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8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
1/24
SBINs profitability was declined by 34% YoY largely due to higher provisions and contingencies led by deterioration in asset quality and highe
tax in order to create DTL special reserve as per suggestion by RBI. Banks NII grew by 13.3% YoY led by higher loan growth and stable NIM
Asset quality slightly deteriorated with GNPA stood at 5.9% versus 5.8% in previous quarter and net NPA further worsen to 3.2% against 2.9%
sequentially due to lower loan loss provisions made. We value bank at Rs.1779/share which is 1.1 times of FY14E book valu
.............................................................................................. ( Page : 13-17)
J&K BANK : "BUY" 20th Feb 2014
J&K Banksprofitability increased by 11% YoY on account of reversal of provisions against NPA and investments, further on account of lower ta
rate profits inflated. Operating profit was flat at 1.4% YoY led by moderate NII growth which further led to margin compression. We lower ou
price target to Rs.1525 from earlier of Rs.1578 which implies 1.3 times of FY14E book and 6 times of price earnin
.................................................................................... ( Page : 2- 6)
Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up 10 % YoY led by healthy growth in export business wit
well support from India operations to. The revenues from export business including formulations and API grew by 36 % to 1509 Cr for the
quarter while domestic business grew by 9% YoY to 1044 Cr. ................................................ ( Page : 20-21)
Somany Ceremics: "Outlook Challenging in near term" "REDUCE" 14th Feb 2014
At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY15E. The company can post RoE of 17.0% and 17.1%
& EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY15E. We are downgrading the rating to "Reduce" and advise investors to book profits at current leve
Over the longer term, we expect the efforts to introduce new ventures, curtail costs and the expected economic revival driven by an uptick i
demand in the latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY15E and pric
target to Rs 115. ............................................................ ( Page : 22-23 )
IEA-Equity
Strategy
CIPLA : "BUY" 14th Feb 2014
eClerx Services :"Consistent Performer" "BUY" 18th Feb 2014
SUNPHARMA :Robust Performance "NEUTRAL" 17th Feb 2014
Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectations with total revenues including other operating incom
at Rs 4312 Cr up 50.5 % YoY led by robust growth in US formulations and Taro business. The stellar performance of company was supporte
well from domestic operations. The US formulation business grew by more 56 % YoY to USD 434 M
.................................................................................................. Pa e : 18-19
State Bank of India : "BUY"
eClerx Services witnessed inline set of growth with 2.3 %(QoQ) sales growth in INR term and 4.7%(QoQ) in USD term (4% in CC term) led b
some preponement of volume of work from Q4 into Q3 which has resulted into the slightly higher sequential growth. Companyshigh RoE an
dividend payout ratio make attractive to invest on the stock. ........................................................ ( Page : 10-12)
17th Feb 2014
Britannia Inds :"Decent quarter" "BUY" 19th Feb 2014
Once again, Britannia Industries revealed better earning performance than street expectation. Its consolidated revenue grew by 10.7% (YoY) le
by 4-5% volume growth during the quarter.The company's margins are also likely to expand due to higher proportion of premium products and
easing input costs. We have "BUY" view on the stock with a target price of Rs 1065. At a CMP of Rs915, stock trades at 9.3x FY15E P/BV
................................................. ( Page : 7-9)
20th Feb, 201
Edition : 210
Narnolia Securities Ltd,
India Equity Analytics aily Fundamental Report on Indian Equities
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
2/24
J&K BANK
1329
15251578
15
-3
1M 1yr YTD
bsolute -4.6 2.1 2.1
el.to Nifty -1.8 -1.8 -1.8
Current 4QFY13 3QFY1
omoters 53.2 53.2 53.2
I 28.2 27.1 24.8
I 4.5 4.3 5.0hers 14.1 15.4 17.1
Financials Rs, Cr
2011 2012 2013 2014E 2015E
NII 1544 1838 2316 2724 3356Total Income 1908 2172 2800 3097 3728
PPP 1149 1370 1811 1952 2349
Net Profit 615 803 1055 1271 1535
EPS 105.7 126.9 165.7 217.6 262.2
532209
SE Symbol J&KBANK
Loan grew by 21.5% YoY led by loan growth in J&K state by 25% YoY and 19% Y
growth in outside state. Incremental loan came from corporate loan book which gre
by 23.4% YoY followed by agriculture (21.2% YoY) and SME (21% YoY). Corpora
loan constituted 83% in outside J&K sate, mostly infrastructure segment which h
high risk of restructure. Banks management guided loan growth of 20% in FY
which means bank has to achieve 9% QoQ growth in loan as against quarterly r
rate of 5%.We lower our loan growth assumption from 20% to 15% in FY14E. Credeposits ratio improved by 611 bps YoY largely due to lower deposits growth
against loan.
