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Transformers and Rectifiers (India) Ltd. (TRIL)
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Daljeet S. Kohli
Head of Research
Mobile: +91 77383 93371, 99205 94087
Tel: +91 22 66188826
daljeet.kohli@indianivesh.in
Andhra Bank(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 10257 9744 8068 27.14% 5.26%
Operating Profit 6474 5646 4818 34.37% 14.68%
Net Profit 3081 3030 2754 11.88% 1.70%
EPS (Rs.) 6.53 6.25 5.68 14.96% 4.48%
Escorts(Rs. In Mn.) Q1Y11E - Bloomberg Estimates Q2 FY 11 - Actual Q1FY10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 7923 6676 6002 32.00% 18.68%
Operating Profit 829 505 542 53.09% 64.22%
Net Profit 465 268 234 98.72% 73.25%
EPS (Rs.) 2.62 2.52 -100.00% -100.00%
KEC Intl(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 12124 10001 9489 27.76% 21.22%
Operating Profit 1223 924 973 25.77% 32.45%
Net Profit 553 427 463 19.34% 29.40%
EPS (Rs.) 2.12 1.66 1.88 12.89% 27.56%
Canara Bank(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 25674 25029 22591 13.65% 2.58%
Operating Profit 15184 14158 14700 3.29% 7.25%
Net Profit 9952 10079 10526 -5.45% -1.26%
EPS (Rs.) 24.82 24.58 25.67 -3.31% 0.98%
Central Bank(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 15739 15922 10946 43.79% -1.15%
Operating Profit #N/A N/A 7779 5898 #VALUE! #VALUE!
Net Profit 3985 3794 3064 30.04% 5.04%
EPS (Rs.) 10.50 8.70 7.04 49.15% 20.69%
Colgate Palmolive(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 5665 5518 4906 15.48% 2.68%
Operating Profit 1301 1378 1286 1.19% -5.54%
Net Profit 1075 1003 1164 -7.67% 7.14%
EPS (Rs.) 7.88 7.38 8.56 -7.94% 6.78%
Dabur India(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 10919 9728 9262 17.89% 12.25%
Operating Profit 2089 2149 1819 14.88% -2.76%
Net Profit 1593 1604 1378 15.62% -0.66%
EPS (Rs.) 0.93 0.92 0.80 16.71% 0.87%
IDFC(Rs. In Mn.) Q3 FY 11E - Bloomberg Estimates Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q % Change
Net Sales 6923 6510 4675 48.08% 6.35%
EBIT 5214 4859 3788 37.65% 7.30%
Net Profit 3424 3384 2699 26.87% 1.19%
EPS (Rs.) 2.57 2.26 2.08 23.41% 13.58%
Bhagwan Singh Chaudhary The company has a good margin in vaccine segment. We expect that good
Research Associate product mix would further improve its margins.
Mobile: +91 77383 93427 The company’s formulation segment seems on the growth trajectory due to
Tel: +91 22 66188835 its 80% y-o-y growth in export formulation on the back of organ transplant
bhagwan.chaudhary@indianivesh.in products.
Q3 FY11
Particulars (Rs Mn except EPS) Q3 FY11 Q3 FY10 Y-o-Y Q2 FY11 Q-o-Q FY 10
Sushil Pathak Transformers and Rectifiers (India) Ltd. (TRIL)-In-line with market
Research Analyst expectation
Mobile: +91 77383 93374
Tel: +91 22 66188833 Key Highlights
sushil.pathak@indianivesh.in During the quarter ended Q3FY11, Net sales remained flattish (-5.24% YoY) to
Rs. 1269.7 Mn from Rs. 1339.9 Mn Q3FY10 and 11% up QoQ. Its production
went up by 35% to 4024 MVA but sales went down to 2711 MVA, de-growth of -
4.7%. Realisation remains stable with marginal down of 2% to Rs .43 Mn per
MVA from Rs .44 Mn YoY.
Operating margin eroded by 334 bps: Decrease in raw material costs yoy was
offset by increase in the employees cost in Q3 by way of a “one off” expenditure
relating to payment of arrears and incentives in Q3, also increased other
expenditure owing to the developmental expenses relating to the 1150 KVA
transformer debited under the respective heads as revenue expenses. As a result
EBITDA declined by 30% and margin contracted by 334 bps (-574 bps QoQ).
15
200 65%
%
Utilities
150 10 (SEBs, PGCIL
and NTPC),
100
5 61%
50 Utilities
Industrial, (SEBs, PGCIL
0 0 39% and NTPC),
Q1FY08
Q2FY08
Q3FY08
Q4FY08
Q1FY09
Q2FY09
Q3FY09
Q4FY09
Q1FY10
Q2FY10
Q3FY10
Q4FY10
Q1FY11
Q2FY11
Q3FY11
35%
Source: Company Filings; IndiaNivesh Research Source: Company Filings; IndiaNivesh Research Source: Company Filings; IndiaNivesh Research
TRIL signed MOU with a leading global manufacturer of 765kV class transformers
for the purpose of manufacturing and supplying transformers to PGCIL.
Order Book
The Company has an order book position of Rs. 4330 Mn (10,732 MVA) as on 1st Jan,
2011.The break-up of current order book position is as under.
