Business Standard

Analysts' corner

Sun TV, Apollo Tyres, ABG Shipyard, Indian Oil

BS Reporter  |  Mumbai 

Sun TV
Reco Price: Rs 407
Target Price: Rs 475 

The strong numbers reported by for the fourth quarter as well as the full financial year 2009-10 (FY10) were in line with estimates. Standalone revenue for the quarter stood at Rs 390 crore, up 42 per cent year-on-year (y-o-y), while net profits grew 45 per cent. The advertisement (ad) revenue for FY10 grew 38 per cent to Rs 790 crore. The company has indicated 18 per cent growth for ad revenue in FY11. continues to benefit from its dominant position in the southern market. Strong ad revenue growth, coupled with increased penetration of its direct-to-home services, will drive revenue growth. SUN TV’s earnings per share is expected to grow at a compounded annual growth rate of 22 per cent over FY10-FY12E (estimated). Maintain buy.

— Ambit Capital

Apollo Tyres


Reco Price: Rs 71
Target Price: Rs 84 

recorded better-than-expected performance during the March quarter, fuelled by high-margin expansion. Operating margins inched up 390 basis points y-o-y due to lower raw material cost as percentage to sales. The company is currently operating at its full capacity. The recently commenced capacity of 100 tonnes a day at its new plant in Chennai will add further volume growth from FY11. The company is expected to see a strong top line growth of 23.3 per cent for FY11. Going forward, the brokerage believes margins may decline on account of higher price for rubber and other raw materials. The stock is trading at 7.5x its FY11E and 6.9x FY12E consolidated earnings. Maintain buy.

— Sharekhan

ABG Shipyard
Reco Price: Rs 253
Target Price: Rs 327 

(ABG) reported lower-than-estimated numbers (adjusted for subsidy) during the March quarter on account of higher raw material cost. However, strong revenue growth of 40.6 per cent y-o-y (up 10.6 per cent sequentially) indicates pick-up in the pace of execution. The company delivered 17 vessels in FY10, as against six vessels in FY09. ABG’s order book stands at Rs 12,050 crore, of which the unexecuted portion is nearly Rs 8,500 crore, executable by FY14E. This translates into 5.2x FY10 sales, thus providing strong revenue visibility for the company. According to the management, ABG is expected to receive Rs 600 crore from Essar and Rs 75 crore in the form of subsidy in FY10. The pace of execution will pick up over the next two years, as clients start taking delivery. This should improve cash flow. Maintain buy.

— Angel Securities


Indian Oil Corporation

Reco Price: Rs 340
Target Price: Rs 392 

(IOC) reported results above estimates, primarily due to the budgetary support of Rs 10,600 crore provided by the govern-ment during the quarter. Revenues declined 16.9 per cent to Rs 78,500 crore. Interest cost was down 48 per cent to Rs 430 crore, as debt levels reduced significantly compared to last year. The company’s net profit declined 16 per cent y-o-y to Rs 550 crore. During the year, the company received budgetary support of Rs 15,100 crore from the government for the underrecovery of cooking fuel, which has been accounted for the year. Though there has been some clarity on sharing mechanism, more budgetary support from the government is needed to keep IOC in black. Maintain buy.

— Emkay Securities 

RECOMMENDED FOR YOU

Analysts' corner

Sun TV, Apollo Tyres, ABG Shipyard, Indian Oil

The strong numbers reported by Sun TV for the fourth quarter as well as the full financial year 2009-10 (FY10) were in line with estimates. Standalone revenue for the quarter stood at Rs 390 crore, up 42 per cent year-on-year (y-o-y), while net profits grew 45 per cent. The advertisement (ad) revenue for FY10 grew 38 per cent to Rs 790 crore.

Sun TV
Reco Price: Rs 407
Target Price: Rs 475 

The strong numbers reported by for the fourth quarter as well as the full financial year 2009-10 (FY10) were in line with estimates. Standalone revenue for the quarter stood at Rs 390 crore, up 42 per cent year-on-year (y-o-y), while net profits grew 45 per cent. The advertisement (ad) revenue for FY10 grew 38 per cent to Rs 790 crore. The company has indicated 18 per cent growth for ad revenue in FY11. continues to benefit from its dominant position in the southern market. Strong ad revenue growth, coupled with increased penetration of its direct-to-home services, will drive revenue growth. SUN TV’s earnings per share is expected to grow at a compounded annual growth rate of 22 per cent over FY10-FY12E (estimated). Maintain buy.

— Ambit Capital

Apollo Tyres
Reco Price: Rs 71
Target Price: Rs 84 

recorded better-than-expected performance during the March quarter, fuelled by high-margin expansion. Operating margins inched up 390 basis points y-o-y due to lower raw material cost as percentage to sales. The company is currently operating at its full capacity. The recently commenced capacity of 100 tonnes a day at its new plant in Chennai will add further volume growth from FY11. The company is expected to see a strong top line growth of 23.3 per cent for FY11. Going forward, the brokerage believes margins may decline on account of higher price for rubber and other raw materials. The stock is trading at 7.5x its FY11E and 6.9x FY12E consolidated earnings. Maintain buy.

