Novartis India - Value Buy

Novartis India is a 51 per cent subsidiary of Swiss giant Novartis, One of world`s leading pharmaceutical and consumer health company. Novartis main businesses in India include pharmaceutical (70%), Animal Health (7%), Generics(8%) and OTC(15%).

Novartis pharmaceutical segment includes therapeutic medicines like hypertension, anti inflammatory and anti fungal. Generic segment includes gynaecology and anti-TB. OTC includes vitamins and minerals. Animal health includes drugs for cattle.

Novartis top leading product portfolio includes Voveran, Methergin, Regestrone, PZA Ciba, Otrivin, Calcium Sandoz and others.

Investor with a medium risk appetite can consider investment into this stock with a horizon of 12 months. At the current price of Rs. 336/- the stock trades at 11 times it's 12 month trailing EPS of 30.72. In the current quarter Q2' 07 the company saw a healthy operating margin of 33.64% as compared with a average of 24% in the earlier few quarters. This translated in to around 22% increase in net profit growth q-o-q. This seems to me a surprise number for a company which has been growing at a rate of 10% for the last 5 to 6 quarters.

Betting on current valuation

As of now there is no data available to compute it's forward earnings. But at the current price the stock is availabe at a discount to it's MNC peers. The stock has a target of Rs. 410/- which translates to 14 times it's 12 month trailing EPS on par with it's MNC peers of equal cader.

The company will get a even better re-rating if the current quarter performance continues in the forward earnings.

Fundamentals

1) Excellent product portfolio and diversified business operation
2) Fifth largest MNC pharma in India by profit.
3) Looking for new global brands to be introduced in India, which will increase the topline further.
4) One of the few players in the growing Animal health arena in India.
5) Decent dividend paying company.

Risks

1) Uncertainty about price control regime looms large
2) Changes in regulatory environment e.g. VAT, MRP based Excise, Service Tax etc
3) Evolution and enforcement of Intellectual Property Rights (IPR) in India
4) counterfeiting of Novartis drugs by Indian pharmaceuticals and selling at an cheaper rate.

Result Snapshot and Analysis Q2' 07 (Sept' 07) - Part 3

Till Date: 27-Oct-07

Large Cap/Midcap/Smallcap Results Analysis

Hits

1)
Dalmia Cement net rises 59.17% in Sep`07 qtr

Snapshot:

Net sales up 42.08% y-o-y
Operating margin at 43.93% as compared to 37.39%
EPS for current quarter at Rs.10.56

Summary:

At the current market price of 515.50 the stock trades at 12.27 times it's Annualized FY08E EPS of 42

2)
Tamilnadu Newsprint (TNPL) net rises 43% in Sep`07 qtr

Snapshot:

Net sales almost flat y-o-y
Operating margin at 30.41% as compared to 23.42%
EPS for current quarter at Rs.4.80

3)
NTPC net up 30.64% in Sep`07 qtr

Snapshot:

Net sales up 17.66% y-o-y
Operating margin at 30.41% as compared to 23.42%
EPS for current quarter at Rs.2.34

Summary:

At the current market price of 228.75 the stock trades at 23.17 times it's Annualized FY08E EPS of 9.87

4)
Colgate-Palmolive Q2 earnings jump 2.36 times

Snapshot:

Net sales up 13.70% y-o-y
Operating margin at 20.89% as compared to 6.33%
EPS for current quarter at Rs.4.02

Summary:

At the current market price of 385.95 the stock trades at 24.24 times it's Annualized FY08E EPS of 15.92

5)
Tulip IT Services Q2 earnings climb 30.29%

Snapshot:

Net sales up 21.46% y-o-y
Operating margin at 22.43% as compared to 15.58%
EPS for current quarter at Rs.10.79

Summary:

At the current market price of 886.85 the stock trades at 21.42 times it's Annualized FY08E EPS of 41.39

6)
Elecon Engineering Q2 net up 5.90%

Net sales up 4.70% y-o-y
Operating margin at 16.49% as compared to 17.60%
EPS for current quarter at Rs.6.67

Summary:

At the current market price of 297.15 the stock trades at 14.27 times it's Annualized FY08E EPS of 20.82

Misses

1)
Shipping Corporation (SCI) net declines 43.26% in Sep`07 qtr

Snapshot:

Net sales down 14.34% y-o-y
Operating margin at 34.99% as compared to 37.29%
EPS for current quarter at Rs.6.48

