Tuesday, March 8, 2011

Analysts' corner Bse Nse Stock

Sterlite Industries, Areva T&D & GVK Power and Infrastructure
SI Team / Mumbai March 08, 2011, 0:33 IST

Reco Price: Rs 168,
Target Price: Rs 206

Sterlite Industries India (SIL) has completed acquisition of the zinc and lead businesses of Anglo American (Anglo) for a total consideration of $1.5 billion (excluding cash in Anglo). Analysts believe the acquisition will contribute 14 per cent to consolidated Ebitda in 2011-12 and will be earnings accretive. Though Sterlite Energy (SEL) has received coal linkage for its entire 2,400-Mw power plant at Jharsuguda, analysts expect availability of only 50 per cent linkage coal as Coal India faces production issues. Moreover, this coal from MCL will now be available at a higher cost. The balance will be procured through a mix of e-auction and imports. Edelweiss has revised down SEL’s Ebitda 43 per cent from earlier estimate. In the light of higher availability of copper concentrate, its Ebitda for the copper business is upgraded by 5 per cent for 2011-12 and contribution from silver in 2011-12 by 90 per cent. Maintain buy.

— Edelweiss Securities

Reco Price: Rs 267,
Target Price: Rs 236

Areva T&D (Areva) reported good numbers in the fourth quarter of 2010 calendar year. Revenue for the quarter grew 14.4 per cent YoY to Rs 1,330 crore. Growth was primarily driven by strong volume growth as pricing was significantly lower for orders taken in 2009 and 2010 calendard years. The management indicated a priced erosion of about 20-30 per cent for orders taken in 2009 and 2010. Management says revenue for the quarter was marginally hit by delayed clearance from customers. Order intake for the quarter declined 8.7 per cent YoY to Rs 1,300 crore. This led to only 2 per cent growth YoY in order book to Rs 4,880 crore at the end of 2010. While pricing remains a concern, further price erosion has halted. The company is hopeful that pricing will improve with higher ordering activity in the second half of 2011, while competition from Chinese and Korean manufacturers remains intense. Ebitda margin for the fourth quarter of 2010 improved 140 basis points to 13.4 per cent YoY due to higher operating efficiency and operating leverage benefit. Interest expense grew 26.2 per cent YoY to Rs 22 crore, driven by higher working capital requirement and a rise in interest rates. Net profit stood at Rs 88 crore, up 52 per cent YoY. Maintain sell.

— Reliance Securities


Reco Price: Rs 26,
Target Price: Rs 45
According to media reports, GVK has bought a 13.5 per cent stake in Mumbai Airport from Bidvest for $280 million. This would value Mumbai Airport at $2.07 billion compared to the implied value of $2.3 billion used in Citigroup’s current GVK SOTP valuation. This is positive for GVK because it acquires a controlling stake — with its total stake going up to 50.5 per cent, and it has been acquired at a 9 per cent discount to Citigroup’s value for Mumbai Airport. Analysts believe the acquisition will be debt-funded. The transaction is be subject to regulatory approvals. Citigroup has valued the operational assets at Rs 39 and the assets under development at Rs 6.

— Citigroup

Current price: Rs 31,
Fair value: Rs 39

Crisil Equities has assigned a fundamental grade of 2/5 to Chaman Lal Setia Exports Ltd (Chaman Lal), indicating ‘moderate’ fundamentals. Chaman Lal holds a reputable position in the fast-growing basmati rice industry. The company’s strong R&D focus has helped differentiate itself by developing innovative products like diabetic and pesticide-free basmati rice. Crisil Equities expects the company’s revenues to grow at a two-year CAGR of 5 per cent to Rs 200 crore in 2011-12. EPS is expected to be Rs 9.5 in 2010-11 and Rs 12.9 in 2011-12.

— Crisil Equities 

       Related Articles

No comments:

Post a Comment