— Sharekhan

ABG Shipyard
Reco Price: Rs 253
Target Price: Rs 327 

(ABG) reported lower-than-estimated numbers (adjusted for subsidy) during the March quarter on account of higher raw material cost. However, strong revenue growth of 40.6 per cent y-o-y (up 10.6 per cent sequentially) indicates pick-up in the pace of execution. The company delivered 17 vessels in FY10, as against six vessels in FY09. ABG’s order book stands at Rs 12,050 crore, of which the unexecuted portion is nearly Rs 8,500 crore, executable by FY14E. This translates into 5.2x FY10 sales, thus providing strong revenue visibility for the company. According to the management, ABG is expected to receive Rs 600 crore from Essar and Rs 75 crore in the form of subsidy in FY10. The pace of execution will pick up over the next two years, as clients start taking delivery. This should improve cash flow. Maintain buy.

— Angel Securities


Indian Oil Corporation

Reco Price: Rs 340
Target Price: Rs 392 

(IOC) reported results above estimates, primarily due to the budgetary support of Rs 10,600 crore provided by the govern-ment during the quarter. Revenues declined 16.9 per cent to Rs 78,500 crore. Interest cost was down 48 per cent to Rs 430 crore, as debt levels reduced significantly compared to last year. The company’s net profit declined 16 per cent y-o-y to Rs 550 crore. During the year, the company received budgetary support of Rs 15,100 crore from the government for the underrecovery of cooking fuel, which has been accounted for the year. Though there has been some clarity on sharing mechanism, more budgetary support from the government is needed to keep IOC in black. Maintain buy.

— Emkay Securities 

image
Business Standard
177 22

Analysts' corner

Sun TV, Apollo Tyres, ABG Shipyard, Indian Oil

Sun TV
Reco Price: Rs 407
Target Price: Rs 475 

The strong numbers reported by for the fourth quarter as well as the full financial year 2009-10 (FY10) were in line with estimates. Standalone revenue for the quarter stood at Rs 390 crore, up 42 per cent year-on-year (y-o-y), while net profits grew 45 per cent. The advertisement (ad) revenue for FY10 grew 38 per cent to Rs 790 crore. The company has indicated 18 per cent growth for ad revenue in FY11. continues to benefit from its dominant position in the southern market. Strong ad revenue growth, coupled with increased penetration of its direct-to-home services, will drive revenue growth. SUN TV’s earnings per share is expected to grow at a compounded annual growth rate of 22 per cent over FY10-FY12E (estimated). Maintain buy.

— Ambit Capital

Apollo Tyres
Reco Price: Rs 71
Target Price: Rs 84 

recorded better-than-expected performance during the March quarter, fuelled by high-margin expansion. Operating margins inched up 390 basis points y-o-y due to lower raw material cost as percentage to sales. The company is currently operating at its full capacity. The recently commenced capacity of 100 tonnes a day at its new plant in Chennai will add further volume growth from FY11. The company is expected to see a strong top line growth of 23.3 per cent for FY11. Going forward, the brokerage believes margins may decline on account of higher price for rubber and other raw materials. The stock is trading at 7.5x its FY11E and 6.9x FY12E consolidated earnings. Maintain buy.

— Sharekhan

ABG Shipyard
Reco Price: Rs 253
Target Price: Rs 327 

(ABG) reported lower-than-estimated numbers (adjusted for subsidy) during the March quarter on account of higher raw material cost. However, strong revenue growth of 40.6 per cent y-o-y (up 10.6 per cent sequentially) indicates pick-up in the pace of execution. The company delivered 17 vessels in FY10, as against six vessels in FY09. ABG’s order book stands at Rs 12,050 crore, of which the unexecuted portion is nearly Rs 8,500 crore, executable by FY14E. This translates into 5.2x FY10 sales, thus providing strong revenue visibility for the company. According to the management, ABG is expected to receive Rs 600 crore from Essar and Rs 75 crore in the form of subsidy in FY10. The pace of execution will pick up over the next two years, as clients start taking delivery. This should improve cash flow. Maintain buy.

— Angel Securities


Indian Oil Corporation

Reco Price: Rs 340
Target Price: Rs 392 

(IOC) reported results above estimates, primarily due to the budgetary support of Rs 10,600 crore provided by the govern-ment during the quarter. Revenues declined 16.9 per cent to Rs 78,500 crore. Interest cost was down 48 per cent to Rs 430 crore, as debt levels reduced significantly compared to last year. The company’s net profit declined 16 per cent y-o-y to Rs 550 crore. During the year, the company received budgetary support of Rs 15,100 crore from the government for the underrecovery of cooking fuel, which has been accounted for the year. Though there has been some clarity on sharing mechanism, more budgetary support from the government is needed to keep IOC in black. Maintain buy.

— Emkay Securities 

image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard