Stocks To Buy & Sell After Q4FY15 Results: Amar Ambani Of IIFL

PTC India Financial (Q4 FY15) – BUY
CMP Rs45, Target Rs61, Upside 35.9%

• Slower than expected accretion in loan assets continue; share of renewable projects has been increasing
• Expect loan book to grow at 35% pa over FY15-17
• Spreads coming-off; to sustain near 4% in longer term
• Asset quality slips; negative surprise on investment write-off
• Valuation has adjusted to the new normal; Re-iterate BUY with 12m price target of Rs61

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GSPL (Q4 FY15) – BUY
CMP Rs119, Target Rs142, Upside 19.3%

• Revenues at Rs. 239cr were lower than our and street estimates owing to 4.5% yoy fall in tariffs
• Volumes were at 22.6mmscmd for Q3 FY15 as compared to our estimates of 23.9mmscmd
• OPM at 83.7% was lower than our estimates of 86.8%, due to lower than expected tariffs
• Decrease in debt levels led to decline in interest expenses on yoy basis
• We maintain our BUY rating as we expect the gas availability to increase in the country, GSPL will be a major beneficiary; we maintain our target price at Rs142

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Bajaj Auto (Q4 FY15) – Accumulate
CMP Rs2,306, Target Rs2,400, Upside 4.1%

• Revenues at Rs. 4,739cr lower by 3.9% yoy; was in higher than our estimates
• Blended realizations improved 14.9% yoy driven by 13% higher export and 15.9% higher domestic realizations
• Total volumes were lower by 16.4% yoy as domestic volumes declined 20.4% yoy and export volumes were lower by 10.9% yoy. In terms of products, 2-W volumes declined by 18.5% yoy while 3-W volumes were flat with modest decline of 0.7% yoy
• OPM at 17.6% was lower by 207bps and 273bps qoq, the fall was in spite of increase in gross margins as staff costs were higher owing to lumpy provisioning for gratuity valuation
• APAT at Rs. 622cr was lower than our estimates
• Maintain Accumulate rating with a 9-month price target of Rs2,400

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Indoco Remedies (Q4 FY15) – Reduce
CMP Rs368, Target Rs350, Downside 4.9%

• Robust domestic and emerging market formulations drive 14.3% yoy revenue growth though slightly below our estimate; regulated market growth disappoints at 2.3% yoy
• Mixed trend in operating costs keeps margin unexpectedly flat; PAT too misses estimate
• Cut FY16/17 estimates on lowered revenue and margin growth assumptions; downgrade to Reduce as 23x FY17E PE adequately factors in robust earnings cagr over FY15-17E

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Tata Motors (Q4 FY15) – BUY
CMP Rs497, Target Rs650, Upside 30.7%

• Consolidated net sales grew by 3.5% as standalone revenues jumped 26.2% yoy and JLR sales grew by 8.9% yoy
• Growth in JLR revenues was driven by 3.4% yoy rise in volumes and 5.3% increase in realizations
• JLR OPM was at 17.4% was lower than our estimates, while margins were higher by 24bps yoy, sequentially it declined by 120bps
• OPM for standalone business was higher than estimates at a 1.5% and was up 9ppts and 11ppts qoq yoy mainly on back of operating leverage
• Maintain our BUY rating as we believe JLR is set to see strong momentum in volumes given its lineup of launches in the next couple of years

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Strides Arcolabs (Q4 FY15) – Accumulate
CMP Rs1,218, Target Rs1,350, Upside 10.8%

• Q4 consolidated revenues flat yoy but EBIDTA up 27% yoy on robust global pharma performance
• Regulated market sales up 20% qoq driven by North American business while lower order inflow in anti malaria business leads to 23% sequential decline in institutional revenues
• Australian acquisition, core business ramp up key positives; recommend Accumulate with revised 9-12mth target of Rs1,350

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Tech Mahindra Ltd (Q4 FY15) – Reduce
CMP Rs641, Target Rs614, Downside 4.2%

• Revenue growth came in much lower than expectation; to revert to industry-leading growth in FY17
• 500bps qoq OPM fall was a shocker; expect a protracted recovery with multiple levers at disposal
• Cut earnings estimates for FY16/17 by 15-20%; Downgrade stock to Reduce

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Bharat Heavy Electricals Ltd (Q4 FY15) – Reduce
CMP Rs241, Target Rs225, Downside 6.6%

• BHEL managed to report higher than expected bottomline due to lower employee costs
• Topline for the quarter declined 15.6% yoy to Rs. 12,686cr, marginally higher than our estimate
• Operating profit for the quarter stood at 13.3%, higher than our estimate of 9.8% due to a 32.8% qoq decline in employee costs
• PAT decline accentuated by a forex loss of Rs. 370cr and higher tax rate
• Order inflow for the quarter stood at Rs. 9,000cr, lower by 45% yoy as few orders were delayed. Order book was down by 0.5% yoy to 101,018cr; orders were largely from state utilities
• Upgrade to Reduce from Sell post the sharp correction in the stock with a price target of Rs. 225

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