Export,
12%
Furnace
Transformers,
16%
Power
Distribution Transformers,
Transformers, 69%
3%
Cost Analysis (% of Net Sales) Q3FY11 Q3FY10 Bps (YoY) Q2FY11 Bps (QoQ) 9MFY11 9MFY10 Bps (YoY)
Raw Material Consumed 75.25 75.57 -31.88 72.41 284.72 73.02 69.42 360.30
Purchase of Finished Goods 0.00 0.00 0.00 0.00 0.00 0.22 0.00 21.92
Employee Expenses 2.98 1.83 115.65 3.95 -96.07 3.42 2.83 59.11
Other Expenses 12.42 9.92 250.16 8.57 385.38 10.63 12.71 -207.97
Tax Rate 33.43 29.84 33.27 33.02 31.72
Source: Company Filings; IndiaNivesh Research
Financials
(Rs in Mn) 3QFY11 3QFY10 YoY 2QFY11 QoQ 9MFY11 9MFY10 YoY
Net Sales 2,728.0 2,212.1 23.32% 2,506.9 8.82% 7,399.5 6,086.7 21.57%
Domestic 2,634.8 2,140.7 23.08% 2,427.2 8.55% 7,099.2 5,874.5 20.85%
Export 93.2 71.4 30.53% 79.7 16.94% 300.3 212.2 41.52%
Other Operating Income 8.6 5.6 53.57% 6.0 43.33% 22.5 17.5 28.57%
Total Income from Operations 2736.6 2217.7 23.40% 2512.9 8.90% 7422.0 6104.2 21.59%
Expenditure :
Decrease/(Increase) in stock in trade and work in progress 3.7 0.4 -46.6 -42.2 (32.0)
Consumption of Raw Materials and Components 2001.3 1638.0 22.18% 1848.8 8.25% 5419.4 4651.8 16.50%
Raw Material 2005.0 1638.4 22.38% 1802.2 11.25% 5377.2 4619.8 16.39%
% of Net Sales 73.50 74.07 ‐56.8 bps 71.89 160.7 bps 72.67 75.90 ‐323.0 bps
Purchase of Traded Goods 18.3 11.3 61.95% 20.5 ‐10.73% 57.3 22.6 153.54%
% of Net Sales 0.67 0.51 16.0 bps 0.82 ‐14.7 bps 0.77 0.37 40.3 bps
Employees Cost 194.1 144.8 34.05% 175.0 10.91% 528.1 400.1 31.99%
% of Net Sales 7.12 6.55 56.9 bps 6.98 13.4 bps 7.14 6.57 56.4 bps
Other Expenditure 233.8 174.2 34.21% 244.1 ‐4.22% 675.7 453.1 49.13%
% of Net Sales 8.57 7.87 69.6 bps 9.74 ‐116.7 bps 9.13 7.44 168.8 bps
Total Expenditure 2451.2 1968.7 24.51% 2241.8 9.34% 6638.3 5495.6 20.79%
Profit from Operations prior Other Income and Interest 285.4 249.0 14.62% 271.1 5.27% 783.7 608.6 28.77%
Core Operating Profit Margin (%) 10.43 11.23 -79.88 bps 10.79 -35.93 bps 10.56 9.97 58.90 bps
Depreciation 73.2 67.7 8.12% 70.2 4.27% 211.5 198.6 6.50%
Profit before Interest 212.2 181.3 17.04% 200.9 5.62% 572.2 410.0 39.56%
Interest 82.7 79.7 3.76% 85.5 ‐3.27% 249.3 255.1 ‐2.27%
Other Income 3.9 4.8 ‐18.75% 4.1 ‐4.88% 10.8 19.7 ‐45.18%
Net Profit before Tax from Ordinary Activities 133.4 106.4 25.38% 119.5 11.63% 333.7 174.6 91.12%
Exceptional Iteam (Net) -38.6 0 6.0 -32.6 0
Profit Before Tax 172.0 106.4 61.65% 113.5 51.54% 366.3 174.6 109.79%
Tax Expense
For current year 46.4 37.5 38.5 110.2 59.9
For earlier year
Total Tax Expense 46.4 37.5 23.73% 38.5 20.52% 110.2 59.9 83.97%
% of Tax 26.98 35.24 ‐826.8 bps 33.92 ‐694.4 bps 30.08 34.31 ‐422.2 bps
Net Profit after Tax for the period 125.6 68.9 82.29% 75.0 67.47% 256.1 114.7 123.28%
NPM (%) 4.60 3.11 148.94 bps 2.99 161.24 bps 3.46 1.88 157.66 bps
Paid up equity share capaital (FV Re 1) 198.7 198.7 198.7 198.7 198.7
EPS 0.63 0.35 82.29% 0.38 67.47% 1.29 0.58 123.28%
Source: Company Filings; IndiaNivesh Research
Contribution to Topline
Power System 41.2% 46.2% -501.0 44.2% -295.3 41.1% 45.6% -450.5
Consumer product 33.7% 29.6% 409.2 31.8% 194.0 34.8% 31.2% 359.9
Industrial System 24.8% 23.7% 116.6 23.6% 120.9 23.8% 22.7% 109.2
Others 0.2% 0.5% -24.8 0.4% -19.6 0.3% 0.5% -18.6
Source: Company Filings; IndiaNivesh Research
Consolidated result
On a consolidated basis the company has reported revenue as per the market
expectation of 9%. The company has reported revenue growth of 7% remained
flat sequentially mainly on account of depressed performance in the overseas
business as a result of ongoing subdued demand scenario in Euro zone. Upside
in revenue for the quarter was driven by consumer products and industrial
systems business of the company with power systems subdued performance.
Consolidated segment revenue of power business was lower by 1% to Rs.
15.45 bn. The de-growth in power sector revenue was largely on account of
subdued performance of overseas power operations especially that of Ganz
and Pauwells. On deducting the consolidated figures with standalone figures
the overseas power sector revenue was down by 3% to Rs. 9.65 bn. On the
other hand the segment revenue of consumer durable was up by 30% to Rs.
4.75 bn. Similarly the segment revenue of consolidated industrial systems
was up by 23% to Rs. 3.81 bn YoY.
The consolidated segment profit of power business was flat at Rs. 2.01 bn
despite marginally lower sales. This was largely on account of marginal 10
bps rise in segment margin to 13%. In spite of strong surge in revenue the
segment profits of consumer durables and industrial systems was strained by
escalation in commodity prices. The company given its market leadership in
consumer durables were largely able to pass on the incremental commodity
cost to customers but it is not the same case and was forced to absorb in case
of industrial systems. Thus the segment margin of consumer durable was
lower by 34 bps to 14% that of industrial systems contracted by 245 bps to
18.2%. Thus despite strong revenue growth the segment profit of consolidated
consumer durable was higher by 27% to Rs. 665.9 Mn and that of consolidated
industrial systems was up by just 8% to Rs. 693.7 Mn.
To an interim dividend of Rs. 0.80 per equity share of Rs. 2 face value for the
financial year 2010-11.
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended
Segment Q3FY11 Q3FY10 YoY 30/06/2010 QoQ 9MFY11 9MFY10 YoY
Segment Revenue (net of excise duty)
Power System 15451.8 15595.7 -0.9% 15778.1 -2% 45794.0 45206.2 1.3%
Consumer product 4751.3 3647.3 30.3% 4634.3 3% 14703.6 11515.8 27.7%
Industrial System 3809.1 3100.4 22.9% 3606.1 6% 10625.4 9110.9 16.6%
Others 57.0 188.3 -69.7% 89.1 -36% 231.8 743.2 -68.8%
Total 24069.2 22531.7 6.8% 24107.60 0% 71354.8 66576.1 7.2%
less: Inter-segment revenue 99.3 67.5 128.8 384.0 246.3
Net Sales / Income from operations 23969.9 22464.2 6.7% 23978.80 0% 70970.8 66329.8 7.0%
Segment Result (PBT)
Power System 2007.6 2012.2 -0.2% 1934.6 4% 5498.0 5198.6 5.8%
Consumer product 665.9 523.7 27.2% 670.7 -1% 2139.5 1627.6 31.5%
Industrial System 693.7 640.6 8.3% 701.6 -1% 1993.1 1871.2 6.5%
Others -144.7 49.9 -390.0% 10 -1547% (118.80) 131.6 -190.3%
Total 3222.5 3226.4 -0.1% 3316.9 -3% 9511.8 8829.0 7.7%
Less:
Interest (net) 38.5 49.2 48.5 137.1 145.8
Other un-allocable expenditure net of un-allocable i n 167.4 206.4 214.7 613.3 632.6
Profit before Tax 3016.6 2970.8 1.5% 3053.7 -1% 8761.4 8050.6 8.8%
PBIT margin
(Segment Assets - Segment Liabilities)
Power System 13.0 12.9 9.0 12.3 73.1 12.0 11.5 50.6
Consumer product 14.0 14.4 -34.3 14.5 -45.7 14.6 14.1 41.7
Industrial System 18.2 20.7 -245.0 19.5 -124.4 18.8 20.5 -178.0
Others -253.9 26.5 -28036.0 11.2 -26508.3 -51.3 17.7 -6895.8
Source: Company Filings; IndiaNivesh Research
Valuation: At CMP of Rs.262 CGL is trading at 16x FY12E consolidated Bloomberg earnings. The Company is conducting a post result
conference call on January 32, 2011 after that we will come out with detail analysis of the stock and its business outlook.