Margin compression on account of higher cost of fund than deposits
Banksmargin compressed by 36 bps QoQ to 3.97% due to 41 bps QoQ declined
loan yield to 11.7% while deposits cost increased by 47 bps to 6.6%. Investme
yield improved by 55 bps to 7.7%. Overall cost of fund increased to 6.6% from 6.2
in previous quarter whereas yield on fund improved slightly from 9.8% to 9.9% whi
compressed margin by 36 bps sequentially.
verage Daily Volume
6419
Moderate growth in deposits; CASA remained flat
Banksdeposits grew by 11% YoY in which 12% growth within state of J&K wh
deposits grew by 7% YoY in outside of state. CASA in absolute term reported grow
of 9% YoY while share to total deposits declined by 65 bps YoY 38.8%. Sav
deposits and current deposits registered growth of 5% and 10% YoY respectivewhereas term deposits reported growth of 12% YoY. Despite of lower growth
CASA bankscost of deposits remain stable at 6.6% while cost of fund increased
16 bps YoY.
Loan grew handsomely led by corporate loan growth
ompany Update BUY
evious Target Price
arket Data
pside
1496/995
SE Code
MP
arget Price
We are disappointed w ith the growth p arameters of bank and acc ording
reduce our target pr ice from Rs.1578 to Rs.1525 due to lower g rowth
balance sheet espec ial ly within state of Jammu & Kashmir.Bank
p rof i tabi l iwas up by 11% due to reversal of provis ions tow ards NPA and inves tme
depreciat io n wh ile tax rate reduce to 28% versus 30% in last year. Bank
manag ement con tinued to guid e loan grow th of 20% in FY14 but we lower o
loan gro wth ass um ption to 15% for FY14. We value bank at Rs.1525/sha
which impl ies that 1.3 t imes of FY14E book value and 6 t imes of p r i
earn ings.
kt Capital (Rs Cr)
Please refer to the Disclaimers at the end of this Report.
(Source: Company/Eastwind)
ock Performance
2wk Range H/L
hange from Previous
&k Bank Vs Nifty
hare Holding Pattern-%
22.54lakh
fty 6153
"BUY"20th Feb, 2014
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
3/24
gher operating expenses led flat growth in operating profit
perating expenses increased by 17% YoY in which employee cost and other operating
st increased by 15% and 22% YoY respectively. Consequently CI ratio increased by
40 bps to 40%. Moderate loan growth, lower other income and higher operating cost led
e provisioning growth of 1.4% YoY.
rofitability increased on account of reversal of provisions and lower tax rate
ofitability increased by 11% YoY to Rs.321 cr despite of flat operating profit growth was
ue to reversal of provisions towards NPA and depreciation. Banks provisions and
ntingencies declined by 121% YoY due to Rs. 13 cr reverse from NPA provision and
s.5 cr reverse from investment depreciation provision. Tax rate was also lower to 28%
rsus 31% in previous quarter and 30% in last quarter. We are disappointed with growth
arameters of profit and loss account. Banksbalance sheet within J&K state especially
deposits growth sense remained muted while credit growth grew handsomely. Overall
e found mixed growth trend which discourage us to reduce price target.
aluation & View
e are disappointed with the growth parameters of bank and accordingly reduce our
rget price from Rs.1578 to Rs.1525 due to lower growth in balance sheet especially
thin state of Jammu & Kashmir. Bankprofitability was up by 11% due to reversal of
ovisions towards NPA and investment depreciation while tax rate reduce to 28% versus
0% in last year. Banksmanagement continued to guide loan growth of 20% in FY14 but
e lower our loan growth assumption to 15% for FY14. We value bank at Rs.1525/share
hich implies that 1.3 times of FY14E book value and 6 times of price earnings.
