market outlook 071212
TRANSCRIPT
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Market OutlookDecember 7, 2012
IPO Note - Credit Analysis and Research (CARE)
CARE is the second
largest rating agency in India, with large PSU banks such as IDBI, Canara and SBI,
being its prominent shareholders (pre-offer combined shareholding of 58.2%).
CARE has garnered market share from its globally affiliated peers in the past few
years and even while doing so, it has maintained its superior margins. Overall theoperating margins for CARE have been significantly higher, as unlike its other two
listed peers, its sole business segment currently is rating services, which has
enjoyed higher margins than research or any other division. Even comparing the
ratings business, CARE has witnessed impressive EBIT margins (71% in FY2012)
which are substantially higher than that of its peers (ICRAs 48% in FY2012, and
CRISILs 40% in CY2011), which as per the management, is primarily due to a)
lower employee costs owing to its low-cost centralized back office at Ahmedabad
(staff costs as a percentage to revenues are almost half vs. peers) and b) relatively
lower SME/MSE ratings business (which involves lower margins on account of its
lower revenue per customer).
Rating
business will remain companys sole business segment at least in the next fewyears. Considering credit growth estimates of 15-17% over the next few years and
efforts for growing our nascent debt market, we expect CARE to register at least
similar kind of growth in its volume of debt rated. However, considering the fact
that its revenue stream has stabilized now, and intention to increase presence in
SME/MSE ratings, we expect growth in its revenue to be approx. 200-300bp lower
than the growth in its volume. Migration to IRB approach, in our view will affect the
most to the rating agency which has major part of its business coming from
SME/MSE ratings (as smaller enterprises normally take loan from a single bank as
against larger ones which usually avail loan from consortium of banks, all of
whom might not be approved for IRB). Having said that, a relatively smaller
SME/MSE rating business for CARE (entered only in FY2011) and ample time to
develop other alternative revenue streams (as impact of IRB on business will not bebefore FY2016), gives us adequate comfort to believe that the impact would be
manageable for the company.
The stock is valued at 17.9x at upper band on TTM
earnings (taking 2HFY2012 earnings to be 60% of entire FY2012), which is at a
~18% discount to ICRA and ~45% discount to CRISIL. Even on a TTM EV/EBITDA
basis, it is valued at ~39% discount to CRISIL and ~33% to CARE. However, on a
TTM EV/Sales basis, it is valued at ~27% premium to CRISIL and ~63% premium
to ICRA, which is due to its high margins (likely to have a downward bias from
here on). Moreover, the company has reported cash and current investments worth
`91/share as of 1HFY2013. Overall, considering the high intellectual
capital/knowledge oriented and cash generating nature of the business, combined
with reasonable 12-15% revenue growth expectation, we believe the IPO isreasonably priced at the upper band.
RIL plans to shut Jamnagar distillation unit for maintenance
Media reports suggest that Reliance Industries plans a 40 day maintenance shut
down at its 580,000bpd Jamnagar refining complex which. The company is
planning to shut a 13.5MTPA (270,000bpd) crude distillation unit for 40 days
beginning January 2012. Also, It is likely to shut a 6.5mmtpa vacuum gasoil
hydrotreater unit. The temporary closure of its units could result in lower
production and sales volumes during 4QFY2013. However, we await further
clarity from the company on this matter. Until then,
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Market OutlookDecember 7, 2012
Maruti Suzuki to hike car prices from January 2013
Maruti Suzuki (MSIL) is planning to increase the prices of its products from January
2013 to mitigate the impact of adverse foreign exchange movement. While the
company is still contemplating the quantum of the price increase; it has indicated
that it could be upto`
20,000/unit. We believe that the company may increase theprices in the range of 2-5% depending upon the models. We expect the price
increase to slightly offset the negative impact of foreign exchange movement on
the operating margins. However, it may also dampen the consumer sentiments
further which could impact sales. At the CMP of `1,481 the stock is trading at
15.7x FY2014E earnings which is slightly higher than its historical average of 15x.
