email: [email protected], website : www.narnolia.com Narnolia Securities Ltd, 402, 4th floor 7/1, Lords Sinha Road Kolkata 700071, Ph 033-32011233 Toll Free no : 1-800-345-4000 JLR VOLUME UPDATE : NOVEMBER 2013 16th Dec 2013 JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the company for the month sold 37403 units up by 25% YoY. This total volume of JLR includes 6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is marked by stellar performance by Jaguar .................................................... ( Page : 2) IEA-Equity Strategy 16th Dec, 2013 Amara Raja Batteries Limited : OPTIMISTIC MANAGEMENT SPEECH "BUY" 6th Dec 2013 Amara Raja had posted its 2QYFY14 sales at Rs 805 Cr up by 12.3 % YoY on the back of the strong demand in the automotive replacement and industrial battery business. There was double digit growth in both of these segments.The automotive battery business reported double digit growth in revenues........................................ ( Page : 16-17) NIIT Tech : "Next Journey to Billion Dollar" "BUY" 9th Dec 2013 NIIT Tech management expressed its confidence of driving growth in the organization and looking at an aspirational goal of USD 1 billion revenue in next 5 years.its order wins in the recent quarters have been healthy, lending visibility on revenue growth. At a CMP of Rs332, trades at 7.5x FY14E earnings. We retain “ buy” view on the stock with a price target of Rs360 (revised from Rs310)............................................. ( Page : 14- 15) TATA Steel Ltd : "HOLD" 10th Dec 2013 Over the past two quarters, Tata Steel has reported strong growth in volumes in the domestic operations despite weak demand. Its Europe operations have been broadly better than expectations indicating some stability and predictability from its Europe operations. Tata Steel’s earnings growth is likely to be driven by higher sales volume in FY2014-15 on the back of 2.9mn ton brownfield expansion project in Jamshedpur and steady improvement in profitability of European operations. We have arrived at "Hold" rating on the stock watching our step for a target price of Rs.340 in near term. ................... ( Page : 10-13) LUPIN : "Optimistic Guidance " "BUY" 11th Dec 2013 The management of the company in its latest interaction said that company is confident of logging 15-20 % CAGR in US and India in the days to come on the back of rich pipeline as well as acquisition based strategy . ……………………………………… ( Page : 8-9) COAL INDIA : "BUY" 12th Dec 2013 We expect modest increase in sales volumes growth during FY2013-15 on account of poor offtake capabilities of CIL. Also, we expect CIL’s margins to decline during FY2014 due to lower e-auction realizations and higher staff costs/other expenses.News flows related to further divestment in CIL by the government is likely to keep the stock price under pressure in our view. we recommend Buy rating on the stock with our previous target price Rs.350............................................ ( Page : 5-7) Persistent System : "Persistently innovating.." "BUY" 13th Dec 2013 With the potential revenue growth, strong deal pipeline and multi-year relationships with marquee clientele in the Infrastructure vertical, we upgrade this stock and expect for better earning visibility across niche IT players.we rate “BUY” on the stock and we revise our target price from Rs 890to Rs 960. At a CMP of Rs 876, stock trades at 13.8x FY14E earnings........................ ( Page : 3-4) India Equity Analytics
India Equity Analytics highlights the JLR volume update which came in November 2013 with annual increase by 25%. The JLR includes 6244 units of Jaguar and 31159 units of Land Rover.