J&K BANK
Source: Eastwind/Company
Please refer to the Disclaimers at the end of this Report.
able asset quality; PCR highest in industry
n asset quality front, banksGNPA increased by 2% QoQ in absolute basis while in
ercentage to gross advance, it slightly improved from 1.72% to 1.67% sequentially.
uring quarter, bank lowered its provisions by 1% which was the result of increased of
et NPA by 25% QoQ in absolute term. However in percentage to net advance, it stood0.22% as against 0.19% in previous quarter. Fresh slippage ratio was at 1.4 %(
nnualized) during quarter which was lower from previous quarter of 1.9%. Provisions
verage ratio remained high at 86.6% (without technical write off) which was best in
dustry in our coverage universe.
oderate growth in NII despite of healthy loan growth
anksNII grew by 8.8% to Rs.647 cr despite of healthy loan growth and improvement in
D ratio led by margin compression. Other income was also lower to Rs.87 cr versus
s.91 cr in last quarter and Rs.99 cr in previous quarter. With the lower support from
her income, total revenue grew by 7.2% YoY to Rs.734 cr.
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
4/24
J&K BANK
Source: eastwind/Company
Please refer to the Disclaimers at the end of this Report.
Moderate growth in NII despite of healloan growth
Higher operating expenses led flat growth
operating profit
Profitability increased on account of rever
of provisions and lower tax rate
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
5/24
J&K BANK
Source: eastwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
aterly Result (Rs. Cr) 3QFY14 2QFY14 3QFY13 % YoY Gr % QoQ Gr 3QFY14E Variation(%)
erest/discount on advances / bills 1266 1244 1090 16.2 1.7 1322 -4.3
ome on investments 434 396 421 3.2 9.7 423 2.6
erest on balances with Reserve Bank of India 16 10 23 -31.4 60.2 13 16.6
ers 0 0 0 0
al Interest Income 1716 1650 1533 11.9 4.0 1759 -2.5
ers Income 87 99 91 -3.4 -12.1 96 -8.8
al Income 1803 1749 1624 11.0 3.1 1855 -2.8
erest Expended 1069 968 939 13.8 10.4 1022 4.6
647 682 594 8.8 -5.2 738 -12.3
er Income 87 99 91 -3.4 -12.1 96 -8.8
al Income 734 781 685 7.2 -6.0 834 -11.9
ployee 188 177 164 14.7 6.3 180 4.3
er Expenses 105 108 86 22.3 -2.5 120 -12.2
erating Expenses 293 285 250 17.3 2.9 300 -2.3
P( Rs Cr) 441 496 435 1.4 -11.2 533 -17.4
visions -5 56 22 -120.6 -108.3 48 -109.5
T 445 441 412 8.0 1.1 485 -8.2
124 138 123 0.9 -10.1 145 -14.7
t Profit 321 303 289 11.0 6.2 339 -5.4
ance Sheet Data ( Rs Cr)
t Worth 5797 5475 4898 18.3 5.9 5815 -0.3
posits 63157 61171 57075 10.7 3.2 65907 -4.2
rowings 1150 1346 801 43.6 -14.6 1579 -27.2
vances 43318 41121 35658 21.5 5.3 44081 -1.7
estment 22714 22316 22681 0.1 1.8 24200 -6.1
et Qaulity ( Rs Cr)
PA 725 709 582 24.7 2.3
PA 97 78 50 95.7 24.9
PA(%) 1.67 1.72 1.63
PA(%) 0.22 0.19 0.14
R(%) 87 89 91
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
6/24
J&K BANK
Source: eastwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
L 2010 2011 2012 2013 2014E 2015Eerest/discount on advances / bills 2342 2630 3394 4318 5046 5703
