Weekly Call - Buy CAIRN above 335 for the short term to medium term target of 360/378, keep SL @ 322

Weekly Call - Buy CAIRN above 335 for the short term to medium term target of 360/378, keep SL @ 322 

Outlook - The stock formed head and shoulder reversal pattern which is a bullish pattern on the weekly chart. The stock has given a breakout from the neckline resistance level of 328 indicating short term to medium term trend is positive. The momentum indicators such as MACD & RSI on the both weekly & daily chart confirms the CAIRN would continue to maintain its uptrend. The stock has been trading within the rising channel with steady volumes on the weekly chart suggesting that the uptrend will continue. The stock is likely to remain uptrend and it can move towards 353/360 in near term. Above 360, it could test at 378. On the downside, the short term key support will be at 322/318.

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70. 

Outlook - The stock produced ‘bullish engulfing’ pattern on candlestick on weekly chart which is a bullish structure. The daily’s volume action in the counter was quiet encouraging and RSI also exhibits strength in the short term and has been successful in holding above the levels of 50. Moreover, on weekly chart, the stock has given a close near its falling resistance line, suggesting that positive momentum. The stock would remain bullish and it has found the key resistance level of 24.40 and 29.90. Break out of 29.90 levels would invite further buying and then the stock may face the upside targets of 28.90/30.70 levels. On the lower side, the support lies at 21 and 20.45 levels.

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70. 

Outlook - The stock produced ‘bullish engulfing’ pattern on candlestick on weekly chart which is a bullish structure. The daily’s volume action in the counter was quiet encouraging and RSI also exhibits strength in the short term and has been successful in holding above the levels of 50. Moreover, on weekly chart, the stock has given a close near its falling resistance line, suggesting that positive momentum. The stock would remain bullish and it has found the key resistance level of 24.40 and 29.90. Break out of 29.90 levels would invite further buying and then the stock may face the upside targets of 28.90/30.70 levels. On the lower side, the support lies at 21 and 20.45 levels.

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70

Weekly Call - Buy SREINFRA above 22.90 with a stop loss of 21, for a potential target of 28.90/30.70. 

Outlook - The stock produced ‘bullish engulfing’ pattern on candlestick on weekly chart which is a bullish structure. The daily’s volume action in the counter was quiet encouraging and RSI also exhibits strength in the short term and has been successful in holding above the levels of 50. Moreover, on weekly chart, the stock has given a close near its falling resistance line, suggesting that positive momentum. The stock would remain bullish and it has found the key resistance level of 24.40 and 29.90. Break out of 29.90 levels would invite further buying and then the stock may face the upside targets of 28.90/30.70 levels. On the lower side, the support lies at 21 and 20.45 levels.

Buy Idea Cellular Ltd For Target Rs.200 - Motilal Oswal

*   Idea’s consolidated EBITDA increased 39.5% YoY and 4.3% QoQ to INR20.56b (v/s est of INR20.75b), broadly in line with the voice traffic growth of 4.1% QoQ.

*   PAT grew 105% YoY and 4.5% QoQ to INR4.68b, lower than estimate of INR5.06b due to ~INR600m impact from higher depreciation due to change in estimated useful life of certain fixed assets as well as EBITDA shortfall.

*   EBITDA margin declined 9bp QoQ to 31.1%. Operating costs were above estimates primarily due to higher ad spends (subscriber acqn, servicing and marketing expenses up 70bp QoQ).

*   Consolidated revenue grew 18.5% YoY and 4.6% QoQ to INR66.13b (est INR65.73b), primarily driven by voice traffic (+4.1% QoQ to 144.6b minutes v/s estimate of 144.8b minutes).

*    RPM improved only marginally (+0.4% QoQ to 44.9p vs our est of 44.6p) v/s ~2% QoQ increase in 2QFY14 and ~6% QoQ increase in 1QFY14.

*    Data revenue increased 14% QoQ led by 19% QoQ increase in data traffic. Data as % of revenue increased from 8.7% in 2QFY14 to 9.5% in 3QFY14. However non-voice contribution remained flat QoQ at 16.1% as non-data VAS revenue continued to decline.

*   Consolidated net debt declined by INR4.6b QoQ to INR100.9b. 3QFY13 capex stood at INR 10.2b. Capex guidance for FY14 remains unchanged at INR35b vs 9MFY14 capex of 22.3b.

Valuation and view

*    While Idea’s 3QFY14 results were broadly in-line, upcoming spectrum auction would be the key event to watch-out given 1) Expected participation of Reliance JIO, and 2) Likely bidding by Idea to address the gaps in data spectrum footprint.

