DLF
Aashiesh Agarwaal, Edelweiss Securities: DLF reported Q2FY14 in-line revenues at Rs 19.5 billion and EBITDA of Rs 6 billion ths lower than estimates due to completion of older projects. We believe most risks are priced in and the stock is trading at an attractive 39% discount to NAV/TP of Rs 249. Hence, we maintain 'BUY/Sector Performer'
Dr Reddy's
Rahul Sharma, Karvy Stock Broking: DRL's revenues rose by 16.5% YoY at Rs 33.6 billion in line with our estimates of Rs 33.2 billion. Net profit has grown by 53%YoY to Rs 6223 million as against our estimates of Rs 4576 million. We upgrade our price target by 3.4 % to Rs 2,715 based on 21x FY 2015E. We maintain our BUY rating on the stock.
HUL
Shivani V. Vishwanathan, Way2Wealth Brokers: The end of FY13 and a carry forward into FY14 saw a slew of promotional activities in the largest segment contributor soaps & detergents as well as shampoos. Net sales grew by 9.6% YOY &1% QOQ to '6747 crs in Q2FY14. We expect H2FY15 to see some growth return, but that too would be on the back of a low base. At the CMP of Rs 604.75 the stock trades at 37x its FY14E EPS of Rs 16.4/- respectively. We remain Neutral on the stock.
Bank of India (BoI)
Kajal Gandhi, ICICI Securities: BoI delivered strong results as recovery (Rs 4.26 billion) and upgradation (Rs 4.63 billion) kept GNPA under check. Also, credit has grown within the corporate sector, which is prone to asset quality risk. Overall, we still remain cautious on the stock and recommend HOLD rating on the stock.
Bharti Airtel
Ankita Somani, Angel Broking: For 2QFY2014, Bharti's consolidated revenue stood at Rs 213.43 billion, up 5% qoq. The company is now hopeful with regards its domestic operations as mobile operators have increased tariffs and cut freebies after a bruising three-year price war. We maintain our Accumulate rating on the stock.
Maruti Suzuki
Suneel Rao, Sushil Financial Services : Maruti Suzuki India Ltd. (MSIL) has reported decent set of numbers exceeding our & street expectations for Q2FY14 with Revenue and PAT of Rs. 104.7 billion & Rs. 6.7 billion respectively. We recommend a Hold on the stock with a revised price target of Rs 1693 (based on 16x FY15E EPS of Rs. 105.8).
IDBI Bank
Vaibhav Agrawal, Angel Broking: IDBI Bank reported weak operating performance for the quarter, with sharp earnings de-growth of 60%. The Net NPAs increased by around Rs 13.00 billion to Rs 51.74 billion. We await clarity from the management regarding the performance on slippages front during the quarter and the overall outlook on the asset quality going ahead. Currently, we maintain our Neutral rating on the stock.
Bata India
Gaurang Kakkad, Religare Institutional Research: Net sales growth was marginally below estimates at Rs 4.85bn (+14.3% YoY despite a favourable base), with SSSg estimated at 6-7%. PAT grew 14.3%/23.9%/17.3% led by an est. SSSg of 6-7%. We restate BUY with a Sep'14 TP of Rs 1,000 (Rs 940 earlier). Bata remains our top consumer discretionary pick.
Grasim
Navin Sahadeo, Edelweiss Securities: Grasim Industries Q2FY14 consolidated EBITDA of Rs 10.3 billionn (down 26% YoY) was lower than our estimated Rs 10.7 billion mainly due to below expectation performance from the cement business. We maintain 'BUY/Sector Outperformer' recommendation/rating on the stock.
Lupin
Rikesh Parikh, Motilal Oswal Securities: Lupin's 2QFY14 EBITDA grew 37% YoY to Rs 6.2 billion & PAT grew 40% YoY to Rs 4.2 billion were above estimate led operational efficiency and forex gain. 2Q Sales of Rs 26.3 billion included one off upside from generic Tricor this quarter, overall sales growth was impacted by slower sales in US & product mix. We expect LPC to report stronger operational performance in FY14/15 on back of strong product pipeline for the US including higher contribution from oral contraceptives. The stock currently trades at 29x FY14E and 21x FY15E earnings. Maintain Buy.
