Macquarie Research, Commodities - No let-up from Queensland weather

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Commodities Comment
No let-up from Queensland weather
Feature article
 The latest chapter in the weather-afflicted Queensland summer is Tropical
Cyclone Yasi, now bearing down on the coastline. While the beleaguered
coal mining sector looks set to avoid a direct hit, disruption to ports and base
metals mines seems inevitable. We note that any volume constraint will
further tighten commodity markets already under intense strain from amplified
levels of demand.

Kotak Sec: Bharti Airtel - 3QFY11 results weak; valuations rich

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Bharti Airtel (BHARTI)
Telecom
3QFY11 results weak; valuations rich despite benign assumptions. REDUCE. Rich
valuations and aggressive EBITDA growth estimates for FY2012/13E continue to seek
comfort in a fab quarter – 3QFY11 was not one, with the company missing estimates
on revenues, EBITDA and net income. Sub-par Indian wireless traffic growth served the
key disappointment, even as market share gains and visible signs of elasticity in Africa
are encouraging. We maintain revenue/EBITDA estimates and TP. REDUCE.

Ambuja Cement -Realisations lower than expected : Rs 130 target; Emkay

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Ambuja Cement

Realisations lower than expected

HOLD

CMP: Rs 125                                        Target Price: Rs 130

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n     APAT at Rs2.14bn (-11.3% yoy ) below est of Rs2.52 bn, led by lower than expected realizations (Rs3584/t). Revenue grew 0.9%yoy- volume growth of 3.3%, realisation down 2.4% yoy 

n     EBITDA at Rs 3.14bn (-27.7%yoy, below est–Rs4.2 bn) -  EBITDA/t at Rs629 down 30%yoy, 3.3% qoq – Downgrade CY11 EPS by 10.7%. Introduce CY12 EPS at Rs9.6

n     Cement offtake improves in Jan – prices hiked Rs15-20/bag in Jan-Feb. Sustainability of cement price over medium term remains uncertain, as demand yet to see significant pick up

n     Stock down 13% in last one month – however valuations at PER of 15.6X & EV/ton of USD133 still not in comfort zone. Maintain HOLD with price target of Rs130

Indian Power - Coal linkages: Beats from the busbar :: Macquarie

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Indian Power - Coal linkages: Beats from the busbar*
Event
􀂃 Over the past week, we have spoken to managers/operators at 22 central and
state government owned coal-fired power plants to get their view on coal
supply from linkages with Coal India (CIL). Two key takeaways were:
⇒ IPPs with upcoming capacities are at much greater risk of not getting
coal than existing government plants as the former do not have FSAs
with high penalty rates (~90%).
⇒ ~50% of respondents noted that they see supply constraints over the
next two years and 80% of those highlighted that rail infrastructure was
the main issue. This was more pronounced in southern states.

Buy Blue Star – 3QFY2011 Result; Target Rs. 477- Angel Broking

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 Blue Star – 3QFY2011 Result Update

Angel Broking maintains a Buy on Blue Star with a Target Price of Rs. 477.

For 3QFY2011, Blue Star reported a weak performance. The top line increased
by mere 4.2% yoy to `613cr (`589cr), against our expectation of `705cr. OPM
declined by 210bp yoy to 7.7% (9.8%), again much below our estimates.
Consequently, PAT declined by 47.2% yoy to `22cr (`42cr). During the quarter,
the company slowed down the pace of revenue billing, given its high debtor
position. This was the primary reason for the company’s lower-than-expected
performance in 3QFY2011. During the quarter, the business environment was
disappointing as well. The expected pick-up in demand from the commercial real
estate market did not materialise during this quarter and seems to have been
delayed by a couple of quarters. Owing to weaker-than-anticipated business
outlook, we have revised our top-line estimates for FY2011 and FY2012
downwards by 7.1% and 9.9% to `2,938cr and `3,594cr, respectively, and PAT
estimates by 19.5% and 20.0% to `173cr and `226cr, respectively. We maintain
our Buy recommendation on the stock

Buy Consolidate Construction Consortium – 3QFY2011; Target Rs.63 - Angel Broking;

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Consolidate Construction Consortium – 3QFY2011 Result Update

Angel Broking maintains a Buy on Consolidate Construction Consortium with a Target Price of Rs. 63.

CCCL extended its disappointing performance this quarter as well. While top-line
came in flat mainly on account of the slow-moving infrastructure orders, margins
positively surprised. However, bottom-line disappointed owing to higher share of
joint venture (JV) profits. We have pruned our FY2011 and FY2012 estimates to
reflect the same. Since our last downgrade in the 2QFY2011 result update, the
stock has fallen by ~35%. However, with the stock trading at reasonable
valuations at current levels, we maintain a Buy.

Initiating report on HCL Technologies- BUY target price of Rs584: Keynote

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Initiating Coverage report on HCL Technologies Ltd.

HCL Technologies Ltd. (HCLT), incorporated in 1991, is a Gurgaon based IT and ITeS company, employing 70000+ employees, serving more than 300 clients in various industries across the globe. The company has exhibited robust 30% CAGR in operations spanning 5 years.