28/02/2010
28/03/2010
28/04/2010
28/05/2010
28/06/2010
28/07/2010
28/08/2010
28/09/2010
28/10/2010
28/11/2010
28/12/2010
28/01/2011
Financials
(Rs in Mn) 3QFY11 3QFY10 YoY 2QFY11 QoQ 9MFY11 9MFY10 YoY
Domestic Vehicles sold (No.) 299527 218910 36.83% 277936 7.77% 820350 625408 31.17%
Export Vehicles Sold (No.) 31160 39116 ‐20.34% 35718 ‐12.76% 107315 105535 1.69%
Total Vehicles Sold (No.) 330,687 258,026 28.16% 313,654 5.43% 927,665 730,943 26.91%
Average Realisation 280529.0 284226.0 -1.30% 284935.0 -1.55% 283124.8 283518.8 -0.14%
Income from Operations
Gross Sales 103828.4 80464.5 29.04% 99869.1 3.96% 293502.3 227343.9 29.10%
Less: Excise Duty on Sales 11061.1 7126.8 55.20% 10498.1 5.36% 30857.3 20107.8 53.46%
% of gross Sales 10.65 8.86 179.6 bps 10.51 14.1 bps 10.51 8.84 166.9 bps
Net Sales 92,767.3 73,337.7 26.49% 89,371.0 3.80% 262,645.0 207,236.1 26.74%
Income from Services (Net) 494.0 388.8 27.06% 402.7 22.67% 1293.9 944.2 37.04%
Other Operating Income 1683.2 1493.7 12.69% 1699 ‐0.93% 5540.2 3818.3 45.10%
Total Income from Operations 94944.50 75220.20 26.22% 91472.70 3.80% 269479.10 211998.60 27.11%
Expenditure :
Decrease/(Increase) in stock in trade and work in progress 1497.5 -1311.5 -1482.1 564.8 (2061.60)
Consumption of Raw Materials and Components 69590.3 54918.6 26.72% 69388.8 0.29% 199776.3 155740.9 28.27%
Raw Material 71087.8 53607.1 32.61% 67906.7 4.68% 200341.1 153679.3 30.36%
% of Net Sales 76.63 73.10 353.4 bps 75.98 64.7 bps 76.28 74.16 212.2 bps
Purchase of Traded Goods 3367.2 2294.1 46.78% 2849.6 18.16% 8972.4 6327.8 41.79%
% of Net Sales 3.63 3.13 50.2 bps 3.19 44.1 bps 3.42 3.05 36.3 bps
Employees Cost 2324.5 1324.5 75.50% 1568.2 48.23% 5502.3 3922.8 40.26%
% of Net Sales 2.51 1.81 70.0 bps 1.75 75.1 bps 2.09 1.89 20.2 bps
Other Expenditure 9147.1 6655.4 37.44% 9545 ‐4.17% 28117.0 19636.5 43.19%
% of Net Sales 9.86 9.08 78.5 bps 10.68 ‐82.0 bps 10.71 9.48 123.0 bps
Total Expenditure (a+b+c+d+e) 85926.6 63881.1 34.51% 81869.5 4.96% 242932.8 183566.4 32.34%
Profit from Operations prior Other Income and Interest 9017.9 11339.1 -20.47% 9603.2 -6.09% 26546.3 28432.2 -6.63%
Core Operating Profit Margin (%) 9.50 15.07 -557.65 bps 10.50 -100.04 bps 9.85 13.41 -356.05 bps
Depreciation 2369.4 2027.8 16.85% 2381.9 ‐0.52% 7168.3 6019.8 19.08%
Profit before Interest 6648.5 9311.3 -28.60% 7221.3 -7.93% 19378.0 22412.4 -13.54%
Interest 3.6 83.7 ‐95.70% 97.2 ‐96.30% 180.6 206.5 ‐12.54%
Other Income 1282.7 912.5 40.57% 1339.7 ‐4.25% 3624.4 4177.9 ‐13.25%
Net Profit before Tax from Ordinary Activities 7927.6 10140.1 -21.82% 8463.8 -6.34% 22821.8 26383.8 -13.50%
Exceptional Iteam (Net) 0 0 0 0 0
Profit Before Tax 7927.6 10140.1 -21.82% 8463.8 -6.34% 22821.8 26383.8 -13.50%
Tax Expense
For current year 2275.9 3264.8 2481.4 6534.0 7973.1
For earlier year
Total Tax Expense 2275.9 3264.8 -30.29% 2481.4 -8.28% 6534.0 7973.1 -18.05%
% of Tax 28.71 32.20 ‐348.84 bps 29.32 ‐60.92 bps 28.63 30.22 ‐158.92 bps
Net Profit after Tax for the period 5651.7 6875.3 -17.80% 5982.4 -5.53% 16287.8 18410.7 -11.53%
NPM (%) 6.09 9.37 -328.25 bps 6.69 -60.16 bps 6.20 8.88 -268.25 bps
Source: Company Filings; IndiaNivesh Research
Valuation
At the CMP of Rs 436 SEL is trading at around 11.9x FY11E EPS. We had recommended
this stock for buying at Rs 380 levels on June 21 for near term target of Rs 420 &
longer term target of Rs 600. Our near term target is achieved. However in view of
the string fundamentals of the company we believe the stock can be accumulated
further for a portfolio investment. It may be added in every dip. On a conservative
basis & back of envelope calculation on EPS of around Rs 36, we arrive at a target of
around Rs 510 assigning 14x PE multiple.
