Takeaways from Infosys AGM: CLSA

Annual General Meeting
In his maiden interaction with investors after taking over as Executive
Chairman, Narayana Murthy warned that it could take up to 3 years to
take Infosys to the investor-desired level of performance. He also
admitted that this would require him to change some of his long-held
beliefs about the business (now open to chasing revenue growth at cost
of margins). His speech suggested that keeping employees happy and
improving communication with all stakeholders (Infosys has been poor in
these in last 2 years) are his key near-term target areas. In this
backdrop, money-making in Infosys remains a game of patience. We are
believers in company’s new-found direction and maintain Outperform.

FII & DII trading activity on NSE, BSE and MCX-SX 17-06-2013

Category		Buy	Sell	Net
		Value	Value	Value
FII		1693.88	1858.98	-165.1
DII		1123.21	761.68	361.53

 

FII DERIVATIVES STATISTICS FOR 17-Jun-2013

FII DERIVATIVES STATISTICS FOR 17-Jun-2013
	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	61393	1789.86	72388	2110.75	398263	11672.38	-320.89
INDEX OPTIONS	635835	18507.91	643591	18720.49	1957521	57342.13	-212.58
STOCK FUTURES	78552	2167.46	60896	1690.35	1060351	29110.65	477.11
STOCK OPTIONS	39848	1073.99	39771	1065.61	79554	2088.45	8.38
						Total	-47.98

 

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Commodities Strategy Silver: A Less Than Glittering Outlook  Citi

Commodities Strategy
Silver: A Less Than Glittering Outlook
 Long run upside potential for the silver price is limited — Given the extent of the
April fall in the silver price, a stronger rebound would still be expected. However, we
believe that any price moves back towards a $27-28/oz level will represent renewed
selling opportunities. Looking further forward, after nearly a decade of rising silver
prices, we expect the combination of growth mine supply, and sluggish demand to
continue to keep silver prices under pressure, though volatility will remain a
characteristic of the market.
 Muted silver industrial demand growth is expected — We believe that cuts in Feedin-
Tariffs, industry consolidation due to overcapacity and reductions in silver use during
the manufacturing process will cause silver demand from the photovoltaic industry to
fall sharply over the next three years. Our view is that this will place a drag on silver
industrial demand and we forecast it to grow at modest rates of 3.5% in 2013, 3.9% in
2014 and 3.7% in 2015.
 Silver mine supply growth to continue — We expect that total mine supply will
increase by 8 million ounces in 2013, 17.9 million ounces in 2014 and 20.7 million
ounces in 2015. Our view is that this rise will be due to increased production of silver
as a by-product of gold.
 Investor interest is required to absorb the excess metal — Citi expect that silver
demand from photographic applications will continue to decline (due to the rise of
digital technology) and silver jewellery fabrication growth will slow (due to weaker
demand from the Western world). This places the burden on investors to pick up the
slack and absorb the excess metal. However, this looks to be a challenging assumption
given April’s effective shattering of the ‘safe haven’ gold myth and the associated
negative impact on silver, gold’s poor relation. Institutional investors are increasingly
favouring the equity-related US growth/low inflation outlook over gold/silver.

BHEL-Insights from analysis of plant level disclosures ::JPMorgan

We compiled disclosures on 7 large plants of BHEL for FY13, which account
for 79% of FY13 revenue. Few highlights for large plants mentioned below, a
more detailed analysis and our preview for results due on 23rd May are in the
body of the report. We estimate FY13 OPM of 18.7%, down 196bps

CCL- Results hit due to maintenance issues. Future Assured.: Nirmal bang

Results hit due to maintenance issues. Future Assured.
Consolidated Revenues for the quarter grew by 23% YoY but were down by 14.4% QoQ at Rs. 177 crore. Sales were below expectations due to trial runs and testing made at the Vietnam plant and some maintenance issues at the Indian plant. In addition, production at Vietnam plant also got affected by 10-12 days due to Chinese New year holidays. Vietnam plant has re-gained operations from the end of April 2013. Company would be adding another 5000 MT capacity by Sep 2013 in Vietnam taking the total capacity to 15000 MT. For FY14E, management expects to produce 6500 MT at the Vietnam plant. CCL operates a 3000 MT plant in Switzerland where it adds value addition to the products. Operations from this unit have been lackluster during the quarter since the Swiss government has imposed additional duty. EBIDTA margins have remained flattish QoQ at 20.8% (despite high power cost) as the company was able to stock up beans when the prices were lower. Coffee prices have remained stable during the quarter. PAT was lower by 25% YoY at Rs.10.9 crore due to higher taxes (39% of PBT) during the quarter. Management expects this to be lower in FY14 since Vietnam would start making profits in FY14E.

Rcom - Incremental steady-state EBITDA of INR7b-7.5b post tower deal :: Motilal Oswal

Incremental steady-state EBITDA of INR7b-7.5b post
tower deal
Increasing target price by 14%; maintain Neutral
 Reliance Communications (RCOM) and Reliance JIO Infocomm have signed an
agreement for sharing tower infrastructure with an aggregate value of INR120b.
 The deal will enable Reliance JIO to utilize up to 45,000 sites from RCOM's existing
network.
 We estimate incremental revenue of ~INR8b per year and incremental EBITDA of
INR7b-7.5b per year for RCOM, assuming that Reliance JIO ramps up to 45,000 sites.
 We are upgrading FY14/FY15E EBITDA by 1-2% and target price by 14% to INR111.
 The stock trades at an EV of 7.5x FY14E and 6x FY15E EBITDA. Maintain Neutral.

Stock Strategy: Consider short strangle on Apollo Tyres :: Business Line

Sesa Goa (Rs 140): SELL :: Business Line

Key Trades and Risks Emerging Markets Equity Strategy ::JPMorgan

 The relative year to date performance of EM versus the US is the poorest
since 1995. Against World and Japan, 2013 is the worst year on record.
EM equities’ problems are fundamental. 2013 EPS revisions for most
major country sectors are negative (see page 3). BRIC economic growth
is disappointing. Despite low GDP growth, the forecast for 2013 EM
EPS growth is a robust 16%oya. In 2012 EM EPS declined 4%oya! We
remain concerned that EPS forecasts will continue to fall.