Economic and Political News
Coal Min de-allocates mine in Odisha alloted to 4 PSUs
PM confident FDI decision will get RS approval India, Australia to strengthen tourism ties RBI rate cut unlikely on Dec 18: BarclaysCorporate News
GMR case: Singapore court rules in favour of Maldives H&R Johnson to set up manufacturing unit in Bengal ONGC gets project operator's nod for US$5bn Kashagan stake buySource: Economic Times, Business Standard, Business Line, Financial Express, Mint
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Global economic events release calendar
Date Time Country Event Description Unit Period Bloomberg Data
Last Reported Estimated
December 7, 2012 3:00PM UK Industrial Production (YoY) % Change Oct (2.60) (0.50)
7:00PM US Change in Nonfarm payrolls Thousands Nov 171.00 86.00
7:00PM US Unnemployment rate % Nov 7.90 7.90
December 9, 2012 7:00AM China Consumer Price Index (YoY) % Change Nov 1.70 2.10
11:00AM China Industrial Production (YoY) % Change Nov 9.60 9.80
December 10, 2012 5:29PM China Exports YoY% % Change Nov 11.60 9.00
5:29PM India Imports YoY% % Change Nov 7.37 --
5:29PM India Exports YoY% % Change Nov (1.63) --
December 12, 2012 11:00AM India Industrial Production YoY % Change Oct (0.40) --
3:00PM UK Jobless claims change % Change Nov 10.10 --
11:00PM US FOMC rate decision % Dec 12 0.25 --
December 13, 2012 7:00PM US Producer Price Index (mom) % Change Nov (0.20) (0.50)
December 14, 2012 12:00PM India Monthly Wholesale Prices YoY% % Change Nov 7.45 --
3:30PM Euro Zone Euro-Zone CPI (YoY) % Nov 2.50 --
7:00PM US Consumer price index (mom) % Change Nov 0.10 (0.20)
7:45PM US Industrial Production % Nov (0.43) 0.30
December 18, 2012 11:00AM India RBI Repo rate % Dec 18 8.00 --
11:00AM India RBI Cash Reserve ratio % Dec 18 4.25 --
3:00PM UK CPI (YoY) % Change Nov 2.70 --
India RBI Reverse Repo rate % Dec 18 7.00 --
December 19, 2012 7:00PM US Housing Starts Thousands Nov 894.00 --
7:00PM US Building permits Thousands Nov 868.00 --
December 20, 2012 8:30PM Euro Zone Euro-Zone Consumer Confidence Value Dec A (26.90) --
7:00PM US GDP Qoq (Annualised) % Change 3Q T 2.70 --8:30PM US Existing home sales Millions Nov 4.79 --
December 21, 2012 3:00PM UK GDP (YoY) % Change 3Q F (0.10) --
December 27, 2012 8:30PM US Consumer Confidence S.A./ 1985=100 Dec 73.70 --
8:30PM US New home sales Thousands Nov 368.00 --
January 1, 2013 6:30AM China PMI Manufacturing Value Dec F 50.60 --
January 2, 2013 3:00PM UK PMI Manufacturing Value Dec 49.10 --
2:25PM Germany Unemployment change (000's) Thousands Dec 5.00 --
Source: Bloomberg, Angel Research
December 07, 2012
Market Outlook
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Market OutlookDecember 07, 2012
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Macro watch
Exhibit 1 :Q uarterly G D P trends
Source: CSO, Ang el Research
Exhibit 2 :IIP trends
Source: M O SPI, Ang el Research
Exhibit 3 :M onthly WPI inflation trends
Source: M O SPI, Ang el Research
Exhibit 4 :M a nufacturing a nd services PM I
Source: Ma rket, Angel Research; N ote: Level above 50 indicates expansion
Exhibit 5 :Expo rts an d impo rts growth trends
Source: Bloomberg, Angel Research
Exhibit 6 :Key policy rates
Source: RBI, Angel Research
3. 5
5. 7
9. 0
7. 5
11.2
8. 5
7. 68 .2
9. 2
8. 0
6. 76. 1
5. 3 5. 5 5. 3
3. 0
4. 0
5. 0
6. 0
7. 0
8. 0
9. 0
10.0
11.0
12.0
4Q
FY09
1Q
FY10
2Q
FY10
3Q
FY10
4Q
FY10
1Q
FY11
2Q
FY11
3Q
FY11
4Q
FY11
1Q
FY12
2Q
FY12
3Q
FY12
4Q
FY12
1Q
FY13
2Q
FY13
(%)
(5.0)
6 .0
2 .7
1 .0
4 .3
(2.8) (1.3)
2 .5
(2.0)(0.2)
2 .3
(0.4)
(6.0)
(4.0)
(2.0)
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2 .0
4 .0
6 .0
8 .0
O
ct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
M
ay-12
Jun-12
Jul-12
