BRITANNIA INDS
Reco price: Rs 470
Target price: Rs 500
Britannia Industries reported Q1FY12 net sales, Ebitda, and adjusted net profit growth at 21.4, 23.7, and 27.3 per cent, respectively, with profitability being below estimates. Ebitda margins came at 4.6 per cent (245 bps below estimates), on account of disappointment in gross margins (down 110 bps QoQ). Analysts expect gross margins to improve in the subsequent quarters, due to stable wheat and sugar prices. Analysts remain positive on Britannia at valuations of 24.5/19.3 times FY12/FY13 estimated EPS. Maintain buy.
—Religare Institutional Research
TORRENT PHARMA
Reco price: Rs 641
Target Price: Rs 663
Q1FY12 was above estimate, with revenues at Rs 650 crore (up 20 per cent YoY), Ebitda at Rs 120 crore (up 19 per cent) & net profit at Rs 100 crore (up 38 per cent YoY). Above estimate sales were led by licensing income (Rs 17 crore versus Rs 2 crore in Q1FY11), and spillover of Brazil sales of Rs 20 crore, from Q4'11 to Q1'12. Revenues were driven by 56 per cent growth in US, and 22 per cent growth in Brazil. With higher licensing income and lower tax rates, revise the earnings upwards. Maintain Hold.
—Emkay Global
NMDC
Reco price: Rs 247
Target price: Rs 229
NMDC will re-open its Kumaraswamy mine (in addition to Donimalai mine, which was operational before the ban), and will be able to produce an additional two million tonnes per year for FY2012 (according to management). NMDC has been producing six million tonnes per year from its Donimalai mines. Ramping up production from these mines to 12 million tonnes per year in the near term would be challenging, analysts believe. Maintain reduce.
—Angel Broking
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TITAN
Reco price: Rs 223
Target price: Rs 250
Titan Eye Plus, the optical retail chain of Titan Industries, has launched 'RIO' - a trendy collection of eyewear aimed at youth, priced in the range of Rs 2,000 - Rs 3,500. For Q1FY12, Eye Plus has contributed significantly to the 'other' segment, growing by 44 per cent YoY. Analysts believe the retail expansion (from the current 175 stores to 225 in FY12, as estimated), and the launch of newer designs, will take Titan Eye Plus to a higher growth trajectory. The stock is currently trading at 34.4 and 26.6 times of FY12 and FY13 estimated EPS, respectively. Maintain buy.
—Edelweiss Securities