Dabur India, Exide Industries & GMR Infrastructure
DABUR INDIA
Reco price: Rs 101
Target price: NA
Dabur India has entered into an agreement with Ajanta Pharma to acquire the latter’s over–the–counter brand 30–Plus. Launched in 1990, 30–Plus is one of the oldest and strongest health care energizer brands in India. The deal value has not been disclosed (“not substantial”, according to Dabur). Dabur is actively scouting for acquisitions around Rs 50-500 crore. Ajanta plans to focus on the pharma segment, hence it sold off this brand. The segment has strong brands like Revital (from Ranbaxy) and Supractiv (from Piramal). The 30-Plus brand is fairly strong and can become much bigger with advertisement support. Also, Dabur will lend synergy in terms of distribution and OTC portfolio. Analysts expect products in the health and wellness segment to grow faster than the overall FMCG sector. Dabur has a presence in OTC segment through its recently launched product, Nutrigo. Nutrigo and 30-Plus have their own niche — the former has two variants, for men and women, the latter is an energizing capsule for thirty–plus men. Maintain buy.
— Edelweiss Securities
EXIDE INDUSTRIES
Reco price: Rs 140
Target price: Rs 167
With 17 per cent quarter-on-quarter revenue growth at Rs 1,220 crore, Exide Industries’ March quarter performance was above expectations, aided by an improvement of 217 bps in Ebitda margins to 17.4 per cent (after adjusting for Rs 20 crore towards gain on the loan repaid). Margins have expanded on higher volumes and an improved product mix due with easing capacity constraints. At 1.25:1, Exide’s product mix is likely to improve further as new capacities come on stream in the first and third quarters of this financial year. Performance of industrial business remains muted for the March quarter as well and is expected to improve from this quarter onwards due to higher seasonal demand for inverters. In 2010-11, losses from investments in ING Vyasa Life Insurance reduced sharply to Rs 35 crore (as against Rs 68 crore in 2009-10). This was due to a higher contribution from renewal premiums being collected. With increased available capacities and strong volume outlook for the replacement market (~20% volume growth), Enam has raised its 2011-12 revenue estimate by 4 per cent and EPS estimates by 2 per cent to Rs 9.1. Maintain buy.
— Enam Securities
GMR INFRASTRUCTURE
Current price: Rs 40
Fair value: Rs 43.33
ICRA Online has assigned the Fundamental Grade 3+ to GMR Infrastructure, implying the company has “good fundamentals”. The Fundamental grade factors in GMR’s sectoral and geographically diversified presence across energy, airports, roads and SEZs, imminent turnaround in airport operations, substantial ramp up in the energy segment, funds availability for immediate investment requirements and proven execution capabilities. GMR Infra has recently completed a substantial capex within the airport segment and is now at the cusp of a 10-fold increase in capacity within the energy segment. Earnings are, thus, expected to ramp up substantially, relative to past levels. Recent fund raising initiatives are expected to meet immediate equity investment requirements with the potential for further value unlocking within the energy and airport segment. Downsides could be from delays in project implementation, regulatory risks, particularly in the airport segment, weakening merchant power prices, disruptions in fuel supply and delayed land monetisation at airports.
— ICRA Online
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