Financials
Q3FY11 Q3FY10 YoY Q2FY11 QoQ 9MFY11 9MFY10 YoY
Net Sales 919.3 681.8 35% 856.7 7% 2619.9 2045.6 28%
Other Operating Income 6.7 5.1 31% 5.3 -94% 17.1 15.2 13%
Total Income 926.0 686.9 35% 862.0 7% 2637.0 2060.8 28%
Expenditure
Inc/dec in stock in trade 5.9 (25.0) (11.5) 7.8 (50.8)
Cost of material 692.1 533.5 658.8 1974.6 1583.9
RM Consumed 698.0 508.5 37% 647.3 8% 1982.4 1533.1 29%
% of Net Sales 75.4 74.0 135.0 75.1 28.5 75.2 74.4 78.3
Employee Cost 42.8 36.9 16% 43.2 -1% 125.8 100.7 25%
% of Net Sales 4.6 5.4 ‐75.0 5.0 ‐39.0 4.8 4.9 ‐11.6
Other Expenditure 25.2 24.3 4% 21.4 18% 70.4 58.6 20%
% of Net Sales 2.7 3.5 ‐81.6 2.5 23.9 2.7 2.8 ‐17.4
Total Expenditure 766.0 569.7 34% 711.9 8% 2178.6 1692.4 29%
Operating Profit 160.0 117.2 37% 150.1 7% 458.4 368.4 24%
Operating Margin 17.3% 17.1% 22bps 17.4% -13bps 17.4% 17.9% -49bps
Depriciation 11.5 12.1 -5% 11.0 5% 33.0 35.9 -8%
PBIT 148.5 105.1 41% 139.1 7% 425.4 332.5 28%
Interest (12.1) (11.2) 8% (13.8) -12% (38.8) (47.1)
Other Income 3.8 7.2 -47% 5.1 -25% 14.7 36.1 -59%
PBT after Other Income 164.4 123.5 33% 158.0 4% 478.9 415.7 15%
Tax rate 31.1% 28.2% 290.5 31.5% ‐44bps 31.4% 32.3% ‐88.0767
Current Tax 53.5 39.6 50.1 7% 156.0 145.0
Deferred tax (2.4) (4.8) (0.3) 700% (5.5) (10.7)
Fringe benefit tax 0.00
Total Tax 51.1 34.8 49.8 3% 150.5 134.3
Net Profit 113.3 88.7 28% 108.2 5% 328.4 281.4 17%
NPM (%) 12.24 12.91 -68bps 12.55 -3168bps 12.45 13.65 -120bps
APAT 109.5 81.5 34% 103.1 0.30 313.7 245.3 28%
APAT Margin (%) 11.83 11.86 -4bps 11.96 406.81 11.90 11.90 -1bps
Paid-up equity share capital (FV-2) 124.20 124.20 124.20 124.20 124.20
Basic EPS & Diluted EPS 9.12 7.14 28% 8.71 26.44 22.66 17%
Source: Company Filings; IndiaNivesh Research
Valuation
We are positive on the long term growth prospects of the company. We expect
the order book of the company to grow further on order inflows from PGCIL
and SEBs. We maintain our earnings estimates with the expectation on new
order inflows.
Currently, at CMP of Rs 114 the stock trades at FY11E & FY12E P/E of 8.5x and
7.3x respectively and looks attractive for long-term investment horizon of
12-18 months.
Financials
Particulars (Rs In M n) Q3FY11 Q3FY10 YoY (%) Q2FY11 QoQ (%) 9M FY11 9MFY10 YoY (%)
Gross Sales 5676.51 5221.03 8.7% 5613.57 1.1% 17081.31 14933.26 14.4%
Less: Excise duty 163.51 118.98 37.4% 190.19 -14.0% 502.49 268.66 87.0%
Net Sales 5513.00 5102.05 8.1% 5423.38 1.7% 16578.82 14664.60 13.1%
Other Operating Income 0 7.84 -100.0% 0 #DIV/0! 0.94 25.85 -96.4%
Total Incom e 5513.00 5109.89 7.9% 5423.38 1.7% 16579.76 14690.45 12.9%
Expenditure
Inc/dec in stock in trade 12.38 (6.65) -286.2% 31.49 -60.7% -87.94 31.77 -376.8%
Cost of material 2955.46 3192.28 -7.4% 3208.46 -7.9% 9537.22 9198.20 3.7%
RM Consumed 2967.84 3185.63 -6.8% 3239.95 -8.4% 9449.28 9229.97 2.4%
% of Net Sales 53.8% 62.3% -850.9 bps 59.7% -590.7 bps 57.0% 62.8% -583.7 bps
Employee Cost 188.00 157.61 19.3% 160.08 17.4% 521.49 435.09 19.9%
% of Net Sales 3.4% 3.1% 32.6 bps 3.0% 45.8 bps 3.15% 3.0% 18.4 bps
Erection & Sub contracting Expenses 1076.35 668.06 61.1% 947.42 13.6% 3141.77 2157.45 45.6%
% of Net Sales 19.5% 13.1% 645.0 bps 17.5% 205.5 bps 18.9% 14.7% 426.3 bps
Other Expenditure 651.66 515.39 26.4% 444.76 46.5% 1567.66 1206.04 30.0%
% of Net Sales 11.8% 10.1% 173.4 bps 8.2% 362.0 bps 9.5% 8.2% 124.6 bps
Total Expenditure 4883.9 4526.7 7.9% 4792.2 1.9% 14680.2 13028.6 12.7%
Operating Profit 629.15 583.20 7.9% 631.17 -0.3% 1899.56 1661.90 14.3%
Operating Margin 11.4% 11.4% -0.1 bps 11.6% -22.6 bps 11.5% 11.3% 14.4 bps
Depriciation 50.05 41.64 20.2% 52.82 -5.2% 148.38 106.89 38.8%
PBIT 579.10 541.56 6.9% 578.35 0.1% 1751.18 1555.01 12.6%
PBIT Margin 10.5% 10.6% -9.4 bps 10.7% -16.0 bps 10.6% 10.6% -2.3 bps
Interest 211.7 186.16 13.7% 206.86 2.3% 617.58 537.15 15.0%
Other Income 3.87 10.94 -64.6% 2.43 59.3% 12.55 19.14 -34.4%
PBT after Other Incom e 371.27 366.34 1.3% 373.92 -0.7% 1146.15 1037.00 10.5%
Tax 124.03 132.70 -6.5% 125.46 -1.1% 387.09 370.70 4.4%
Tax Rate 33.4% 36.2% -281.6 bps 33.6% -14.6 bps 33.8% 35.7% -197.4 bps
Net Profit 247.24 233.64 5.8% 248.46 -0.5% 759.06 666.30 13.9%
NPM 4.5% 4.6% -8.8 bps 4.6% -9.7 bps 4.6% 4.5% 4.3 bps
Source: Company Filings; IndiaNivesh Research
P&G
P&G’s net sales went up by 8% YoY and 31% QoQ. Despite managing a volume
growth of 15%, the operating profit was almost halved to Rs.559 mn on an
annual basis. The company blames it on excise duty on its feminine hygiene
products and investments in accelerating category growth. The net profit for
the company stood at Rs.450 mn.
At the CMP of Rs. 1648, the stock is trading at 27.6x and 22.2x PER FY11E and
FY12E Bloomberg earnings estimates. At present it is trading at attractive
valuation.
Procter & Gamble(Rs. In Mn.) Q3 FY 11 Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q %
Change
Net Sales 2986 2278 2746 8.75% 31.08%
Operating Profit 559 448 1026 -45.50% 24.91%
Net Profit 450 314 745 -39.68% 43.34%
EPS (Rs.) 13.85 9.66 23.00 -39.78% 43.37%
Arvind Ltd
Arvind ltd. Posted healthy numbers on a YoY basis but registered a decline
sequentially. The net sales on a standalone basis went up to Rs.6340 mn (17%
YoY; down 3% QoQ). On a consolidated basis, the branded apparel category
and retial business segment showed a growth of 57% YoY whereas denim
and khaki revenue grew by 39% and 22% YoY. The net profit stood at Rs. 314
mn on SA basis.
At the CMP of Rs. 65, the stock is trading at 14.7x and 11.2x PER FY11E and
FY12E Bloomberg earnings estimates.
