{LONGTERMINVESTORS} India Daily: Strategy - Good news travels fast; Results; Update - Economy

 

 

 

Special Reports

Strategy

Strategy: Good news travels fast

l Valuations are full on FY2017E basis unless earnings surprise positively (difficult to envisage) l Domestic 'certainty' and global uncertainty are both unsettling l Some risks to our FY2017E earnings despite decent 4QFY16 results l 4QFY16 results: 7.5% yoy growth in net profits of BSE-30 Index; 2.3% in Nifty-50 Index's

Daily Alerts

Results

Sun Pharmaceuticals: Weak quarter, weaker guidance

l Weak quarter l Weaker guidance; MK-3222 now critical for long-term growth l Pressure remains on the base business, and so does SELL

Reliance Communications: Noisy 4QFY16 print; only key takeaway - net debt goes up further

l 4QFY16 results - P&L a bit too noisy to assess underlying operational performance l Retain SELL; revise down our asset-based fair value target to Rs40 (from Rs60)

Max Financial Services: Performance on track

l Strong operating RoEV for Max Life in 2HFY16 l FY2016 RoEV declines but on expected lines l Retain ADD; TP Rs400 l Key assumptions of our EV forecasts

Jagran Prakashan: Set for a better year

l 4QFY16 - ad revenue growth accelerates, profitability was marginally weak l FY2017 guidance a tad conservative; buyback likely later this year l Stock performance to track earnings growth. ADD

Astral Poly Technik: A slow FY2016, still rich valuations

l In-line results in pipes segment; improvement in adhesives profitability l Organic growth trajectory slows down across both segments in FY2016 l 6-8% cut in estimates to factor slower growth across business segments

S H Kelkar and Company: Mixed bag

l Strong domestic performance drives operational beat; GM trajectory remains disappointing l Domestic fragrance business delivers; weak growth in overseas business l Raise estimates a tad; stock is fairly valued - retain REDUCE with unchanged TP of Rs230

Suprajit Engineering: Strong execution at Phoenix Lamps boosts consolidated performance

l Standalone performance below expectations while subsidiaries report a strong growth l Restructuring of Phoenix Lamps underway l Maintain BUY rating on strong growth outlook

Sunteck Realty: Another BKC delivery booked in 4QFY16

l Operations review: marginal sales growth in FY2016, but most aided by PE deals l Signia Isles books revenue in 4QFY16; debt increases to Rs12.4 bn l Valuation remains strong, but performance needs to catch up

Economy

Economy: Banking on consumption growth

l FY2016 real GDP growth at 7.6%; GVA growth at 7.2% l Details no big surprise; manufacturing leads the pack l FY2016 services sector growth dragged down by government spending l Expenditure side depicts slowing consumption while investment gains some traction l Looking at a consumption-led recovery in FY2017

 

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