Monday, February 24, 2014

KARVY MAINTAINS 'BUY' RATING ON TATA POWER POST CERC ORDER

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Karvy Stock Broking has recommended 'Buy' on Tata Power Company with target price of Rs 97 as against current market price (CMP) of Rs 79 with 23% upside in its report.
 
Commenting on the investment rationale, Karvy Stock Broking said, ''Considering the peculiar nature of the PPAs, which totally vests the fuel risks on the petitioner, the effect of price escalation of coal as a result of Indonesian regulations can't be covered under the provisions of  'Change in Law' or 'force majeure'.
 
The Electricity Act-2003 vests in the Commission the responsibility to balance consumers' interest with project developers' interest, while regulating the tariff of the generating companies and transmission licensees. Financial viability of the generating stations is an important consideration to enable them to continue to supply power to the consumers.
 
Petitioner's plea deserves serious consideration and in depth examination of facts to address its concern. Unless the concerns of the petitioner are addressed, the possibility of the petitioner defaulting in discharging its obligations under the PPA due to the perceived financial burden can't be totally ruled out and that will affect the interest of the consumers. In that event, the respondents shall be required to invite fresh bids to meet their requirement of power and till the selected project or projects are operationalized, CERC are not inclined to favour any renegotiation of the tariff discovered through the process of competitive bidding; the sanctity of the bids should be maintained. The parties should confer to find out and agree to a compensation package to deal with the impact of subsequent event, which has adversely affected performance under the PPAs.
 
In the present case, the escalation in price of imported coal on account of Indonesian regulation is a temporary phenomenon and will be stabilized after some time. Therefore, the petitioner needs to be compensated for the intervening period with a compensation package over and above the tariff discovered through the competitive bidding.
 
We believe implementation of compensatory tariff in right spirit will be positive for Tata Power.   At CMP, as the stock trades at 6.5xFY15E EV/EBITDA & 1.8x FY15E P/BV, we believe many negatives have already factored in the price. Thus, we reiterate our Buy recommendation on Tata Power with target price of Rs. 97 a share, implying 23% upside from the CMP with option value of Rs 10 a share.''
 

BROKERAGE VIEWS ON CIPLA POST Q3 FY14 NUMBERS

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Sunday, February 16, 2014

BROKERAGE VIEWS ON SKS MICRO POST Q3 FY14 NUMBERS

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 SKS Microfinance Ltd Q3FY14 results had clocked a 31 % improvement in earnings. Following the announcement brokerages Esprito Santo and Antique Stock broking have raised share price rating to 'buy'.

Espirito Santo on SKS Microfinance (Buy, FV240):  

VIEW:  We have been buyers of the stock with a valuation of Rs.240 given that we expect the company to more than double its profitability between FY14E and FY15E, given that we expect the company to show 40% loan book growth in FY14 and 40% loan book growth in FY15. We think that the company is on track to achieve the management guidance of 2800-3000 crores of loan book and our PAT expectation of 75 crores for the year.

Antique Stock Broking on SKS Microfinance - Embarking on the growth path (BUY)

After a long period of consolidation, SKS Microfinance is back on the growth path with it AUMs (ex-Andhra) growing 17% sequentially to Rs 23.6 bn as on quarter ended December 2013. Given the back-ended nature of growth as well as securitization in Q3FY14, NII declined 3% QoQ to Rs 573 mn. The company maintained a tight leash on operating costs with no increase in branch network as well as employee count, thus enabling stable costs despite the strong growth. Recoveries at ~Rs 50 mn were strong (possibly from Andhra Pradesh) and aided 31% sequential improvement in earnings to INR214m. Borrowing environment remained benign as the company securitized ~Rs 3.5 bn over Q3FY14.
Stable regulatory environment, overhauled processes and reduced competitive fervor have improved the risk perception of MFI sector over past few quarters. Funding environment continues to improve and disbursement CAGR of 36% will drive AUM CAGR of 36% over FY14-16E. Operating leverage benefits will continue to accrue as growth accelerates propelling earnings CAGR of 76% over FY14-16E.
We maintain BUY with twelve month price target of Rs 228/share, which implies an upside of 34%. We value the core business at Rs 199/ share (8.5x FY16e earnings) and the DTA at Rs 29/share. Another Andhra Pradesh like event remains the key risk, which gets completely mitigate once the MFI Bill 2012 get passed.
 

BROKERAGE VIEWS ON TCS POST Q3 FY14 NUMBERS

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BROKERAGE VIEWS ON TECH MAHINDRA POST Q3 FY14 NUMBERS

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BROKERAGE VIEWS ON HCL TECH POST Q3 FY14 NUMBERS

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Sunday, January 26, 2014

PROMINENT BROKERAGE VIEWS 13/1/2014 TO 25/1/2014; INCLUDING INFY, HCL TECH, WIPRO, ASIAN PAINTS, ITC, HDFC BANK POST Q3 FY 13-14 NUMBERS

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13/1/2014 TO 25/1/2014

STOCK BROKERAGE CALL DT CALL PRICE TARGET
INFOSYS JP MORGAN 13/1/2014 OUTPRFRM
4000
INDUSIND BANK CLSA 13/1/2014 BUY
540
INDUSIND BANK CITIGROUP 13/1/2014 SELL
375
DR REDDYS LAB MACQUARIE 13/1/2014 OUTPRFRM
3100
COAL INDIA JP MORGAN 15/1/2014 NEUTRAL
295
COAL INDIA CITIGROUP 15/1/2014 BUY
335
NIIT TECH CREDIT SUISSE 15/1/2014 OUTPRFRM
480
HCL TECH CLSA 17/1/2014 OUTPRFRM
1550
HCL TECH GOLDMN SACHS 17/1/2014 BUY
1500
HCL TECH BOFA ML 17/1/2014 BUY
1560
WIPRO UBS 20/1/2014 BUY
655
WIPRO CREDIT SUISSE 20/1/2014 BUY
650
WIPRO JEFFRIES 20/1/2014 HOLD
565
WIPRO NOMURA 20/1/2014 HOLD
590
ITC CREDIT SUISSE 20/1/2014 OUTPRFRM
385
ITC JP MORGAN 20/1/2014 OVERWT
385
ITC JEFFRIES 20/1/2014 BUY
393
ITC UBS 20/1/2014 BUY
400
ITC BOFA ML 20/1/2014 BUY
390
HDFC BANK CLSA 20/1/2014 BUY
800
HDFC BANK CREDIT SUISSE 20/1/2014 OUTPRFRM
770
HDFC BANK JP MORGAN 20/1/2014 OVERWT
750
HDFC BANK CITIGROUP 20/1/2014 NEUTRAL
750
HDFC BANK JEFFRIES 20/1/2014 BUY
815
HDFC BANK UBS 20/1/2014 BUY
800
ASIAN PAINTS GOLDMN SACHS 21/1/2014 SELL
358
ASIAN PAINTS MORGN STNLY 21/1/2014 UNDERWT
405
ASIAN PAINTS JP MORGAN 21/1/2014 UNDERWT
445
ASIAN PAINTS CREDIT SUISSE 21/1/2014 NEUTRAL
470
ASIAN PAINTS UBS 21/1/2014 SELL
500
ASIAN PAINTS JEFFRIES 21/1/2014 UNDRPRFM 416
LARSEN CITIGROUP 23/1/2014 BUY
1135
LARSEN JEFFRIES 23/1/2014 BUY
1140
LARSEN MACQUARIE 23/1/2014 OUTPRFRM
1210