Greaves Cotton - A Sequel, Reiterate BUY : Emkay

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Greaves Cotton

A Sequel, Reiterate BUY

BUY

CMP: Rs 92                                       Target Price: Rs 111

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n     Greaves Cotton enters into a 5-year supply agreement with M&M for supply of single cylinder engines for latter’s 3-wheeled vehicles

n     Shifting of engine sourcing from other suppliers to Greaves Cotton creates room for 2-3% upgrade in FY11E and FY12E earnings

n     M&M’s 4-Wheeler’s continues to remain out of ambit – but case strengthens in favour of Greaves Cotton

n     Currently, maintain earnings estimates of Rs6.4/Share and Rs7.9/Share for FY11E and FY12E, Reiterate BUY rating

11. 35% Non-Convertible Debentures (NCDs) issued by Tata Motors Finance

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We are pleased to provide you an opportunity to invest in the Non-Convertible Debentures (NCDs) issued by Tata Motors Finance Ltd. These bonds have been assigned a rating of “A/Stable by CRISIL and LA+ by ICRA”. A limited quantity of these bonds is currently available with us for sale (in the secondary market).

Voltas - Sharp Reaction; Retain BUY: Target Price: Rs 250: Emkay

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Voltas

Sharp Reaction; Retain BUY

BUY

CMP: Rs 181                                       Target Price: Rs 250

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n     Voltas reports weak performance - (1) revenue up 5% yoy to Rs10.4 bn (2) 140 bps yoy drop in Ebidta margins to 7.6% and (3) 17% yoy decline in APAT to Rs551 mn

n     2nd quarter back-to-back weak performance in Electro Mechanical & Projects (EMP) -  revenues down 3% yoy to Rs6.9 bn, Ebit margins fall 260 bps yoy to 6.4%

n     Earnings revised by -7% and -4% for FY11E and FY12E  - Rs10.5/Share and Rs12.8/Share

n     At 14.0X FY12E- trades 10% lower then Minimum PER of 15.6X FY06-08 cycle – Trading at attractive valuations - Maintain ‘BUY’ with target price of Rs250/Share

Edelweiss:: Key takeaways from the NALCO Q3FY11 result concall

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NALCO (NACL IN, INR 422, Reduce)

Key takeaways from the NALCO Q3FY11 result concall:

n  Costs marginally reduced but still at elevated levels

Alumina and aluminium cost of production for the quarter was INR 11,786/t and INR 92,830/t, respectively. Aluminium cost declined by ~INR 2,000/t Q-o-Q largely due to unit power costs, which declined Q-o-Q to INR 2.2/unit from
INR 2.6/unit in Q2FY11. This was largely due to coal linkage proportion which increased and was 85% in Q3FY11. The balance 15% was sourced through e-auction and imports. While import coal cost is INR 4,700/t, e-auction price, which was INR 2,200/t in Q3FY11, has increased to INR 2,600/t in January 2011.

DB Corp; Set to cross another language barrier; Target: Rs 284: Emkay

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DB Corp

Set to cross another language barrier

HOLD

CMP: Rs 253                                        Target Price: Rs 284

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n     DB Corp announces entry into Marathi land to cross another language barrier after success in Gujarati

n     To launch Marathi daily during CY11 and deferred Bihar launch to end of FY12. Management est. Marathi ad market at ~Rs7.0bn, growing at 15-20% annually 

n     The management has guided with the initial capex of Rs600-700mn for Maharashtra launch

n     Given the healthy cash on balance sheet and further dilution of promoters’ stake to 75% (currently 86.3%) by FY13E (mandated by Sebi) would keep the funding intact for further  expansions

FII & DII trading activity on NSE and BSE as on 03-Feb-2011

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FII trading activity on NSE and BSE on Capital Market Segment

The following is combined FII trading data across NSE and BSE collated on the basis of trades executed by FIIs on 03-Feb-2011.

FII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value FII 03-Feb-2011 2602.43 2063.72 538.71

 

Domestic Institutional Investors trading activity on NSE and BSE on Capital Market Segment

The following is combined Domestic Institutional Investors trading data across NSE and BSE collated on the basis of trades executed by Banks, DFIs, Insurance, MFs and New Pension System on 03-Feb-2011.

DII trading activity on NSE and BSE in Capital Market Segment(In Rs. Crores) Category Date Buy Value Sell Value Net Value DII 03-Feb-2011 1155.2 1200.65 -45.45

 

FII DERIVATIVES STATISTICS FOR 03-Feb-2011

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FII DERIVATIVES STATISTICS FOR 03-Feb-2011
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	58525	1606.81	74130	2028.24	437549	12081.03	-421.43
INDEX OPTIONS	209280	5667.57	207244	5663.90	1781857	49231.54	3.67
STOCK FUTURES	54954	1432.96	49790	1318.36	1160529	28896.43	114.59
STOCK OPTIONS	17053	467.77	18884	520.61	21024	569.80	-52.84
						Total	-356.00

NSE, Bulk deals, 03-Feb-2011

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Symbol	Security Name	Client Name	Buy / Sell	Quantity Traded	Wght. Avg.  Price
BIRLAPOWER	Birla Power Solutions Ltd	INDRAVARUN TRADE IMPEX PVT LTD	BUY	225,82,243	1.28
BIRLAPOWER	Birla Power Solutions Ltd	INDRAVARUN TRADE IMPEX PVT LTD	SELL	117,49,944	1.30
CMAHENDRA	C.Mahendra Exports Ltd	CROSSEAS CAPITAL SERVICES PVT. LTD.	BUY	4,26,438	167.27
CMAHENDRA	C.Mahendra Exports Ltd	CROSSEAS CAPITAL SERVICES PVT. LTD.	SELL	4,26,438	167.57
EVINIX	Evinix Accessories Limite	RELIGARE FINVEST LTD	SELL	13,00,000	1.21