Dabur India Ltd: "Confident tone for growth" "BUY" 7th Mar 2014 Dabur expects volume growth at a range of 8-12% for FY15E led by innovation and effective distribution initiatives in chemist channels. If discretionary demand from urban area improves, then volume growth in double digit would not be a surprise for street. Considering its expected expressive volume growth than other peers, aggression on new launches through innovation and aggressive distribution reach energize our positive stance on the stock. ............................................................. ( Page : 4-8) Prestige Estates Projects: "Downgrade to Hold" "HOLD" 10th Mar 2014 The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down gradulally. The stories behind the current price diving are the concern of price war, staggered economics, and non softening of interest rates. However given the limited upside in counter in near term, we revise our rating on PEPL to “Hold” with a revised price target of Rs. 190. Regarding the stock's future course, our “Hold” rating indicates that we do not recommend additional investment in this stock despite its gains in the current period. ..................................................................................... ( Page : 2-3) SWARAJ ENGINES Ltd : "BOOK PROFIT" 6th Mar 2014 CAN FIN HOME "BUY" 7th Mar 2014 We have initiated coverage with Buy rating on the stock with price target of Rs.220 which implies 1 times of FY14E book value. The company has delivered strong performance all around. During quarter, profitability was up by 60% on the back of healthy NII growth and improvement in operating leverage. Return ratio improved from 12% in FY12 to 18% in 3QFY14 which is expected to remain healthy on the back of improving operating leverage and aggressive branch expansion. ................................................... ( Page :9-15) 6th Mar 2014 DB CORP : "Waging war on Print media" "NEUTRAL" 7th Mar 2014 The Supreme Court upheld the constitutional validity of the November 11, 2011 Union government notifications, directing implementation of the recommendations of the Majithia Wage Boards for journalists and non-journalists of newspapers and news agencies. This judgment will work as a dampener for newspaper industry as well as DB CORP. Company’s EBITDA margin will be effected very negatively not only in FY15E but also next few or more years. Therefore we downgrade DB CORP from `BUY’ to `NEUTRAL’ ........................................................................ ( Page : 16-17) IEA-Equity Strategy 10th Mar, 2014 Edition : 221 The company has been evaluating strategic alternatives since 2012, we believe the company is not inclined to sell at valuations multiple of 2 times of its FY15E book value. However, If the company if things will going positively we could rationalize valuations near Rs. 145 per share, but we don't believe buyers would be willing to pay a premium to BVPS more than 2 times at this time. We are downgrading Voltas to Neutral given the recent rise in its share price following 3QFY14 earnings and revised our price target to Rs. 120. ................................................................ ( Page : 21-22) In our earlier report dated 25-04-13, we had recommended readers to buy the scrip with a view to earn healthy gains. As expected, the counter have given a premium of 40 per cent over its recommended price. We expect the current price growth rally factored all the fundamental changes, and we advise our readers to book profits at the current levels. Our bearish attitude on the counter stems from its valuations. At a P/BV of 2.8x of its annualised FY14E RoE of Rs 28.7%, we believe that the counter is very expensive in comparison of its own past historical data . ...................................................................... ( Page : 23-24) Hindustan Zinc LTD : Good gains ahead "BUY" 6th Mar 2014 Zinc fundamentals are becoming attractive with suppotive lead prices brings a positive outlook for Hindustan Zinc.With a cash-rich balance sheet and strong visibility over production growth of zinc, lead and silver over FY2013-15, we are positive on HZL.Being an integrated & dominant player in the domestic industry with low cost of production, the company is poised to benefit in the long run. Now the stock is trading at 1.6x in one year forward P/B we estimated it at 1.8x for 2015.At current level we see a significant growth in the stock. We valued & reaffirm our positive stance on HZL and assign a BUY rating to the stock with a target price of Rs. 148/-. ....................................................... ( Page : 18-20) Voltas Ltd : Downgrade to "Neutral" "NEUTRAL" Narnolia Securities Ltd, India Equity Analytics Daily Fundamental Report on Indian Equities
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India Equity Analytics Today : Hold Rating on Prestige Estates Stock
The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down gradulally. Narnolia Securities Limited do not recommend additional investment in this stock despite its gains in the current period.
