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Hold TVS Motor, TRF; accumulate Jubilant FoodWorks: Emkay
Emkay Global Financial Services has recommended hold rating on TVS Motor, TRF and recommended accumulate rating on Jubilant FoodWorks in its November 3, 2011 research report.
Emkay Global Financial Services has recommended hold rating on TVS Motor , TRF and recommended accumulate rating on Jubilant FoodWorks in its November 3, 2011 research report.
TVS Motor Results in line with Sales/EBITDA/PAT at Rs 19.9bn/1.4bn/765mn vs est. of Rs 19.7bn/1.4bn/752mn. Company invested Rs 769mn in various subsidiaries during the quarter. Oct 2011 vols declined by ~6.3% YoY to ~183,000 units due to one week maintenance shut down. Strong demand led to delay in planned shutdown (generally in May) to October. Retain FY12E/FY13E vols. at 2.3mn/2.6mn units. Upgrade our F12E/FY13E by 12%/16% to Rs 5.8/7.2 due to favorable forex, price hike of 1%/3.5% in dom./exports and lower RM cost We maintain our volume estimates for FY12E/13E at 2.3mn/2.6mn units respectively. Our estimates imply volume growth of ~14% in H2FY12. We revise our net sales by 1.4%/1.6% in FY12/13 to factor in improved realizations and price hike of 1%/3.5% in domestic and export markerts. We increase our EBITDA margins by 50bps/80bps in FY12/13 driven by price hike, moderation in input costs and favorable forex rates. We factor in USD/Re at Rs 46/47.5 in FY12/13 vs our earlier est. of Rs 45.5. Our net profit estimates is revised upwards by 11.7%/15.7% to Rs 2.8bn/3.4bn in FY12/13..
TRF Improved operational performance - Standalone sales up 13% yoy to Rs 1.2 bn with EBITDA mgn of 10.5% - negated by forex loss of Rs 54 mn. Projects div. EBIT loss reduces to Rs 11 mn. Auto components surprises positively with 7.1% EBITDA margins (+380 bps qoq). Revenue growth healthy at 18% qoq to Rs 1.4 bn. Net loss of Rs 2 mn due to forex loss of Rs 60 mn. Dry run in order inflows continues for 6th consecutive quarter. Order book down 3% qoq to Rs 12.8 bn. Retains guidance of Rs 10 bn inflows for FY12E on back of Rs 5 bn L1 orders. Retain our FY12E and FY13E consolidated earnings estimates of Rs 32.7 and Rs 29.4 per share respectively. Despite strong improvement in operational performance in Q2FY12, risks to earnings remain from (1) concerns on profitability of incremental order inflows (2) profitable execution of current order backlog (3) concerns on sustainability of operating performance in auto business and (4) high DER at 2.4X (Sep'11). We retain our FY12E and FY13E consolidated earnings estimates of Rs 32.7 and Rs 29.4 per share respectively. With no upside catalysts, we retain HOLD rating with price target of Rs 282 per share.
Jubilant FoodWorks Q2FY12 performance on expected lines - sales growth of 47% yoy to Rs 2.4 bn is driven by strong 27% same store growth. APAT growth of 33% yoy to Rs 246 mn. Moderation in SSG to 27% in Q2FY12... but remains on expected lines... attributed to base effects with no visible signs of consumer spending being curtailed. Incurred expenditure of Rs 9 mn on Dunkin Donuts. Process of formalizing the food menu, supply chain, store location, etc - reiterates to open its first Dunkin Donuts outlet in H1CY12E. JFL continues to progress on expansion of Dominos franchisee and introduce Dunkin Donut's franchisee. We continue to maintain our positive bias, considering the robust business model and strong growth potential of QSR segment in India. Further, we expect JFL to continue its robust earnings growth momentum for next 5-7 years - capitalizing the untapped market potential. We maintain our ACCUMULATE rating on the stock with a target price of Rs 900/share, says Emkay Global Financial Services research report.
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