Aug-12
Sep-12
(%)
9. 5
7. 76. 9
7. 4 7. 7 7. 5 7. 6 7. 6 7. 58. 0 7. 8 7. 5
0. 0
1. 0
2. 0
3. 0
4. 0
5. 0
6. 0
7. 0
8. 0
9. 0
10.0
Nov
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Dec
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Jan
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Fe
b-
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ar
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Apr
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ay
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O
ct-12
(%)
48.0
50.0
52.0
54.0
56.0
58.0
60.0
Nov
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Dec
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Jan
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Fe
b-1
2
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M fg. PM I Services PM I
(30.0)
(15.0)
0 .0
15.0
30.0
45.0
Nov
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Dec
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Jan
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Fe
b-1
2
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Apr-
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Exp orts yoy g ro wth Im ports yo y growth( %)
8.00
7.00
4.25
4.00
5.00
6.00
7.00
8.00
9.00
Nov
-11
Dec
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Jan
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Fe
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Repo rate Reverse Repo rate C RR(%)
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
Agri / Agri Chemical
Rallis Neutral 161 - 3,129 1,466 1,686 14.8 14.8 7.0 8.1 23.0 19.9 4.9 4.2 22.6 22.5 2.2 1.9
United Phosphorus Buy 123 170 5,674 8,421 9,263 16.5 16.5 15.0 17.0 8.2 7.2 1.2 1.1 15.6 15.5 0.8 0.7
Auto & Auto Ancillary
Amara Raja Batteries Neutral 252 - 4,304 2,911 3,321 16.2 16.2 17.3 19.8 14.6 12.7 4.0 3.1 31.1 27.6 1.4 1.2
Apollo Tyres Accumulate 86 96 4,357 13,713 15,341 11.2 11.2 12.5 14.8 6.9 5.8 1.3 1.1 20.2 19.9 0.5 0.4
Ashok Leyland Accumulate 28 31 7,330 14,490 16,606 9.5 9.6 2.2 2.9 12.4 9.7 2.3 2.0 13.6 16.1 0.6 0.5
Automotive Axle# Neutral 362 - 547 1,103 1,240 11.0 11.3 39.1 45.0 9.3 8.1 1.7 1.6 19.5 22.8 0.5 0.4Bajaj Auto Neutral 1,927 - 55,757 21,121 23,642 18.4 18.5 108.7 122.6 17.7 15.7 7.4 5.9 46.2 41.6 2.3 1.9
Bharat Forge Buy 268 324 6,245 6,754 7,565 15.5 15.7 18.8 23.2 14.3 11.6 2.5 2.1 18.5 19.7 1.1 0.9
Bosch India* Neutral 9,080 - 28,510 8,776 10,276 16.6 18.0 331.9 4 17.7 27.4 21.7 5.1 4.3 18.7 19.5 2.9 2.4
CEAT Buy 108 163 368 4,989 5,634 8.2 8.5 27.1 40.8 4.0 2.6 0.5 0.4 13.2 17.2 0.3 0.2
Exide Industries Accumulate 146 155 12,393 6,229 7,200 14.8 15.8 7.2 9.0 20.3 16.3 3.6 3.0 18.5 19.9 1.7 1.4
FAG Bearings* Neutral 1,733 - 2,880 1,489 1,750 16.5 17.5 103.3 126.9 16.8 13.7 3.3 2.7 21.3 21.6 1.7 1.4
Hero Motocorp Accumulate 1,826 1,956 36,468 24,743 27,996 14.8 15.2 118.2 130.4 15.5 14.0 6.6 5.3 48.3 41.9 1.2 1.0
JK Tyre Buy 120 165 494 7,517 8,329 6.6 6.6 37.2 41.3 3.2 2.9 0.6 0.5 18.8 17.8 0.3 0.3
Mahindra and Mahindra Accumulate 930 986 57,106 40,035 46,272 11.5 11.6 54.7 62.8 17.0 14.8 3.8 3.2 24.3 23.4 1.2 1.0
Maruti Neutral 1,475 - 42,608 42,019 50,246 7.3 8.6 66.1 94.4 22.3 15.6 2.5 2.2 11.9 15.1 0.9 0.7
Motherson Sumi Neutral 180 - 10,558 24,285 27,317 6.7 7.2 8.1 10.6 22.3 17.0 4.7 3.8 22.9 24.7 0.6 0.5
Subros Accumulate 31 35 187 1,286 1,479 9.4 9.7 2.6 5.1 12.0 6.2 0.7 0.6 5.6 10.3 0.4 0.4
Tata Motors Buy 275 319 73,267 192,330 219,770 12.8 13.1 37.0 44.5 7.4 6.2 2.1 1.6 31.2 28.9 0.4 0.4
TVS Motor Accumulate 40 45 1,898 7,466 8,290 6.2 6.3 4.8 5.6 8.3 7.1 1.4 1.3 18.2 18.7 0.2 0.2
Capital Goods
ABB* Sell 724 573 15,341 7,796 9,907 4.8 7.8 9.2 22.0 78.7 32.9 5.7 5.0 7.5 16.4 1.9 1.5BGR Energy Neutral 269 - 1,944 3,605 4,542 11.8 10.7 25.1 27.9 10.7 9.7 1.6 1.4 31.1 27.1 1.0 0.9