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Dabur India Ltd: "Confident tone for growth" "BUY" 7th Mar 2014
Dabur expects volume growth at a range of 8-12% for FY15E led by innovation and effective distribution initiatives in chemist channels. If
discretionary demand from urban area improves, then volume growth in double digit would not be a surprise for street. Considering its expected
expressive volume growth than other peers, aggression on new launches through innovation and aggressive distribution reach energize our
positive stance on the stock. ............................................................. ( Page : 4-8)
Prestige Estates Projects: "Downgrade to Hold" "HOLD" 10th Mar 2014
The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down gradulally. The stories behind the current price
diving are the concern of price war, staggered economics, and non softening of interest rates. However given the limited upside in counter in
near term, we revise our rating on PEPL to “Hold” with a revised price target of Rs. 190. Regarding the stock's future course, our “Hold” rating
indicates that we do not recommend additional investment in this stock despite its gains in the current period.
We have initiated coverage with Buy rating on the stock with price target of Rs.220 which implies 1 times of FY14E book value. The company has
delivered strong performance all around. During quarter, profitability was up by 60% on the back of healthy NII growth and improvement in
operating leverage. Return ratio improved from 12% in FY12 to 18% in 3QFY14 which is expected to remain healthy on the back of improving
operating leverage and aggressive branch expansion. ................................................... ( Page :9-15)
6th Mar 2014
DB CORP : "Waging war on Print media" "NEUTRAL" 7th Mar 2014
The Supreme Court upheld the constitutional validity of the November 11, 2011 Union government notifications, directing implementation of
the recommendations of the Majithia Wage Boards for journalists and non-journalists of newspapers and news agencies. This judgment will
work as a dampener for newspaper industry as well as DB CORP. Company’s EBITDA margin will be effected very negatively not only in FY15E
but also next few or more years. Therefore we downgrade DB CORP from `BUY’ to `NEUTRAL’ ........................................................................ (
Page : 16-17)
IEA-Equity
Strategy
10th Mar, 2014
Edition : 221
The company has been evaluating strategic alternatives since 2012, we believe the company is not inclined to sell at valuations multiple of 2
times of its FY15E book value. However, If the company if things will going positively we could rationalize valuations near Rs. 145 per share, but
we don't believe buyers would be willing to pay a premium to BVPS more than 2 times at this time. We are downgrading Voltas to Neutral given
the recent rise in its share price following 3QFY14 earnings and revised our price target to Rs. 120. ................................................................ (
Page : 21-22)
In our earlier report dated 25-04-13, we had recommended readers to buy the scrip with a view to earn healthy gains. As expected, the counter
have given a premium of 40 per cent over its recommended price. We expect the current price growth rally factored all the fundamental
changes, and we advise our readers to book profits at the current levels. Our bearish attitude on the counter stems from its valuations. At a
P/BV of 2.8x of its annualised FY14E RoE of Rs 28.7%, we believe that the counter is very expensive in comparison of its own past historical data .
Hindustan Zinc LTD : Good gains ahead "BUY" 6th Mar 2014
Zinc fundamentals are becoming attractive with suppotive lead prices brings a positive outlook for Hindustan Zinc.With a cash-rich balance sheet
and strong visibility over production growth of zinc, lead and silver over FY2013-15, we are positive on HZL.Being an integrated & dominant
player in the domestic industry with low cost of production, the company is poised to benefit in the long run. Now the stock is trading at 1.6x in
one year forward P/B we estimated it at 1.8x for 2015.At current level we see a significant growth in the stock. We valued & reaffirm our
positive stance on HZL and assign a BUY rating to the stock with a target price of Rs. 148/-. ....................................................... ( Page : 18-20)
Voltas Ltd : Downgrade to "Neutral" "NEUTRAL"
Narnolia Securities Ltd,
India Equity AnalyticsDaily Fundamental Report on Indian Equities
V- Prestige Estates Projects Ltd.
