Angel Broking's research report
Dishman Pharmaceuticals & Chemicals
"For 3QFY2014, Dishman posted lower-than-expected numbers, both on the sales and net profit front. The company posted net sales of Rs 313.4cr for the quarter, lower than an expected Rs 370cr. The dip in the sales was on back of the CRAMS segment, which dipped by 1.9 percent yoy to end the period at Rs 205cr, while the MM segment posted almost flat sales, which came in at Rs 108.3cr. The OPM came in at 19.4 percent (vs our expectation of 19.1 percent), expanding by 123bp yoy. The expansion in the margins came on back of a 514bp expansion in the gross profit margin and an almost flat other expenditure for the quarter. Thus, the net profit came in at Rs 15.2cr (vs an expected Rs 20cr), ie an 8.1 percent yoy dip for the quarter."
Outlook and valuation: "We expect Dishman’s net sales and net profit to come in at Rs 1,464cr and Rs 117.7cr, respectively, in FY2015. At current levels, Dishman is trading at 6.1x and 5.4x FY2014E and FY2015E earnings, respectively. We believe the current valuations are attractive, hence, we maintain our Buy recommendation on the stock with a target price of Rs 117.
"During 3QFY2014, Mumbai market achieved operational breakeven aided by 25 percent yoy growth in revenues to Rs 47cr. However, Mint reported a loss of Rs 2.5cr during the quarter. The Management expects Mint to achieve operational breakeven in 4QFY2014. The digital business continues to make losses. According to Management commentary, the digital business is expected to make a loss of Rs 38cr in FY2014."
Outlook and valuation: "At the current market price, HT Media is trading at attractive valuations of 7.5x FY2015E consolidated EPS of Rs 9.6. We maintain Buy on the stock with a target price of Rs 84, based on 8.8x FY2015E EPS. Downside risks to our estimates include 1) a sharp rise in newsprint prices in INR terms, and 2) higher-than-expected losses/increase in the breakeven period of emerging editions and digital business," says Angel Broking research report.
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