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JLR wholly owned subsidiary of Tata Motors come up with November 2013 volume, the company for the month sold 37403 units up by 25%
YoY. This total volume of JLR includes 6244 units of Jaguar and 31159 units of Land Rover. This month’s performance in particular is marked by
stellar performance by Jaguar .................................................... ( Page : 2)
IEA-Equity
Strategy
16th Dec, 2013
Amara Raja Batteries Limited : OPTIMISTIC MANAGEMENT SPEECH "BUY" 6th Dec 2013
Amara Raja had posted its 2QYFY14 sales at Rs 805 Cr up by 12.3 % YoY on the back of the strong demand in the automotive replacement and
industrial battery business. There was double digit growth in both of these segments.The automotive battery business reported double digit
growth in revenues........................................ ( Page : 16-17)
NIIT Tech : "Next Journey to Billion Dollar" "BUY" 9th Dec 2013
NIIT Tech management expressed its confidence of driving growth in the organization and looking at an aspirational goal of USD 1 billion
revenue in next 5 years.its order wins in the recent quarters have been healthy, lending visibility on revenue growth. At a CMP of Rs332, trades
at 7.5x FY14E earnings. We retain “ buy” view on the stock with a price target of Rs360 (revised from Rs310)............................................. (
Page : 14- 15)
TATA Steel Ltd : "HOLD" 10th Dec 2013
Over the past two quarters, Tata Steel has reported strong growth in volumes in the domestic operations despite weak demand. Its Europe
operations have been broadly better than expectations indicating some stability and predictability from its Europe operations. Tata Steel’s
earnings growth is likely to be driven by higher sales volume in FY2014-15 on the back of 2.9mn ton brownfield expansion project in
Jamshedpur and steady improvement in profitability of European operations. We have arrived at "Hold" rating on the stock watching our step
for a target price of Rs.340 in near term. ................... ( Page : 10-13)
LUPIN : "Optimistic Guidance " "BUY" 11th Dec 2013
The management of the company in its latest interaction said that company is confident of logging 15-20 % CAGR in US and India in the days to
come on the back of rich pipeline as well as acquisition based strategy . ……………………………………… ( Page : 8-9)
COAL INDIA : "BUY" 12th Dec 2013
We expect modest increase in sales volumes growth during FY2013-15 on account of poor offtake capabilities of CIL. Also, we expect CIL’s
margins to decline during FY2014 due to lower e-auction realizations and higher staff costs/other expenses.News flows related to further
divestment in CIL by the government is likely to keep the stock price under pressure in our view. we recommend Buy rating on the stock with
Provision for Taxes 14.42 32.3 63.75 75.05 105.64 131.26
Net Profit (+)/Loss (-) 127.65 185.41 196.46 218.4 265.03 321.37
Growth-% (YoY)
Sales -6.8% 34.9% 27.9% 28.2% 18.0% 20.1%
EBITDA 2.3% 39.7% 13.6% 21.9% 12.3% 23.9%
PAT 9.6% 45.2% 6.0% 11.2% 21.4% 21.3%
Expenses on Sales-%
Employee Cost 55.1% 48.8% 56.5% 55.2% 56.5% 55.5%
Other expenses 26.2% 31.9% 26.3% 28.5% 28.0% 28.5%
Tax rate 10.1% 14.8% 24.5% 25.6% 28.5% 29.0%
Margin-%
EBITDA 18.6% 19.3% 17.1% 16.3% 15.5% 16.0%
EBIT 14.7% 16.7% 14.8% 13.5% 12.7% 13.4%
PAT 14.0% 15.0% 12.5% 10.8% 11.1% 11.2%
Valuation:
CMP 170.25 184.65 270.9 262.35 332 332
No of Share 5.88 5.93 5.96 6.02 6.02 6.02
NW 579.78 752.11 922.2 1094.12 1350.45 1662.62
EPS 21.7 31.3 33.0 36.3 44.0 53.4
BVPS 98.6 126.8 154.7 181.7 224.3 276.2
RoE-% 22.0% 24.7% 21.3% 20.0% 19.6% 19.3%
P/BV 1.7 1.5 1.8 1.4 1.5 1.2
P/E 7.8 5.9 8.2 7.2 7.5 6.2
BUY Company hopeful to maintain double digits growth for second half of the year.