Key Points
CMP 169
Target Price 190
165
Upside 12%
15%
BSE Code 533274
NSE Symbol
5,717
161,912
Nifty 6,401
1M 1yr YTD
Absolute 15.6 0.4 0.4
Rel. to Nifty 9.3 (11.5) (12.2)
3QFY14 2QFY14 1QFY14
Promoters 75.0 75.0 75.0
FII 17.4 17.4 17.2
DII 6.3 6.3 6.1
Others 1.3 1.3 1.7
Valuation:
2
"Downgrade to Hold………..."
Hold
102/195
Result update
PRESTIGE
Mkt Capital (Rs Crores)
52wk Range H/L
At the current CMP of Rs. 165, the stock is trading at a PE of 16.0x FY14E & 13.6x FY15E . The
company can post EPS of Rs. 10.3 & Rs. 12.1 in FY14E & FY15E and RoE of 11.3% & 12.0%.
Prestige Estates Projects said it sold 1,204 residential units and 0.026 million square feet (Mnsft)
of commercial space, aggregating to 2.075 Mnsft, amounting to Rs 1262 crore of sales in Q3
December 2013. Of the above, Prestige share is 904 units -1.55 Mnsft amounting to Rs 940.20
crore of sales, up by 24.69% from that of Q3 December 2012.In Q3 December 2012, the company
had sold 682 units aggregating 1.44 Mnsft of residential and commercial space, amounting to Rs
754 crore of sales - Prestige share. (Overall sales of 1.69 Mnsft of area amounting to Rs 873.90
crore). Collections rose 16.69% to Rs 592.30 crore in Q3 December 2013 over Q3 December 2012
- Prestige share. (Overall collections for the Q3 December 2013 - Rs 713.30 crore). In Q3
December 2013, the company launched the first phase of its largest residential project- Prestige
Lakeside Habitat in Bangalore aggregating to 2.79 million square feet of total developable area.
The project is spread across 102 acres in area and consists of apartments and villas with total
developable area of 8.40 Mnsft.
Management Guidence FY14E
Company will exceed its presales guidance. Company has already done sales to the extent of Rs
1,200 crore plus and now it is just a question of production and these numbers getting
recognised because company need to touch the trigger of 30 percent to recognise these
numbers. During the year, company has made Rs 3,700 crore and guidance was Rs 4,300 crore.
On his outlook for the company's business, Prestige Estates Projects, says there is no slowdown
in the Bangalore market and aims to concentrate on the phase 2 and 3 of its Lakeside Habitat
project newt quarter
• The Prestige Estate has moved up form starting of CY12, peaked in May13, then went down
gradulally. The stories behind the current price diving are the concern of price war, staggered
economics, and non softening of interest rates. The heat wave in economy have affected
complete sector, this hurt the real estate companies' revenue and the revival which were
expected by us in previous year cannot be seen in the manner in which we expect.
• Earlier in our 3QFY14 result update we had given a buy rating on stock when the price was
Rs. 145, with the next 5-6 month price target of Rs. 165. However seeing the current rally in
stock post 3QFY14 result and on back of guidance for FY14 at Rs. 4300 crore sales booking as
the management commentary on the result call regarding launches in Q3FY14 as well as
through the year remained extremely positive. However given the limited upside in counter in
near term, we revise our rating on PEPL to “Hold” with a revised price target of Rs. 190.
• Regarding the stock's future course, our “Hold” rating indicates that we do not recommend
additional investment in this stock despite its gains in the current period.
Result Highlights 3QFY14
Please refer to the Disclaimers at the end of this Report.
Change from Previous
Previous Target Price
1 yr Forward P/B
Share Holding Pattern-%
Stock Performance-%
Market Data
Average Daily Volume
"Hold"10th Mar' 14
Narnolia Securities Ltd,
3
Please refer to the Disclaimers at the end of this Report.
(Ammount in crore) (Source: Company/Eastwind)
Prestige Estates Projects Ltd.
