Primed for recovery Earnings growth to accelerate with ~27% CAGR (FY14-17E) – Bharat Forge (BHFC) has emerged stronger, leaner and healthier from the downcycle, driven by its proactive strategic shift towards a stable, broad-based and greater value-adding business model. It is now one of India’s largest engineering exporters. – It is primed for recovery in […]
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Motilal Oswal’s Report On Best Sectors & Stocks (June 2014)
Despite the recent out-performance, Cyclicals still trade at a discount to its historical average on P/B basis. PSU Banks is at 15% discount to its historic average P/B, while Capital Goods is at 24% and Metals are at 36% discount
READ MORE »IPCA Labs Research Report By Motilal Oswal
We view IPCA as a structural growth story, with all business segments contributing to growth. We expect IPCA to report 30% EPS CAGR over FY14-16, led by international generics. We reiterate Buy, with a target price of INR 1,025 (16x FY16E EPS). IPCA is one of our preferred picks in the midcap healthcare space
READ MORE »V-Guard Industries Research Report By Motilal Oswal
Valuation and view: We expect V-Guard Industries to post 20.3% CAGR in revenue and 28.1% CAGR in PAT over FY14E-16E. We believe that growth has bottomed out after two quarters of lower single digit performance and is expected to accelerate, given the strong outlook of summer going forward and lower base effect. At CMP of INR442, the V-Guard Industries stock trades at 13.9x FY15E and 11.2x FY16E earnings respectively. We value V-Guard Industries at 14x FY16E EPS of INR39.3 and arrive at a target price of INR550. Maintain Buy
READ MORE »Cummins India Research Report By Motilal Oswal
Over the last 18 months, Cummins India has seeded several growth levers, including: i) LHP Products, for Exports (potential revenues of INR10b+, vs INR3.9b in FY13) and Domestic (targeting ~15-20% market share, possible revenues of INR5b+) ii) Reconditioning (Recon), as CPCB-2 implementation will improve economic viability. We model revenue CAGR of 14.6% during FY14-16 largely led by potential ramp-up in LHP products and Recon business; excluding these segments, the growth CAGR stands at just 8.7%. Maintain Buy, with price target of INR560/sh (18x FY16E)
READ MORE »Alembic Pharma Research Report By Motilal Oswal
Improving business profile; re- rating candidate: The business mix at Alembic Pharma is likely to improve further, with higher contribution from US generics and specialty therapies in India, while low-margin APIs and acute therapies may continue to face slowdown. We expected transition to result in 280bp EBITDA margin expansion and 35% earnings CAGR over FY14E-16E. […]
READ MORE »Symphony Stock Research Report By Motilal Oswal
Symphony (SYML) is the largest Air Cooler company in India, with 50% value market share (40% volume) in the organized market. It commands 10-12% pricing premium over competitors and sells its products on advance payment, a testimony of its strong brand equity
READ MORE »Arvind’s Margins To Increase Over Top Brands: Motilal Oswal Research Report
Arvind’s retail segment margins to increase 650bp by FY16E. Brands and retail segment margins to see structural improvement from 5.4% in FY13 to 12% by FY16E, driven by consolidation of portfolio, more power brands, turnaround of loss-making new brands and improved margins in Megamart. Restructuring in garments segment led to turnaround and improvement in margins from -8% in FY10 to 11% in FY13. Plans to expand capacity from 10m pieces to 25m by FY15 to drive profitable growth. Arvind is valued at 6x FY16E EV/EBITDA, in line with five-year historical average multiple of 6.4x one-year forward EV/EBITDA. Initiate coverage with a ‘Buy’
READ MORE »ENIL Is A Potential 4x Multibagger Stock: Motilal Oswal Research Report
Radio industry has potential to grow 4x: The KPMG FICCI M&E
2013 report suggests a 16.6% CAGR in radio adspend over 2012-
2017. Radio is devoid of subscription revenues and depends upon
adspends. If radio advertising were to rise to half the global standards of 0.9xGDP, ENIL and the industry have potential to grow 4x
HDFC Bank Research Report By Motilal Oswal
HDFC Bank’s stock price has been flat in CY13. However, we note that earnings CAGR of 25%+ over FY14E/16E is intact, which percolates to valuation becoming cheaper – one-year forward P/E of 15x (near 10-year low LPA; 25% discount to its LPA) and P/BV of 3.2x (5% discount to its LPA). While discount over the LPA has increased significantly, RoE is best in the decade at 22%+.
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