Summary:

At the current market price of 268.55 the stock trades at 8.42 times it's trailing 12 months EPS of 31.87

2)
Moser Baer net declines 87.40% in Sep`07 qtr

Snapshot:

Net sales down 10.83% y-o-y
Operating margin at 35.13% as compared to 29.04%
EPS for current quarter at Rs.0.19

Summary:

At the current market price of 302.10 the stock trades at 60.66 times it's trailing 12 months EPS of 4.98

3)
Nagarjuna Fertilizers Q2 net falls 52.18%

Snapshot:

Net sales up 10.80% y-o-y
Operating margin at 11.41% as compared to 14.91%
EPS for current quarter at Rs.0.20

Summary:

At the current market price of 56.30 the stock trades at 28 times it's trailing 12 months EPS of 0.50

4)
BEML`s net down 33.49% for Sep`07 qtr

Snapshot:

Net sales down 21.79% y-o-y
EPS for current quarter at Rs.5.95

Summary:

At the current market price of 1612 the stock trades at 30.7 times it's trailing 12 months EPS of 52.34

5)
Asahi India Q2 consolidated net falls 71.47%

Snapshot:

Net sales up 42.25% y-o-y
Operating margin at 21.64% as compared to 24.73%
EPS for current quarter at Rs.0.35

Summary:

At the current market price of 105.45 the stock trades at 34.57 times it's trailing 12 months EPS of 3.05

6)
Jindal Stainless net declines 56.91% in Sep`07 qtr

Snapshot:

Net sales down 1.49% y-o-y
Operating margin at 14.62% as compared to 20.60%
EPS for current quarter at Rs.2.62

Summary:

At the current market price of 162.55 the stock trades at 7.74 times it's trailing 12 months EPS of 21

Neutral

1)
Arvind mills net up 89% in Sep '07 qtr

Snapshot:

Net sales up 43.36% y-o-y
Operating margin at 14.18% as compared to 20.81%
EPS for current quarter at Rs. 0.47

Summary:

At the current market price of 75.20 the stock trades at 68.36 times it's trailing 12 months EPS of 1.10

For Live Result updates visit the Market News page @ http://profitfrommarketnews.blogspot.com

Note :
The information above is just an update on the current quarter results. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein.Please perform your analysis before entering into these scripts.

Result Snapshot and Analysis Q2' 07 (Sept' 07) - Part 2

Till Date: 20-Oct-07

Midcap/Smallcap Results Analysis

Hits

1)
Grindwell Norton net jumps 7.19 times in Sep`07 qtr

Snapshot:

Net sales up 6.04% y-o-y
Operating margin at 21.40% as compared to 20.22%
EPS for current quarter at Rs.16.49 (Includes extra ordinary item of Rs. 775 million)

Summary:

At the current market price of 133.75 the stock trades at 5.77 times it's trailing 12 months EPS of 23.16.

2)
State Bank Of Mysore net rises 53.49% for Sep`07 qtr

Snapshot:

Net sales up 45.41% y-o-y
profit margin at 14.83% as compared to 14.05%
EPS for current quarter at Rs. 253

Summary:

At the current market price of 7600 the stock trades at 9.03 times it's trailing 12 months EPS of 841.

3)
Uttam Galva net rises 10.84% for Sep`07 qtr

Snapshot:

Net sales up 32.54% y-o-y
Operating margin at 8.47% as compared to 10.90%
EPS for current quarter at Rs.2.90

Summary:

At the current market price of 39.60 the stock trades at 3.15 times it's trailing 12 months EPS of 12.56.

4)
Accentia Technologies net up 12.02 times for Sep`07 qtr

Snapshot:

Net sales up 1227% y-o-y
Operating margin at 33.11% as compared to 32.31%
EPS for current quarter at Rs.17.54

Summary:

At the current market price of 231.85 the stock trades at 6.08 times it's trailing 12 months EPS of 38.11.

5)
Godavari Fertilisers net up 47.56% in Sep`07 qtr

Snapshot:

Net sales up 24.03% y-o-y
Operating margin at 9.17% as compared to 7.97%
EPS for current quarter at Rs.15.22

Summary:

At the current market price of 149.55 the stock trades at 5.85 times it's trailing 12 months EPS of 25.55.