Key financials :
(Source: Eastwind Research) (Figures in crore)
Narnolia Securities Ltd,
PARTICULAR 2011A 2012A 2013A 2014E 2015E
Performance
Revenue 1543 1052 1948 2532 3038
Other Income 68 34 64 64 64
Total Income 1611 1086 2011 2595 3102
EBITDA 442 331 579 696 805
EBIT 381 270 511 621 722
DEPRICIATION 61 61 68 75 83
INTREST COST 123 119 149 163 163
PBT 326 185 426 522 623
TAX 91 63 131 161 199
Reported PAT 235 122 294 361 423
Dividend 39 39 39 39 39
EPS 7.2 3.7 8.4 10.3 12.1
DPS 1.2 1.2 1.1 1.1 1.1
Yeild %
EBITDA % 28.6% 31.4% 29.7% 27.5% 26.5%
NPM % 14.6% 11.3% 14.6% 13.9% 13.7%
Earning Yeild % 5.7% 3.7% 5.2% 6.2% 7.3%
Dividend Yeild % 1.0% 1.2% 0.7% 0.7% 0.7%
ROE % 11.1% 5.7% 10.7% 11.8% 12.0%
ROCE% 6.5% 3.0% 5.7% 6.6% 7.4%
Position
Net Worth 2114 2151 2743 3065 3531
Total Debt 1505 1864 2420 2420 2200
Capital Employed 3619 4015 5163 5485 5731
No of Share 33 33 35 35 35
CMP 125 100 163 165 165
Valuation
Book Value 64.4 65.6 78.4 87.6 100.9
P/B 1.9 1.5 2.1 1.9 1.6
Int/Coverage 3.1 2.3 3.4 3.8 4.4
P/E 17.5 26.8 19.4 16.0 13.6
Dabur India Ltd.
BUY
Expecting for bottomed up sign on volume growth:
1M 1yr YTD
Absolute 0.3% 30% 33.9%
Rel. to Nifty -6.03% 19% 22.0%
Current 2QFY14 1QFY14
Promoters 68.64 68.66 68.66 Aggression on expending distribution reach:
FII 19.94 20.71 20.4
DII 4.47 3.96 3.97
Others 6.95 6.7 7
View and Valuation:
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
1904.28 1748.81 8.9 1635.98 16.4
297.59 329.24 (9.6) 274.51 8.4
243.5 249.83 (2.5) 209.87 16.0
15.6% 18.8% 220bps 16.8% 120bps
12.8% 14.3% 150bps 12.8% -
4
PAT Margin
Financials
Revenue
EBITDA
PAT
EBITDA Margin
The strong momentum in relatively low competition in the core categories with
diversified portfolio, Dabur gets a better place than other peers and its rural distribution
expansion should boost sales volumes. We retain our “Buy” view on the stock with a
target price of Rs206. At a CMP of Rs 173 stock trades at 9x FY15E P/BV.
Share Holding Pattern-%
NSE Symbol DABUR
30246
Average Daily Volume 908049
52wk Range H/L 185/128
Mkt Capital (Rs Cr)
A mature segment like Hair Oil remains a concern because of competitive intensity,
likely to grow slower than healthcare and home segments.
Consistently, Dabur is aggresively working on innovation activities to launch new
product as well as product development activities. Recently new launches would come
to the people like Vatika Enriched Coconut Oil with hibiscus, Vatika Olive Enriched Hair
Oil.
Considering its expected expressive volume growth than other peers, aggression on new
launches through innovation and aggressive distribution reach energize our positive
stance on the stock.
Post earning, management of the company expressed hypothetically its view regarding
bottoming out of urban demand. The management of other FMCG bellwether like Marico
had also stated that the trend of volume decline has bottomed out based on hypothesis.
Recent Consumer Confidence Index indicates some upward movement than previous
quarters. At a same point, recent softening in CPI and Food Inflation Index (graph on 3rd
page of this company's report) hint to improve consumer discretionary demand from rural
and urban area.
Market Data
Previous Target Price -
Upside 19%
Change from Previous -
"Confident tone for growth"
Company update
CMP 173
Target Price 206
Analysis on recent management interview to media :
Dabur expects volume growth at a range of 8-12% for FY15E led by innovation and
effective distribution initiatives in chemist channels. If discretionary demand from urban
area improves, then volume growth in double digit would not be a surprise for street.
