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Page 1: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

Diwali DhamakaDiwali Dhamaka

®

SMC wishes you a Happy DiwaliSMC wishes you a Happy Diwali

Page 2: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

RELIANCE INDUSTRIES LIMITED CMP: 960.00 Upside: 25%Target Price: 1205.00Strong presence in South and West. Robust growth seen in Investment Rationaleprivate labels. Digital format has 1379 stores across 225 cities

•Gross refining margin (GRM) was the highest in last seven years, with net store addition of 81 during Q2FY16. Fashion and coming in at USD 10.6 a barrel during the quarter ended Lifestyle contributes 15% to overall retail sales.September 2015 against USD 10.4 a barrel in the preceding

quarter, which too was ahead of estimates of USD 9-9.5 a barrel.

GRM in the year-ago period was USD 8.3 a barrel. RIL's premium Valuation

over Singapore complex margins widened to USD 4.3/bbl during

the quarter, the highest level since early 2009. The company maintained a rapid pace of construction activity

during the quarter ended September 2015. The Company's world-•Petcoke gasifier with 95% civil work complete is expected to scale petcoke gasification facility and ethylene cracker complex

commission phase-wise in 2016. Also petcoke prices have fallen remains on track for its planned 2016 start-up. In Digital Services,

as much as LNG prices. Therefore, the economics of petcoke it had substantially completed the network roll-out across the

gasification project is still looking good.country and initiated the process of beta testing of network and

•The capital expenditure for the half year ended 30th September platforms, thus we expect the stock to see a price target of Rs 2015 was Rs 52864 crore including exchange rate difference 1205 in 8 to 10 months time frame on a target P/E of 13x and FY17 capitalization. Capital expenditure was principally on account (E) earnings of Rs.92.66.of ongoing expansions projects in the petrochemicals and

refining business at Jamnagar, Dahej and Hazira, Jio Infocomm

and US Shale gas projects.

•The company continues to build towards the roll-out of Jio's

services, with the imminent launch of a range of 4G

smartphones under the 'Lyf' brand aimed at helping build an

ecosystem of handsets compatible with the full range of Jio's

services. Network tests on Jio continue, with initial results

positive.

•The company and RCOM have filed intimation with the DoT for

sharing of 800MHz spectrum in seven cities. The company

reiterated that it intends to launch services, without

elaborating an exact timeframe.

•Reliance Retail expanded its reach with a net addition of 110

stores in Q2FY16 and number of stores at 2857 across 250 cities.

Face Value (Rs.) 10.00

52 Week High/Low 1067/796.75

M.Cap (Rs. in Cr.) 310949.74

EPS (Rs.) 75.27

P/E Ratio (times) 12.75

P/B Ratio (times) 1.43

Dividend Yield (%) 0.95

Stock Exchange BSE

VALUE PARAMETERS

% OF SHARE HOLDING

P/E Chart

` in cr

Actual Estimate

FY Mar-15 FY Mar-16 FY Mar-17

Revenue 375,435.00 300,812.00 344,160.70

EBITDA 37,364.00 41,629.90 49,843.40

EBIT 25,817.00 31,511.00 36,820.50

Pre-tax Profit 30,996.00 33,043.50 37,927.60

Net Income 23,566.00 25,844.90 29,501.40

EPS 80.10 81.87 92.66

BVPS 676.07 786.12 864.08

ROE(%) 11.30 11.00 11.30

Diwali Dhamaka

Foreign

Institutions

Non Promoter Corporate Holding

Promoters

Public & Others

22.46

12.97

3.27

45.21

16.11

1

Page 3: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

ZEE ENTERTAINMENT ENTERPRISES LIMITED CMP: 390.70 Upside: 25%Target Price: 487.00performance of channels has helped the ad revenue to grow. On Investment Rationaleincrease in receivables, the management said that it has grown

•Zee Entertainment Enterprises, one of India's leading television in-line with business.

media and entertainment companies, is amongst the largest

producers and aggregators of Hindi programming in the world,

with an extensive library housing over 210,000 hours of Valuationtelevision content.