ome on investments 705 1066 1403 1723 1713 1983
erest on balances with Reserve Bank of India 11 17 39 97 56 56
tal Interest Income 3057 3713 4836 6137 6816 7742hers Income 416 365 334 484 372 372
tal Income 3473 4078 5170 6621 7188 8114
erest on deposits 1841 2069 2902 3741 3987 4386
erest on RBI/Inter bank borrowings 83 46 41 26 101 139
hers 14 54 54 54 0 0
erest Expended 1938 2169 2997 3821 4092 4386
1119 1544 1838 2316 2724 3356
Growth(%) 37.9 19.1 26.0 17.6 23.2
her Income 416 365 334 484 372 372
tal Income 1536 1908 2172 2800 3097 3728
ployee 366 524 521 652 675 814
her Expenses 211 235 281 337 469 566
erating Expenses 577 759 802 989 1144 1379
P( Rs Cr) 958 1149 1370 1811 1952 2349
ovisions 446 534 567 756 137 156
t Profit 512 615 803 1055 1271 1535
t Profit Grwoth(%) 20.1 30.6 31.4 20.5 20.8
y Balance sheet data
posits 37237 44676 53347 64221 66789 73468
posits Growth(%) 20.0 19.4 20.4 4.0 10.0
rrowings 1100 1105 1241 1075 1363 1884
rrowings Growth(%) 0.4 12.3 -13.4 26.8 38.2
an 23057 26194 33077 39200 45080 51843
an Growth(%) 13.6 26.3 18.5 15.0 15.0
estments 13956 19696 21624 25741 24535 21099
estments Growth(%) 41.1 9.8 19.0 -4.7 -14.0
stwind Calculation
ld on Advances 10.2 10.0 10.3 11.0 11.2 11.0
ld on Investments 5.0 5.4 6.5 9.4 7.0 9.4
ld on Funds 7.7 7.5 8.3 8.9 9.8 10.6
st of deposits 4.9 4.6 5.4 5.8 6.1 6.0
st of Borrowings 8.8 9.1 7.7 7.4 7.4 7.4
st of fund 5.1 4.7 5.5 5.9 6.0 5.8
luation
ok Value 621 718 844 1003 1146 1412
BV 1.1 1.2 1.1 1.3 1.2 0.9E 6.4 6.9 5.5 5.9 5.1 4.2
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
7/24
Britannia Inds
1M 1yr YTD
solute 1.7 86.9 34.57
l. to Nifty 3.8 82.8 18.27
Current 2QFY14 1QFY14
omoters 50.75 50.8 50.85
20.11 19.11 19.48
8.77 9.59 9.89
hers 20.38 20.5 19.78
Financials3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 1771.94 1755.27 0.9 1620.4 9.4
EBITDA 159.7 160.4 (0.4) 103.5 54.3
PAT 99.8 97.1 2.8 62 61.0
EBITDA Margin 9.0% 9.1% (10bps) 6.4% 260bp
PAT Margin 5.6% 5.5% 10bps 3.8% 180bp
year forward P/BV
Rs, Cro
(Source: Company/Eastwi
Please refer to the Disclaimers at the end of this Report.
View and Valuation: Management also believes that volume growth will recov
gradually over the next few quarters, driven by higher brand spends and portfo
expansion. The company's margins are also likely to expand due to higher proportion
premium products and easing input costs. We have "BUY" on the stock with a targ
price of Rs 1065. At a CMP of Rs915, stock trades at 9.3x FY15E P/BV.
"Decent quarter"
MP 915
rget Price 1065
Consis tency on wi tness ing b et ter num bers wi th Margin expans ion:esult update BUY
evious Target Price -
side 16%
ange from Previous -
Healthy distribution reach:The Company is also taking initiative to increase its ru
distribution reach for benefitting the opportunity of increasing consumption of fo
products in rural markets. The company plans to increase its overall distributi
coverage by around 7-8% every year and rural coverage by around 10% every year.
