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 :7-13) 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 : 2-6) 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 : 14-15) SWARAJ ENGINES Ltd : "BOOK PROFIT" 6th Mar 2014 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 : 21-22) 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 : 16-18) Voltas Ltd : Downgrade to "Neutral"……. "NEUTRAL" 6th Mar 2014 5th Mar 2014 Healthy movies pipeline for FY15E; Company is expecting to release more than 8 big budget movies across Hindi and regional languages. Likewise, company is going to release much awaited Rajnikanth’s movie Kochadaiiyaan on 11 April, 2014. Its well positioned to monetize rich content of library ensures annuity and regular set of revenue. .......................................... ( Page :23-25) IEA-Equity Strategy 7th March, 2014 Edition : 220 EROSMEDIA :"Moving to Blockbuster" "BUY" 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 : 19-20) Narnolia Securities Ltd, India Equity Analytics Daily Fundamental Report on Indian Equities
26
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Stock Advisory for Today - Buy Stock of Dabur India Ltd and CAN FIN HOME
Narnolia Securities Limited recommend on Dabur India Ltd “Buy” view on the stock with a target price of Rs206 as well as CAN FIN HOME stock with price target of Rs.220. Neutral view on DB CORP Share
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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 :7-13)
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 : 2-6)
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 : 14-15)
SWARAJ ENGINES Ltd : "BOOK PROFIT" 6th Mar 2014
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 : 16-18)
Voltas Ltd : Downgrade to "Neutral"……. "NEUTRAL" 6th Mar 2014
5th Mar 2014
Healthy movies pipeline for FY15E; Company is expecting to release more than 8 big budget movies across Hindi and regional languages.
Likewise, company is going to release much awaited Rajnikanth’s movie Kochadaiiyaan on 11 April, 2014. Its well positioned to monetize rich
content of library ensures annuity and regular set of revenue. .......................................... ( Page :23-25)
IEA-Equity
Strategy
7th March, 2014
Edition : 220
EROSMEDIA :"Moving to Blockbuster" "BUY"
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 : 19-20)
Narnolia Securities Ltd,
India Equity AnalyticsDaily Fundamental Report on Indian Equities
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% -
2
PAT Margin
Financials
Revenue
EBITDA
PAT
EBITDA Margin
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.
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.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.
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.
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.
Previous Target Price -
Upside 19%
Change from Previous -
"Confident tone for growth"
Company update
CMP 173
Target Price 206
Share Holding Pattern-%
NSE Symbol DABUR
30246
Average Daily Volume 908049
52wk Range H/L 185/128
Mkt Capital (Rs Cr)
Market Data
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
"BUY"7th Mar' 14
Narnolia Securities Ltd,
Vatika hair oil
Honitus
3
Odonil Variants
(Source: Company/Eastwind)
Vatika Shampoo
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
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?
4
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
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