Re: {LONGTERMINVESTORS} Research Reports extracts & summaries - Thread

 

Special Reports

Strategy

Strategy: Materials art, not science

l Valuing cyclical stocks is tricky but there is some 'science' behind it l Reverse valuation exercise shows cement multiples are quite unrealistic for peak earnings l Metal stocks are even tougher to value l Cost of money is not what it used to be while business risks are higher

Daily Alerts

Results

ICICI Bank: The final hurdle

l Earnings decline sharply on elevated credit costs l Disclosures have improved but need a few more quarters to derive comfort l Maintain BUY; our top pick in the sector

IDEA: Strong end to the year but with surprising internals

l A welcome change in voice pricing stance; weak data volume trajectory a dampener l Key changes to our model l Retain BUY with a modest cut in target price to Rs170 (from Rs175)

InterGlobe Aviation: In-line 4QFY16 results; FY2016 payout at 83%

l 4QFY16 results steady and in-line; final dividend increases payout ratio to 83% l Strong earnings growth and high payout ratio to continue in FY2017-18E l Maintain BUY with TP of Rs1,200 (Rs1,065 earlier)

Marico: Strong quarter but a tad below estimates

l 4QFY16 - robust quarter partly aided by low base l Another quarter of double-digit volume growth in Saffola and VAHO; youth portfolio revives l Cut EPS estimates by 1-3%; stock fully valued - REDUCE stays with revised TP of Rs240/share

UPL: LATAM remains the growth engine

l Robust 4QFY16 performance driven once again by LATAM region l FY2017 revenues growth guidance at 12-15%, working capital, capex to remain high l Increase estimates by ~9% and TP to Rs600 (Rs560 earlier); recommend ADD

Shriram Transport: Core performance strong, equipment finance pulls down earnings

l Strong performance of the CV business l Merger with equipment finance business leads to lower reported PAT l Retain BUY with TP of Rs1,150 (Rs1,050 earlier)

Cholamandalam: Stellar performance

l Chola continues to surprise positively l 90 dpd NPL classification: almost there l Remains among our preferred plays: ADD; TP Rs880

Oberoi Realty: A strong FY2016, but growth momentum needs to sustain!

l Results review: 4QFY16 and FY2016 - strong growth in collections too l Operations review: 4QFY16 sees rounding up of demand at Oberoi Sky City l Financials and valuation: At least three projects to hit recognition in FY2018E

Federal Bank: On the mend

l Credit costs and weak treasury income (high base) take a toll l The exit performance on key metrics is turning positive; cost ratios needs to be addressed l Maintain BUY rating; exit performance raises confidence for a strong show ahead

Sadbhav Engineering: FY2017E to be an optically weak year

l Good execution capabilities on display although would set high base for FY2017E l Margin would be a function of pace of execution and nature of contracts l Working capital requirements may remain at elevated levels l 4QFY16 results: Operationally in-line results

Change in Reco

Mahindra CIE Automotive: Downgrade to SELL

l India business: Growth outlook from new products/customers weaker than envisaged earlier l Benefits from improvement in profitability of overseas subsidiaries has largely played out l Debt reduction in CY2015 is largely driven by factoring of payables l Valuations are expensive at 21X CY2017E EPS; downgrade to SELL with TP of Rs175

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