With various economic reforms in the pipeline, the overall •During the quarter ended September 2015, the advertising business environment in India is improving. The company hopes

revenues inclined by 35% to Rs 843.31 crore. International that the Media industry will reap the benefits of the improved advertisement revenue was at Rs 73.5 crore. The subscription environment through higher advertisement and subscription revenues grew by 13% to Rs 479.14 crore. Of subscription revenue. The management continues to see the positive results revenue, domestic subscription revenue grew by 11% to Rs of investments. The company will continue to endeavor on this 375.2 crore while international subscription revenues grew by track going forward and pursue new opportunities that will yield 19% to Rs 103.9 crore. long term growth. Companies effort is to entertain audience

•Apart from its flagship Hindi news channels, Zee has content in across the world, thus we expect the stock to see a price target of

nearly every local language, allowing it to gain viewership in Rs 487 in 8 to 10 months time frame on a one year average P/E of

both rural and urban areas. The company is also seeking to 36.66x and FY17 (E) earnings of Rs.13.29.

expand in global markets, as it aims to boost viewership by five

times to become one of the top global players by 2020. The

group is also launching an English news channel through its Zee

Media unit, next year, targeting international viewers.

•The newly launched Hindi GEC &tv continues to build on its

successful launch and has been performing well. The popular

fiction show, Bhabhiji Ghar Pe Hai is now among the best

performing property in its slot.

•On the back of healthy growth in industry on advertisement front

and increase in market share & new channel launches, it was able to

grow by 35%. Ex- &TV growth ad growth was 26% yoy, which was

primarily driven by yield improvement. The management said that

the improvement in the advertisement market would spur the ad

revenue in future.

•The ad E-commence, FMCG, Telcos and Consumer Durables

have helped the ad revenue to grow. Moreover, the good

Face Value (Rs.) 1.00

52 Week High/Low 440.30/299.65

M.Cap (Rs. in Cr.) 37524.73

EPS (Rs.) 11.07

P/E Ratio (times) 35.29

P/B Ratio (times) 10.63

Dividend Yield (%) 0.58

Stock Exchange BSE

VALUE PARAMETERS

% OF SHARE HOLDING

P/E Chart

` in cr

Actual Estimate

FY Mar-15 FY Mar-16 FY Mar-17

Revenue 4,883.70 5,762.60 6,725.40

EBITDA 1,273.70 1,468.10 1,848.00

EBIT 1,186.40 1,418.30 1,554.90

Net Income 977.50 1,052.70 1,313.10

EPS 8.67 10.45 13.29

BVPS 57.78 58.95 68.41

ROE 19.00 21.30 22.90(%)

Diwali Dhamaka

Foreign

Institutions

Non Promoter Corporate Holding

Promoters

Public & Others

48.65

3.482.67

43.07

2.14

2

Page 4: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

JAGRAN PRAKASHAN LIMITED CMP: 143.80 Upside: 33%Target Price: 192.00•After posting good set of numbers in Second quarter of current Investment Rationale

fiscal, the management believes that the next two quarters will •Jagran Prakashan Limited is a leading media house of India with also be good. The company will continue to see double digit

interests spanning across newspapers, magazines, outdoor growth in ad revenue and it has passed on the benefit of low advertising, promotional marketing, event management, on newsprint prices to advertisers.ground activities and digital businesses.

•For the quarter ended Sept 2015, advertisement revenue

increased 27% to Rs 388.96 crore. Circulation revenue was up by Valuation3.5% to Rs 99.83 crore. The net profit increased by 61% to Rs

Over the years, the company has gained strong foot print in the 91.28 crore.

media and communications space. Going forward, it is expected •Dainik Jagran's ad growth was driven by mix of yield

to benefit from the expansion in regional language newspaper improvement (50%) and volumes (50%) while growth for other

readership and growth in ad revenue. It enjoys leadership in editions primarily driven by volume increase. October-2015 has

terms of readership among the Hindi language newspapers, we seen better than expected ad growth, management expects at

expect the stock to see a price target of Rs 192 in 8 to 10 months least 10% growth till Diwali. UP has started to get its due share

time frame on a target P/E of 18x and FY17 (E) earnings of with improving national advertisement.

Rs.10.65.

•The performance of Naidunia and Midday continues to be better

than expected. Outdoor business registered a steep growth in

revenues and improved net realization, which was credible in

the given market conditions. The company is happy to report

that its Digital properties are now at number 45 and in News &

Information and Education categories ranking is 6th and 3rd

respectively as per COMSCORE, which augurs well for future.

•The sector which has contributed to advertisement revenue

growth are automobile, white goods and online shopping

companies. Auto did excellently. Online shopping also did well

but the company has not carried every company ads to protect

rates. Retail on local side is picking up.

•With strong franchise across various media platforms, market

position and operating performance duly backed by financial

prudence, the company is very well poised to next level of

growth.