Hindustan Construction Company (HCC)
Parvez Akhtar Qazi, Edelweiss Securities: HCC reported a profit of Rs 316 million in Q2FY14 aided by high other income and tax write back. We believe the stock will trade at a discount to fair value till revenue visibility improves and concerns on a leveraged balance sheet and Lavasa get resolved. Hence, we maintain Hold recommendation on the stock.
Oriental Bank of Commerce (OBC)
Vaibhav Agrawal, Angel Broking: OBC delivered weak operating performance for the quarter. Net Interest Income for the bank grew moderately at 11% yoy, while its non-interest income de-grew by 23% yoy, leading to largely flat operating income yoy. Provisioning expenses grew by 20%, thereby leading to PBT level earnings de-growth 40% yoy. However, aided by unexpected 86% yoy decline in tax expense, the earnings decline was limited to 17% yoy. We await clarity from the management regarding the asset quality performance during the quarter and outlook on the same going ahead. We recommend Neutral on the stock.
Tata Communication
Rumit Dugar, Religare Institutional Research: TCOM reported a strong Q2 led by a sharp 240bps expansion in the EBITDA margin to 16.9%, which drove PAT to Rs 804 million. We believe steps taken over the past year to boost profitability are yielding results, and raise our FY14/FY15 EBITDA by 6%. TCOM has seen a sharp 40% bounce since our upgrade. We remain positive on the company's improving business fundamentals, which would help drive a significant leverage on stock valuations. Maintain BUY.
Ranbaxy
Sarabjit Kour Nangra, Angel Broking: Ranbaxy labs, posted lower than expected numbers on the OPM and the net profit front. The company reported a loss of Rs 4.54 billion, on account of the forex losses and extraordinary expenditure to the tune of Rs 4.05 billion However, adjusted for the same the net profit came in at Rs 720 million V/s expectation of Rs. 1.30 billion, vs Rs 3.87 billion during the corresponding period of last year, a yoy dip of 81.3%. For FY2014, the company has given a guidance of achieving a sales of Rs 130 - Rs 135 billion We maintain our neutral stance on the stock.
NTPC
Rupesh Sankhe, Karvy Stock Broking: NTPC has posted Rs 24.9 billionn net profit down 20.7% YoY on the back of higher base of last year. We have switch valuation methodology from DCF to (P/B vs RoE) to factor in near term concerns on declining PLF accordingly our TP has reduced from Rs 184 a share to Rs161. Maintain BUY.
JSW Steel
Arihant Research: JSW Steel's Q2FY14 numbers came ahead of estimates primarily on higher exports volumes and lower other expenses. Saleable steel volumes came in at 3.13 million tones, while blended realisation dipped 2.2% qoq to Rs 36,129 per tone. JSW Steel continues to post strong performance despite faced with challenging operating environment. We have valued stock on SoTP and have arrived at fair value of Rs 788 share. Recommend Reduce rating on stock.
Dabur India
Sanjay Manyal, ICICI Securities: Dabur reported a stellar performance in the quarter with 10.7% volume growth in its domestic business & margin of 18.8% (120 bps higher YoY), highest in past eight quarters. Hence, we maintain our Hold recommendation on the stock with a target price of Rs 180.
Syndicate Bank
Vaibhav Agrawal, Angel Broking: Syndicate Bank reported weak operating performance for the quarter. However, the increase in Net NPA levels was much higher at 45% qoq. Moreover, the bank's provisioning expenses for the quarter declined by 29% yoy, which aided the bank to report PBT level earnings growth of 30%. Tax expenses remained at near zero levels as against tax reversals of Rs 1 billion in Q2FY2013 resulted in muted PAT growth of 2%. We await further clarity from the management regarding the asset quality performance during the quarter and the outlook on asset quality and tax rate going ahead. We maintain our Neutral Rating on the stock.