Margin Pickup:EBITDA Margin improved by 250 bps to 8.9%. The operating profit h
increased by 54% mainly due to decline in raw material cost by 420 bps to 54.7% a
purchase of stock in trade by 100 bps to 7.3% of adjusted net sales. The company aexpects to track margin expansion ahead by judicious mix of cost rationalization a
increasing supply chain efficiency.
Once again, Britannia Industries revealed better earning performance than stre
expectation. Its consolidated revenue grew by 10.7% (YoY) led by 4-5% volume grow
during the quarter. Even, company has hiked the prices of some of its brands dur
the quarter. PAT grew by 61% (YoY) because of its effective cost rationalization effor
The management expects the biscuit business to grow by 10-11% in FY14E, where
the non-biscuit business to grow at a faster rate by 20-25% in FY14E. Over the last f
quarter, company has more focused on its product portfolio expansion. We expe
that new products expansion is likely to increase going forward. By judicious mix
cost rationalization and high value added biscuits, we expect its margin expansi
gradually over next couple of quarters.
No pressure on RM cost:High food price inflation remains a concern for the compan
Thankfully, Britannia doesntimport much raw materials from abroad and is thus n
affected by rupee fluctuations. Its strategy of focusing on premium brands has not o
allowed the company to hike prices but also improve its product mix as well.
arket Data
E Code 500825
E Symbol
wk Range H/L 973/478
10967
erage Daily Volume 248428
Pricing and Promotion: During the quarter, company initiated its price hike of some
its brand. The full benefit of these prices hikes will be seen in the March quarter.
strategy of focusing on premium brands has not only allowed the company to hike pric
but also improve its product mix as well.
BRITANNIA
are Holding Pattern-%
fty 6127
kt Capital (Rs Crores)
ock Performance
"BUY"19th Feb' 14
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
8/24
(Source: Company/Eastwind)
argin-%
Britannia Inds.
les and Sales growth-%(YoY)
Entry into new categories like cereals w
also help drive growth. Consequently, t
company's earnings are expected to gr
20% over the next 2 years.
(Source: Company/Eastwind)
le of Land in Chennai and Banglore could result in Value unlocking: The company
ans to sell off its 8.60 acres industrial land in Chennai,which is located at Madrasiruvallur High (MTH) Road, Padi, Chennai. We expect the company to realize around
120 crores to Rs150 crores from this land sale when it happens. Further the company
s another 5.0 acres prime real estate land in Bangalore at old airport road which can
tch around Rs 350 crores.
volatility on key input (wheat, sugar, pa
oil) would prices directly impact
margin picture,
The company's margins are also likely
expand due to higher proportion
premium products and easing input cos
(Source: Company/Eastwind)
penses on Sales-%
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
9/24
Please refer to the Disclaimers at the end of this Report.
Britannia Inds.
