Emkay Global Financial Services has come out with its hold, buy and accumulate strategies for 7 stocks. Persistent Systems, Jubilant Lifesciences, United Phosphorus, Phoenix Mills, Sesa Goa, Sterlite Industries and Gujarat Narmada Valley Fertilizers Company are the stocks in the list.
Persistent Systems Reco: HOLDCMP: Rs 521
Target Price: Rs 500 Await consistency to turn constructive, retain HOLD
- Persistent reported inline revenues at US$ 60.8 mn (+1.2% QoQ), however margins slipped by ~250 bps QoQ to 24.7% (lower than est) driving lower than est profit performance
- Linear rev grew by ~1.8% QoQ (V/s 3% in Sep’12 qtr). We note that IP bus have contributed to ~80% of FY13YTD growth with linear business growing by a mere 3% YoY in 9MFY13
- Mgmt confident of a stronger FY14 both for IP/linear business, cites decent pipeline. Acquires Novaquest to strengthen E2E PLM service capabilities
- Incorporate Doyenz and Novaquest acquisitions in our est driving a 4/2% increase in FY13/14E EPS. Roll over to FY15 drives raise in TP to Rs 500. HOLD stays as we await more consistency in financial performance to turn constructive.
CMP: Rs 228
Target Price: Rs 340 In-line with expectations – Maintain Buy
- Q3FY13 Results, in-line with expectations – Revenues at Rs13.1bn (up 20%YoY), b) EBITDA at Rs2.6bn (up 25% YoY) and c) APAT at Rs977mn (up 27% YoY)
- Top-line growth was led by 19% growth in pharma biz & 20% growth in ingredients biz. Margins expanded by 75 bps on back of raw material prices easing in Ingredients biz.
- Debt/Equity ratio has come down to 1.3:1 from 1.5:1 earlier on back of repayment of Rs. 1.2 bn debt. Going forward, debt/equity ratio will come down to 1 by the end of FY14.
- Stock is trading at attractive valuations of 7xFY14E EPS & 6x FY14E EV/EBITDA and with earnings CAGR of 26% over FY12-14E, we maintain Buy with a target price of Rs 340.
CMP: Rs 137
Target Price: Rs 172 Encouraging results; maintain Accumulate
- UPL reported encouraging results for Q3FY13. Topline increased by 19% yoy driven by volume growth of 15%. Gross margins improved 200bps yoy; APAT at Rs 1.7bn, 50% yoy
- RoW will remain the key growth driver over the medium term led by growth in Brazil & expansion in new geographies. India remains a key focus market & is likely to rebound
- Management indicated improving product profile & rationalization of costs are likely to result in 200bps improvement in margins over medium term. Working capital is unlikely to deteriorate further
- Maintain Accu with target of Rs 172. At CMP, valuations remain attractive as stock trades at 40% disc to peers.
CMP: Rs 258
Target Price: Rs 285 HSP surprises positively
- HSP continues to surprise on the positive side. Avg. rental crosses Rs 204/sf/mth. With another 0.15msf up for renewal by FY14, we believe this avg. to touch Rs 214 by FY15
- Occupancy and leasing across the MC projects increases QoQ, adding more to our NAV estimation. Blore (W) housing sales velocity & realizations also surprises positively
- Shangri La hotel is operational with 120 of 390 rooms. MC Chennai also commences operations in Jan’13 with 95% lease area and more than 55% occupancy
- Upgrade TP to Rs 285, maintaining Accumulate rating. Increase in TP is mainly on back of HSP’s valuation due to rising rentals and valuing 0.5msf of free area against 0.25msf.
CMP: Rs 183
Target Price: Rs 178 Operations on a standstill
- Excluding Cairn India, Sesa Goa posted a loss of Rs 1.7 bn including other income of Rs 154 mn. With Cairn's Rs 6.7 attributable PAT, the reported PAT came at Rs 5.0 bn
- Without any meaningful contribution from iron ore, the company posted an EBITDA loss of Rs 1303 mn as pig iron margins of 4.3% could not offset the total fixed costs
- Topline at Rs 2.4 bn, down 91% YoY on back of ban on iron ore mining. The company could sell only 30 kt of ore through e-auction. Pig iron contributed Rs 1.7 bn to the topline
- We don’t see any near term relief for iron ore business; with Sesa Sterlite merger nearing completion, our SOTP fair value for the merged entity stands at Rs 178 per share; Assign Hold.
CMP: Rs 113
Target Price: Rs 107 Subdued performance
- APAT at Rs 12.5 bn, down 18% QoQ mainly due to weak operational performance; Adjusting for an exchange loss of Rs 0.6 bn, reported PAT stood at Rs 11.9 bn was down 32% QoQ
- EBITDA at Rs 23.3 bn, was down 8% QoQ with margin falling 109 bps QoQ and 83 bps YoY to 21.7%. Except intl. zinc, EBIT margins across the segments fell sharply led by power
- Topline at Rs 107 bn, up 4% YoY and down 3% QoQ fell short of our estimates (Rs 111 bn), primarily on account of lower copper volume and weak PLF (31%) at SEL
- Our revised SOTP target price for Sesa Sterlite stands at Rs 178/share. Based on the merger ratio, the corresponding value for Sterlite stands at Rs 107/share. Assign Hold.
CMP: Rs 79
Target Price: Rs 105 Valuations remain attractive; maintain Buy
- GNFC reported encouraging results for Q3FY13 driven by strong performance of fertiliser division. Revenues stood at Rs 11.1bn, 7% yoy ; PAT at Rs 1bn, 17% yoy
- Fert margins at 11.5% surprised positively. GNFC reported fert revenues of Rs 6.5bn, 1% yoy. Urea volumes stood at 190000mt, -4% yoy; complex fert volumes 44200mt, -17% yoy
- Chemicals performance remained satisfactory. Chemicals reported revenues of Rs 4.6bn, 17% yoy with EBIT of 848mn, 16% yoy (margins of 18.6%)
- GNFC continues with its Rs 42bn capex which is likely to be completed by FY13 end. Maintain Buy with target of Rs 105. At CMP, stock trades at 3.5x FY14 earnings/60% disc to BV.
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