BHEL Neutral 238 - 58,167 47,801 43,757 18.5 18.0 24.6 21.8 9.7 10.9 2.9 2.5 33.5 24.5 1.1 1.2
Blue Star Buy 197 242 1,770 2,763 2,948 3.1 5.6 2.6 8.6 74.8 23.0 4.3 3.8 5.9 17.6 0.7 0.7
Crompton Greaves Buy 120 145 7,701 12,370 14,277 5.2 7.3 4.0 7.8 30.0 15.4 2.0 1.9 6.9 12.6 0.7 0.6
Jyoti Structures Accumulate 48 53 396 2,794 3,048 10.6 10.6 9.2 11.7 5.2 4.1 0.6 0.5 10.9 12.5 0.4 0.4
KEC International Accumulate 67 73 1,722 6,858 7,431 7.1 7.5 8.3 9.8 8.1 6.9 1.4 1.2 25.1 24.0 0.4 0.4
LMW Reduce 2,105 1,992 2,371 2,369 2,727 11.7 11.7 143.4 166.0 14.7 12.7 2.4 2.2 17.4 18.4 0.5 0.4
Thermax Neutral 601 - 7,156 5,514 5,813 9.3 10.2 28.1 31.2 21.4 19.3 3.8 3.3 19.2 18.5 1.2 1.1
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
Cement
ACC Neutral 1,428 - 26,804 11,085 12,415 21.6 21.4 79.4 83.1 18.0 17.2 3.5 3.1 20.1 19.2 2.1 1.8
Ambuja Cements Neutral 207 - 31,925 10,272 11,884 26.4 26.1 11.5 12.9 18.1 16.1 4.0 3.5 20.8 21.1 2.7 2.2
India Cements Neutral 89 - 2,722 4,293 4,666 17.7 18.1 8.6 10.8 10.3 8.2 0.8 0.7 7.5 9.0 1.0 0.9
J K Lakshmi Cements Accumulate 132 143 1,618 2,082 2,423 22.9 23.1 20.8 22.5 6.4 5.9 1.1 1.0 18.4 17.4 0.9 1.2
Madras Cements Neutral 206 - 4,903 3,814 4,045 29.3 27.5 18.7 19.2 11.0 10.7 2.0 1.7 19.9 17.4 1.9 1.7
Shree Cements^ Neutral 4,284 - 14,923 5,701 6,210 29.7 28.1 240.7 260.7 17.8 16.4 4.3 3.5 27.1 23.6 2.1 1.7
UltraTech Cement Neutral 1,952 - 53,517 21,368 24,043 22.5 23.5 103.5 121.4 18.9 16.1 3.5 3.0 20.2 20.1 2.5 2.3Construction
Ashoka Buildcon Buy 212 304 1,118 2,034 2,315 22.4 22.4 27.1 31.7 7.8 6.7 1.0 0.8 13.1 13.4 1.8 2.1
Consolidated Co Neutral 13 - 237 2,262 2,522 6.7 7.5 1.5 2.7 8.6 4.8 0.4 0.4 4.4 7.5 0.4 0.4
IRB Infra Buy 138 164 4,578 3,843 4,212 43.1 43.6 16.8 17.8 8.2 7.7 1.4 1.2 18.3 17.0 3.3 3.6
ITNL Buy 195 225 3,792 6,564 7,054 27.2 27.4 26.3 29.0 7.4 6.7 1.2 1.0 14.0 11.8 2.7 2.7
IVRCL Infra Neutral 45 - 1,395 4,249 6,897 7.8 8.2 0.3 3.3 147.4 13.8 0.6 0.6 0.4 4.4 0.9 0.6
Jaiprakash Asso. Neutral 101 - 21,493 13,842 15,863 26.9 26.4 3.7 4.6 27.5 22.1 1.7 1.6 6.2 7.3 3.0 2.7
Larsen & Toubro Neutral 1,666 - 102,465 60,556 69,167 11.2 11.6 73.8 85.5 22.6 19.5 3.6 3.2 13.5 14.1 1.9 1.6
Nagarjuna Const. Reduce 48 44 1,242 5,947 6,569 8.5 8.6 3.1 4.1 15.6 11.8 0.5 0.5 3.3 4.2 0.6 0.6
Punj Lloyd Neutral 58 - 1,923 11,892 13,116 9.0 9.0 1.8 3.2 32.0 18.0 0.7 0.6 2.5 3.7 0.6 0.5
Sadbhav Engg. Buy 130 168 1,967 2,344 2,804 10.6 10.7 7.2 8.7 18.1 15.0 2.2 1.9 13.0 13.5 1.2 1.0
Simplex Infra Buy 198 251 980 6,882 8,032 9.1 9.1 23.2 31.3 8.5 6.3 0.8 0.7 9.1 11.2 0.5 0.4
Financials
Allahabad Bank Neutral 155 - 7,760 6,392 7,238 2.7 2.8 30.3 33.3 5.1 4.7 0.8 0.7 14.8 14.5 - -
Andhra Bank Neutral 114 - 6,351 4,731 5,431 2.9 3.0 21.5 21.8 5.3 5.2 0.9 0.8 15.2 13.8 - -
Axis Bank Accumulate 1,335 1,476 56,986 15,686 18,687 3.1 3.2 116.8 138.0 11.4 9.7 2.1 1.8 20.0 20.2 - -Bank of Baroda Neutral 782 - 30,617 15,436 18,208 2.5 2.6 111.8 137.4 7.0 5.7 1.1 0.9 15.8 17.0 - -
Bank of India Neutral 290 - 16,617 12,491 14,883 2.2 2.4 43.8 63.7 6.6 4.5 0.9 0.7 12.1 15.8 - -
Bank of Maharashtra Neutral 57 - 3,384 3,563 3,876 3.1 3.1 9.7 12.0 5.9 4.8 0.8 0.7 14.6 16.1 - -
Canara Bank Neutral 471 - 20,856 10,699 12,213 2.1 2.2 67.3 80.1 7.0 5.9 1.0 0.9 13.7 14.6 - -
Central Bank Neutral 79 - 5,786 7,171 8,236 2.5 2.6 16.4 21.5 4.8 3.7 0.8 0.7 12.7 14.9 - -
Corporation Bank Neutral 429 - 6,349 4,780 5,569 2.0 2.1 101.8 99.2 4.2 4.3 0.7 0.6 17.0 14.7 - -
Dena Bank Accumulate 115 123 4,008 3,087 3,453 2.7 2.8 25.9 24.1 4.4 4.8 0.8 0.7 19.4 15.6 - -
Federal Bank Neutral 483 - 8,252 2,617 2,968 3.3 3.2 45.9 51.7 10.5 9.3 1.3 1.2 13.1 13.3 - -
