Comments
MSFL Research
AIA Engg (Accumulate)
CMP: Rs 288
Target: Rs 341
AIA is gradually expanding its wings in the mining space and has primarily used pricing as a tool to penetrate the global market. Hence, it is facing pressure on overall margins since past few quarters but we expect margins to stabilise from the next fiscal year. Management has also guided for a growth of 20 per cent in both top line and bottomline in FY13. We believe demand for mill internals leading to strong volumes; capacity expansion and expansion of new business segment – quarry are likely to be long-term growth drivers for the stock. However, due to pressure on realisation and margin on account of subdued performance of AIA in cement and utilities; we revise our earnings estimates by 6.6 per cent and 7.2 per cent for FY12P and FY13P, respectively, and therefore, reduce our target multiple from 16x to 15.5xFY13P. We maintain Accumulate on the stock with a revised target price of Rs 341 (15.5xFY13P).
Emkay Global
Sun Pharma (Accumulate)
CMP: Rs 490
Target: Rs 554
Sun Pharma's second quarter in the FY12 was in-line with expectations - Revenues at Rs 1,900 crore (up 38 per cent year-on-year), EBITDA at Rs 780 crore (up 68 per cent year-on-year) and RPAT at Rs 600 crore (up 19 per cent y-o-y). Revenue growth was led by 15 per cent growth in domestic business and 77 per cent growth in US business largely driven by Taro and new launches – Gemzar, Taxotere, Uroxatral and Imitrex. Going forward, management has maintained its guidance of 28-30 per cent growth in top-line for FY12. With strong traction from Taro and a stable domestic business – we maintain accumulate rating with a revised target price of Rs 554.
Arihant Capital
Visa Steel (Reduce)
CMP: Rs 58
Target: Rs 47
Visa steel has completed 0.5 million tonne expansion, however, given the current global macroeconomic uncertainties and sluggish demand outlook in domestic market, full benefit of expansion is unlikely to accrue over FY12E and expect utilisation levels to gradually ramp up in FY13. Going forward, we expect margin pressure to ease out as raw material prices have started cooling down. We have cut down our FY12E and FY13E estimates by 48 per cent and 34 per cent, respectively, to account for sluggish demand scenario, slower than estimated ramp up at expanded capacities and higher interest cost. We have valued Visa Steel at 5x FY13E EBITDA and have come out with a fair value of Rs 47 a share. At CMP of Rs 58, the stock is trading at 5.5x FY13E EBITDA and 7.1x FY13E EPS. We recommend reduce on the stock.
KJMC Research
IRB Infra (Buy)
CMP: Rs 147
Target: Rs 236
IRB Infrastructure Developers Ltd's Q2FY12 results were inline with our expectation on account of strong contribution from construction business. The company reported consolidated Q2FY12 net revenue of Rs 735 crore with growth of 50 per cent (y-o-y). The construction segment witnessed strong 78.6 per cent y-o-y growth in Q2FY12 at Rs 527 crore. IRB witnessed 452 bps decline in consolidated EBITDA margin at 43.7 per cent led by higher contribution from (low margin) EPC business. The EBITDA and PAT for the quarter grew by 36 per cent and 11 per cent y-o-y to Rs 320 crore and Rs 110 crore respectively. Order book at the end of the quarter was at Rs 9,635 crore which included Rs 2,067 crore of O&M order.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.