125 stocks that hit 52-week low on BSE-500:: ET

Indian benchmark indices plunged below their key support levels on Tuesday as the rupee further weakened against the US dollar to hit its all-time low of 61.80.


The fall smashed through the previous low of 61.21 seen on July 8, what traders said was due to dollar demand from importers.

The S&P BSE Sensex corrected over 500 points in intraday trade and has slipped below its psychological support level of 19,000. The Nifty also plunged below its crucial level of 5,550 to its lowest level since April 16.

The 50-share index closed at 5,542.25, down 143 points, or 2.52 per cent. It touched a high of 5,664.90 and a low of 5,521.80 in trade today.

The S&P BSE Sensex finally closed at 18,733.04, down 449.22 points, or 2.34 per cent. It touched a high of 19,131.92 and a low of 18,667.30 today.

According to analysts, the rupee is likely to head towards 64 in the near term and a further weakness in the currency is likely to cause more pain in markets.

If Nifty fails to hold on to its crucial support level of 5,500 in the near term, it could slip further to 5,200 levels.

However, at times like these analysts are of the view that investors can still look at IT and pharma stocks on account of weak rupee.

"There are very few places to hide in the market, but one could look at export-driven sectors such as IT and pharmaceuticals that have been doing well," said Manishi Raychaudhuri, MD & HoR, BNP Paribas Securities, in an interview with ET Now.

"Even among the manufacturing companies the net exporters like Bajaj Auto or let us say Tata Motors are likely to do well," he added. Raychaudhuri is of the view that there is a small pocket of stocks which investors can look at.

"We like ITC, Asian Paints or Dabur or even Hindustan Unilever at the present price of close to Rs 600 could be considered," he added.

Here's a list of 125 stocks which hit their 52-week lows in Tuesday's trade:

Asian Paints - Below expectations: EBIT miss on negative operating leverage:: Goldman Sachs,

What surprised us
Asian Paints (ASPN) reported 1QFY14 PAT of Rs2.9bn (-5% yoy, -19% vs
GSe). While sales were broadly in line, the PAT miss was due to higher
SG&A. Key takeaways: 1) Volumes: Based on RM (raw materials) costs
inflation, we calculate volume growth of 11-12%, against a lower base in
1QFY13. Management expects double-digit yoy volume growth for FY14
on account of a good monsoon; 2) ASPN took a 1.15% price increase on
May 1, and will take a further 1% price increase on August 1; 3) Gross
margin for the quarter rose by 164bps yoy as RM costs remained benign.
However, EBIT margin fell 106bps yoy due to higher SG&A. Depreciation
rose due to installation of the Khandala plant. One-offs in employee costs
(Rs100mn for re-evaluation of pension liability at a lower discounting rate)
and other expenses (Rs140mn for FX impact) had a total negative impact
of Rs240mn on PBT; 4) Tax rate for the quarter was higher yoy at 32.8%
due to a surcharge imposition. ASPN expects a similar tax rate for FY14; 5)
ASPN expects 30-35% utilization of the Khandala plant for FY14.
What to do with the stock
We lower our FY14-16E EPS by 3-6% to reflect higher SG&A and tax rate.
Hence, we cut our 12m P/E-based (26X, unchanged) TP to Rs4,130 from
(Rs4,258). We forecast FY13-16E EPS CAGR of 16% vs 5-yr historical CAGR
of 22% (10-yr: 23%). On our estimates, ASPN is trading at 12m fwd P/E of
34.6X , vs 3-yr historical average of 29.3X (10-yr 21.7X), but in line with the
sector average FY14E P/E of 36X. Maintain Neutral. Key risks: Upside:
Faster-than-expected volume growth; sharp correction in input cost prices;
Downside: competitive pressure; slower growth in international business.

Nestle India Analyst meet: Excessive margin focus a long-term risk ::Credit Suisse

● Nestle held its analyst meeting yesterday, where it signalled no
change in direction in the company’s margin-focussed strategy.
● We believe the company's priority is margins. Nestle continues to
discontinue low-price SKUs where margins are not ‘acceptable’;
1H CY13 saw 250 bp of volume impact. With the company level
EBITDA margin at over 22%, we find it tough to understand this
strategy. Also it is surprising that the company has cut ad spends
by another 30 bp from an already low base in this environment of
negligible volume growth.
● Nestle's volumes grew 1.6% YoY in 1H CY13, on a base year with
almost zero volume growth. Milk and nutrition, and chocolates
continue to see significant YoY volumes decline. We expect market
share erosion to continue. Increasing competition in milk and
nutrition from Danone and Abbott, and media reports of ITC’s entry,
make Nestle highly vulnerable to further share loss, in our view.
● We maintain our UNDERPERFORM rating. We believe any recovery
in growth rates has to be preceded by a period of margin pain. In the
interim, we see risk for the company from high competition.