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
Financials
HDFC Neutral 838 - 129,120 7,336 8,802 3.5 3.5 31.5 37.8 26.6 22.2 5.3 4.7 34.8 32.1 - -
HDFC Bank Neutral 692 - 163,783 21,696 26,811 4.4 4.5 28.7 36.0 24.2 19.2 4.6 3.9 20.7 22.0 - -
ICICI Bank Accumulate 1,119 1,270 128,677 22,271 26,690 3.0 3.0 69.2 83.1 16.2 13.5 2.0 1.8 14.2 15.7 - -
IDBI Bank Neutral 109 - 13,948 7,684 9,264 1.8 2.1 15.6 22.0 7.0 5.0 0.8 0.7 10.9 13.9 - -
Indian Bank Accumulate 188 202 8,090 5,874 6,551 3.2 3.2 40.6 41.8 4.6 4.5 0.8 0.7 18.1 16.4 - -
IOB Neutral 82 - 6,535 7,050 8,313 2.3 2.5 12.3 19.9 6.7 4.1 0.6 0.6 8.8 13.1 - -
J & K Bank Neutral 1,404 - 6,805 2,762 2,885 3.6 3.6 226.7 193.0 6.2 7.3 1.4 1.2 24.4 17.7 - -LIC Housing Finance Accumulate 272 298 13,704 1,799 2,255 2.3 2.4 20.3 27.3 13.4 10.0 2.1 1.8 16.9 19.7 - -
Oriental Bank Neutral 345 - 10,072 6,277 7,090 2.6 2.7 60.5 65.1 5.7 5.3 0.8 0.8 15.0 14.4 - -
Punjab Natl.Bank Neutral 813 - 27,575 19,652 22,601 3.2 3.3 135.0 164.3 6.0 5.0 1.0 0.9 16.3 17.3 - -
South Ind.Bank Reduce 26 25 3,494 1,556 1,750 2.8 2.7 3.5 3.9 7.5 6.8 1.3 1.1 19.1 16.9 - -
St Bk of India Accumulate 2,269 2,437 152,274 61,883 71,546 3.4 3.4 227.2 257.5 10.0 8.8 1.7 1.5 17.8 17.7 - -
Syndicate Bank Neutral 127 - 7,672 6,756 7,783 3.0 3.0 26.3 27.1 4.9 4.7 0.8 0.7 18.3 16.6 - -
UCO Bank Neutral 78 - 5,201 5,234 6,097 2.3 2.4 11.8 14.7 6.6 5.3 1.1 0.9 11.9 13.4 - -
Union Bank Neutral 247 - 13,590 9,912 11,536 2.8 2.9 40.4 46.7 6.1 5.3 1.0 0.9 16.1 16.4 - -
United Bank Neutral 76 - 2,735 3,500 3,912 2.6 2.8 15.8 21.2 4.8 3.6 0.6 0.5 13.1 15.7 - -
Vijaya Bank Neutral 61 - 3,015 2,354 2,754 2.0 2.2 7.4 10.2 8.3 6.0 0.8 0.7 9.3 11.9 - -
Yes Bank Accumulate 450 492 16,051 3,270 4,240 2.8 3.0 34.5 42.2 13.1 10.7 2.8 2.3 23.5 23.5 - -
FMCG
Asian Paints Neutral 4,376 - 41,974 11,198 13,184 16.2 16.2 123.7 146.4 35.4 29.9 12.0 9.5 38.1 35.4 3.7 3.1
Britannia Buy 488 584 5,835 5,627 6,581 4.9 5.7 18.3 24.7 26.7 19.8 9.7 7.5 39.1 42.7 1.0 0.8
Colgate Neutral 1,449 - 19,703 3,146 3,573 20.6 21.4 36.4 42.5 39.8 34.1 36.8 30.9 102.0 98.5 6.1 5.3
Dabur India Neutral 130 - 22,641 6,124 7,101 17.0 16.8 4.5 5.2 29.1 24.8 12.0 9.5 43.2 41.5 3.7 3.1
GlaxoSmith Con* Neutral 3,798 - 15,974 3,124 3,663 17.1 17.6 104.5 123.8 36.4 30.7 11.3 9.1 34.4 32.8 4.8 4.0
Godrej Consumer Neutral 728 - 24,791 6,355 7,548 18.4 18.6 22.8 27.6 31.9 26.4 7.3 6.0 26.4 26.1 4.1 3.4
HUL Neutral 532 - 115,037 25,350 28,974 13.3 13.5 14.7 17.1 36.1 31.2 28.6 20.2 84.5 75.8 4.3 3.8
ITC Neutral 298 - 234,597 29,409 34,060 35.7 36.1 9.3 10.9 32.0 27.3 10.6 8.8 35.8 35.3 7.7 6.6
Marico Neutral 218 - 14,055 4,840 5,643 13.1 13.1 6.2 7.8 35.3 28.0 6.7 5.5 25.4 22.6 3.0 2.5
Nestle* Neutral 4,825 - 46,521 8,529 10,079 20.8 21.1 113.1 137.8 42.7 35.0 25.6 17.9 70.5 60.2 5.5 4.6
Tata Global Neutral 166 - 10,235 7,207 7,927 9.7 10.0 6.6 7.8 25.0 21.2 2.5 2.4 8.6 9.5 1.3 1.2
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December 07, 2012
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7/30/2019 Market Outlook 071212
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
IT
HCL Tech^ Neutral 639 - 44,336 24,214 26,772 19.5 18.1 44.0 48.0 14.5 13.3 3.4 2.9 24.0 22.0 1.8 1.5
Hexaware* Buy 110 135 3,255 1,944 2,159 21.8 21.1 11.4 12.2 9.7 9.0 2.5 2.1 26.4 24.1 1.4 1.2
Infosys Accumulate 2,382 2,573 136,799 39,174 41,580 29.5 30.4 159.2 171.6 15.0 13.9 3.6 3.2 24.1 23.1 2.9 2.7
Infotech Enterprises Neutral 193 - 2,152 1,886 2,032 17.9 17.3 18.7 20.2 10.3 9.6 1.5 1.3 14.9 14.0 0.8 0.7
KPIT Cummins Accumulate 125 132 2,232 2,195 2,317 15.5 15.0 10.7 12.1 11.6 10.4 2.5 2.0 21.0 19.8 1.0 0.9
Mahindra Satyam Accumulate 102 115 11,957 7,597 8,141 20.0 18.8 9.7 10.4 10.5 9.8 2.9 2.2 27.5 22.9 1.2 1.0