Note: Godavari Fertilisers sales is on a seasonal basis and the same performance may not continue in the quarters to come

6)
Prakash Industries net rises 74.31% for Sep`07 qtr

Snapshot:

Net sales up 38.43% y-o-y
Operating margin at 23.09% as compared to 23.68%
EPS for current quarter at Rs.5

Summary:

At the current market price of 128 the stock trades at 7.83 times it's trailing 12 months EPS of 16.34.

7)
Petronet LNG net up 74.31% in Sep`07 qtr

Snapshot:

Net sales up 21.48% y-o-y
Operating margin at 13.56% as compared to 11%
EPS for current quarter at Rs.1.54

Summary:

At the current market price of 73.20 the stock trades at 13.26 times it's trailing 12 months EPS of 5.52.

8)
Orchid Chemicals net doubles in Sep`07 qtr

Snapshot:

Net sales up 20.10% y-o-y
Operating margin at 34.37% as compared to 31.76%
EPS for current quarter at Rs.6.46

Summary:

At the current market price of 229.70 the stock trades at 10.32 times it's trailing 12 months EPS of 22.25.

9)
Chettinad Cement Q2 net jumps 48.55%

Snapshot:

Net sales up 25.77% y-o-y
Operating margin at 34.15% as compared to 34.97%
EPS for current quarter at Rs.16.16

Summary:

At the current market price of 436.10 the stock trades at 9.89 times it's trailing 12 months EPS of 44.07.

Misses

1)
Geometric Software consolidated net drops by 10.11% in Sep`07 qtr

Snapshot:

Net sales down 0.77% y-o-y
Operating margin at 21.09% as compared to 27.16%
EPS for current quarter at Rs.0.83

Summary:

At the current market price of 123.90 the stock trades at 17.48 times it's trailing 12 months EPS of 4.97.

Neutral

1)
Welspun India net down 8.36% in Sep`07 qtr

Snapshot:

Net sales up 6.27% y-o-y
Operating margin at 20.97% as compared to 19.94%
EPS for current quarter at Rs.2.28

Summary:

At the current market price of 62.05 the stock trades at 8.65 times it's trailing 12 months EPS of 7.17.

For Live Result Analysis visit the Market News page @ http://profitfrommarketnews.blogspot.com

Note :
The information above is just an update on the current quarter results. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein.Please perform your analysis before entering into these scripts.

Rallis India - Value Buy

Rallis India is one of India's leading agrochemical companies. The company deals with pesticides, speciality fertilisers, micronutrients and seeds.

Rallis has an extensive distribution system with more than 1,500 distributors and 30,000 dealers nationwide. It also has marketing alliances with several multinational agrochemical companies, including FMC, Nihon Nihyaku, Dupont, Syngenta, Makhteshim Agan and Bayer.

Investor with Low to Medium risk horizon can consider investment into this stock with a horizon of 12 months. At the current price of Rs. 465/- the stocks trades around 5 times it's trailing 12 month EPS of 95. The current quarter results includes a one time profit from sale of land of Rs.873.8 million. Taking into account the income from company core business, excluding the one time payment on sale of land the company trades at 13.7 times it's 12 month trailing EPS of 34. At the current valuation the stock is available at a discount to it's peers like Bayer. Buy the stock with a target price of Rs. 660/- based on it's FY08E EPS of 44.

The company currently has a good domestic presence and the international business currently accounts for just 22% of the company’s revenues. The company currently is taking aggresive initiative to grow it's international business in the short to medium term. Rallis is also looking for strategic acquisitions and licensing deals in the international market to enhance it's global presence. Currently the global agrochemical business accounts for a huge $35 billion of which more than two-thirds is off-patented (without patent exclusivity) products. Rallis initiative of tapping into the off-patented international business can prove better earnings visibility and margins in the future.

Fundamentals

1) In the domestic market, Rallis is the second largest player after Bayer CropScience Ltd.
2) International business expected to grow at a faster rate in days to come.
3) Rallis currently enjoys about 14% market share in the local pesticide and crop-protection market.

Risks

1) The Company´s business is seasonal in nature and the performance can be impacted by weather conditions.
2) Delay in the initiative to increase it's international business.

