Buy ARSHIYA INTERNATIONAL:: Kotak Securities (PDF link)

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ARSHIYA  INTERNATIONAL
PRICE: RS.154 RECOMMENDATION: BUY
TARGET  PRICE:  RS.185 FY13E P/E: 6.6X


Arshiya (ARST) starts commercial operations at Khurja - we are
positive on company's FTWZ business
ARST has started its Khurja FTWZ with 2 warehouses and we estimate the
company to ramp it up to 4 by end of FY13E. The company is already
operating 4 warehouses at Panvel FTWZ and we estimate the company to
ramp it up to 8 warehouses by end of FY13E. We also expect the VAS to
rental ratio to improve from current 1x to 1.5x by FY13E and further to 2x by
FY14E. We are positive on the company's FTWZ business and estimate
revenues for the segment to grow at more than 100% CAGR to Rs 3.2 bn
over FY11 to FY13E, with the share of the segment increasing from 3% in
FY11 to ~25% in FY13E. In the rail segment the company operates 16 rakes
currently which they would ramp up to 20 by end of FY13E. The company
also intends to take about 10 rakes on lease during the same period. The
company wants to integrate its entire rail operations with its logistics
business and FTWZ business and run these rakes primarily on the domestic
segment. The company continues to grow steadily in its core third party
logistics (3PL) businesses. The stock at CMP of Rs.154 trades at 6.6 times
FY13E earnings, below the average one year forward trading multiple of
peer companies of 10x. We expect the company to deliver revenue CAGR of
24% over FY11 to FY13E to ~ Rs 12.7 bn with improvement in operating
margins from 19.4% in FY11 to 24.2% in FY12E and 26.9% in FY13E. With
improvement in margins and benefits of aggressive capex accruing to the
company going ahead, we expect the return ratios of the company to
improve. High leverage, execution delays and poor acceptability of the key
FTWZ concept are some of the pitfalls and can be a drag for the company.
Consequently we value the company at 25% discount to the one year
forward multiple of peer group companies in the Logistics space which
comes at Rs 185. The discount captures the risks on account of the high
leverage position of the company. We rate the stock BUY with a one year
price target of Rs.185.

Feb 23: Economy News:: Kotak Securities

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Economy News
4 The Prime Minister's economic think tank painted a disappointing twin
deficit picture for the economy and wrote a hard prescription. It wants the
Centre to raise excise duty and service tax rates by two percentage points,
decontrol diesel prices and prune subsidies to cut the fiscal deficit. The
PM's Economic Advisory Council (PMEAC) has asked the government to
narrow the current account deficit (CAD) in the range of 2-2.5 per cent of
GDP from a level worse than during the 1991 BoP (balance of payments)
crisis. (BS)
4 The government plans to further reduce gas supply to non-priority sectors
to meet the demand of fertilizer and power plants that are suffering
because output from Reliance's D6 field has fallen sharply, official sources
said. (ET)
4 Amid widening fiscal deficit, Prime Minister's economic advisory panel
today suggested aligning diesel prices to global market in a phased
manner and also raising excise and service taxes to pre-crisis level of 12
per cent. Releasing the Review of the Economy: 2011-12, Chairman of
Prime Minister's Economic Advisory Council (PMEAC) C Rangarajan also
pitched for deregulation of urea prices. (ET)
4 The government has formally allowed local airlines to import jet fuel
directly, it said in a statement, in a major policy move expected to bring
down costs for debt-laden carriers. (BS)
4 The Reserve Bank of India (RBI) announced that it would purchase
government securities worth Rs 120 Bn through open market operations
(OMOs) on Friday to ease the current liquidity crisis. (BS)
Corporate News
4 Bharat Petroleum has turned to Saudi Arabia, the world's top oil
exporter, for higher supplies in 2012/13, fearing global sanctions may
jeopardise trade with Iran. (ET)
4 Reliance Industries has challenged market regulator Securities and
Exchange Board of India's probe into its alleged violation of takeover
norms over a promoter stake purchase in 2000. The plea was filed before
the Securities and Appellate Tribunal (SAT), two people close to the
development said. (ET)
4 DLF, the country's largest realty firm, has sold 350 flats worth about Rs.5
bn in a luxury housing project in Gurgaon. The housing project 'The
Primus', which is part of a 450 acre integrated township - DLF Garden City,
was launched yesterday and all the flats were sold on the same day. (BS)
4 Econet Wireless is seeking at least $3.1 billion in damages from  Bharti
Airtel  in a dispute over ownership of its subsidiary Airtel Nigeria,
according to a suit filed. (BS)
4 Hindustan Petroleum (HPCL) is looking to increase its borrowing limit
by Rs 100 Bn to Rs 420 Bn. The country's biggest oil marketer Indian Oil
had earlier raised borrowing limit by Rs 300 Bn to Rs 1100 Bn in October
last year. (BS)
4 Reliance Brands, a part of Reliance Industries, has formed an equal joint
venture with US-based Iconix Brand Group to launch the latter's 20
fashion and lifestyle brands in India. (ET)

Reliance Industries - Cairn India :: Kotak Industries (PDF link)

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Reliance Industries: A small loss for RIL, a giant loss for India
` Low visibility on gas production precludes a positive view on RIL stock at
current levels
` Modest downward revision to EPS; offset by higher crude price assumptions
` Much more serious for India - gas supply, downstream units, CAD


Cairn India: Time to SELL
` Surge in crude prices offset by recent appreciation in Rupee
` Comfortable global oil supply-demand balance versus Iran situation and
global liquidity
` Cairn's EPS to decline to Rs31 in FY2017E given higher profit sharing with
the Government
` Downgrade to SELL; revise earnings for change in exchange rates and crude
price assumptions

Areva T&D India; Allcargo Global Logistics :: Kotak Securities (PDF link)

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AREVA T&D INDIA LTD
RECOMMENDATION: REDUCE
TARGET  PRICE:  RS.158
C12 P/E: 27.2X



ALLCARGO GLOBAL LOGISTICS
RECOMMENDATION: BUY
TARGET  PRICE:  RS.190
CY12E P/E: 7.4X

Day 2: Multi Commodity Exchange of India (MCX) IPO: Over subscribe 4.48

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Total Issue Size	5500772
Total Bids Received	24652896
Total Bids Received at Cut-off Price	12140418
No. of times issue is subscribed	4.48

MULTI COMMODITY EXCHANGE
Sr.No.	Category	No.of shares offered/reserved	No. of shares bid for	No. of times of total meant for the category
1	Qualified Institutional Buyers (QIBs)	2162083	7957398	3.68
1(a)	Foreign Institutional Investors (FIIs)		6768366
1(b)	Domestic Financial Institutions(Banks/ Financial Institutions(FIs)/ Insurance Companies)		1162914
1(c)	Mutual Funds		13530
1(d)	Others		12588
2	Non Institutional Investors	926607	1741698	1.88
2(a)	Corporates		945054
2(b)	Individuals (Other than RIIs)		565080
2(c)	Others		231564
3	Retail Individual Investors (RIIs)	2162082	14940234	6.91
3(a)	Cut Off		12127422
3(b)	Price Bids		2812812
4	Employees	250000	13566	0.05
4(a)	Cut Off		12996
4(b)	Price Bids		570
Updated as on 23 FEB 2012 at 1700 hrs