Arvind Ltd(Rs. In Mn.) Q3 FY 11 Q2 FY 11 - Actual Q3 FY 10 - Actual Y.oY % Change Q.o.Q %
Ch
Net Sales 6340 6545 5428 16.79% -3.14%
Operating Profit 880 914 772 13.97% -3.73%
Net Profit 314 283 123 156.49% 11.10%
EPS (Rs.) 1.48 1.13 0.48 208.33% 30.97%
25/02/2010
25/03/2010
25/04/2010
25/05/2010
25/06/2010
25/07/2010
25/08/2010
25/09/2010
25/10/2010
25/11/2010
25/12/2010
25/01/2011
Net Sales/ Income from Operations 3,636.1 2,642.2 3,367.0 37.6% 8.0%
Other Operating Income 8.0 34.2 19.2 ‐76.6% ‐58.3%
3,644.1 2,676.4 3,386.2 36.2% 7.6%
Expenditure
(Increase)/ Dec. in Stock-in-trade & WIP (17.7) (22.6) 36.9 ‐21.7% ‐148.0%
Consumption of raw materials 1,158.5 777.4 1,167.6 49.0% ‐0.8%
Employee cost 320.4 287.5 252.0 11.4% 27.1%
Construction Expenses 1,636.1 1,217.2 1,440.9 34.4% 13.5%
Depreciation 101.5 96.6 88.0 5.1% 15.3%
Other Expenditure 236.3 187.9 227.8 25.8% 3.7%
Total Expenditure 3,435.1 2,544.0 3,213.2 35.0% 6.9%
P/(L) from Oper. before Inc., Int., & Excep. Items 209.0 132.4 173.0 57.9% 20.8%
25/02/2010
25/03/2010
25/04/2010
25/05/2010
25/06/2010
25/07/2010
25/08/2010
25/09/2010
25/10/2010
25/11/2010
25/12/2010
25/01/2011
Y. Santosh
Research Analyst
Mobile: +91 77383 93416
Tel: +91 22 66188842
s.yellapu@indianivesh.in
Expenditure
Construction Expenses 3,923.9 2,024.8 2,706.3 93.8% 45.0%
Employee cost 68.8 48.7 46.8 41.3% 47.1%
Other Expenses 240.8 221.2 109.1 8.9% 120.7%
Depreciation 68.4 66.5 43.7 2.9% 56.5%
Total Expenditure 4,301.9 2,361.3 2,905.9 82.2% 48.0%
P/(L) from Oper. before Inc., Int., & Excep. Items 460.3 247.7 244.0 85.8% 88.6%
25/02/2010
25/03/2010
25/04/2010
25/05/2010
25/06/2010
25/07/2010
25/08/2010
25/09/2010
25/10/2010
25/11/2010
25/12/2010
25/01/2011
Operating Expenses
(Inc.)/ Dec. in stock-in-trade & WIP (585.7) (1,164.1) 1,947.8 ‐49.7% ‐130.1%
Operating/Manufacturing Expenses 16,820.8 19,085.8 14,879.6 ‐11.9% 13.0%
Employee Remuneration and Benefits 1,492.1 1,453.2 1,129.8 2.7% 32.1%
Other Operating Expenses 1,541.7 3,747.0 1,109.4 ‐58.9% 39.0%
Raw Materials and Components Consumed 0.0 0.0 0.0
Depreciation 3,294.9 1,527.8 2,828.7 115.7% 16.5%
Total Operating Expenses 22,563.8 24,649.7 21,895.3 ‐8.5% 3.1%
Profit before Oth. Income, Interest & Exceptional item 6,922.7 6,062.5 7,743.0 14.2% ‐10.6%
Other Non Operating Exp./ (Income) (39.0) (39.9) (38.5) ‐2.3% 1.3%
Profit before Interest & Exceptional items 6,961.7 6,102.4 7,781.5 14.1% ‐10.5%
Exceptional Items
Profit on sale of shares 0.0 0.0 0.0
Provision for writing off claims- Iraq works 0.0 0.0 0.0
Prior Period adjustments (8.8) 27.4 9.8
Profit from ordinary activities before tax 3,571.10 2,896.30 5,029.00 23.3% ‐29.0%
Tax Expense
Current Tax 707.5 569.3 812.8 24.3% ‐13.0%
Deferred Tax 537.0 1,171.8 1,066.6 ‐54.2% ‐49.7%
Fringe Benefits Tax 0.0 0.0 0.0
1,244.5 1,741.1 1,879.4
Net Profit from ordinary activities after tax 2,326.6 1,155.2 3,149.6 101.4% ‐26.1%
Net Profit for the period 2,326.6 1,155.2 1,030.2 101.4% 125.8%
Diluted EPS before Extra-ordinary items 1.10 0.52 1.49 111.5% ‐26.2%
Source: Company Filings; IndiaNivesh Research
80.00
an increase in EBITDA margins to 61.9% in Q3FY11 compared to 59.2% in
60.00 Q2FY11, however, margins remained below when compared to 64.1% in
40.00
Q3FY10. The improvement in EBITDA margins is despite an increase in the
20.00
-
land, development, construction of properties costs as % of sales from 33.2%
in Q2FY11 and 35.1% in Q3FY10 to 36% in Q3FY11. The impact of sharp shoot-
10/05/2010
10/06/2010
10/07/2010
10/08/2010
10/09/2010
10/10/2010
10/11/2010
10/12/2010
10/01/2011
up in the revenues covers up for this increase in these expenses during the
Oberoi Realty Sensex quarter.
Source: IndiaNivesh Research, Capitaline
Oberoi reported PAT margins of 51.5% in Q3FY11 compared to 56.2% in
Q2FY11 and 62% in Q3FY10.
The company reported an EPS of Rs 6.37/share in Q3FY11 compared to
Rs 3.31/share in Q2FY11 and Rs 4.47/share in Q3FY10.
The company raised Rs 10.2 bn from the IPO in October 2010. With zero debt
on books, and a huge land bank of 20 mn sq. ft. acquired at attractive prices
(likely to last for another 4-5 years), and a revival in Mumbai real estate
markets, makes us believe in the long term growth propsects of the company.
We expect the stock to continue reporting impressive set of numbers going
forward. At CMP of Rs 246.2/share, the stock trades at an EV/EBITDA multiple
Y. Santosh of 11.2x and 7.7x for its FY11 and FY12 multiples.
Research Analyst
Mobile: +91 77383 93416
Tel: +91 22 66188842
s.yellapu@indianivesh.in
Net Sales/ Income from Operations 3,951.7 1,699.7 2,605.9 132.5% 51.6%
Other Operating Income 35.1 0.9 0.0
3,986.8 1,700.6 2,605.9 134.4% 53.0%
Operating Expenses
Land Cost, Development rights, constructed properties & Other Operating Exp. 1,422.4 563.7 1,060.3 152.3% 34.2%
Employee Cost 70.2 68.7 17.1 2.2% 310.5%
Depreciation & Employees 60.8 57.8 23.0 5.2% 164.3%
Other Expenditure 25.6 61.9 13.0 ‐58.6% 96.9%
1,579.0 752.1 1,113.4 109.9% 41.8%
Profit from Operations before Oth. Income, Int. & Exceptional Items 2,407.8 948.5 1,492.5 153.9% 61.3%
Key Highlights:
Bank of Baroda’s net profit grew by 28.4% (Y-o-Y) in Q3FY11, primarily driven
by robust growth of 43.2% (Y-o-Y) in NII and 46.4% (Y-o-Y) in pre-provision
operating profits in Q3FY11.
