This is illustrated in the fact that the company posted losses in FY02 and FY03 owing to the downturn in the global telecom markets. Compared with a profit of Rs 34.4 crore in FY01, Sasken posted losses of Rs 5.4 crore in FY02 and Rs 11.2 crore in FY03.
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| While Sasken's business credentials are sound, the issue looks aggressively priced. |
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| RESEARCH CALLS |
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HIKAL (value buy)
Edelweiss Capital maintains its 'value buy' grading for Hikal. The company reported strong pharma sales. There was a 42 per cent topline growth and 37 per cent bottomline growth. |
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| The revenue growth was driven by higher pharma sales at Rs 18.9 crore for the June 2005 quarter, while the crop science division maintained its steady growth with Rs 38.8 crore revenues. |
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| The company is on its way to achieve an estimated 65 per cent topline growth and a 43 per cent consolidated topline growth. The stock is trading at 16.1x FY06E and 11x FY07E earnings. |
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| The company's EBITDA margins were down due to higher raw material costs. But Edelweiss sees this as a temporary phenomenon. Margins are expected to improve going forward on the back of the increasing share of higher margins from the pharma division. |
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| Edelweiss believes that on a stand-alone basis, Hikal would deliver robust earnings growth, well above the peer group. Gabapentin and Bupropion are expected to be the key growth drivers at the topline and margin levels. The company is said to have the potential to surprise on the upside. |
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BHEL (neutral)
Enam Securities grades Bhel as 'neutral', relative to the sector. It terms Bhel
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