Result Snapshot and Analysis Q2' 07 (Sept' 07)

Till Date: 15-Oct-07

Midcap/Smallcap Results Analysis

Hits

1)
Shri Lakshmi Cotsyn Q2 net profit up nearly 3 folds

Snapshot:
Net sales up 134% y-o-y
Operating margin at 14.58% as compared to 7.98%
EPS for current quarter at Rs.10.16

Summary:
At the current market price of 123.90 the stock trades at 3.5 times it's trailing 12 months EPS of 35.50.

2)
Bliss GVS Pharma Limited net rises around 48 times

Snapshot:
Net sales up 1900% y-o-y
Operating margin at 42.88% as compared to 27.16%
EPS for current quarter at Rs.19.38

Summary:
At the current market price of 392.80 the stock trades at 13.5 times it's trailing 12 months EPS of 29.

3)
Compact Disc net rises around 2.26 times

Snapshot:
Net sales up 74.52% y-o-y
Operating margin at 19.86% as compared to 15.33%
EPS for current quarter at Rs.4.41

Summary:
At the current market price of 67.55 the stock trades at 4.65 times it's trailing 12 months EPS of 14.5.

4)
Mangalam Timber continues to be in profit

Snapshot:
Net sales down 5.5%
Operating margin at 22.72% as compared to 3.10%
EPS for current quarter at Rs.1.29

Summary:
At the current market price of 27.75 the stock trades at 8 times it's trailing 12 months EPS of 3.5.

5)
Himalya International net jumps around 91%

Snapshot:
Net sales up 31.88%
Operating margin at 30.23% as compared to 23.92%
EPS for current quarter at Rs.1.15

Summary:
At the current market price of 17.55 the stock trades at 6.1 times it's trailing 12 months EPS of 2.86.

5)
Rallis India Limited

Snapshot:
Net sales up 16.55%
Operating margin at 49.23% as compared to 30.29%
EPS for current quarter at Rs.83.39

Summary:
At the current market price of 497.60 the stock trades at 5.23 times it's trailing 12 months EPS of 95.

Misses

1)
Abhishek Industries

Snapshot:
Net sales up 36.8%
Operating margin at 15.89% as compared to 24.85%
EPS for current quarter at Rs.0.39

Summary:
At the current market price of 20.60 the stock trades at 11.31 times it's trailing 12 months EPS of 1.82.

For Live Result Analysis visit the Market News page @ http://profitfrommarketnews.blogspot.com

Note :
The information above is just an update on the current quarter results. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein.Please perform your analysis before entering into these scripts.

Buy Hotel Leela venture

Investor with medium to high risk appetite can consider investment into Hotel Leela venture with a horizon of 24 months+. Hotel Leela venture operates in the premium 5-star deluxe category owning 4 hotels in Bangalore, Goa, Kovalam and mumbai with a total of 1086 rooms.

At the current market price of Rs. 49 the stock trades at 15 times it FY08E EPS. Offlate hotel industry in Bangalore is witnessing decline in ARR (Average Room Rate) and Bangalore accounting 46% of it's revenue can impact the company's topline. On the other hand the declining ARR will be offset by better realization from the mumbai property which contributes to 32% of it's revenue.

Since there is no major additions coming on before FY09, the current market price justifies it's forward earnings. Investor considering investment into this stock can buy on declines.

Betting on upcoming projects as below

1) The company is Expanding operation by developing projects in Delhi, Chennai, Pune, Hyderabad and Udaipur.
2) Entered into a Contract for management of The Leela Kempinski Gurgaon, Delhi (NCR) 319 room, and The Leela Residences Kempinski gurgaon 90 serviced residences.
3) Additional 29 more rooms are being added in Goa and also setting up an IT park and a Commercial Complex in Chennai.

The above projects are expected to be completed by FY09 and FY10. The company plans to double it's room count after the implementation of the above projects. The company has opened sales and marketing offices in London, Dubai and appointed GSA in singapore.

After the complete expansion in place the company's revenue is set to grow @75% p.a. The stock can prove on to be a good multibagger play.

Fundamentals

1) The average occupancy rate is around 80%.
2) Strong presence in 5-star deluxe category.
3) Aggressive capex to add exponentially to the revenues.

Risks

1) A slowdown in economy can reduce the occupancy rate and also the ARR.
2) Bangalore accounting for 45% of its revenues, earnings remain vulnerable to decline in tariffs and occupancies.
3) With number of luxury service apartments increasing in last couple of years, corporate occupancy is set to decline.
4) Strong rupee appreciation can offset the margin's partially for dollar based room tariff's.