Aashiesh Agarwaal, Edelweiss Securities: DLF reported Q2FY14 in-line revenues at Rs 19.5 billion and EBITDA of Rs 6 billion ths lower than estimates due to completion of older projects. We believe most risks are priced in and the stock is trading at an attractive 39% discount to NAV/TP of Rs 249. Hence, we maintain 'BUY/Sector Performer'
Dr Reddy's
Rahul Sharma, Karvy Stock Broking: DRL's revenues rose by 16.5% YoY at Rs 33.6 billion in line with our estimates of Rs 33.2 billion. Net profit has grown by 53%YoY to Rs 6223 million as against our estimates of Rs 4576 million. We upgrade our price target by 3.4 % to Rs 2,715 based on 21x FY 2015E. We maintain our BUY rating on the stock.
HUL
Shivani V. Vishwanathan, Way2Wealth Brokers: The end of FY13 and a carry forward into FY14 saw a slew of promotional activities in the largest segment contributor soaps & detergents as well as shampoos. Net sales grew by 9.6% YOY &1% QOQ to '6747 crs in Q2FY14. We expect H2FY15 to see some growth return, but that too would be on the back of a low base. At the CMP of Rs 604.75 the stock trades at 37x its FY14E EPS of Rs 16.4/- respectively. We remain Neutral on the stock.
Bank of India (BoI)
Kajal Gandhi, ICICI Securities: BoI delivered strong results as recovery (Rs 4.26 billion) and upgradation (Rs 4.63 billion) kept GNPA under check. Also, credit has grown within the corporate sector, which is prone to asset quality risk. Overall, we still remain cautious on the stock and recommend HOLD rating on the stock.
Bharti Airtel
Ankita Somani, Angel Broking: For 2QFY2014, Bharti's consolidated revenue stood at Rs 213.43 billion, up 5% qoq. The company is now hopeful with regards its domestic operations as mobile operators have increased tariffs and cut freebies after a bruising three-year price war. We maintain our Accumulate rating on the stock.
Maruti Suzuki
Suneel Rao, Sushil Financial Services : Maruti Suzuki India Ltd. (MSIL) has reported decent set of numbers exceeding our & street expectations for Q2FY14 with Revenue and PAT of Rs. 104.7 billion & Rs. 6.7 billion respectively. We recommend a Hold on the stock with a revised price target of Rs 1693 (based on 16x FY15E EPS of Rs. 105.8).
IDBI Bank
Vaibhav Agrawal, Angel Broking: IDBI Bank reported weak operating performance for the quarter, with sharp earnings de-growth of 60%. The Net NPAs increased by around Rs 13.00 billion to Rs 51.74 billion. We await clarity from the management regarding the performance on slippages front during the quarter and the overall outlook on the asset quality going ahead. Currently, we maintain our Neutral rating on the stock.
Bata India
Gaurang Kakkad, Religare Institutional Research: Net sales growth was marginally below estimates at Rs 4.85bn (+14.3% YoY despite a favourable base), with SSSg estimated at 6-7%. PAT grew 14.3%/23.9%/17.3% led by an est. SSSg of 6-7%. We restate BUY with a Sep'14 TP of Rs 1,000 (Rs 940 earlier). Bata remains our top consumer discretionary pick.
Grasim
Navin Sahadeo, Edelweiss Securities: Grasim Industries Q2FY14 consolidated EBITDA of Rs 10.3 billionn (down 26% YoY) was lower than our estimated Rs 10.7 billion mainly due to below expectation performance from the cement business. We maintain 'BUY/Sector Outperformer' recommendation/rating on the stock.
Lupin
Rikesh Parikh, Motilal Oswal Securities: Lupin's 2QFY14 EBITDA grew 37% YoY to Rs 6.2 billion & PAT grew 40% YoY to Rs 4.2 billion were above estimate led operational efficiency and forex gain. 2Q Sales of Rs 26.3 billion included one off upside from generic Tricor this quarter, overall sales growth was impacted by slower sales in US & product mix. We expect LPC to report stronger operational performance in FY14/15 on back of strong product pipeline for the US including higher contribution from oral contraceptives. The stock currently trades at 29x FY14E and 21x FY15E earnings. Maintain Buy.