We note that growth in NII was mainly attributed to 35.7% (Y-o-Y) growth in
interest income and 31% (Y-o-Y) growth in interest expended, along with CASA
ratio at 35.12%. This translated into improved NIM to 3.82% for Q3FY11 from
3.40% for Q3FY10.
The bank’s profitability matrix remained flat as RoA at 1.34% for Q3FY11,
compared to 1.36% for Q3FY10 and 1.34% for Q2FY11.
The bank’s operating efficiency improved significantly with cost to income
ratio at 37.64% for Q3FY11, down from 44.05% for Q3FY10 and 39.08% for
Q2FY11.
The bank’s asset quality improved with gross NPA at 1.32% at Q3FY11, down
from 1.43% at Q3FY10 and 1.39% at Q2FY11. The bank’s net NPA ratio stood
at 0.36% at Q3FY11, compared to 0.31% at Q3FY10 and 0.38% at Q2FY11.
The bank’s capitalization remained adequate with CAR at 12.45% at Q3FY11
as against 14.65% at Q3FY10 and 13.22% at Q2FY11. Furthermore, we note
that the bank has been short listed for capital infusion by the Government of
India, which will strengthen the bank’s capitalization further.
The bank’s balance sheet grew by 30.78% (Y-o-Y) in Q3FY11 with 30.86% (Y-o-Y)
growth in deposits and 32.68% (Y-o-Y) in advances at Q3FY11.
Valuation
At CMP of Rs. 836, the stock is trading at P/ABV of 1.5x (Consolidated) FY12E. We
note that recently the bank’s stock price has come under pressure on account of
concerns over pending heavy provision towards gratuity and pension liability.
However, we believe that the bank is fundamentally strong and has maintained
track record of robust financial performance. Furthermore, the expected capital
infusions will strengthen the bank’s fundamentals. We also note that the stock is
over-owned by FIIs, holding 18.19% at December 2010. Hence, we recommend
using correction in stock price as a buying opportunity for portfolio investment.
Financial Highlights
Rs. Mn
Quarter Ended Nine Months Ended
Particulars Q3FY11 Q3FY10 YoY(%) 9MFY11 9MFY10 YoY(%) Q2FY11 QoQ(%) FY10
Interest Earned 56662 41770 35.7 155518 123445 26.0 51587 9.8 166983
Interest / discount on advances/bills 42122 31572 33.4 116162 92951 25.0 38383 9.7 125412
Income on Investments 12774 9132 39.9 34564 27309 26.6 11565 10.5 36559
Interest on Balance with RBI and other Inter-Bank Funds 1146 1020 12.4 3412 2989 14.2 1469 ‐22.0 4222
Others 619 47 1231.6 1380 196 603.5 169 266.0 791
Other Income 6762 6596 2.5 19747 19580 0.9 6813 ‐0.8 27249
Total Income 63423 48366 31.1 175265 143025 22.5 58400 8.6 194233
Interest Expended 33739 25757 31.0 93634 81500 14.9 31205 8.1 107589
Net Interest Income 22923 16012 43.2 61884 41945 47.5 20381 12.5 59395
Operating Expenses 11172 9959 12.2 31273 28461 9.9 10627 5.1 38106
Employee Cost 6942 6292 10.3 19271 18191 5.9 6562 5.8 23509
Other Operating Expenses 4230 3667.6 15.3 12002 10270 16.9 4065 4.1 14597
Total Expenses 44911 35717 25.7 124907 109960 13.6 41832 7.4 145694
Pre-Provision Operating Profit 18512 12649 46.4 50358 33065 52.3 16567 11.7 48538
Provisions and Contigencies 3041 2425 25.4 7409 3199 131.6 1855 63.9 6158
Profit Before Tax 15471 10224 51.3 42949 29866 43.8 14713 5.2 42380
Tax Expenses 4783 1900 151.8 13476 8346 61.5 4520 5.8 11797
Net Profit 10689 8324 28.4 29473 21521 37.0 10193 4.9 30583
Ratios (%)
RoA 1.34 1.36 1.30 1.20 1.34 1.21
Cost to Income 37.64 44.05 38.31 46.26 39.08 43.98
Gross NPA 1.32 1.43 1.32 1.43 1.39 1.36
Net NPA 0.36 0.31 0.36 0.31 0.38 0.34
Total CAR 12.45 14.65 12.45 14.65 13.22 14.26
Source: Company Filings; IndiaNivesh Research
Key Highlights:
Allahabad Bank’s net profit grew by 20.4% (Y-o-Y) in Q3FY11, mainly due to
robust growth of 55.7% (Y-o-Y) in NII and 21.3% (Y-o-Y) in operating profits in
Q3FY11.
The bank’s profitability matrix remained flat with RoA at 1.28% at Q3FY11
and Q2FY11.
The bank’s asset quality also remained at the previous level with gross NPA
ratio at 1.77% at Q3FY11, Q2FY11 and Q3FY10. The bank’s NPA ratio also
stood at 0.59% at Q3FY11, compared to 0.56% at Q2FY11 and 0.35% at
Q3FY10.
The bank’s CAR stood at 12.78% at Q3FY11, as against 15.00% at Q3FY10 and
13.49% at Q2FY11.
Valuation
At CMP of Rs. 198, the stock is trading at a P/ABV of 0.9x FY12E. We recommend
“HOLD” on this stock.
Financial Highlights
Rs. Mn
Quarter Ended Nine Months Ended
Particulars Q3FY11 Q3FY10 YoY(%) 9MFY11 9MFY10 YoY(%) Q2FY11 QoQ(%) FY10
Interest Earned 28554 21077 35.5 78955 61626 28.1 26369 8.3 83692
Interest / discount on advances/bills 21309 15955 33.6 59256 47348 25.2 19840 7.4 63985
Income on Investments 7117 5047 41.0 19242 14061 36.8 6308 12.8 19448
Interest on Balance with RBI and other Inter‐Bank Funds 108 75 43.7 331 210 57.7 143 ‐24.2 252
Others 20 0 ‐ 126 8 1559.2 78 ‐74.7 8
Other Income 2576 3395 ‐24.1 9009 11139 ‐19.1 3447 ‐25.3 15159
Total Income 31130 24473 27.2 87964 72765 20.9 29816 4.4 98851
Interest Expended 18038 14322 25.9 50243 42548 18.1 16677 8.2 57187
Net Interest Income 10516 6756 55.7 28712 19079 50.5 9692 8.5 26505
Operating Expenses 5209 3650 42.7 14976 11311 32.4 5324 ‐2.2 16178
Employee Cost 3196 2094 52.7 9552 7057 35.4 3503 ‐8.8 10114
Other Operating Expenses 2013 1556 29.3 5423 4255 27.5 1821 10.5 6065
Total Expenses 23247 17971 29.4 65219 53859 21.1 22001 5.7 73366
Pre‐Provision Operating Profit 7883 6501 21.3 22746 18906 20.3 7815 0.9 25485
Provisions and Contigencies 2359 2463 ‐4.2 6584 4798 37.2 2714 ‐13.1 7769
Profit Before Tax 5525 4038 36.8 16162 14108 14.6 5101 8.3 17716
Tax Expenses 1368 585 133.9 4507 4290 5.1 1075 27.2 5653
Net Profit 4157 3454 20.4 11655 9818 18.7 4026 3.3 12063
Ratios (%)
RoA 1.28 1.31 1.24 1.29 1.28 1.16
Cost to Income 39.78 35.95 39.70 37.43 40.52 38.83
Gross NPA 1.77 1.77 1.77 1.77 1.77 1.69
Net NPA 0.59 0.35 0.59 0.35 0.56 0.66
Total CAR 12.78 15.00 12.78 15.00 13.49 13.62
Source: Company Filings; IndiaNivesh Research
J. Kumar Infraprojects Ltd. The impact of the recent inflationary pressures was seen with the company
STOCK INFO experiencing increase in its construction costs. Construction costs as % of
BSE 532940 sales were increased from 73.4% in Q3FY10 and 72.6% in Q2FY11 to 75.8% in
NSE JKIL
Bloomberg JKIL IN
Q3FY11. As a result, the overall EBITDA margins took a hit from 15.7% in
Reuters JKIP.BO Q3FY10 and 16.4% in Q2FY11 to 14.8% in Q3FY11.