*    Our EBITDA estimates are largely unchanged but PAT estimates have been downgraded by 2-5% led by change in accounting policy for depreciation.

*    We expect an EBITDA CAGR of 16% over FY14-16E. The stock trades at EV/EBITDA of 5.4x FY15E. Maintain Buy with a price target of INR200.

To Read Complete Report Click Here

Disclaimer: ADVICE RECEIVED VIA THIS WEB SITE SHOULD NOT BE RELIED UPON FOR PERSONAL, MEDICAL, LEGAL OR FINANCIAL DECISIONS AND YOU SHOULD CONSULT AN APPROPRIATE PROFESSIONAL FOR SPECIFIC ADVICE TAILORED TO YOUR SITUATION. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA MAKES NO REPRESENTATIONS ABOUT THE SUITABILITY, RELIABILITY, TIMELINESS, AND ACCURACY OF THE INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS CONTAINED ON THIS WEB SITE FOR ANY PURPOSE. ALL SUCH INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HEREBY DISCLAIMS ALL WARRANTIES AND CONDITIONS WITH REGARD TO THIS INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS, INCLUDING ALL IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OR PERFORMANCE OF THIS WEB SITE, WITH THE DELAY OR INABILITY TO USE THIS WEB SITE, THE PROVISION OF OR FAILURE TO PROVIDE SERVICES, OR FOR ANY INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS OBTAINED THROUGH THIS WEB SITE, OR OTHERWISE ARISING OUT OF THE USE OF THIS WEB SITE, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HAS BEEN ADVISED OF THE POSSIBILITY OF DAMAGES. BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. IF YOU ARE DISSATISFIED WITH ANY PORTION OF THIS WEB SITE, OR WITH ANY OF THESE TERMS OF USE, YOUR SOLE AND EXCLUSIVE REMEDY IS TO DISCONTINUE USING THIS WEB SITE. MUTUAL FUND INVESTMENTS IS SUBJECT TO MARKET RISK. PLEASE READ THE COMPLETE OFFER DOCUMENT, PRODUCT BROCHURE BEFORE MAKING INVESTMENTS. BEFORE INVESTING IN INSURANCE PLEASE READ THE COMPLETE PRODUCT DETAILS AND TAKE REGISTERED EXPERT ADVICE TO UNDERSTAND THE FINER POINTS & DETAILS OF THE PRODUCTS.

Buy Ipca Laboratories Ltd For Target Rs.1,000 - Motilal Oswal

Operational performance above estimates

*   Sales grew 19% YoY to INR8.3b (v/s est. INR8b), EBITDA rose 37% to INR2.2b (higher than est. INR1.8b), with EBITDA margin up 350bp YoY at 26.1% (v/s est. 22.2%). PAT grew 58% YoY to INR1.4b (v/s est. INR1.2b).

*   Revenue growth was led by 20% growth (v/s est. 16%) in export formulations, while domestic formulations grew 16% (v/s est. 14%). Total APIs grew 15% YoY (v/s est. 11%), led by export APIs.

*   Strong operational performance continues to be led by robust expansion in gross margins. Management attributed this to improved sales mix as international branded formulations and institutional tender sales report high margins. PAT was above estimate mainly due to stronger-than-expected operational performance.

*   Guidance: Management has guided to sustain the current growth rate in domestic formulations, while international branded formulations is likely to grow 25-30% over the next few quarters. Ramp-up in Indore SEZ is expected to drive export generics growth above 30%. EBITDA margin is expected to sustain at 25% on account of improving sales mix in the medium term.

Post 3QFY14 result, we have upgraded the FY14E/15E/16E EPS estimate by 8%/6%/5% primarily to reflect the improvement in gross margins reported in 9MFY14. We expect IPCA’s sales to witness a CAGR of 19% over FY13-16E, led by international branded formulations and US, while domestic formulations is expected to grow at 16% over the next two years. Institutional Business could be lumpy on a quarterly basis but is likely to deliver 15% sales CAGR over this period. We see a shift in company’s margin profile and expect further margin expansion through an improving sales mix and vertical integration benefits. We believe current valuations of 15.7x FY15E EPS and 12.7x FY16E EPS do not factor the strong earnings CAGR of 35% over FY13-16E. We maintain a Buy with a revised target price of INR1,000 (16x FY16E EPS), 25% upside. IPCA is our best pick in the mid cap pharma space.

Valuation and view

*   Post the 3QFY14 result, we have upgraded our FY14E/15E/16E EPS estimate by 8%/6%/5% primarily to reflect improvement in gross margins reported in 9MFY14.

*   We expect IPCA’s sales to witness a CAGR of 19% over FY13-FY16 led by international branded formulations and US while domestic formulations is expected to grow at 16% over the next two years. Institutional Business could be lumpy on a quarterly basis but is likely to deliver 15% sales CAGR over this period.

*   We see a shift in margin profile of the company and see further margin expansion through an improving sales mix as well as vertical integration benefits.

*   We believe current valuations of 15.7x FY15E EPS and 12.7x FY16E EPS do not factor in the strong earnings CAGR of 35% over FY13-FY16E.

*   We maintain Buy with a revised target price of INR1,000 (16x FY16E EPS), 25% upside. IPCA is our best pick in the mid cap pharma space.

To Read Complete Report Click Here

Disclaimer: ADVICE RECEIVED VIA THIS WEB SITE SHOULD NOT BE RELIED UPON FOR PERSONAL, MEDICAL, LEGAL OR FINANCIAL DECISIONS AND YOU SHOULD CONSULT AN APPROPRIATE PROFESSIONAL FOR SPECIFIC ADVICE TAILORED TO YOUR SITUATION. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA MAKES NO REPRESENTATIONS ABOUT THE SUITABILITY, RELIABILITY, TIMELINESS, AND ACCURACY OF THE INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS CONTAINED ON THIS WEB SITE FOR ANY PURPOSE. ALL SUCH INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HEREBY DISCLAIMS ALL WARRANTIES AND CONDITIONS WITH REGARD TO THIS INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS, INCLUDING ALL IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OR PERFORMANCE OF THIS WEB SITE, WITH THE DELAY OR INABILITY TO USE THIS WEB SITE, THE PROVISION OF OR FAILURE TO PROVIDE SERVICES, OR FOR ANY INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS OBTAINED THROUGH THIS WEB SITE, OR OTHERWISE ARISING OUT OF THE USE OF THIS WEB SITE, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HAS BEEN ADVISED OF THE POSSIBILITY OF DAMAGES. BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. IF YOU ARE DISSATISFIED WITH ANY PORTION OF THIS WEB SITE, OR WITH ANY OF THESE TERMS OF USE, YOUR SOLE AND EXCLUSIVE REMEDY IS TO DISCONTINUE USING THIS WEB SITE. MUTUAL FUND INVESTMENTS IS SUBJECT TO MARKET RISK. PLEASE READ THE COMPLETE OFFER DOCUMENT, PRODUCT BROCHURE BEFORE MAKING INVESTMENTS. BEFORE INVESTING IN INSURANCE PLEASE READ THE COMPLETE PRODUCT DETAILS AND TAKE REGISTERED EXPERT ADVICE TO UNDERSTAND THE FINER POINTS & DETAILS OF THE PRODUCTS.

Accumulate Deepak Fertilisers For Target Rs.135 - Prabhudas Lilladher Ltd

Deepak Fertilisers’ Q3FY14 results surprised positively, driven by higher top‐line as well as better margins in fertiliser. Top‐line growth of 63% YoY was driven by higher manufacturing as well as trading in both chemicals and fertilisers segment. Chemicals margins improved 260bps QoQ to 13.1% driven by improvement in realization along with stabilization of raw material prices. Fertiliser margins improved significantly to 13.7% (530bps YoY/300bps QoQ) benefitting from margin improvement in specialty fertilisers and higher manufactured fertilisers. Adjusted PAT stood at Rs699m, 121% YoY. With ramp‐up in TAN operations, opportunity in chemical trading and higher manufactured fertiliser volumes, we expect revenues to increase at a CAGR of 15.4% over FY13‐16E. We maintain ‘Accumulate’ (21% earnings CAGR over FY13‐16E, attractive valuations, 5% dividend yield, 30% discount to book value) with target price of Rs135. However, increase in gas prices, going forward, are likely to remain a key overhang on the stock in the near‐term.

*  Top‐line growth of 63% YoY along with margin improvement boosted PAT:

Deepak Fertilisers reported revenues of Rs10.1bn, 63% YoY (PLe: Rs8.6bn) driven by higher chemicals as well as fertiliser revenues. EBITDA for the quarter stood at Rs1.3bn, 91% YoY with margins of 13.1%. (PLe: Rs1.0bn with margins of 11.7%). Adjusted PBT for the quarter stood at Rs962m, 130% YoY (PLe: Rs706m). Adjusted PAT stood at Rs699m, 121% YoY (PLe: Rs523m). We have adjusted for Rs111m of VRS-related cost included in the current quarter results and Rs55m of MTM gain included in the fertiliser segment. Reported PAT stood at Rs643m, 103% YoY. We have not adjusted for EO losses of Ishanya of Rs53m included in results. On a 9M basis, adjusted EPS stands at Rs19.7.