inancials
(Source: Company/Eastwi
(Source: Company/Eastwind)
Narnolia Securities Ltd,
s in Cr, FY10 FY11 FY12 FY13 FY14E FY15E
et Sales 3770.84 4589.73 5460.75 6135.91 6869.15 7693.45
Other Operating Income 63.53 19.65 24.62 49.5 68.69 76.93
otal income from operations (ne 3834.37 4609.38 5485.37 6185.41 6937.84 7770.38aw Materials Cost 2416.78 2714.38 3109.12 3350.51 3722.15 4196.01
urchases of stock-in-trade 0 328.91 437.68 518.51 520.34 543.93
WIP 0 -15.68 -14.03 -7.57 -76.32 -77.70
mployee Cost 157.9 177.49 211.15 226.75 270.58 310.82
dvertisement and Publicity 300.96 332.84 419.6 534.28 610.53 660.48
Other expenses 728.57 834.76 1010.98 1142.39 1255.75 1398.67
otal expenses 3604.21 4372.7 5174.5 5764.87 6303.03 7032.20
BITDA 230.16 236.68 310.87 420.54 634.81 738.19
epreciation 58.23 64.91 61.83 73.15 84.12 100.50
Other Income 0 59.01 59.14 52.24 27.75 38.85
BIT 171.93 230.78 308.18 399.63 578.44 676.54
nterest Cost 23.46 43.63 41.6 41.3 8.88 4.10rofit (+)/Loss (-) Before Taxes 148.47 187.15 266.58 358.33 569.57 672.45
rovision for Taxes 5.58 52.94 66.85 98.55 176.57 208.46
et Profit (+)/Loss (-) 142.89 134.21 199.73 259.78 393.00 463.99
ales 10.2% 21.7% 19.0% 12.4% 12.0% 12.0%
BITDA -16.8% 2.8% 31.3% 35.3% 51.0% 16.3%
AT -0.3% -6.1% 48.8% 30.1% 51.3% 18.1%
M Cost 63.0% 58.9% 56.7% 54.2% 53.7% 54.0%
d Spend 8.0% 7.3% 7.7% 8.7% 8.9% 8.6%mployee Cost 4.1% 3.9% 3.8% 3.7% 3.9% 4.0%
Other expenses 19.3% 18.2% 18.5% 18.6% 18.3% 18.2%
ax rate 3.8% 28.3% 25.1% 27.5% 31.0% 31.0%
BITDA 6.0% 5.1% 5.7% 6.8% 9.2% 9.5%
BIT 4.5% 5.0% 5.6% 6.5% 8.3% 8.7%
AT 3.7% 2.9% 3.6% 4.2% 5.7% 6.0%
MP 1599.5 382.6 459.9 504.7 915.0 915.0
o of Share 2.39 11.95 11.95 11.95258 11.97 11.97W 282.8 326.04 409.17 555.58 829.55 1174.50
PS 59.79 11.23 16.71 21.73 32.83 38.76
VPS 118.33 27.28 34.24 46.48 69.30 98.12
oE-% 50.5% 41.2% 48.8% 46.8% 47.4% 39.5%
ividend payout-% 126.4% 51.8% 45.1% 45.5% 30.3% 25.7%
/BV 13.5 14.0 13.4 10.9 13.2 9.3
/E 26.8 34.1 27.5 23.2 27.9 23.6
rowth-% (YoY)
aluation:
Margin-%
xpenses on Sales-%
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
10/24
eClerx Services
1M 1yr YTD
solute 20.4 26.3 30.6
l. to Nifty 14.6 20.5 16.3
Current 2QFY14 1QFY14
omoters 52.95 52.88 53.13
26.21 22.37 21.38
11.27 14.72 14.80
hers 9.57 10.03 10.69
Financials3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 219.5 214.6 2.3 170.8 28.5
EBITDA 88.81 92.8 (4.3) 66.8 32.9
PAT 62.33 67.91 (8.2) 49 27.2
EBITDA Margin 40.5% 43.2% (270bps) 39.1% 140bps
PAT Margin 28.4% 31.6% (320bps) 28.7% (30bps)
erage Daily Volume 18894
View and Valuation:We expect that companysorganic revenue growth remains soft
near term, and company is very focussed on inorganic growth and expect to see grow
from cable business . Furthermore, stable billing rate will support to maintain marg
Companys high RoE and dividend payout ratio make attractive to invest on the sto
At a CMP of Rs 1212, stock trades at 12.5x FY15E earnings, we recommend BU
view on the stock with a target price of Rs 1410 (revised from Rs 1350) .
On demand environment, it indicated that there is no significant change and expe
to grow same pace of 10-15% in USD terms in the medium term. On margins,
indicated that it will continue to operate in the mid 30% going forward. It continues
look at inorganic opportunities.
Margin declined and expects to maintain stablity on demand:The OPM fell by 310 b
QoQ to 37% on the back of rise in Selling and Distribution costs due to increase in ons
headcount, bonus and commission and travel. Accordingly, PAT margin down by 270b
to 28.6%, sequentially. Management is very confident to maintain its PAT margin at 3
31% in near term.Good growth from Financial Services:The Cable business grew faster on the low ba
Financial Services also grew fast during the quarter. In the Cable business, there is lot
demand for its services. The digital and digital market has lot of demand and is anoth
key area.
