Analysts' corner

NTPC, Cadila Healthcare, Hindalco & Godrej Consumer Products Ltd,

NTPC
Reco price/date: Rs 140/April 8;
Current/target price: Rs 140/Rs 163
According to media reports, Coal India Ltd (CIL) had suspended coal supply to some of NTPC's power plants in the north eastern region over non-payment of dues to the tune of Rs 1,000 crore. NTPC withheld the payment on account of disputes with CIL regarding quality of coal. However, the issue has been resolved for now, following a meeting between the two companies. NTPC is yet to sign a fuel supply agreement (FSA) with CIL, due to their differences over quality of coal supplied. Maintain Accumulate.

-Angel Broking

CADILA HEALTHCARE
Reco price/date: Rs 751/April 8;
Current/target price: Rs 751/Rs 800
Cadila's EPS could be impacted by two per cent if its agreement with Boehringer Ingelheim, for the promotion of two gastro-intestinal products namely, Dulcolax and Buscopan, is not extended. These two products account for three per cent of Cadila's India sales. Analysis of Hospira's quarterly earnings shows that contrary to expectations, Cadila's Q3'13 weak Ebitda margin was not driven by Docetaxel. Hospira reports quarterly profits of JV with Cadila and profitability in the last three quarters has been flattish. This implies that margin decline was in the base business. Hospira's JV profitability still contributes 30 per cent of Cadila's profits. Further, 35 per cent of Cadila's India sales will be affected by the new pricing policy. Maintain Neutral.

-Credit Suisse

HINDALCO
Reco price/date: Rs 90/April 8;
Current/target price: Rs 90.85/Rs 75
We believe the aluminium cycle would remain in a downward trajectory for a prolonged period. We also believe that consensus projections have factored in a lot of optimism on aluminium prices and hence, the earnings downgrade would continue in FY14 as well. We have revised our FY14E Ebitda/PAT estimates downward by 13 per cent and 15 per cent, respectively, due to a reduction in domestic market volume estimates and a change in currency assumption. Our Ebitda estimates are 10 per cent and 19 per cent below consensus estimates for FY14E/FY15E, respectively. We continue to retain our Sell rating on the stock.

-Nirmal Bang Institutional Equities

GODREJ CONSUMER PRODUCTS LTD
Reco price/date: Rs 779/April 5;
Current/target price: Rs 804/Rs 833
The Africa business has, in the past couple of years, held immense strategic importance for Godrej Consumer Products Ltd (GCPL). Its share of revenues has been steadily going up, from 15 per cent in FY11 to 23 per cent in FY12 and now 26 per cent in 9MFY13. This will again go up over the next few years, we forecast, as GCPL closes the remaining phases of its Darling acquisition. GCPL's vision is to make Africa the biggest business amongst all international businesses, even bigger than Indonesia. BUY.

-Nomura Institutional Research