*   Chemicals reported revenues significantly ahead of estimates; margins improved 260bps QoQ to 13.1%:

Chemicals reported revenues of Rs6.5bn, 57% YoY (PLe: Rs5.4bn), driven by higher manufacturing volumes and traded chemicals. Manufactured chemicals recorded revenues of Rs5.2bn, 43% YoY (PLe: Rs4.6bn), while traded chemicals reported revenues of Rs1.3bn (PLe: Rs800m). Key products like Iso Propyl Alcohol and Technical Ammonium Nitrate registered a growth of 12% and 36%, respectively. Adjusted chemicals margins improved 260bps QoQ to 13.1% (reported chemicals margins stood at 12.6%; 50% of the Rs111m VRS-related costs was in chemicals segment). Margins benefitted from easing of ammonia prices and better realization of products including, Methanol and IPA.

*   Fertilisers performance impressive:

Fertiliser segment reported revenues of Rs4.0bn, 78% YoY (PLe: Rs3.6bn) driven by higher trading. Traded fertiliser revenues stood at Rs1.9bn (PLe: Rs1.6bn) driven by higher specialty fertiliser trading. Manufactured fertilisers reported revenues of Rs2.1bn, 105% YoY (PLe: Rs2.0bn) led by higher volumes of ANP manufactured fertiliser. ANP sales volumes stood at 77,077mt, 120% YoY. Adjusted fertiliser margins stood at 13.7%. Fertiliser margins benefitted from margin improvement in specialty fertilisers. Going forward, management highlighted that sustainable margins in fertilisers will be 10-12%.

*   Maintain ‘Accumulate’ with target price of Rs135:

Deepak Fertilisers is currently trading at 4.7x FY15E earnings, which is at a discount of 30% to its long-term average. We recommend ‘Accumulate’, with target price of Rs135. Dividend yield of 5.0% prevents further downside risk. Increase in gas prices and reduction in APM gas for complex fertiliser production remains a key overhang on the stock.

To Read Complete Report Click Here

Disclaimer: ADVICE RECEIVED VIA THIS WEB SITE SHOULD NOT BE RELIED UPON FOR PERSONAL, MEDICAL, LEGAL OR FINANCIAL DECISIONS AND YOU SHOULD CONSULT AN APPROPRIATE PROFESSIONAL FOR SPECIFIC ADVICE TAILORED TO YOUR SITUATION. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA MAKES NO REPRESENTATIONS ABOUT THE SUITABILITY, RELIABILITY, TIMELINESS, AND ACCURACY OF THE INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS CONTAINED ON THIS WEB SITE FOR ANY PURPOSE. ALL SUCH INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HEREBY DISCLAIMS ALL WARRANTIES AND CONDITIONS WITH REGARD TO THIS INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS, INCLUDING ALL IMPLIED WARRANTIES AND CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT. IN NO EVENT SHALL INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL DAMAGES OR ANY DAMAGES WHATSOEVER INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF USE, DATA OR PROFITS, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE USE OR PERFORMANCE OF THIS WEB SITE, WITH THE DELAY OR INABILITY TO USE THIS WEB SITE, THE PROVISION OF OR FAILURE TO PROVIDE SERVICES, OR FOR ANY INFORMATION, SOFTWARE, PRODUCTS, SERVICES AND RELATED GRAPHICS OBTAINED THROUGH THIS WEB SITE, OR OTHERWISE ARISING OUT OF THE USE OF THIS WEB SITE, WHETHER BASED ON CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF INVESTMENTGURUINDIA.COM OR BDTECHINFO MEDIA HAS BEEN ADVISED OF THE POSSIBILITY OF DAMAGES. BECAUSE SOME STATES/JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, THE ABOVE LIMITATION MAY NOT APPLY TO YOU. IF YOU ARE DISSATISFIED WITH ANY PORTION OF THIS WEB SITE, OR WITH ANY OF THESE TERMS OF USE, YOUR SOLE AND EXCLUSIVE REMEDY IS TO DISCONTINUE USING THIS WEB SITE. MUTUAL FUND INVESTMENTS IS SUBJECT TO MARKET RISK. PLEASE READ THE COMPLETE OFFER DOCUMENT, PRODUCT BROCHURE BEFORE MAKING INVESTMENTS. BEFORE INVESTING IN INSURANCE PLEASE READ THE COMPLETE PRODUCT DETAILS AND TAKE REGISTERED EXPERT ADVICE TO UNDERSTAND THE FINER POINTS & DETAILS OF THE PRODUCTS.