Sunday, October 4, 2009

VARIOUS II Research Reports

AHLUWALIA CONTRACTS INDIA -- India Infoline
The expected investment in urban infrastructure under JNNURM program is RS 1271 bn. Huge potential for ACIL to increase its order book, the company expects to increase its urban infrastructure order book share to 30% by FY11 from current levels of 19%.

We do not rule out the possibility of further earnings surprises in Q2FY10, but believe that the market has largely factored in the probability. In our view, large cap valuations appear stretched and could hinder index movement; this, however, is no cause for alarm as the broad market still provides select lucrative opportunities.

India is likely to emerge 10th largest pharma market by 2015. Indian Pharma market, currently stands at US$16bn, is likely to be a US$50bn market by 2015. With the emergence of Innovator-generic partnerships model, we believe Indian generic companies will continue to trade at premium valuations. CRAMS industry in India is at a nascent stage and set for multi year secular growth trend. While Biosimilars is a big opportunity, there is still lack of clarity for product launches in the regulated markets.

We expect order inflows for transmission line orders alone to increase from Rs41bn in FY10 to Rs77bn in FY17. Given the large opportunity in this space, competition is expected to increase. However, in the long term, we expect the top four players (including L&T) to maintain a combined market share of 70-75%.

The latest initiatives undertaken by the stable Indian government towards PSU disinvestment and focused approach in infrastructure developments such as roads, ports, airports, railways and the hydrocarbon sector are likely to benefit companies in the PSU arena. In addition, valuations of the companies mentioned below remain attractive despite the recent run up in the market. Investment in these companies with an 18 months time horizon is likely to deliver return between 36-42 percent. The basis of selection is expected good earnings visibility, high ROE, high cash reserves, and investments.

We have upgraded SAIL to Buy (from Hold) due to improved mid-term revenue visibility on the back of renewed demand from various government projects and the consumer durable,
automobile and construction sectors.

Efforts are on to generate USD75-100/t of EBITDA at Corus even in a depressed price regime. This, along with strong domestic earnings aided by increase in scale and upsurge in ferro alloys realisations make for a strong case for earnings expansion over the next two years. We thus have revised our target price to INR551 (from earlier INR501), and recommend a BUY.

No comments:

Post a Comment

xe.com  Universal Currency Converter ®
Convert this amount
of this type of currency
into this type of currency.

enter any amount

scroll down to see more currencies

scroll down to see more currencies
Universal Currency Converter under license from XE.com. Terms of Use

About Me

DISCLAIMER

All opinions are based on my technical study; however, I do not vouch for the accuracy or the completeness of the matter. I am not liable for any potential damages that may be incurred while acting upon any information mentioned in this report. The views expressed are not of binding nature. The report is intended for a restricted audience & I am not soliciting any action based on it. Please exercise discretion and due diligence in making your decisions. Investments in Capital Markets are not my obligation or guarantee and are subject to investment risks. In no event will I be liable for any damages, including without limitation direct or indirect, special, incidental or consequential damages, losses or expenses arising in connection with this report or use thereof or inability to use by any party, or in connection with any failure of performance, error, omission, interruption, defect, delay in operation even if I am thereof, advised of the possibility of such damages, losses or expenses.