SSKI Securities rates Zee Telefilms as an Underperformer. Zee, with a bid of $ 350 million, has been the highest bidder for exclusive broadcasting rights of 139 days of cricket telecast rights over the four years. ESPN Star Sports is believed to have made a bid of $ 325 million, Sony Entertainment Television ($ 250 million) and Prasar Bharti ($ 225 million). |
While Zee is the highest bidder, it remains to be seen if it will pass the broadcasting criteria of BCCI, which includes having at least three years experience in telecasting international cricket. |
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Other broadcasters fulfil this criterion as they got their production team stabilised and have also had experience of telecasting cricket World Cup. |
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The report states that the aggressive bidding made by Zee is significantly higher to the earlier bid of $ 308 million and at a premium over other bidders. Winning the telecast rights would not be a profitable proposition for Zee, as the bid price is significantly higher and the cost of production will be higher. |
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Camlin: turn around story |
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Kotak Securities recommends a Buy on Camlin. The company is all set to turn around after posting a loss in FY05. Its core business is set to turn around due to rationalisation in cost, reduction of manpower, higher extent of outsourcing in consumer products and discontinuation of loss-making pharma operations. |
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As a result of relocation of the workshop, Camlin's property at a prosperous Mumbai suburb is lying idle. In view of the spiralling property prices, the management is exploring options of unlocking value from it. The stock is trading at P/E of 9.3x based on FY07E estimates. |
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The report states, "The turnover of the consumer products division was Rs 138 crore in FY05, but the operating margin slumped due to cost pressure and loss of sales on account of VAT. To counter this, the management decided to relocate the workshop to Taloja, increased the degree of outsourcing and implemented a VRS to scale down the manpower. Turnover of the fine chemicals in FY05 was Rs 36.7 crore and operating margin was healthy at 13.8 per cent. During FY06E and FY07E, improvement is expected in operating margin of consumer products." |
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Sun Pharma: growth pill |
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ASK Raymond James, initiating coverage on Sun Pharma, recommends a Hold on the stock. The report states that the business is good and is fairly valued. |
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Despite growing competition and slowing industry growth, the company is expected to grow between 12 per cent and 15 per cent per annum over next few years. |
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This would mainly be driven by its focus on speciality segments (which have longer treatment cycles), strengthening positions with key customers and effective marketing. |
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Moreover, the company is expected to continue its momentum of around 22 ANDA filings per annum in the coming years, just behind Ranbaxy (with 29 ANDAs). It is the second largest Indian player in the US generic business and has six Para IV filings. |
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It is increasing focus on relatively less competitive injectables market, and plans to launch NDDS-based products in the US. Acquisitions are crucial for the company. But any significant delay in identifying a good acquisition would put pressure on its returns as well as its future growth. |
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