QFY2013 results. Net sales increased by 22.7% to `602cr. On the operating front, although EBITDA increased by 44.4% yoy to `11cr, EBITDA margin contracted 449bp yoy to 18.2% on account of higher prices of key inputs. The other income fell by 29.8% yoy to `3cr. The net profit increased by 55.3% yoy to `47cr in line with increase in EBITDA. We keep our rating and target price under review. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 2,085 16.8 117 36.9 14.3 3.4 0.4 2.9 0.5
FY2014E 2,139 18.2 146 45.9 15.2 2.7 0.4 2.3 0.4
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Market Outlook August 13, 2012
CCCL (CMP: `17 / TP: - / Upside: - %) CCCL posted a dismal set of numbers once again for the quarter. A lower-than-expected performance at both the revenue and the EBITDAM front along with a high interest cost led to a higher-than-expected loss for the quarter. The top-line of the company declined by 4.8% yoy to `482cr against our estimate of `534cr. However, the major disappointment came on the margin front, as the company posted abysmal EBITDA margin of 2.7% a drop of 270bp yoy and 680bp qoq, against our expectations of it coming at 4.2%. Further, on the bottom-line front the company posted loss of `16cr vs a profit of `1cr in 1QFY2012 and against our expectations of `6cr loss mainly on account of poor performance at revenue and EBITDAM level and high interest cost (`26cr, a jump of 43.1% yoy). CCCL had an order inflow of `335cr during the quarter, taking its outstanding order book to `4,821cr. The company has disappointed on the earnings front and posted erratic margins since the last few quarters. Hence, we maintain our Neutral view on the stock. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 2,489 7.0 44 2.4 6.9 7.1 0.5 5.2 0.4
FY2014E 2,755 7.8 67 3.6 9.8 4.6 0.4 4.3 0.3
Madhucon Projects (CMP: `37/ TP: `56 / Upside: 53%) For 1QFY2013, Madhucon Projects (MPL) reported mixed set of numbers with revenue coming below our expectations however higher EBITDAM resulted in better-than-expected earnings performance. On the top line front, MPL posted disappointing performance with yoy increase of 2.1% to `336cr, way below our expectations of `425cr. EBITDAM came in at 14.0%, flat on yoy basis but posted a jump of 220bp on qoq basis against our expectations of 11.9%. Interest cost stood at `24cr a jump of 15.1% on yoy basis but a decline of 11.3% on a sequential basis. On the earnings front, the company posted a decline of 11.9% on yoy basis at `7cr higher than our expectations of `5cr despite a higher tax rate (39.5%) on the back of higher EBITDAM and lower-than-expected interest cost. We maintain Buy on the stock with target price of `56. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 2,206 10.7 34 4.6 8.6 7.9 0.4 6.6 0.7
FY2014E 2,502 10.7 35 4.7 8.3 7.8 0.4 6.4 0.7
Hitachi Home (CMP – `114, TP: `130, Upside: 14.3%) For 4QFY2012, Hitachi reported a better than expected topline of `376cr, 14.6% higher yoy from `328cr in 1QFY2012. The company disappointed on the EBITDA margin front which came in at 6.8% in 1QFY2013, contraction of 108bp yoy from 7.9% in 1QFY2012 on account of higher other expenses. Net profit grew marginally by 3.8% yoy from `13.1cr in 1QFY2012 to `13.6cr in 1QFY2013. We
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Market Outlook August 13, 2012
recommend an Accumulate on the stock with a target price of `130, based on a target PE of 12x for FY2014E. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
March (` cr) (%) (` cr) (`) (%) (x) (x) (x) (x)
FY2013E 865 5.4 15 6.7 8.7 17.0 1.4 6.8 0.4
FY2014E 936 6.9 25 10.9 12.9 10.5 1.3 4.9 0.3
Result Previews Coal India Coal India is slated to report its 1QFY2013 results today. We expect net sales to increase by 12.8% yoy to `16,361cr mainly on account of higher volumes. However, the EBITDA margin is expected to contract 740bp yoy to 27.9% on account of higher employee costs. Nevertheless, the net profit is expected to decrease by only 1.6% yoy to `4,090cr as a decrease in operating profits is expected to be partially offset by increase in interest income. We maintain our Neutral view on the stock. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Tata Steel Tata Steel would be reporting its consolidated 1QFY2013 results today. We expect net sales to decrease by 2.1% yoy to `32,297cr mainly on account of lower volumes from its European operations which however would get partially offset by higher realizations. The EBITDA margin is expected to decline by 230bp yoy on account of higher costs of raw materials (mainly in its European operations). We maintain our Buy rating on the stock with a target price of `499. Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
