Coverage on Indian Fertilizer Stocks

Indian Fertilizer sector stocks have recovered due to the allocation of natural gas, which has reduced cost and increased utilization levels of fertilizer plants. Many of these plants ran on expensive naphtha or FO / LSHS feedstock. Closed units are also likely to open due to this cost reduction. The consumption of fertilizers in India is expected to grow by 4% CAGR till FY12. Urea is expected to witness a supply deficit of 5.4mmtpa by FY12. Phosphatic and potash fertilizers also remain matters of concern due to the lack of indigenous raw materials.

De-regulation of Fertilizer Prices – While Urea was under mandatory pricing control under the New Pricing Scheme, Stage-III, the government recommended an MRP for DAP, MOP, MAP, TSP, SSP, Ammonium Sulphate and 11 other complex fertilizers under the Read more

Thermax Stock on Boil with Babcock – Wilcox JV

The much anticipated JV for supercritical boilers with Babcock and Wilcox was announced on 10 March 2010. The JV (51:49) intends to set up a new 3 GW per annum boiler manufacturing facility at an investment of Rs7.6 bn. Of this, equity contribution from Thermax is anticipated to be Rs1.75 bn. With sufficient cash reserves (Rs7.2 bn in 2Q), even after the Purolite settlement, Thermax should be able to fund capex through internal resources. Read more

Mahindra & Mahindra + Reliance Infra – Sum of Parts Valuation

Is the sum of the parts greater than the whole ? We wi8ll have a look at looks at discounts to NAV as well as stub values for each holding company. Today we will analyze, Mahindra & Mahindra and Reliance Infrastructure.

Mahindra & Mahindra:
Mahindra & Mahindra rallied late in 2009 on strong auto sales in India before correcting early this year on a 3QFY10 earnings miss. We believe the auto momentum should continue and current stub values are attractive after the correction. Read more

Aurobindo Pharma – Buy the CRAMS Story

Aurobindo Pharma Ltd (APL) has launched a new division, AuroSource, to provide contract research and manufacturing services to innovator pharma & biotech companies. It intends to position itself as a provider of manufacturing (intermediates, APIs, pre-formulations and formulations) and research services across the life cycle (from pre-clinical to commercial stages). At a later stage, APL would also look at providing medicinal chemistry and other discovery services. Read more

Vardhman Textile – Review

MF Global Securities has initiated Coverage on Vardhman Textile Ltd [VTXL] with a BUY Rating. The investment Rationale behind the call is the deficient cotton production & increase in consumption, will keep cotton price at higher levels & as India has excess production Indian miller who have pricing power can pass on the increasing raw material price to Yarn & Fabric consumer. The rise in production is because of rebound seen in yarn and textile demand. Read more

Apar Industries – Riding Capital Goods Boom

Apar Industries is one among the best-established companies in India operating in the diverse fields of electrical, metallurgical and chemical engineering.

Consolidation of conductor manufacturing plants – The company will continue to invest and maintain its leadership position as  a direct beneficiary of the robust growth emerging in India’s power sector.

Increased focus on the export of specialty oils – Its specialty oils business strengthened itself through approvals of new generation transformer oils from global OEMs like Areva, Siemens and ABB. Read more

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