Hindustan Construction Company (HCC)
Parvez Akhtar Qazi, Edelweiss Securities: HCC reported a profit of Rs 316 million in Q2FY14 aided by high other income and tax write back. We believe the stock will trade at a discount to fair value till revenue visibility improves and concerns on a leveraged balance sheet and Lavasa get resolved. Hence, we maintain Hold recommendation on the stock.
Oriental Bank of Commerce (OBC)
Vaibhav Agrawal, Angel Broking: OBC delivered weak operating performance for the quarter. Net Interest Income for the bank grew moderately at 11% yoy, while its non-interest income de-grew by 23% yoy, leading to largely flat operating income yoy. Provisioning expenses grew by 20%, thereby leading to PBT level earnings de-growth 40% yoy. However, aided by unexpected 86% yoy decline in tax expense, the earnings decline was limited to 17% yoy. We await clarity from the management regarding the asset quality performance during the quarter and outlook on the same going ahead. We recommend Neutral on the stock.
Tata Communication
Rumit Dugar, Religare Institutional Research: TCOM reported a strong Q2 led by a sharp 240bps expansion in the EBITDA margin to 16.9%, which drove PAT to Rs 804 million. We believe steps taken over the past year to boost profitability are yielding results, and raise our FY14/FY15 EBITDA by 6%. TCOM has seen a sharp 40% bounce since our upgrade. We remain positive on the company's improving business fundamentals, which would help drive a significant leverage on stock valuations. Maintain BUY.
Ranbaxy
Sarabjit Kour Nangra, Angel Broking: Ranbaxy labs, posted lower than expected numbers on the OPM and the net profit front. The company reported a loss of Rs 4.54 billion, on account of the forex losses and extraordinary expenditure to the tune of Rs 4.05 billion However, adjusted for the same the net profit came in at Rs 720 million V/s expectation of Rs. 1.30 billion, vs Rs 3.87 billion during the corresponding period of last year, a yoy dip of 81.3%. For FY2014, the company has given a guidance of achieving a sales of Rs 130 - Rs 135 billion We maintain our neutral stance on the stock.
NTPC
Rupesh Sankhe, Karvy Stock Broking: NTPC has posted Rs 24.9 billionn net profit down 20.7% YoY on the back of higher base of last year. We have switch valuation methodology from DCF to (P/B vs RoE) to factor in near term concerns on declining PLF accordingly our TP has reduced from Rs 184 a share to Rs161. Maintain BUY.
JSW Steel
Arihant Research: JSW Steel's Q2FY14 numbers came ahead of estimates primarily on higher exports volumes and lower other expenses. Saleable steel volumes came in at 3.13 million tones, while blended realisation dipped 2.2% qoq to Rs 36,129 per tone. JSW Steel continues to post strong performance despite faced with challenging operating environment. We have valued stock on SoTP and have arrived at fair value of Rs 788 share. Recommend Reduce rating on stock.
Dabur India
Sanjay Manyal, ICICI Securities: Dabur reported a stellar performance in the quarter with 10.7% volume growth in its domestic business & margin of 18.8% (120 bps higher YoY), highest in past eight quarters. Hence, we maintain our Hold recommendation on the stock with a target price of Rs 180.
Syndicate Bank
Vaibhav Agrawal, Angel Broking: Syndicate Bank reported weak operating performance for the quarter. However, the increase in Net NPA levels was much higher at 45% qoq. Moreover, the bank's provisioning expenses for the quarter declined by 29% yoy, which aided the bank to report PBT level earnings growth of 30%. Tax expenses remained at near zero levels as against tax reversals of Rs 1 billion in Q2FY2013 resulted in muted PAT growth of 2%. We await further clarity from the management regarding the asset quality performance during the quarter and the outlook on asset quality and tax rate going ahead. We maintain our Neutral Rating on the stock.