Face Value (Rs.) 2.00

52 Week High/Low 154.40/107.50

M.Cap (Rs. in Cr.) 4700.99

EPS (Rs.) 8.15

P/E Ratio (times) 17.64

P/B Ratio (times) 4.14

Dividend Yield (%) 2.43

Stock Exchange BSE

VALUE PARAMETERS

% OF SHARE HOLDING

P/E Chart

` in cr

Actual Estimate

FY Mar-15 FY Mar-16 FY Mar-17

Revenue 1,725.40 2,105.50 2,350.00

EBITDA 450.60 576.00 644.10

EBIT 347.00 462.70 520.60

Pre-tax Profit 338.00 451.20 508.50

Net Income 227.70 311.90 352.70

EPS 7.30 9.46 10.65

BVPS 34.69 42.52 47.59

ROE(%) 21.70 24.40 23.30

Diwali Dhamaka

Foreign

Institutions

Non Promoter Corporate Holding

Promoters

Public & Others

14.99

12.7

9.2660.76

2.3

3

Page 5: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

Foreign

Institutions

Non Promoter Corporate Holding

Promoters

Public & Others

25.71

0.06

0.9

69.92

3.42

ALLCARGO LOGISTIC LIMITED CMP: 345.65 Upside: 30%Target Price: 448.00•The company is providing warehousing services to Snapdeal. It Investment Rationale

will help to develop business in the NCR region. The deal •Allcargo Logistics provides integrated logistics solutions. The

happened some months ago. company offers specialized logistics services across multimodal

•It posted a net consolidated profit of Rs.72.5 crore for the July-transport operations, container freight station operations and September quarter compared to Rs.63.6 crore a year earlier.project & engineering solutions.

•With the intention of touching a $2-billion (roughly Rs. 13,020

crores) revenue target by 2020, the company will be investing Valuation$500 million (around Rs 2,410 crore) in the next three-five years

The company is also one of the fastest growing service providers towards organic as well as inorganic growth of its business. For in the contract logistics space. With these capabilities, it is well its overall acquisitions, company plans to raise funds partly placed to provide an unparalleled coastal shipping service which through internal accruals and also via debt in the overseas adds value to its customers' logistics requirements, we expect market.the stock to see a price target of Rs 448 in 8 to 10 months time

•Recently, the company has has acquired two additional vessels frame on a current P/E of 15.85x and FY17 (E) earnings of

aggregating 24,000 DWT for an undisclosed sum for its coastal Rs.28.26.

shipping business. With this, Allcargo now owns a total of five

cargo vessels making it one of the largest players in the logistics

industry. The main criterion for this acquisition was to cater to

the growing requirements not only of coastal shipping but

regional trade and commerce as well.

•Alibaba, the biggest e-commerce company in the world has tied

up with Allcargo Logistics' overseas subsidiary to ship less-than-

container load (LCL) consignments to India, a move that will

mean faster deliveries for the Chinese etailer's customers in

India.

•Recently, the company is setting up a container freight station

facility at Kolkata Port. The objective of setting up the said

facility is to avail the opportunity of covering growing container

traffic of eastern parts of the country. The facility will also be

strategically located to serve EXIM business of bordering areas

of Eastern Region including Nepal and Bhutan.

•The company plans to build logistics parks at Narendra Modi's

ambitious smart cities.

Face Value (Rs.) 2.00

52 Week High/Low 378.50/246.80

M.Cap (Rs. in Cr.) 4356.84

EPS (Rs.) 21.81

P/E Ratio (times) 15.85

P/B Ratio (times) 2.28

Dividend Yield (%) 0.58

Stock Exchange BSE

VALUE PARAMETERS

% OF SHARE HOLDING

P/E Chart

` in cr

Actual Estimate

FY Mar-15 FY Mar-16 FY Mar-17

Revenue 5,618.00 6,144.70 7,011.70

EBITDA 475.40 562.10 657.20

EBIT 318.00 426.70 545.20

Pre-tax Profit 317.10 403.90 520.00

Net Income 239.90 299.30 361.30

EPS 19.00 23.50 28.26

ROE(%) 13.00 14.50 15.00

Diwali Dhamaka

4

Page 6: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

JB CHEMICALS AND PHARMACEUTICALS LIMITED (JBCPL) CMP: 271.75 Upside: 38%Target Price: 376.00Africa. It has been able to increase its footprint in South Africa Investment Rationaleand SADC countries due to excellent performance of Biotech.

•JBCPL, one of India's leading pharmaceutical companies, Recently, it has approved the acquisition of 21,94,030 (51%)

manufactures and markets a diverse range of pharmaceutical ordinary shares in Biotech Laboratories (Pty.) Ltd., subject to

formulations, herbal remedies and APIs (active Pharmaceutical necessary approvals and definitive agreements to be entered

ingredient). It exports too many countries worldwide with a into with the seller.

strong presence in Russia, Ukraine, CIS countries and South

Africa.