Mindtree Accumulate 695 747 2,856 2,324 2,437 20.0 17.7 73.3 74.7 9.5 9.3 2.3 1.8 24.1 19.7 1.0 0.8Mphasis& Neutral 388 - 8,158 5,700 5,993 18.0 16.9 37.0 37.3 10.5 10.4 1.5 1.3 14.3 12.6 1.0 0.8
NIIT Accumulate 32 36 524 1,048 1,161 9.3 10.9 4.2 6.2 7.6 5.1 0.8 0.7 10.5 14.1 0.3 0.2
Persistent Neutral 490 - 1,961 1,261 1,352 26.4 24.7 48.2 54.0 10.2 9.1 1.9 1.6 19.0 17.9 1.2 1.1
TCS Accumulate 1,297 1,410 253,881 61,053 67,313 28.7 29.1 69.7 76.2 18.6 17.0 6.1 5.0 32.6 29.1 4.0 3.5
Tech Mahindra Buy 887 1,070 11,336 6,603 7,150 19.8 18.4 92.9 102.0 9.6 8.7 2.3 1.8 23.7 21.0 1.8 1.6
Wipro Accumulate 381 421 93,816 43,219 47,241 20.0 20.0 26.1 28.1 14.6 13.6 2.8 2.4 19.3 17.9 1.8 1.6
Media
D B Corp Buy 218 259 4,001 1,581 1,784 23.3 25.0 11.6 14.4 18.8 15.1 3.7 3.1 21.0 22.3 2.4 2.1
HT Media Accumulate 107 113 2,519 2,111 2,272 15.0 15.2 7.4 8.3 14.6 13.0 1.6 1.4 11.3 11.4 0.8 0.7
Jagran Prakashan Accumulate 102 117 3,228 1,503 1,681 23.1 23.1 6.4 7.3 16.0 14.1 4.0 3.5 25.8 26.5 2.3 2.0
PVR Neutral 321 - 926 682 786 17.3 16.9 17.6 19.7 18.2 16.3 2.2 1.9 14.9 14.5 1.7 1.4
Sun TV Network Neutral 419 - 16,522 1,942 2,237 77.2 75.5 17.6 19.1 23.8 22.0 6.0 5.3 25.8 25.2 8.0 6.9
Metals & Mining
Bhushan Steel Neutral 474 - 10,067 11,307 14,287 29.5 29.1 45.1 51.0 10.5 9.3 1.2 1.1 12.2 12.2 2.9 2.3
Coal India Neutral 361 - 228,273 66,666 70,292 25.7 27.3 24.2 26.6 15.0 13.6 4.4 3.6 33.1 29.1 2.5 2.2
Electrosteel Castings Buy 25 29 856 1,984 2,074 10.6 11.6 0.8 2.0 29.6 12.2 0.5 0.2 1.7 4.1 0.6 0.6Hind. Zinc Neutral 138 - 58,457 12,446 13,538 52.3 52.9 15.0 16.4 9.3 8.5 1.8 1.5 21.4 19.7 2.8 2.2
Hindalco Neutral 121 - 23,138 79,148 89,258 9.4 9.0 15.0 15.6 8.1 7.8 0.7 0.6 8.8 8.4 0.7 0.6
JSW Steel Neutral 772 - 17,224 39,586 41,459 17.6 17.0 78.7 90.1 9.8 8.6 1.0 0.9 10.2 10.7 0.8 0.8
MOIL Neutral 256 - 4,302 941 1,019 47.3 48.3 25.8 28.1 9.9 9.1 1.6 1.4 16.7 16.2 2.2 1.9
Monnet Ispat Buy 279 344 1,795 2,501 3,264 22.2 24.6 41.8 55.2 6.7 5.1 0.7 0.6 11.3 13.4 1.8 1.3
Nalco Reduce 49 44 12,525 6,898 7,841 9.9 14.7 2.0 3.2 24.5 15.3 1.1 1.0 4.3 6.8 1.3 1.2
NMDC Buy 164 198 65,041 11,209 12,525 78.4 78.3 18.5 20.6 8.9 8.0 2.2 1.8 27.0 24.6 3.9 3.2
SAIL Neutral 83 - 34,366 47,252 60,351 14.2 14.8 9.6 11.7 8.7 7.1 0.8 0.7 9.4 10.6 1.2 1.0
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
Metals & Mining
Sesa Goa Neutral 189 - 16,435 4,551 6,640 32.8 34.4 33.7 39.3 5.6 4.8 1.0 0.8 18.3 18.3 4.3 2.9
Sterlite Inds Neutral 113 - 37,908 43,185 45,442 23.3 23.7 16.8 17.9 6.7 6.3 0.7 0.7 11.6 11.2 0.9 0.8
Tata Steel Buy 398 463 38,620 145,725 154,108 8.3 9.5 22.0 44.5 18.1 8.9 0.9 0.8 4.9 9.3 0.6 0.5
Sarda Accumulate 138 153 496 1,442 1,494 17.6 17.3 27.2 28.7 5.1 4.8 0.6 0.5 11.5 11.0 0.7 0.7
Prakash Industries Buy 52 73 698 2,694 2,906 14.6 16.6 16.4 20.8 3.2 2.5 0.3 0.3 11.4 12.8 0.5 0.4
Godawari Power andIspat
Buy 120 143 381 2,342 2,470 13.7 15.3 27.7 33.8 4.3 3.6 0.4 0.4 10.9 11.4 0.6 0.6
Oil & Gas
Cairn India Accumulate 332 382 63,494 17,567 17,643 76.2 72.3 61.1 56.8 5.4 5.9 1.1 1.0 22.0 17.5 2.8 2.4
GAIL Neutral 354 - 44,841 46,652 54,142 15.7 15.7 34.0 35.3 10.4 10.0 1.8 1.6 18.5 16.8 0.7 0.5
ONGC Buy 267 312 228,645 147,139 154,821 33.9 33.7 30.7 32.3 8.7 8.3 1.5 1.4 18.3 17.2 1.3 1.2
Reliance Industries Neutral 831 - 272,083 362,700 380,031 7.9 8.0 60.0 63.3 13.9 13.1 1.3 1.2 11.1 10.6 0.7 0.7
Gujarat Gas* Neutral 304 - 3,900 3,128 3,707 13.2 11.7 22.8 23.5 13.3 12.9 4.0 3.6 33.2 29.2 1.1 0.9
Indraprastha Gas Neutral 264 - 3,695 3,213 3,643 23.3 23.5 24.3 25.7 10.9 10.3 2.5 2.1 25.0 22.1 1.3 1.1
Petronet LNG Accumulate 160 183 12,019 30,077 33,570 6.6 6.3 15.1 15.3 10.6 10.5 2.7 2.2 28.4 23.1 0.4 0.4
Gujarat State PetronetLtd.
