Cybermedia: Outsourcing driver

ANALYSTS' CORNER

Emkay PCG, in its report on Cybermedia, states that the company would leverage its strong content development expertise and is expanding its content BPO business.

This business began commercial operations in June 2005 with 90 professionals and now it has plans to increase its skilled manpower by 215 by May 2006. The report expects the company to post 23 per cent CAGR in sales revenue from Rs 66.5 crore in FY05 to Rs 151.9 crore in FY09E.

Media business is expected to report CAGR of 20 per cent, while media service business is expected to report 25 per cent CAGR during the said period. The company's Global Outsourcing magazine and content BPO are expected to be the growth drivers.

The company is a speciality media house, with 11 publications spread across infotech, telecom, consumer electronics, biotech and an end-to-end media value chain including internet, events and television. It is leveraging strong customer and industry relationship to cross-sell other services.

Shree Cements: Volume growth

Merrill Lynch recommends a "buy" on Shree Cement. Initiating coverage on the company, the report states that the company, despite ranking as one of the most profitable cement companies in India, has valuations for FY07E that are at 20-30 per cent discount vs majors on PE and EV/EBITDA, while EV/capacity at about $ 120 per ton is comparable.

The report sees a window for strong stock upside, given high earnings momentum and room for pushbacks in the industry's FY08 capacity pipeline. The report forecasts the company's FY07E earnings to grow 50 per cent y-o-y led by 36 per cent growth in volumes and 7 per cent price rise.

The report believes that the company offers the opportunity to combine significant company-level volume growth with strong industry-level pricing. The company's recent 1.5 million per annum expansion at Ras in north India comes at a time when capacity utilisation in the region is averaging about 103 per cent, the highest across regions.

Godrej Consumer Products: Well poised

Emkay PCG, in its report on Godrej Consumer Products, states that the company's market share in toilet soaps has increased to 9.5 per cent, while hair colour market stood at 40.5 per cent. The Rs 4,900 crore toilet soap market has seen realignment in market share with Godrej taking a lead over Nirma.

At the end of October '05, the company had a value share of 9.6 per cent of the market compared with Nirma's 8.2 per cent. The Deluxe lather shaving cream, Cinthol talc and Snuggy Diapers resulted in 56 per cent growth in toiletries division.

The move to acquire Keyline Brands (a UK-based company) marks the company's foray into the global market with a ready clutch of brands and at the same time, gives it access to the modern trade distribution in the UK.

Godrej is a major player in the Indian FMCG market with leadership in personal, hair, household and fabric care segments.