LKP Research :Petronet LNG - Q1FY14 Result Update

Petronet LNG - Q1FY14 Result Update

Lower trading margin and spot volume decline hurts operational performance

PLNG Q1FY14 operating profit of Rs4bn was lower than our estimate of Rs4.5bn mainly on account of lower spot volume and lower trading margin. Spot volumes witnessed a sequential decline of 22.2% to 18.9tbtu (yoy -7.4%). Implied trading margin on spot volumes declined by 85.5% qoq to Rs4.6mmbtu, much lower than our expectation of Rs30/mmbtu, due to weak demand from power sector as a result of cheaper coal prices. PLNG’s operating margin for the quarter declined by 42bps qoq to 4.7% (yoy -179bps). We maintain our BUY rating on PLNG with a revised price target of Rs156. At the CMP, the stock is trading at 8.2x and 5x FY15e EPS and EBITDA respectively.

Valuation and view

The current imbroglio of the Kochi-Mangalore/Bangalore pipeline would continue to affect volume ramp up at PLNG’s Kochi terminal. Any early solution of this problem would be very positive for the company in the near term. In the longer run, we expect the gas deficit scenario in India to worsen as domestic gas supplies fall woefully short in comparison with growth in demand for gas. By 2015 we estimate gas demand to increase to 317mmscmd while supply is expected to grow to 202mmscmd, thus leading to a huge deficit of 115mmscmd. PLNG is doubling its capacity by FY16 to 20mntpa to capitalize on the high demand supply mismatch of gas in the energy deficient Indian markets.

We value PLNG on DCF basis given the long term earnings visibility. We have used WACC of 12.3% and terminal growth rate of 2% for DCF valuation. We have not valued the proposed 5mntpa Gangavaram LNG terminal in Andhra Pradesh. Further progress and clarity on this project could lead to upside to our valuation of PLNG. We maintain our BUY rating on PLNG with a revised price target of Rs156. At the CMP, the stock is trading at 8.2x and 5x FY15e EPS and EBITDA respectively.

Actual v/s Estimates

Y/E, Mar (Rs. m)	Q1FY14	Q4FY13	qoq (%)	Q1FY13	yoy (%)	LKP Estimates	Deviation (%/bps)
Revenue	84,442	84,656	-0.3%	70,304	20.1%	88,121	-4.2%
EBITDA	3,978	4,344	-8.4%	4,571	-13.0%	4,506	-11.7%
EBITDA (%)	4.7%	5.1%	-42 bps	6.5%	-179 bps	5.1%	-40 bps
PAT	2,253	2,451	-8.1%	2,708	-16.8%	2,668	-15.6%

LKP Research

Jindal Steel & Power Weak 1Q: Steel business weakness and CPP utilisation challenges are headwinds ::Credit Suisse

● Consolidated sales missed our estimates by 10%. Two-thirds of
the miss came from lower steel and power sales volumes in the
standalone business. A 20-day shutdown at CPP units and higher
captive demand led to lower power sales from captive units.
● A third of the sales miss came from lower volumes at the Shadeed
plant in Oman. The 1,000 MW power unit performed at 100%
utilisation in the quarter. However, power realisations continued to
be subdued with likely selling through exchanges.
● Material costs were lower due to lower steel volumes. EBITDA
missed by 11% as lower material costs were offset by a Rs 2bn
MTM forex loss booked in 1Q14. Steel EBITDA/t at $209
improved sharply QoQ (4Q13: $138) when discounted sales were
used to push inventory. The South African coal business seems to
have reversed the EBIDTA losses from 4Q13.
● A company share buyback now seems inevitable. A sub-committee
of Board of Directors has been authorised to evaluate such a buyback

