RANBAXY LABS
Reco price/date: Rs 534/August 23
Current/target price: Rs 546/NA
On Ranbaxy's withdrawal of 27 approved abbreviated new drug applications in the US market appearing on the US regulator's website, the company clarified certain products with negligible commercial impact should be withdrawn, which, according to the company, would enable it to focus on applications of greater importance to the US business and healthcare system. The company also stated the abbreviated new drug applications did not pertain to current business and would have negligible impact on the company's business in the US. Neutral
Angel Broking
DEWAN HOUSING
Reco price/date: Rs 162/August 22
Current/ target price: Rs 169/Rs 243
Dewan Housing management remains upbeat on growth in the mortgage space, aided by its diversified product offerings, increasing ticket sizes and rising non-individual loans. Analysts are factoring a compounded annual growth rate of 28 per cent in loans and 2.6 per cent rise in the net interest margin over 2013-14. The asset quality is impeccable, with gross non-performing assets at 0.9 per cent. Credit cost assumptions were raised to 25 basis points over 2013-14, against 14 basis points in 2011-12. A higher share of non-retail loans would be the key. Emkay has lowered its 2012-13 estimated earnings per share by four per cent. Valuations of 0.9 times the 2013-14 standalone adjusted book value seem unjustified, given growth visibility and stable asset quality. Upgrade to 'Buy'.
Emkay Global
Parsvnath Developers
Reco price/date: Rs 39/August 22
Current price/ Fair Value: Rs 39/Rs 63
Parsvnath’s results for the quarter ended June were below CRISIL Research's expectations. Revenue fell 25 per cent year-on-year to Rs 163 crore, owing to slow execution of some projects. The earnings before interest, tax, depreciation and amortisation (Ebitda) margin stood at 66 per cent, against 26 per cent in the year-ago period, owing to a change in disclosure levels. Project-specific interest costs, earlier part of the cost of goods sold, are now reported under interest costs below Ebitda. Net profit fell 22 per cent year-on-year to Rs 20 crore due to higher interest costs. Factoring in delays in some projects, CRISIL Research has lowered the revenue estimate by 5.5 per cent for 2012-13. The debt is expected to increase from current levels. Accordingly, the estimate for earnings for 2012-13 is lowered by 18 per cent.
CRISIL Research
MERCATOR
Reco price/date: Rs 21/August 22
Current/ target price: Rs 20/Rs 32
Mercator Lines' results for the quarter ended June were better than expected, with a jump in offshore revenue booked on the back of the ONGC order execution and improved performance in the coal segment, sequentially. Revenue rose 37 per cent year-on-year to Rs 1,095 crore. The earnings before interest, tax, depreciation and amortisation margin contracted 290 basis points to 16 per cent. Earnings for the quarter stood at Rs 17 crore, a 16 per cent rise compared to the year-ago period. Charter rates are likely to remain depressed in the shipping sector for the next one to one and a half years. The coal and offshore segments are likely to cushion the stress for Mercator. The management plans to reduce debt in the coming year (the current debt/equity ratio is 1.35). Maintain 'Buy'.
IDBI Capital