BSE Code 500096
P/BV(x)-1year forward
Rs, Crore
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
Stock Performance
Nifty 6401
Dabur is working on chemist channel to drive growth of its health care and Personal care
portfolio, and they are planning to distribute personal products through this channel.
Dabur had direct coverage of 55,000 chemist stores, which has now increased to 75,000;
plans to take it to 125,000 by FY15E.
Despite signs of weak discretionary demand and increased competitive intensity in the
market, Dabur India has reported comparatively better volume growth in its key
categories. On all operating parameters, its performance was satisfactory. Still,
management is cautious for margin ramp up due to high inflation in India.
"BUY"7th Mar' 14
Narnolia Securities Ltd,
Vatika hair oil
Honitus
5
Dabur India Ltd.
Please refer to the Disclaimers at the end of this Report.
Segment-wise snapshot
Dabur New Launches:
Ratnaprash
(Source: Company/Eastwind)
Fem with no ammonia Odonil Variants
(Source: Company/Eastwind)
Vatika Shampoo
Narnolia Securities Ltd,
Segments Growth (YoY)-% Key takeaways (3QFY14)
Domestic Business 24%
-Launched Vatika Enriched Olive Hair Oil,
-Shampoo grew by 25%(YOY),
-Perfumed hair oils posted 8% YoY growth,
-Dabur Chyawanprash reported healthy growth with a range of 17-18% YoY,
-Launched premium health supplement – Dabur Ratnaprash,
-Dabur Honey performing well on the back of higher demand,
-Toothpastes grew by 14% with premium offerings/added market share,
-Flattish growh in Red Toothpaste,
-Meswak on new packaging launched ,
-Honitus: Honey & Tulsi variant launched,
-Ethicals portfolio grew by 15.5% YoY,
-Hajmola performed well with positve response from Anadana variants,
-Recently launched Pudin Hara Lemon Fizz has received emense response,
-Odonil 1 Touch Freshener launched in South India,
-Odonil and Sanifresh performed well during the quarter,
-Gulabari performed well during the quarter,
-Launch of Fem Fairness Naturals with No Added Ammonia,
-Fem witnessed double digit growth led by good take from Bleaches,
-Real Fruit Juice reported double digit growth,
-Real in a new Diwali Gift packaging launched,
-Organic International Business grew by 29% with 14% constant
currency(CC) growth driven by strong growth in GCC, Egypt & Nigeria,
-Namaste business registered double digit growth in CC term,
6.9%Hair Care
17.7%
13.2%OTC & Ethicals
Digestives
16.0%Home Care
Health Supplements 19.5%
Oral Care 10.4%
Skin Care 13.4%
Foods 18.0%
International Business 26.0%
Ratnaprash
Odonil Variant
Beverage variants
Vatika Shampoo variant
Vatika hair oil
Fem portfolio with no ammonia
Pudin Hara Lemon Fizz
Vatika Hair Oi l with Hibiscus
OxyLi fe Men
Odoni l re-launched with 2x perfume content
Test launched Real Mi lk Shakes in Delhi and Punjab
Oxy life Aloe Vera Gel Bleach
Real Activ Drinking Yoghurts in mango and strawberry flavours
Hajmola Anardana
Super Babool + Salt Power
New Ethnic flavour "Kokam" under Real Burrst
Fem brand was introduced in Turkey
Odoni l Gel
Dabur's New Launches
3QFY14
Q2FY14
Q1FY14
4QFY13
Slowdown in Hair Oils segment remains for long term?
How chemist channel would play a role to opportune the gain of market share?
6
Dabur India Ltd.
Pace of innovation continues ‐ Vatika
Enriched Olive Hair Oil
launched during the quarter
Key Takeaways:
On 3QFY14, Hair Oils segment witnessed decline across categories. Marico reported only
2% YoY volume growth in parachute rigid packs and 8% YoY in value-added hair oils, Bajaj