Wabco India - Nirmal Bang,

‘Brake’ Out
Wabco India (WIL), a leader in the manufacture of conventional braking products,
advanced braking systems and other related air-assisted products and systems, has
one of the best margin profiles in the automobile component industry with a strong
balance sheet, debt-free status and robust return ratios. The product profile of the
company is technology-intensive as a result of which the competitive intensity is
almost negligible, with WIL commanding an 85% market share. Further, low content
per vehicle and the under-developed commercial vehicle (CV) industry in India
leaves WIL with ample scope for growth. WIL is also one of the best companies to
play on MHCV (medium and heavy commercial vehicle) demand recovery expected in
FY15 as the demand cycle, in our view, is close to bottoming out and staging a
recovery towards the end of FY14. We have assigned a Buy rating to WIL with a
target price of Rs2,187 (20x FY15E EPS), up 24% from the current market price. Key
downside risks to our estimates are weak macro-economic activity leading to a steep
fall in CV sales. Upside risk to our estimates is successful implementation of
compulsory ABS (anti-lock braking system) in India from FY15.
Best play on recovery theme: WIL is a key beneficiary of the CV demand cycle recovery
expected from FY15. WIL has historically outperformed the MHCV segment’s growth over
the past several years due to increase in the content supplied per vehicle. Further,
continued growth in replacement segment and exports makes WIL a strong play for FY15.
Also, the government is likely to issue a notification making ABS compulsory for MHCVs
from FY15, which augurs well for WIL. We expect sales to post a CAGR of 21% over
FY13-FY15E backed by improvement in demand for CVs and increase in the content
per vehicle likely over FY14-FY15.
Ample scope for growth: The content per vehicle in India is among the lowest in the world
at ~US$240 per vehicle compared to US$500 per vehicle in eastern Europe, US$1000 in
North America, and US$3,000 per vehicle in western Europe. We believe the current
technology gap in India offers WIL a strong growth opportunity as new products launched
by it gradually gain importance.
Earnings to witness double-digit growth: With the content per vehicle set to increase
and volume recovery expected to begin by the end of FY14, we expect the margins of
the company to improve by 356bps at 20.6% in FY15E from 17.0% in 1QFY14. Due to
healthy top-line growth and expansion in margins, we expect the earnings of the
company to witness a strong CAGR of 26% over next two years i.e. over FY14/FY15.
Valuation: We have valued WIL at a 10% premium to its past three years’ average as we
believe the CV demand cycle is close to its bottom and the best for WIL is likely in
FY14/FY15. Further, the government is likely to issue a notification for compulsory use of
ABS in MHCVs in India from FY15, which will give WIL’s earnings a strong boost. Given the
comfort on the earnings front i.e. a 26% CAGR likely over FY13-FY15E, lean cost structure
and superior return ratios, we believe its premium valuation is justified. We have valued the
stock at 20xFY15E EPS of Rs109 to arrive at a target price of Rs2,187 (20x FY15E EPS),
up 24% from the current market price.

NTPC - Q1FY14 result update - Centrum

Efficiency gains aid earnings
NTPC’s results for Q1FY14 were above our estimates primarily due to
higher unit sale price reported at Rs 2.9 (+4% Est.) and efficiency gains
reported despite lower PLF and PAF for coal based stations. Earnings
through efficiency gains are reflected in the core RoE derived at 5.7 %
(+100 bps QoQ) in Q1FY14. Adjusted EBITDA per unit sold is up by 15%
YoY at Rs 0.81, however a 24% YoY increase in depreciation and interest
cost dragged APAT per unit sold to Rs 0.43 (-4% YoY). Increase in
EBITDA per unit sold is attributed to efficiency gains and not towards
11% YoY decline in fuel cost, as it is a cost pass-through and reflected in
sales as well. Overall adjusted net sales declined by 4% YoY to Rs 153.1
bn and adjusted EBITDA increased by 6% to Rs 40.1 bn whereas APAT
declined by 6% YoY to Rs 23.1 bn.
Adjusted EBITDA margin at 26% (+250bps YoY): On neutralizing the
impact of prior period sales, deferred tax and tax recoverable aggregating to
Rs 3bn in Q1FY13 vs. 0.6 bn in Q1FY13, adjusted sales and EBITDA stands at
Rs 153.1 bn / Rs40.1 bn respectively. Adjusted EBITDA margins increased to
26.2% (+250 bps YoY). Adjusted EBITDA/unit sold at Rs0.81 is up by 15% YoY.
Adjusted PAT is down by 6% YoY but APAT margin is marginally down:
On neutralizing the impact of prior period sales and non-core earnings
detailed above, APAT is at Rs23.1 bn (-6% YoY). Decline in APAT is attributed
to 24% YoY increase in interest and depreciation cost and higher tax rate at
27% vs. 23% in Q1FY13. Adjusted PAT margin stands at 15.1% (-30 bps YoY)
and adjusted PAT per unit sold is at Rs 0.43(-4% YoY).
Capacity addition on the rise: We estimate NTPC-standalone to add
1.55/0.91 GW in FY14E/FY15E. In the XII plan, we conservatively estimate
capacity addition of 10GW as group and 8.1GW on standalone vs.
management guidance of 14GW as group and 11.1GW on standalone. Our
capacity addition figures are based on CEA’s estimates (22-Apr-13). We have
not included 11.3 GW capacity which is under varying stages of
development. Hence, commissioning of these capacities will offer margin of
safety and earnings upside to our estimates.

Strong Q1 but regulatory uncertainty persists: HOLD TITAN :Religare research

Strong Q1 but regulatory uncertainty persists: HOLD
TTAN’s Q1 net sales/EBITDA/PAT grew by a strong 42%/15.6%/16.9% with
topline growth led by the jewellery business (+47% YoY; grammage up 67%
YoY) even as watches clocked a mere 11.4% growth. Jewellery margins
were hit by a lower studded share and inventory losses (~Rs 340mn). We
raise our FY14/FY15 earnings by 7%/9% and our Mar’14 TP to Rs 265 (from
Rs 225) due to reversal to the gold-on-lease scheme. However, gold
availability and further regulatory risks remain key stock overhangs. HOLD.