Neutral 75 - 4,243 1,079 1,034 91.8 91.9 8.8 8.4 8.6 9.0 1.4 1.3 17.9 15.0 3.7 3.7
Pharmaceuticals
Alembic Pharma Buy 67 91 1,255 1,624 1,855 14.2 15.6 6.6 9.1 10.1 7.3 2.5 1.9 27.9 29.9 0.9 0.8
Aurobindo Pharma Neutral 195 - 5,673 5,243 5,767 14.6 14.6 11.8 12.6 16.5 15.5 2.1 1.8 17.9 16.4 1.6 1.4
Aventis* Neutral 2,207 - 5,083 1,482 1,682 15.5 15.5 95.1 104.4 23.2 21.1 4.1 3.2 18.6 17.0 3.2 2.8
Cadila Healthcare Accumulate 846 926 17,327 6,148 7,386 18.6 19.6 32.7 44.8 25.9 18.9 5.7 4.6 23.7 26.6 3.2 2.6
Cipla Neutral 414 - 33,265 8,151 9,130 25.0 24.0 19.5 20.9 21.3 19.8 3.7 3.2 18.8 17.2 3.9 3.3
Dr Reddy's Neutral 1,832 - 31,100 10,696 11,662 20.7 21.0 83.7 92.9 21.9 19.7 4.5 3.8 22.4 20.8 3.2 2.8
Dishman Pharma Buy 122 145 987 1,280 1,536 20.2 20.2 10.4 14.5 11.8 8.4 1.0 0.9 8.7 11.0 1.4 1.2
GSK Pharma* Neutral 2,045 - 17,321 2,651 2,993 31.7 31.2 76.0 82.4 26.9 24.8 7.8 6.9 20.1 26.3 5.7 5.0
Indoco Remedies Buy 68 89 622 685 837 15.2 15.2 7.4 8.9 9.1 7.6 1.4 1.2 16.4 17.0 1.1 0.9
Ipca labs Accumulate 461 485 5,815 2,850 3,474 21.0 21.0 29.9 37.3 15.4 12.4 3.7 2.9 26.7 26.4 2.2 1.8
Lupin Accumulate 595 652 26,631 8,426 10,082 19.7 20.0 26.3 31.3 22.6 19.0 5.3 4.3 26.0 24.7 3.3 2.7
Ranbaxy* Neutral 514 - 21,717 12,046 11,980 18.0 15.8 31.3 29.8 16.4 17.3 5.6 4.5 39.1 28.9 1.8 1.8
Sun Pharma Neutral 703 - 72,668 9,752 12,134 41.6 41.6 26.0 28.2 27.0 24.9 5.1 4.3 20.3 18.8 6.7 5.2
Power
CESC Neutral 319 - 3,987 5,218 5,644 24.2 23.8 44.6 47.6 7.2 6.7 0.8 0.7 11.0 10.6 1.5 1.5
GIPCL Accumulate 69 78 1,038 1,523 1,568 30.3 30.3 5.4 11.5 12.7 6.0 0.7 0.6 5.6 11.3 1.2 1.0
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December 07, 2012
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Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
Power
NTPC Neutral 159 - 130,979 74,111 85,789 22.7 23.1 12.1 13.7 13.1 11.6 1.6 1.5 12.6 13.2 2.4 2.2
Real Estate
Anant Raj Sell 101 78 2,973 657 875 52.0 56.1 8.4 12.7 12.0 7.9 0.7 0.7 6.3 8.9 5.8 4.4
DLF Neutral 222 - 37,768 9,878 12,033 44.7 46.1 9.6 13.4 23.2 16.6 1.5 1.4 6.4 8.7 6.3 5.2
HDIL Neutral 118 - 4,930 2,441 3,344 55.1 48.2 22.7 26.6 5.2 4.4 0.4 0.4 8.8 9.4 3.9 2.9
MLIFE Neutral 413 - 1,685 813 901 26.2 26.6 32.0 37.1 12.9 11.1 1.3 1.2 10.4 11.0 2.5 2.1
TelecomBharti Airtel Neutral 330 - 125,337 81,984 90,718 32.1 33.8 10.9 16.9 30.2 19.6 2.3 2.1 7.6 10.6 2.2 1.8
Idea Cellular Neutral 97 - 32,269 22,234 24,161 26.9 27.7 3.3 4.9 29.5 19.8 2.3 2.0 7.7 10.3 1.9 1.7
Rcom Neutral 72 - 14,954 21,090 22,308 31.8 29.9 3.0 3.8 23.8 19.1 0.4 0.4 1.7 2.1 2.4 2.1
zOthers
Abbott India Accumulate 1,466 1,590 3,115 1,629 1,886 11.8 13.3 60.8 79.5 24.1 18.4 5.0 4.1 22.0 24.4 1.7 1.4
Bajaj Electricals Neutral 208 - 2,071 3,497 3,968 6.6 7.6 9.8 15.5 21.2 13.4 2.7 2.3 12.7 17.4 0.6 0.5
Cera Sanitaryware Neutral 417 - 528 427 528 15.7 14.6 30.0 34.0 13.9 12.3 3.1 2.5 24.6 22.5 1.3 1.1
