Category: Equity Research

Petronet LNG (PLNG) is the largest LNG re-gasifier in India. The company has a unique risk-free business model, generating revenues by charging re-gasification margins. Its supply and demand side risks are hedged through a long-term sourcing contract from Ras-Gas Qatar and off take contracts from three of its heavyweight promoters – GAIL, IOCL, and BPCL.

A massive impetus in US shale gas production recently has plugged the country’s demand-supply gap. With US LNG imports dipping (more…)

HDFC Robust growth of 62% in new residential loans led to a 17% loan book growth after sell-down of some part of the loan book. While new developer loans data were unavailable, we believe overall disbursements (new loans) grew 25-30% in 1QFY11. Home loan spreads, too, grew from last year to 2.34%. Fees and capital gains are typically lumpy and hence acted as a (more…)

Tata Consultancy Services (TCS) reported 8.1% sequential volume growth (highest in past 11 quarters), 6.4% USD revenue growth and EBITDA margins at 29.3% (decline of only 60bps) – all ahead of our and Street’s expectations. TCS’ Q1 results have clearly surpassed that of Infosys on multiple counts such as volume growth, large deal wins, pricing movement and operating margin performance.

EBITDA outperformance and lower foreign exchange loss led to net profits (INR 18.4bn) well ahead of our expectations of INR 17.1 (more…)

Anad Rathi has initiated coverage on Ester Industries which produces PET films & Engineering plastic, whereindemand and realizations are moving northwards in recent past. Company’s utilization levels are more than 100% for PET film andlooking to realization trend in last 6 months, this division will be a big money spinner for now. The company is also doubling the capacity of PET Films, which maybe commissioned by the end of calendar year 2010. Engg Plastic division which caters to Automobile, Engg & Electrical segments is also doing well.

Over 80% revenues come from PET films, where (more…)

BOFA Merrill is bullish on the prospects of Tea Business. North India crop was up 10% till April-2010, these gains will likely be offset
by a drop in production during May and June led by pest attack and excessive rains. Annual production will likely remain flat in FY11 vs industry estimate of 5% growth. Expect upward movement in tea prices ahead, led by i) increasing shortage, ii) seasonal improvement in quality and iii) increased presence of institutional buyers.

Kenya and Sri Lanka form over 25% of global black tea produced and saw 33% YoY scale up in production to normal levels till (more…)

Goldman has initiated coverage on BGR Energy with a BUY Rating. BGR will benefit from lack of a sufficient number of turnkey BoP (Balance of Plant) players in the Indian power equipment space – Most individual component makers currently lack the ability to provide turnkey services.

With its order book growing at a CAGR of 84% over FY08-10 and sales CAGR based on FY08-10 reported numbers of 42% over this period, BGR has displayed a strong execution track record. (more…)