•It has a strong R&D and regulatory set-up for the development Valuationof new drug delivery system and formulations, filing of ANDAs

The company accords high priority to domestic formulations (Abbreviated New Drug Application) and DMFs (Drug Master

business, which offers significant value proposition. During the File).

current year, the company plans to continue to pursue focus on •The company is ranked 35th in the Industry (IMS MAT March harnessing potential of the existing products, launch new

2015) with the it's three brands viz. Rantac (anti-peptic products selectively and achieve increased productivity .Thus, it ulcerant), Cilacar (calcium channel blocker) and Metrogyl is expected that the stock will see a price target of Rs.376 in 8 to (amoebicides), featuring among top 300 brands (IMS MAT March 10 months time frame on a target 3 year average P/E of 16.56x 2015) in terms of value. and FY17 EPS of Rs.22.70.

•The increasing fund allocation by the government for public

health and an increasing investment by the private sector in

hospitals make the institutional business more attractive. It,

with several injectable products in its portfolio, expects to well

expand the business in this segment.

•It's wide geographical presence in international markets and

strong product portfolio with high growth brands and strong

marketing capability gives a positive outlook for overall

business of the company. The supply agreement with Cilag

GmbH International ('Cilag'), a wholly owned subsidiary of

Johnson & Johnson, has been functioning smoothly.

•It has a consistent, strong free cash flow annually, with a low

debt-equity of 0.1x.

•Biotech Laboratories Pty. Ltd. ('Biotech'), a South African

marketing and distribution company in which it holds 49%

equity stake, is amongst the top 15 Pharma companies of South

Face Value (Rs.) 2.00

52 Week High/Low 318.05/180.00

M.Cap (Rs. in Cr.) 2300.32

EPS (Rs.) 8.25

P/E Ratio (times) 32.87

P/B Ratio (times) 2.31

Dividend Yield (%) 5.16

Stock Exchange BSE

VALUE PARAMETERS

% OF SHARE HOLDING

P/E Chart

` in cr

Actual Estimate

FY Mar-15 FY Mar-16 FY Mar-17

Revenue 1,120.70 1,282.80 1,495.70

EBITDA 192.80 215.40 274.10

EBIT 154.10 170.30 226.00

Pre-tax Profit 145.50 200.40 256.90

Net Income 100.40 150.30 192.70

EPS 11.84 17.70 22.70

ROE(%) 10.00 18.00 22.00

Diwali Dhamaka

Foreign

Institutions

Govt Holding

Non Promoter Corp. Hold.

Promoters

Public & Others

6.03

3.76

03.51

55.77

30.94

5

Page 7: Diwali dhamaka - SMC Trade Online · Diwali Dhamaka ® SMC wishes you a Happy Diwali. RELIANCE INDUSTRIES LIMITED CMP: 96 0. Ta rg t P ic 12 0. Upside: 25 % Investment Rationale Strong

SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offering of its equity shares and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (“SEBI”) and the Stock Exchanges. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and on the websites of the Book Running Lead Manager i.e., ICICI Securities Limited at www.icicisecurities.com and the Co- Book Running Lead Manager i.e., Elara Capital (India) Private Limited at www.elaracapital.com . Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, please see the section titled “Risk Factors” of the aforementioned offer document.

Disclaimer: This report is for the personal information of the authorized recipient and doesn't construe to be any investment, legal or taxation advice to you. It is only for private circulation and use .The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. No action is solicited on the basis of the contents of the report. The report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are general and are neither comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any person due to any action taken on the basis of this report. It does not constitute personal recommendations or take into account the particular investment objectives, financial situations or needs of an individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn't guarantee future results. The value of, and income from investments may vary because of the changes in the macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that we and our affiliates, officers, directors, and employees, including persons involved in the preparation or issuance if this material;(a) from time to time, may have long or short positions in, and buy or sell the securities thereof, of company (ies) mentioned here in or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company (ies) discussed herein or may perform or seek to perform investment banking services for such company(ies) or act as advisor or lender/borrower to such company(ies) or (c) may have any other potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High court.

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SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited and its associate is member of MCX stock Exchange Limited. It is also registered as a Depository Participant with CDSL and NSDL.

Its associates merchant banker and Portfolio Manager are registered with SEBI and NBFC registered with RBI. It also has registration with AMFI as a Mutual Fund Distributor.

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Diwali Dhamaka