Bosch Bosch (BOS) is slated to announce its 2QCY2012 results today. We expect the company to deliver ~9% yoy growth in revenues to `2,206cr as the automotive sector registered a modest growth during the quarter. Meanwhile, the company also announced temporary shutdowns at its plant in Jaipur and Bangalore for two to three days in June 2012 to align its production with the demand and avoid unnecessary build-up of inventory. On the operating front, the company is
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Market Outlook August 13, 2012
expected to post a 170bp yoy expansion in operating margin to 20% led by decline in raw-material expenses. The net profit is expected to register a 13% yoy growth to `316cr. At `8,865 the stock is trading at 19.3x CY2013E earnings, which is in-line with its historical average of 20x. Currently we have a Neutral rating on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
NMDC NMDC is slated to announce its 1QFY2013 results today. We expect the company’s top-line to decrease by 2.7% yoy to `2,706cr on account of decrease in sales volumes. On the operating front, the EBITDA margin is expected to decrease by 490bp yoy to 76.1%. The bottom-line is expected to decrease by 3.7% yoy to `1,735cr. We maintain our Neutral view on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/Sales
India Cements India cements is expected to announce its 1QFY2013 results today. We expect the company to post an 8.6% yoy growth in its topline to `1,152cr, aided largely by better realization. OPM is expected to increase by 322bp yoy to 26%. Bottomline is expected to grow by 6.2% yoy to `108cr. We maintain a neutral view on the stock.
Y/E Sales OPM PAT EPS ROE P/E P/BV EV/EBITDA EV/tone*
Foreign Telcos can bid alone in 2G Auctions Centre tells power forum to fall in line on open access PFC considers `17,000cr transition loans to discoms
Corporate News
Maruti’s Manesar plant may become operational next week Sun Pharma to spin off local formulation business Tata may produce high performance engines in India, UK
Source: Economic Times, Business Standard, Business Line, Financial Express, Mint
Date Company
August 13, 2012 Coal India, NMDC, Tata Steel, Bosch India, GSK Pharma, Suzlon Energy, India Cements, PTC India
August 14, 2012Hindalco, Reliance Power, IDFC, Nalco, Essar Oil, Reliance Infra., Unitech, HDIL, Monnet Ispat, Amara Raja Batteries, Orchid Chemicals, Simplex Infra, Electrosteel Castings, Finolex Cables, Cravatex, S. Kumars Nationwide
Source: Bloomberg, Angel Research
Result Calendar
Global economic events release calendar
Date Country Event Description Unit Period Bloomberg Data
Last Reported Estimated
August 14, 2012 UK CPI (YoY) % Change Jul 2.40 2.30
IndiaMonthly Wholesale Prices YoY%
% Change Jul 7.25 7.20
US Producer Price Index (mom) % Change Jul 0.10 0.20
Euro Zone Euro-Zone GDP s.a. (QoQ) % Change 2Q A -- (0.20)
Germany GDP nsa (YoY) % Change 2Q P 1.70 0.90
August 15, 2012 UK Jobless claims change % Change Jul 6.10 6.00
US Industrial Production % Jul 0.43 0.50
US Consumer price index (mom) % Change Jul -- 0.20
August 16, 2012 US Initial Jobless claims Thousands Aug 11 361.00 365.00
US Housing Starts Thousands Jul 760.00 758.00
US Building permits Thousands Jul 760.00 766.00
Euro Zone Euro-Zone CPI (YoY) % Jul 2.40 2.40
August 22, 2012 US Existing home sales Millions Jul 4.37 4.52
August 23, 2012 Germany PMI Services Value Aug A 50.30 --
Germany PMI Manufacturing Value Aug A 43.00 --
Euro ZoneEuro-Zone Consumer Confidence
Value Aug A (21.50) --
US New home sales Thousands Jul 350.00 360.00
August 24, 2012 UK GDP (YoY) % Change 2Q P (0.80) --
August 28, 2012 US Consumer ConfidenceS.A./
1985=100Aug 65.90 --
August 29, 2012 US GDP Qoq (Annualised) % Change 2Q S 1.50 --
August 30, 2012 Germany Unemployment change (000's) Thousands Aug 7.00 --
August 31, 2012 India Qtrly GDP YoY% % Change 2Q 5.30 --
September 01, 2012 China PMI Manufacturing Value Aug 50.10 --
September 03, 2012 India Imports YoY% % Change Jul (13.46) --