1M 1yr YTD
Absolute 4.0 29.0 69.0
Rel. to Nifty 5.0 23.0 53.0
Current 1QFY14 4QFY1
3Promoters 52.1 52.1 52.1
FII 11.1 10.8 10.1
DII 15.0 14.2 15.3
Others 21.9 22.9 22.6
Financials Rs, Crore
2QFY14 1QFY14 (QoQ)-% 2QFY13 (YoY)-%
Revenue 807 894 (9.7) 719 12.2
EBITDA 142 145 (2.1) 118 20.3
PAT 95 98 (3.1) 70 35.7
EBITDA Margin 17.6% 16.2% 140bps 16.4% 120bps
PAT Margin 11.8% 11.0% 80bps 9.7% 200bps
16
The operating EBITDA for the 2QFY14 came at Rs 142 Cr and OPM at 17.6%.The OPM
improves by nearly 118 bps mainly due to decrease in purchase of stock in trade as
percentage of sales. The purchase of stock in trade as percentage of sales stands at 3%
versus 7% for the same time last fiscal. However RM cost to sales have increased to 64%
from 59% due to rise in the price of major component of RM, lead and an employee benefit
cost was higher by 60 bps to 4.8% during the period.
The management of the company after results said that company will maintain its margins at
17-18 % for the rest of the fiscal with no pricing moderation. The management further said
that company is confident of maintaining double digit growth for the second half of the year.
The company believes that there is improvement in the market share.
The Company's effort to enhance the capacities of Two-wheeler battery in the existing plant
has witnessed some delay and is likely to go on stream by end January 2014. The enhanced
capacities will support the Company to commence business with other major Two-wheeler
OEM's and to grow the aftermarket business in a big manner. The green field project for
enhancement of Four-wheeler capacity is progressing as per schedule and is likely to
commence production by Q2 of next financial year.
Target Price 365
Previous Target Price 315
CMP 328
4%
Upside
Amara Raja Batteries Limited
OPTIMISTIC MANAGEMENT SPEECH
Result Update
One Year Forward P/Bv Band
(Source: Company/Eastwind)
5,606
Average Daily Volume 163647
Nifty 6241
AMARAJABAT
Stock Performance-%
Share Holding Pattern-%
Mkt Capital (Rs, Cr)
Please refer to the Disclaimers at the end of this Report.
52wk Range H/L 342/207
11%
Market Data
BSE Code 500008
The stock is currently trading at CMP Rs 328 and it has achieve our first TP Rs 315.The
strong 2QFY14 results , Optimistic management speech and strong business outlook going
forward raises positive view on the stock. We have slightly tweaked our TP up to Rs 365 on
the back of above fundamental reasons.
NSE Symbol
Change from Previous
Amara Raja had posted its 2QYFY14 sales at Rs 805 Cr up by 12.3 % YoY on the back of
the strong demand in the automotive replacement and industrial battery business. There
was double digit growth in both of these segments.
The automotive battery business reported double digit growth in revenue, supported by
strong volume expansion both in 4 wheeler and 2 wheeler batteries in the replacement
market, however the OEM demand continued to be sluggish. The trading volume in the
home UPS business suffered due to unfavorable season on account of mild summer and
good monsoon.
The net profits for the 2QFY14 came at Rs 95 Cr and NPM at 11.7% .The other income for
the quarter came at Rs 7 Cr and Tax rate stands at 29 %.
"BUY" 06th
Dec' 13
Narnolia Securities Ltd,
17
Please refer to the Disclaimers at the end of this Report.
RM Cost as % Sales
(Source: Company/Eastwind)
Lead costs which accounts for a major chunk
of its expenses were higher than the year ago
quarter. As a per cent of sales, raw materials
were at 64 % up 500 bps over the year-ago
period.
(Source: Company/Eastwind)
SALES & PAT TREND
The expansion in OPM seems largely due to
decrease in purchase of stocks in trade costs
by 430 bps to 3% .
Growth in sales came on the back of the
strong demand in the automotive
replacement and industrial battery business.
There was double digit growth in both of
these segments.
Amara Raja Batteries Limited
OPM & NPM TREND
(Source: Company/Eastwind)
Narnolia Securities Ltd,
18
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