Sector Construction & Engineering
Face Value (Rs) 10 The Q3FY11 PAT margins were benefitted from the decline in Tax rates, which
Equity Capital (Rs mn) 278
Mkt Cap (Rs mn) 3,920 had come down from 34% in Q3FY10 and 30.8% in Q2FY11 to 21.8% in Q3FY11.
52w H/L (Rs) 272.2/ 134.0 On a whole the PAT margins improved from 8.2% in Q3FY10 and 7.8% in
3m Avg Daily Volume (BSE + NSE) 5,049,182 Q2FY11 to 8.4% in Q3FY11.
SHAREHOLDING PATTERN %
(as on 31st Dec. 2010)
Almost muted order inflows (Rs 1.7 bn of order flows based on BSE filings
Promoters 54.5 assumed) and higher execution capabilities of the company led to a reduced
FIIs 4.0 order book of Rs 13.4 bn in Q3FY11 compared to Rs 14.1 bn in Q2FY11.
DIIs 4.7 Transportation Engineering, Civil projects, and Irrigation projects account for
Public & Others 36.8
Source: BSE
86%, 5% and 7% of the current order books, respectively.
STOCK PERFORMANCE (%) 1m 3m 12m At CMP of Rs 137/ share, the stock trades at P/E multiple of 5.2x and 4.3x
J KUMAR INFRA -21 -44 -20 times the FY11E and FY12E earnings. Further, for FY11 and FY12 on an EV/
BSE SENSEX -7 -7 15 EBITDA basis, the stock trades at 2.5x and 2.1x.
Source: IndiaNivesh Research
J. KUMAR INFRA v/s BSE SENSEX However, the declining order book/ TTM sales trend (1.6x in Q3FY11 vs. 1.7x
160.00 in Q2FY11) concerns us. With an overall muted infrastructure award activity
140.00
120.00 environment, we expect investors to have a cautious views to enter at current
100.00
80.00 levels, as there are stocks available with better revenue visibility to be available
60.00
40.00 in the sector at compelling valuations.
20.00
‐
25/01/2010
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25/09/2010
25/10/2010
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25/12/2010
25/01/2011
J Kumar Infra Sensex
Y. Santosh
Research Analyst
Mobile: +91 77383 93416
Tel: +91 22 66188842
s.yellapu@indianivesh.in
Company Financials
(Rs in mn.) Q3FY11 Q2FY11 Q3FY10 q‐o‐q change y‐o‐y change
Net Sales/ Income from Operations 2,402.7 1,647.8 1,937.3 45.8% 24.0%
Other Operating Income 98.3 50.9 80.8 93.0% 21.6%
Total Operating Income 2,501.0 1,698.7 2,018.1 47.2% 23.9%
Profit from op. before Oth. Inc., int. & exc. Items 316.5 231.9 268.3 36.5% 18.0%
Valuations
At CMP Rs 415/share the stock is trading at PE 23x and 17.2x at FY11e and FY12e
EPS Bloomberg estimates, respectively. In previous quarter, we recommended stock
with target price of Rs 506/ share which was achieved. The long term growth story
of Lupin is intact. In short to medium term, company can feel some hindrances due
to slower down of sales from its existing products in US. Hence, we recommend
HOLD.
Capital Market Segment: A weak opening followed hard selling pressure till the end. Nifty tumbled around 154.85 points to
close at 5512.15 down 1.64% from previous day’s close. Be it Banking, IT, Infra, Realty, Mid cap or Small cap all were hammered
with equal disdain.
ICICI Bank, ONGC and ITC were top three positive contributors to nifty while Reliance, HDFC and L&T were top three draggers.
Breadth of market worsened from 0.28:1 A/D ratio at 9:30am to 0.14:1 at the close i.e. for each advancer there were 7
decliners at close. Total traded value in cash segment was Rs. 15048.46 crores on NSE.
9.00
HOURLY MARKET BREADTH : 28/01/2011 NIFTY OHLC : 28/01/2011 7.10
8.00
7.00
6.97 VIX :28/01/2011
1600 5650 5.52
6.00
1400 5.00 3.66
5600 4.00 2.22
1200 5614.4 3.00 3.84
INDEX VALUES
5550 2.00
1.00 2.71
1000 0.00
5500 -1.00
800 1345 1269 -2.00
1057 1192 1264 1320 1334 5527.3
895 -3.00
600 5450 -4.00 VIX
-5.00
400 5400 5459.15 -6.00
-7.00
200 -8.00
255 219 162 132 105 104 184 5350 -9.00
98
0
OPEN/HIGH 9.15 AM LOW 2.40 PM CLOSE 3.30 PM 10:00 11:00 12:00 1.30 2:00 3:00 3.30
9.30 AM 10.00 AM 11.00 AM 12:00 PM 1.00 PM 2.00 PM 3.00 PM 3.30 PM
ADVANCES DECLINES AM AM PM PM PM PM PM
Breadth - O - Meter Source: NSE; IndiaNivesh Research Source: NSE; IndiaNivesh Research
Source: NSE; IndiaNivesh Research
Volatility Index: Remained firm through the session to climb 2.21% towards the close. It closed at 22.58 up 2.21% for the
day.
Statistics: As per provisional data compiled by NSE, FII’s were aggressive sellers in Capital market segment (NSE+BSE) of Rs. -
706.84 crores while DII’s were buyer’s of Rs. 81.24 crores of equities. Since, 31st of Dec’10 FII’s are net sellers of Rs. -7451.89
crores of equities (provisional) while DII’s have bought around Rs. 4107.23 crores of equities.
FII Activity in Cash Market since beginning of DII Activity in Cash Market since beginning of FII (Rs Cr) 28/01/2011 DII (Rs Cr)
January'11 series in F & O. January'11 series in F & O 200
Net Buy (Rs. Cr.) Net Sell (Rs. Cr.) Buy - Sell (Rs. Cr.) 100
81.24
Net Buy (Rs. Cr.) Net Sell (Rs. Cr.) Buy - Sell (Rs. Cr.)
