IFIN
Indusind Bank (Buy)
CMP: Rs 270
Target: Rs 330
IIB continued to deliver well on asset quality front as gross NPAs form 1.09 per cent of gross advances and net NPA at 0.31 per cent remain healthy. Restructured assets reduced further and stood at 0.30 per cent (Rs 910mn) of gross advances, down 7 bps from 0.37 per cent in Q1FY12. Provision expenses declined 17 per cent y-o-y. Provision coverage ratio remains healthy at 72 per cent. Non-interest income continued to be the focus area for the bank. It grew 37 per cent y-o-y, led by 30 per cent increase in core fee income. Of the total core fee income 45 per cent is delinked to the balance-sheet. A higher composition being delinked to the balance-sheet assures that the growth in this segment is not limited to the growth in balance-sheet. We have arrived at the target price of Rs 330.
MSEC
Petronet LNG (Accumulate)
CMP: Rs 165.45
Target: Rs 178
PLL's 5 mtpa expansion at Dahej which is expected to take the nameplate capacity to 17.5 mtpa has been filed for DFR and the approval in expected by next month. Also, the Kochi terminal is expected to be commenced at full 5 mtpa capacity (earlier the capacity built up was scheduled in two stages of 2.5 mtpa). PLL is also planning a green-field 5 mtpa terminal in the East coast, for which a detailed feasibility study has been undertaken. These expansion projects are expected to boost PLL's growth prospects in the long-run. We recommend ACCUMULATE, with a revised target price of Rs 178 (earlier Rs 170).
Emkay Global
Coromandel International (Buy)
CMP: Rs 326.25
Target: Rs 435
Q2FY12 APAT of Rs 2.6 billion, +17 per cent y-o-y, was ahead of estimates driven by higher than estimated EBITDA margins at 13.8 per cent (85 bps y-o-y/130 bps q-o-q). Revenue growth of 5.7 per cent y-o-y to Rs 27.2 billion despite 12 per cent decline in volumes (emkay estimates) is led by higher fertiliser prices which were up by 30-40 per cent y-o-y. Volume growth to pick up in H2FY12 due to improved availability of phos acid from Tunisia and increased imports of MOP to facilitate higher NPK production. Announced bonus debenture of Rs 15 for every one share, we maintain estimates of Rs 26.4/Rs 32.3 for FY12 and FY13 respectively and maintain our BUY recommendation on the stock.
Kotak Securities
Mundra Port (Accumulate)
CMP: Rs 150.70
Target: Rs 166
Mundra Port and Special Economic Zone (MPSEZ) is the largest private port (minor port) in the country providing port services for a diversified cargo including bulk, liquid and container cargo. It also provides value added service including container rail and storage service. Its superior infrastructure and natural advantages have helped the company increase its volume at a CAGR of 33 per cent over FY06-FY11 to 52 million tonnes. The company is also aggressively expanding in other coastal parts of India and even abroad. We incorporate robust growth in volumes in medium term for MPSEZ. However, due to the recent run up in the price, we initiate coverage on the stock with an ACCUMULATE rating and a price target of Rs 166.
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