Bharti Airtel Ltd (Q4 FY08) - BUY



Bharti Airtel Ltd (Q4 FY08) - BUY

CMP Rs922, BUY

Target price Rs1,123,  Upside 21.8%

 

ä      Revenues increase 13.1% qoq driven by 12.4% qoq subscriber growth; FY08 subscriber additions up 67%

ä      Q4 wireless margins fall 360bps yoy on transfer of passive infrastructure to Infratel

ä      Q4 PAT higher by 32.9% qoq on lower interest cost

ä      Strong capex led growth, tower JV are key positives; recommend BUY with a target price of Rs1,123, an upside 21.8%.

 

Click below for the quarterly update of Bharti Airtel Ltd.
http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/2842008/bhartiartl_0408.pdf

 

 

Warm Regards,

 

India Infoline Research Team

 


Reliance Industries Ltd (Q4 FY08)_ Maintain BUY





Reliance Industries Ltd (Q4 FY08): Maintain BUY

 

CMP Rs2,64 2, BUY

 

Target price Rs3,196,  Upside 21%

 

ä        Net sales up 35.8% driven by higher realizations across the segments.

ä       GRMs at US$15.5/bbl for Q4 FY08, much in line with expectations.

ä OPM down 270bps to 16.1% as petchem and oil and gas EBIT margin fall.

ä       Three additional discoveries made in Q4 FY08.

ä       Firm refining margins, commencement of production of gas from KGD6 in H2 FY09 and additional discoveries to drive future growth.

ä       We recommend a BUY with a sum-of-parts target price of Rs3,196

 

Click below for the quarterly update of Reliance Industries Ltd.

http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/2242008/reliance_0408.pdf

 

 

Warm Regards,

 

India Infoline Research Team

 


Satyam Computer Services Ltd (Q4 FY08) – “Strong quarter and guidance”




Satyam Computer Services Ltd (Q4 FY08) – "Strong quarter and guidance"

CMP Rs459, Market Performer

Target price Rs457,  Downside 0.4%

 

ä       Sector-leading revenue growth continues with 10% qoq growth in Q4 FY08

ä       EBITDA margin improve by 130 bps qoq driven by higher utilization, improved pricing, offshore shift and break-even in BPO

ä       Lower other income due to forex losses restricts net profit growth to 7.7% qoq

ä       Q1 FY09 guidance strong for EPS growth but modest on revenue growth

ä       FY09 guidance above expectations; but still room for outperformance

ä       Remain positive (relative to the sector) on Satyam with a target price of Rs457

 

Click below for the quarterly update of Satyam Computer Services Ltd.

http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/2242008/satyamcomp_0408.pdf

 

 

 

Warm Regards,

 

India Infoline Research Team


Wipro Ltd (Q4 FY08): “Valuation remain expensive – SELL”



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Wipro Ltd (Q4 FY08): "Valuation remain expensive – SELL"  

CMP Rs459, SELL

Target price Rs390,  Downside 15%

 

ä       Strong all-round revenue growth of 8.6% qoq beats expectations

ä       EBITDA margin expand by 80 bps despite onsite salary hikes, business mix change and lower pricing

ä       Net profit grows by 3% qoq due to sharp decline in other income  

ä       Q1 FY09 growth guidance is modest; weakness expected to persist in Q2 as well  

ä       Maintain SELL with a target price of Rs390 implying 15% downside  

 

Click below for the quarterly update of Wipro Ltd.

http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/2142008/wipro_0408.pdf 

 

 

Warm Regards,

 

India Infoline Research Team

 

 


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    HCL Technologies Ltd (Q3 F6/08): “Better positioned”



    HCL Technologies Ltd (Q3 F6/08): "Better positioned"

    CMP Rs246, BUY

    Target price Rs283,  Upside 15%

     

    ä       HCL reports a lower than expected 5.2% qoq dollar revenue growth. Volume growth slows down though pricing improvements continue.

    ä       Core software services registers solid growth of 6.5% qoq while IMS and BPO revenues grow by sluggish 1.5-2% qoq.

    ä       EBITDA margin expands by 90bps qoq to 22.3% driven by improved realizations, higher utilization, SG&A leverage and offshore shift. Core software services margin improves by 95 bps.

    ä       Lower other income, due to forex loss, leads to a net profit growth of just 1.1%.

    ä       Management maintains F6/08 revenue growth outlook at 35% yoy on a reduced headcount target. Company expects a modest Q4 F6/08.

    ä       Reiterate BUY on HCL Tech with a price target of Rs283 implying 15% upside.

