SUNTECK REALTY
Reco price/date: Rs 334/25 Nov;
Current/target: Rs 334/500
Sunteck Realty Ltd (SRL) sold property of Rs 91.2 crore in Q2FY14 against Rs 91 crore in Q1FY14, in line with our estimates. Collections at Rs 89.5 crore in Q2 and Rs 190 crore in H1FY14 have been disappointing. These should get covered in H2FY14, led by new projects and completion of Signature Island, where collections due are Rs 300 crore. Collections from Sunteck City 1 (which will cross plinth level in Q4) will improve. We expect collections of Rs 340 crore in H2 against SRL's Rs 400 crore, which should help meet the commitment of Rs 290 crore. SRL has pre-launched Phase-II of Sunteck City at Goregaon West, Mumbai. The strategy, despite 66 per cent inventory in Phase-I, is to launch sub-Rs 1 crore product of one-and-a-half BHK. In a week, the project sold .03 million square feet (sq ft), four per cent of its total SBA of 0.8 million sq ft, for an average realisation of Rs 12,900 a sq ft. Valuations remain attractive on the huge value of inventory. Maintain Buy
Emkay Global
ORACLE FINANCIAL SERVICES SOFTWARE
Reco price/date: Rs 3,099/25 Nov;
Current/target: Rs 3,102/3,428
The Q2FY14 numbers were in line with estimates. Product revenues grew 29 per cent year-on-year on a 51 per cent rise in licence revenues. The product business is volatile. The new licence signings were $6 million, lower than the $18 million of Q1 and $22 million of Q4FY13. The macro scene has stabilised in developed markets and clients are doing discretionary spends. However, the low licence fee signings are disappointing. Our FY14 and FY15 earnings' estimates are Rs 153.5 (Rs 142 earlier) and Rs 159, respectively. We have assumed the rupee to appreciate to 60 in FY15. Our FY15-based target is Rs 3,428 (earlier Rs 2,995, based on FY14). At our target, the valuations will be similar to those accorded to Tata Consultancy Services. We upgrade the stock to accumulate from reduce. A delayed recovery/sharp deterioration in user economies and a sharper-than-expected rupee appreciation are key risks to earnings estimates. Upgrade to Accumulate
Kotak Securities
DISHMAN PHARMACEUTICALS
Reco price/date: Rs 81/25 Nov;
Current/target: Rs 83/110
The tide is turning in favour of Dishman Pharmaceuticals, with the improving outlook for custom research and manufacturing services (CRAMS) due to targeting of mid-sized companies, scale-up in hypo business and active pharmaceutical ingredients (API) generics. Recruitment of people for CRAMS, the US and Japan augurs well. We reduce our revenues estimates 3.3 per cent to Rs 1,350 crore for FY14 and five per cent to Rs 1,570 crore for FY15 in lieu of lower forecast. The key revenue and margins drivers in H2FY14 and FY15 would be the start of the Vitamin D3 facility, generic API and hypo facility traction. We upgrade our earnings before interest, taxes, depreciation and amortisation from 21.2 per cent to 25.4 per cent in FY14 and from 21.8 per cent to 24.9 per cent in FY15 on better gross margins; and our earnings a share estimates 15 per cent to Rs 12.7 for FY14 and a decline by 5.5 per cent to Rs 16.5 for FY15. We continue to amortise goodwill over 10 years. We reiterate Buy
Karvy Stock Broking