Cravatex Buy 418 545 108 272 308 7.2 7.3 37.5 45.4 11.2 9.2 2.7 2.1 23.7 22.7 0.5 0.4
CRISIL Neutral 1,029 - 7,230 982 1,136 34.3 34.3 34.3 40.0 30.0 25.7 13.6 10.9 50.9 46.9 6.9 5.8
Finolex Cables Neutral 61 - 928 2,304 2,552 9.9 9.1 8.2 10.1 7.4 6.0 1.0 0.9 13.7 14.7 0.4 0.3
Force Motors Accumulate 478 537 623 2,318 2,700 5.0 5.7 45.0 67.0 10.6 7.1 0.5 0.5 5.0 7.0 0.2 0.2
Goodyear India Accumulate 335 360 773 1,494 1,607 6.4 7.8 23.9 33.0 14.0 10.1 2.2 1.9 16.5 20.1 0.3 0.3
Greenply Industries Neutral 307 - 740 1,925 2,235 10.6 10.9 29.6 44.1 10.4 7.0 1.7 1.4 16.8 21.0 0.7 0.6
Hitachi Buy 126 146 289 873 989 4.4 6.5 6.4 12.2 19.8 10.4 1.6 1.4 8.3 14.4 0.4 0.3
Honeywell Automation* Buy 2,365 2,842 2,091 1,745 1,993 4.0 5.3 59.5 90.4 39.8 26.2 3.0 2.6 8.1 11.3 1.1 0.9
Styrolution ABS India* Accumulate 704 744 1,238 1,059 1,116 8.5 9.5 36.0 42.0 19.6 16.8 2.9 2.5 15.4 16.0 1.2 1.1ITD Cementation Neutral 238 - 274 1,323 1,455 12.4 12.4 23.2 27.7 10.3 8.6 0.7 0.6 6.8 7.6 0.7 0.6
Jyothy Laboratories Neutral 188 - 3,032 1,228 1,443 9.0 10.9 3.9 6.4 48.4 29.4 4.8 4.4 10.1 15.6 3.0 2.5
MCX Reduce 1,533 1,440 7,818 553 624 65.3 66.3 62.5 72.0 24.5 21.3 6.7 5.8 27.5 27.4 11.1 9.4
MRF Accumulate 11,639 12,884 4,936 11,804 12,727 10.4 10.5 1,289.9 1,431.3 9.0 8.1 1.7 1.4 21.3 19.4 0.6 0.5
Page Industries Neutral 3,479 - 3,881 836 1,023 20.2 20.6 105.6 133.4 33.0 26.1 16.8 11.8 59.3 53.2 4.7 3.8
Relaxo Footwears Buy 784 933 941 1,019 1,208 11.0 12.5 47.0 66.7 16.7 11.8 4.1 3.1 28.2 30.1 1.1 0.9
Sintex Industries Buy 65 79 1,936 4,751 5,189 16.3 16.6 13.6 15.8 4.7 4.1 0.6 0.6 12.9 13.2 0.8 0.6
Siyaram Silk Mills Buy 306 366 287 1,043 1,149 12.3 12.9 65.7 73.3 4.7 4.2 0.9 0.8 21.0 19.6 0.5 0.5
S. Kumars Nationwide Neutral 16 - 476 7,134 7,985 19.7 19.4 12.2 14.1 1.3 1.1 0.1 0.1 11.3 11.5 0.6 0.6
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December 07, 2012
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7/30/2019 Market Outlook 071212
12/13
Company Name Reco CMP Target Mkt Cap Sales ( cr ) OPM(%) EPS () PER(x) P/BV(x) RoE(%) EV/Sales(x)
( ) Price ( ) ( cr ) FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E FY13E FY14E
zOthers
SpiceJet Reduce 49 43 2,356 5,720 6,599 5.3 6.8 3.6 5.4 13.5 9.1 19.5 6.2 - - 0.5 0.5
TAJ GVK Buy 74 108 466 300 319 35.8 36.2 7.9 9.1 9.4 8.2 1.2 1.1 13.9 14.4 1.9 1.6
Tata Sponge Iron Buy 309 384 476 750 803 18.6 18.4 65.4 69.1 4.7 4.5 0.7 0.6 16.5 15.3 0.3 0.2
TVS Srichakra Buy 263 335 201 1,476 1,643 7.0 8.2 32.6 55.9 8.1 4.7 1.3 1.1 16.8 24.8 0.4 0.3
United Spirits Neutral 2,015 - 26,349 10,289 11,421 12.8 12.8 26.0 45.3 77.5 44.5 3.5 3.3 5.8 7.6 2.9 2.6
Vesuvius India Neutral 354 - 718 560 611 16.1 17.0 24.7 28.8 14.3 12.3 2.1 1.9 15.8 16.2 1.2 1.0
Source: Company, Angel Research; Note: *December year end; #September year end; &October year end; Price as on December 06, 2012
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Market OutlookDecember 07, 2012