Growth from Emerging revenue:It added 2 clients during the quarter. The Reven
growth from Top 5 grew by 8% YoY and Emerging grew by 35% QoQ respectively duri
the quarter. The Emerging revenue has continued to outpace growth in strategic clien
in line with firm strategy.
Approval on SEZ:The SEZ approval received for new floor in Airoli and planned go li
on April 2014 (600 Seats). It is discussing additional floors in Airoli to consolida
Mumbai facilities, subject to regulatory approval. During the quarter, the Final paymeis done for Agilyst acquisition (for the total acquisition cost ~ $21 million) during t
quarter.
fty 6048
arket Data
E Code 532755
E Symbol ECLERX
ock Performance
year forward P/E
Rs, Cro
(Source: Company/Eastwi
Please refer to the Disclaimers at the end of this Report.
are Holding Pattern-%
881
side -11%
kt Capital (Rs Crores) 3701
wk Range H/L 1255/599
"Consistent Performer"
MP 1212
rget Price 1074
esult update Inline numbers , and expects to report better than NASSCOM guidance(FY14E);
eClerx Services witnessed inline set of growth with 2.3 %(QoQ) sales growth in I
term and 4.7%(QoQ) in USD term (4% in CC term) led by some preponement of volum
of work from Q4 into Q3 which has resulted into the slightly higher sequential growt
It expects some impact of this on Q4 growth. While, PAT decline by 7.2%, sequentia
ange from Previous 22%
Buy
evious Target Price
"BUY"18th Feb' 14
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
11/24
) The billing rates expected to be flat to slight uptick for the FY15E.
) Expect to see similar set of environment in FY 15E than FY14.
) Tax rate is expected to see at 23% mark in FY15E.
) It continues to look at inorganic opportunities.
) Expects to maintain 51% of payout ratio.
Please refer to the Disclaimers at the end of this Report.
) On margins, it indicated that it will continue to operate in the mid 30% (30-31%) going
rward.
ey Facts from Cnference Call
argin-%
(Source: Company/Eastwind)
mployee Metrics-%
Attrition decreased from 36% (2QFY14)
31.8% .
(Source: Company/Eastwind)
(Source: Company/Eastwind)
eClerx Services.
les (USD) and Sales growth-%(QoQ)
On $term, Sales growth was up by 4.
(QoQ) and 2.3% on INR term,
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
12/24
Please refer to the Disclaimers at the end of this Report.
(Source: Company/Eastwi
nancials;
eClerx Services.
perating Metrics;
Narnolia Securities Ltd,
ales Mix-Geography 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY1
orth America 70% 70% 71% 75% 75% 74% 74% 74% 74%
urope 24% 23% 20% 19% 18% 21% 21% 21% 21%
oW 6% 7% 9% 6% 7% 5% 5% 5% 5%
ient Concentration 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY1
op-5 86% 87% 80% 79% 78% 78% 76% 75% 74%
ient addition 8 10 8 4 7 6 5 5 2
otal Clients 53 55 54 54 60 73 61 65 65
SO,days 52 29 30 41 31 33 35 41 33
lling Mix 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY1
TE 94% 95% 93% 93% 92% 91% 94% 95% 95%
EZ Revenue 67% 72% 62% 58% 59% 60% 60% 60% 60%
mployee Metrics 3QFY12 4QFY12 1QFY13 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 3QFY1
mployee Utilization 72% 72% 68% 68% 69% 69% 66% 65.0% 66%
ttrition - 30.9% 23.2% 30.2% 26.5% 27.3% 25.2% 36.4% 31.8%
otal Employee - 4405 5545 5760 5837 5954 6389 6543 6620
mployee Cost 39% 45.1% 42.4% 46.0% 45.0% 45.2% 44.1% 42.2% 43.6%
Rs, Cr FY11 FY12 FY13A FY14E FY15E
