SOBHA DEVELOPERS
Reco price/date: Rs 336/January 6;
Current/target price: Rs 323.5/Rs 460
Sobha Developers (SDL) reported a dismal sales volume for Q3FY14 which sets tone for a guidance miss during FY14E, the brokerage now expect SDL to achieve 3.7 million sq ft in pre-sales and Rs 2,300 crore in new sales value. SDLs muted Q3FY14 sales volume is largely attributable to fewer high volume launches. The brokerage do not see any collateral damage yet on the demand offtake as quality supply has reduced with 45 per cent of the real estate developers facing balance sheet stress. Second, quality developers properties have delivered appreciation in prices and continue to see buyer accretion. Also Southern markets affordability remains strong whilst they deliver a better value in terms of quality & timeliness vs Northern & Western peers. Besides NRIs are increasing their share of property investments into the home markets exploiting the currency windfall. Recommend Buy.
RELIANCE COMMUNICATIONS
Reco price/date: Rs 131.7/January 6;
Current/target price: Rs 131/NA
Reliance Communications (RCom) has fully repaid a syndicated external commercial borrowing loan of $500 million or about Rs 3,100 crore. In July last year, RCom had completed full repayment of two syndicated ECB loan of $500 million each, amounting to $1 billion (Rs 6,200 crore). Besides, it had paid bilateral ECB loan of more than $310 million (Rs 1,900 crore). With the repayments of the ECB loans, RCom has fully liquidated the borrowings from 23 foreign banks and financial institutions. RCom reported a net debt of Rs 41,170 crore as on September 30, 2013 and the company attributed the spike in debt to rupee depreciation vis-à-vis the US dollar. Maintain Neutral.
EROS INTERNATIONAL MEDIA
Reco price/date: Rs 166/January 3;
Current/target price: Rs 179.6/Rs 242
Eros International Media is a part of Eros International Group. The company's distribution network spans over 50 countries, with offices in India, UK, US, Dubai, Australia, Fiji, Isle of Man and Singapore. Eros international is an undisputed leader in domestic movie distribution segment. It has a strong content library of 1,800 movies (including digital rights only) and has good relations with leading production houses. The new media verticals are showing robust revenue growth and the brokerage believe its contribution to total revenue will inch up gradually. It estimate revenue and net profit to grow at a CAGR of 14.8 per cent and 14.2 per cent respectively over FY12-15E. The stock is available at PE 6.9 to its FY15E earnings. Recommend Buy.
KRBL
Reco price/date: Rs 34/January 3;
Current/target price: Rs 38.3/Rs 48
CRISIL Research reiterates its fundamental grade of 3/5 on KRBL. It has consistently posted superior financial performance vis-à-vis peers in the past five years. A strong brand and efficient working capital management have enabled KRBL to tap growth in the basmati rice industry. Demand for basmati rice at home and overseas has been robust in the past five years; analysts expect this trend to continue. Revenues are expected to grow at a two-year CAGR of 22 per cent to Rs 3,100 crore in FY15. Higher paddy prices could reduce Ebitda margins from 15.4 per cent in FY14 to 14.5 per cent in FY15. Net profit is expected at Rs 220 crore in FY14 and 230 crore in FY15.
Reco price/date: Rs 336/January 6;
Current/target price: Rs 323.5/Rs 460
Sobha Developers (SDL) reported a dismal sales volume for Q3FY14 which sets tone for a guidance miss during FY14E, the brokerage now expect SDL to achieve 3.7 million sq ft in pre-sales and Rs 2,300 crore in new sales value. SDLs muted Q3FY14 sales volume is largely attributable to fewer high volume launches. The brokerage do not see any collateral damage yet on the demand offtake as quality supply has reduced with 45 per cent of the real estate developers facing balance sheet stress. Second, quality developers properties have delivered appreciation in prices and continue to see buyer accretion. Also Southern markets affordability remains strong whilst they deliver a better value in terms of quality & timeliness vs Northern & Western peers. Besides NRIs are increasing their share of property investments into the home markets exploiting the currency windfall. Recommend Buy.
-Karvy Stock Broking
RELIANCE COMMUNICATIONS
Reco price/date: Rs 131.7/January 6;
Current/target price: Rs 131/NA
Reliance Communications (RCom) has fully repaid a syndicated external commercial borrowing loan of $500 million or about Rs 3,100 crore. In July last year, RCom had completed full repayment of two syndicated ECB loan of $500 million each, amounting to $1 billion (Rs 6,200 crore). Besides, it had paid bilateral ECB loan of more than $310 million (Rs 1,900 crore). With the repayments of the ECB loans, RCom has fully liquidated the borrowings from 23 foreign banks and financial institutions. RCom reported a net debt of Rs 41,170 crore as on September 30, 2013 and the company attributed the spike in debt to rupee depreciation vis-à-vis the US dollar. Maintain Neutral.
-angel broking
EROS INTERNATIONAL MEDIA
Reco price/date: Rs 166/January 3;
Current/target price: Rs 179.6/Rs 242
Eros International Media is a part of Eros International Group. The company's distribution network spans over 50 countries, with offices in India, UK, US, Dubai, Australia, Fiji, Isle of Man and Singapore. Eros international is an undisputed leader in domestic movie distribution segment. It has a strong content library of 1,800 movies (including digital rights only) and has good relations with leading production houses. The new media verticals are showing robust revenue growth and the brokerage believe its contribution to total revenue will inch up gradually. It estimate revenue and net profit to grow at a CAGR of 14.8 per cent and 14.2 per cent respectively over FY12-15E. The stock is available at PE 6.9 to its FY15E earnings. Recommend Buy.
-Kisan Ratilal Choksey Shares and Securities
KRBL
Reco price/date: Rs 34/January 3;
Current/target price: Rs 38.3/Rs 48
CRISIL Research reiterates its fundamental grade of 3/5 on KRBL. It has consistently posted superior financial performance vis-à-vis peers in the past five years. A strong brand and efficient working capital management have enabled KRBL to tap growth in the basmati rice industry. Demand for basmati rice at home and overseas has been robust in the past five years; analysts expect this trend to continue. Revenues are expected to grow at a two-year CAGR of 22 per cent to Rs 3,100 crore in FY15. Higher paddy prices could reduce Ebitda margins from 15.4 per cent in FY14 to 14.5 per cent in FY15. Net profit is expected at Rs 220 crore in FY14 and 230 crore in FY15.
-crisil reserach