Nirmal Bang

Maruti Suzuki (Hold)

CMP: Rs 1,253

Target: Rs 1,333

We expect margins to improve gradually from the historic lows of 5.4 per cent in Q3FY12. Comparatively higher sales coupled with lower raw material cost should drive expansion in EBITDA margin in FY13. Therefore, we expect conditions to improve from FY13 with ramping up of production, higher capacity, price hike, stable interest rates and new launches. However, the stock has seen a strong run-up in the past few weeks, up +25 per cent from the recent bottom (since mid-December).

In our view, upside from these levels will be largely dependent on improving sales. However, we do suggest buying the stock on decline.

ONGC (Buy)

CMP: Rs 283

Target: Rs 338

The Ministry of Petroleum and Natural Gas has increased 3QFY12 subsidy burden of upstream oil companies to 47.09 from 33.33 per cent (last nine-month average at 37.91 per cent). Following higher contribution, ONGC's subsidy burden will increase to $63.59/bbl in 3QFY12 from our estimate of $45.83/bb. We have always maintained that given the likely higher under-recoveries in FY12, the Government will not allow net realisation to move beyond $56.00/bbl for ONGC, with upstream companies' overall contribution being more than 39 per cent.

If the Government maintains 39 per cent upstream companies' contribution and total under-recoveries touch Rs 1.42 trillion in FY12, our FY12 EPS for ONGC stands reduced by two per cent.

MSFL Research

Manappuram Fin (Buy)

CMP: Rs 57

Target: Rs 76

The results for MGFL came at a variance of plus 2-7 per cent on all income heads. The NII growth for Q3FY12 came at 84 per cent y-o-y driven predominantly by a 90 per cent increase in AUM. Moreover, due to a better management at the expenditure front, the earnings grew by 116 per cent.

During the quarter, in the midst of volatile gold prices, MGFL managed a smart sequential accretion of 16.6 per cent in AUM with assignment comprising nine per cent of the AUM. The quantum of growth in ticket size and an analogous growth in gold stock + gold price indicate sustained/low levels of LTV's at initiation. Trend in NPLs continues to comfort at 0.19 per cent level NNPA.

Emkay Global

Marico (Accumulate)

CMP: Rs 161

Target: Rs 172

Upbeat volume growth drives performance in Q3FY12; Revenue +29.4 per cent y-o-y to Rs 1,006 crore, EBIDTA +22.1 per cent Rs 120 crore and APAT +21 per cent Rs 84.1 crore. Domestic business registered volume growth of 13 per cent and International business registered organic growth of 16 per cent. Shares has optimistic outlook, volume growth of 10-12 per cent in FY13; We foresee strong earnings performance in ensuing quarter and retain FY13E earnings at Rs 7.5/share.

comment COMMENT NOW