     

    Click below for the quarterly update of HCL Technologies Ltd.

    http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/1642008/hcltech_0408.pdf 

     

     

    Warm Regards,

     

    India Infoline Research Team


    Fwd: Infosys Technologies Ltd (Q4 FY08): “No reason to cheer”





    Infosys Technologies Ltd (Q4 FY08): "No reason to cheer"

    CMP Rs1,510, SELL

    Target price Rs1,341, Downside11.2%

     

    ä       Rupee revenue growth of 6.3% qoq in Q4 FY08 was in line with expectations. Volume growth was modest at 4.9% qoq while pricing improvement was negligible.

    ä       Slow growth was witnessed in the US region along with a material de-growth in banking and financial services segment.

    ä       EBITDA margin was stable qoq at 32.5% aided by SG&A leverage, better subsidiary profitability, rupee depreciation and absence of one-time expenditure.

    ä       Q4 FY08 net profit growth of 4.1% qoq, excluding the tax reversals, was marginally below expectations. Announcement of a special dividend of Rs20 and increase in payout policy is a positive surprise.

    ä       Terming the business environment as challenging and imposing revenue loss risk, management guides for a weak Q1 FY09. However, FY09 guidance of 19-21% revenue growth and EPS of Rs92.3-93.9 is healthy. 

    ä       We believe that strong back-ended revenue growth expectation (Q2-Q4 FY09 CQGR 5.6-6.7%) and Re/$ assumption of Rs40 are key risks in the guidance.   

    ä       Remain negative on Infosys with a price target of Rs1,341, implying 11% downside.

     

     

    Click below for the quarterly update of Infosys Technologies Ltd.

    http://www.indiainfoline.com/content/rep/Result_Analysis/2008/4/1642008/infosys_0408.pdf

     

     

     

    Warm Regards,

     

    India Infoline Research Team


    Sebi to make e-application easy

    Sebi has decided to set up a working group of banks for a pilot project aimed at implementing its biggest move yet on the primary market, that of making the new issue application process simple so that funds do not have to exit the accounts of investors.

    This move, loosely seen as an electronic form of the earlier Stockinvest scheme, will ensure that applicants do not have their funds locked into the new offers without any certainty over how much allotment they will get. The pilot project, to be implemented in a clutch of cities, would begin in three months' time, a top Sebi official told FE.

    This process would essentially mean that the money committed to applying for public offers would remain locked in investors' bank accounts. But, this amount does not leave a bank; it is merely locked. Once applicants are allotted shares, an equivalent amount is then unlocked from their accounts, electronically.

    This process eliminates the hassle of refunds, since the funds remain in the accounts of the applicants. Of late, several investors who have applied for new offers have been crying hoarse about their funds being blocked, while they await refunds for days. In fact, Sebi sources said the regulator was still grappling with refund problems of some large issues of this calendar year and even of those floated four years ago.

    "We are talking to the banks. The working group will be comprising banks from both public and private sectors. They will then let us know how the system will be put in place and what the challenges are," the Sebi official said.

    The pilot project would begin in three months in cities where these banks had the required infrastructure in place, the official added.

    Sebi has made it clear that reducing the time gap between the closure of an issue and its listing is also a key priority, but the first big move it wants to make on the primary market is to make sure that monies do not leave investors' accounts when they apply for offers. "That will be a big change from the current regime," Sebi sources said.

    Last week, Sebi chairman Chandrasekhar Bhaskar Bhave had hinted at an electronic version of blocking funds in investors' accounts, something which had been done in the 1990s by way of the now-defunct Stockinvest scheme. The problem with Stockinvest was that an entire instrument had to be liquidated even if the full amount was not required. This did not fully eliminate the problem of refunds. Blocking bank accounts electronically would eliminate that completely, Sebi officials explained.

    The next, and an equally important step, will then be to ensure that institutions put up the entire application money up-front, and not just 10% as they do now. "If the money doesn't leave an account at all, why can't institutions commit the entire application money?" said Sebi officials. Once e-applications are made possible this way, institutions, too, do not have to worry about their funds being locked into offers without allotment being certain.

    Read this

    This week I selected the following two articles for your reading basket.
    1. How to select your stockbroker
    2. Accounting gimmicks
    Happy Reading.

    Sarda Energy & Minerals Ltd





    CMP Rs335

    Not Rated

     

    Sarda Energy & Minerals Ltd (SEML) is a manufacturer of sponge iron, steel and ferro alloys based out of Raipur, Chhattisgarh. Company has undertaken an expansion plan which will not only increase saleable output in a buoyant pricing environment but also de-risk the business model by diversifying revenues. On the other side, increasing resource integration would expand profitability significantly. We expect robust earnings CAGR of 79% over FY07-10. Our estimates have an upside risk from company's proposed power investments and downside risk from any execution shortfalls.

     

    Click below for the Company update on Sarda Energy & Minerals Ltd.

    http://www.indiainfoline.com/adserver/InverstorReportSarda030408.asp   

     

    Warm Regards,

    India Infoline Research Team


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