7000 0
4000
1999.54 5735.85
6000 -100
2000
5000 4107.23 -200
0
4000 -300
-2000
3000
-4000 -400
2000
-6000 -500
1000
-8000 -600
-7451.89 0
-10000 -700
-9451.43 -1000
-12000 -800 -706.84
-2000 -1628.62
Net Buy (Rs. Cr.) Net Sell (Rs. Cr.) Buy - Sell (Rs. Cr.) Net Buy (Rs. Cr.) Net Sell (Rs. Cr.) Buy - Sell (Rs. Cr.) FII (Rs Cr) DII (Rs Cr)
Source: NSE; IndiaNivesh Research Source: NSE; IndiaNivesh Research Source: NSE; IndiaNivesh Research
Outlook: Momentum indicators in daily, weekly and monthly charts continue to be in negative territory. Short term momentum
indicators in hourly charts have turned negative. For any meaningful pull back Nifty should clear 5640 on closing basis. However,
one is advised to wait for investment buy till Nifty holds 5940 on closing basis. For opportunistic buy and sell trades; one
should trade only with strict stop losses in place.
(contd...)
OPTION’S ACTIVITY
Nifty: In February series build up was seen in 5100 to 5500 put options which saw 15.22, 16.33, 14.36, 29.15 & 12.84 lacs of
shares being added to open interest respectively. While call option strikes of 5500 to 5700 saw buying of 10.87, 21.44 & 13.66
lacs of shares respectively. Aforementioned call and put option strikes added at around their respective theoretical prices.
Interestingly, 5800 & 5900 call option strikes added 8.15 & 7.26 lacs of shares in their open interest at around 20% discount
to their theoretical price. Overall, PCR of Index options was 1.10. 5600 CE & PE strike had the maximum build in open interest
as on 28th of Jan’11 for February’11 series. Build up in PE: CE for current month series is 4:1.
Stocks: Out of 223 securities, options on 143 underlying securities got traded. The total number of contracts traded was
112867 with a notional value of Rs.3198.35 crores. The top twenty contracts contributed to around 33% of the total traded
volume in Options on individual securities. RELIANCE was the most active option contracts on individual securities traded
today with 16836 contracts and TATASTEEL was the next most active options contracts with 11318 contracts being traded.
Nifty's Change in O.I. vis-à-vis Change in Index Options Activity Chart for 28/01/2011
7.77 5300 Feb'11 5400 Feb'11 5500 Feb'11 5600 Feb'11 5700 Feb'11
7.28
5.69 5.92 2915000
4.94
3.32 3.07 3.32 2144600
2.01 2.40 2.21
1.90
No of shares
4/1/2011
5/1/2011
6/1/2011
7/1/2011
10/1/2011
11/1/2011
12/1/2011
13/1/2011
14/1/2011
17/1/2011
18/1/2011
19/1/2011
20/1/2011
21/1/2011
24/1/2011
25/1/2011
27/1/2011
-401150 -317050
Nifty strikes
% Change in O. I. % Change Nifty Change in O.I. "CE" Change in O.I. "PE"
FII Activity – Futures & Stocks: FII’s were net sellers in index and stock futures and stock options while they were net buyers
in index options. They net sold Rs. -320.59 crores of index futures which had an impact of increasing their open interest by Rs.
657.85 crores and Rs. -412 crores of stock futures leading to a decrease in open interest by Rs. -427.95 crores. Aforesaid data
suggests FII’s created new shorts in index futures and closed out some of their buy positions in stock futures.
They were buyers in index options of Rs. 3039.64 crores and sellers in stock options of Rs. -8.50 crores. Since the beginning of
January series on 31st Dec’10 FII’s are net sellers of Rs. -5396.24 crores of Index futures leading to a decrease in open interest
by Rs. -1477.13 crores till 28th of January ’11. During the same period they bought Rs. 2362.96 crores of stock futures leading
to a decrease of Rs. -5558.42 crores in open interest.
Cumulative FII positions as percentage of total gross market position in the derivative segment as on Jan 27, 2011 is 38.48%.
FII Activity in Index & Stock Futures for 28/01/2011 Cumulative FII Activity in Index future since beginning of Cumulative FII Activity in Stock future since beginning of
January'11 series in F & O. January'11 series in F & O.
Index Futures Stock Futures
800.00 Buy - Sell Inc. O.I. Buy - Sell Inc. O.I.
657.85
0.00 3000.00 2362.96
600.00
2000.00
400.00 (1000.00)
1000.00
Rs (Crores)
Rs(Crores)
(1000.00)
0.00 (3000.00)
(2000.00)
-200.00 (4000.00) (3000.00)
-400.00 (4000.00)
-320.59 (5000.00)
-412.41 -427.95 (5000.00)
-600.00
(6000.00) (5396.24) (6000.00)
SINCE 31st Dec'10 SINCE 31st Dec'10 (5,558.42)
Buy - Sell (Rs. Cr.) O.I. (Rs. Cr.)
Source: NSE; IndiaNivesh Research Source: NSE; IndiaNivesh Research Source: NSE; IndiaNivesh Research
(contd...)
0.07
RELIANCE
0.06
HDFC
LT
0.03
-0.12
ICICIBANK
ONGC
ITC
-0.17
-0.25
% UPSIDE CONTRIBUTION ON 28/01/2011 TOWARDS NIFTY % DOWNSIDE CONTRIBUTION ON 28/01/2011 TOWARDS NIFTY
TECHNOLOGIES
79% % Change in O.I.
GREAVES LTD
LIMITED
CROMPTON
NMDC LTD.
WIPRO LTD
HCL
LTD
35%
21% 21% 20%
ORIENTAL BANK OF COMMERCE
-9% -9%
-18% -18%
-22%
% Change in O.I.
1.71
RELCAPITAL
HINDALCO
1.14
M&M
0.53
ACC
DLF
0.49 0.49
CIPLA
RELINFRA
ONGC
BHARTIARTL
DRREDDY
% Change % Change
(contd...)
News Flow
Asian Stocks, U.S. Futures Fall as Dollar, Yen Gain on Egypt: Asian stocks fell, extending the biggest global share slump in two
months, and U.S. index futures declined while the yen and dollar gained on speculation Egypt’s crisis will slow the global
recovery. Oil prices jumped. Egypt’s banks and markets stayed shut after clashes in the most populous Arab country left as
many as 150 people dead.
Japan’s Industrial Output Gains Most in 11 Months: Japan’s industrial production increased the most in 11 months in December,
boosted by overseas demand that’s spurring the nation’s recovery. Factory output climbed 3.1 percent from November, when
it rose 1 percent, the Trade Ministry said in Tokyo today.
Events Today
Personal Income and Outlays: Consensus estimate for personal income is an increase of 0.4% (M/M) for dec’10 over prior’s
months 0.3% (M/M) increase. While consumer spending is expected to grow by 0.5% (M/M) over prior month’s reading of
0.4% (M/M) gain. Personal income is the dollar value of income received from all sources by individuals. Personal outlays
include consumer purchases of durable and nondurable goods, and services.
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