21 July 2012

Week ended July 20, 2012 WEEKLY ROUND UP :ICICI Securities



Data released          
• Headline inflation came in at 7.25% YoY in June (as compared to our expectation
of 7.60% YoY), lower than previous month’s print of 7.55%  YoY.
Global update                                                                
• China’s  Premier  Wen  Jiabao  said  that  growth  momentum  is  weak  but
Government measures to support growth are “bearing fruit” and current pace
of growth is within the target range.
• The IMF lowered its global economic forecasts as prolonged Eurozone debt
crisis  weighed  on  global  growth.  The  2013  global  growth  forecast  was
revised down to 3.9% from 4.1% estimated in April. India’s 2013 growth
projection was cut by 0.7 percentage points to 6.5%.
• US Federal Reserve Chairman Bernanke, on his second day of testimony to
US Congress said that the economy has “decelerated” in the first half of the
year and that the Fed is “prepared to take further action as appropriate”. He
also sought to assure lawmakers that the Fed can control inflation while
providing additional stimulus.
• German lawmakers voted in favor of Spanish banking sector bailout after Finance Minister Schaeuble assured that Spain
would remain liable for the aid and the German Parliament would be consulted on each step of the rescue


NIIT Technologies: Steady order backlog, cheap valuations; maintain BUY: Religare research

NIIT Tech (NITEC) reported an in-line quarter. Revenues were up 0.5% CC (5.9% in Re terms), mainly driven by Travel & Transportation (T&T) vertical (up 7% QoQ). However, margin declined 80bps QoQ due to wage hikes even as Re depreciation negated some of the impact. Overall we remain positive backed by its healthy order-book and margin improvement. We are revising our estimates upwards to account for Re depreciation and are building 20% EPS growth in FY13. Our new Mar-13 TP stands at Rs 350. Maintain BUY.


Dish TV Buy Target Price: Rs81 :Centrum



Dish TV
Buy
Target Price: Rs81
CMP: Rs71
Upside: 14%
Strong operating performance
Dish TV posted strong operating performance in Q1FY13 on the back of 3.3% QoQ ARPU improvement, reduction in churn level to ~1% and flat SAC. Benefits of recent hikes in package prices, entry level STB price hikes coupled with higher subscriber addition on the back of digitization will accrue in the coming 3 quarters. We believe the margin expansion witnessed in the current quarter will sustain in FY13 and boost profitability. Maintain BUY rating on the stock.


Hero MotoCorp - Q1FY13 Result Update - Centrum



Hero MotoCorp
Buy
Target Price: Rs2,366
CMP: Rs2,088
Upside: 13%
Operating performance disappoints
Hero MotoCorp Limited’s (HMCL) 1QFY13 operating results were below our expectations with EBITDA margins at 15.0% compared to our estimate of 15.6% largely on account of lower than expected revenue growth. Net realization declined 0.9% QoQ. However, adjusted PAT stood largely in line at Rs.6.15bn compared to our estimate of Rs.6.23bn due to lower tax rate at 16.3% vs. est. 19.5%. The management expects industry growth to be around 9-10% and believes HMCL will register better than industry growth rate (>10%). We continue to maintain Buy rating on the stock with a target price of Rs.2,366.