ales 366.12 495.19 660.58 852.54 1020.8
mpolyee Cost 147.65 203.87 295.28 370.00 449.18
Other expenses 59.87 79.28 108.47 130.44 158.24
BITDA 158.6 212.04 256.83 352.10 413.45
Dep 9.13 12.89 25.53 33.10 43.10
BIT 149.47 199.15 231.3 319.00 370.35
NT 0 0 0 0.00 0.00
Other Income 0 0 0 28.99 10.21
BT 149.47 199.15 231.3 347.98 380.56
ax 16.76 39.47 39.34 83.52 91.33
AT 132.71 159.68 191.96 264.47 289.22
Growth-%
ales-% 39.5% 35.3% 33.4% 29.1% 19.7%
AT-% 80.5% 20.3% 20.2% 37.8% 9.4%
Margin-%
BITDA 43.3% 42.8% 38.9% 41.3% 40.5%
BIT 40.8% 40.2% 35.0% 37.4% 36.3%
AT 36.2% 32.2% 29.1% 31.0% 28.3%
xpense on Sales-%
mployee cost-% 40.3% 41.2% 44.7% 43.4% 44.0%
Other expenses-% 16.4% 16.0% 16.4% 15.3% 15.5%
ax Rate% 11.2% 19.8% 17.0% 24.0% 24.0%Valuations
CMP 783.95 625 650 1212 1212
OS.Cr 2.9 2.958 2.9875 2.99 2.99
PS 45.76207 53.9824 64.2544 88.52 96.81
NW 238.32 342.92 438.32 615.20 816.84
VPS 82.17931 115.93 146.718 205.93 273.42
/E (x) 17.131 11.5778 10.116 13.69 12.52
/BV (x) 9.54 5.39 4.43 5.89 4.43
RoE-% 55.7% 46.6% 43.8% 43.0% 35.4%
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
13/24
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
14/24
State Bank of India
Please refer to the Disclaimers at the end of this Report.
ontinue to report week trend of asset quality
uring quarter bank increased provisions and contingencies by 37% QoQ to Rs. 4150 cr
ue to deteriorating asset quality. In absolute term GNPA and net NPA increased by 6%
nd 16% sequentially. In absolute term, GNPA and net NPA stood at 5.9% and 3.2%
rsus 5.8% and 2.9% in 2QFY14 respectively. During quarterbanksloan loss provisioncreased by 29.6% sequentially and stood at Rs.23429 cr. Standard asset provisions
nd depreciation provisions were Rs.196 cr and Rs.621531 cr respectively. Net
ovisions were declined by 4% sequentially which resulted 16% rise in net NPA in
bsolute term. Consequently provision coverage ratio without technical writ off was
eclined by 475 bps QoQ to 45.2% from 50% in previous quarter.
rong traction in loan and deposits growth
uring quarter SBIsprofitability declined by 34% largely due to higher provisions and
ntingencies led by deteriorating asset quality and higher tax in order to create DTL
ecial reserve as per suggestion by RBI. However, bank has seen growth in loan and
eposits which translated into growth in profit loss to some extent. Due to higher
perating expenses, operating profit growth was negative despite of 14% growth in
venue. We value bank at Rs.1779/share which would be 1.1 times ofFY14Esbook
lue.
oan grew by 17.4% YoY led by across the sectors. Loan to large corporate grew by 17%
oY, mid corporate grew by 19%, SME grew by 14% and retail loan grew by 19%. Strong
action in auto loan (21.2% YoY) and house loan (19.4% YoY) led retail loan growth.
eposits grew by 17% YoY largely supported by 20% YoY growth in term depositsllowed by saving deposits and demand deposits which grew by 8% and 13%
spectively. Overall CASA ratio was declined by 153 bps YoY to 41%.
M declined on account of higher deposits cost and lower yield
BIsnet interest margin was flat at 3.19% versus 3.18% in previous year. Domestic NIM
eclined by 2 bps to 3.49% while oversea NIM declined by 1 bps sequentially to 1.49%.
ost of deposits increased to 6.25% from 6.22% sequentially while yield on advances
ch up to 10.4% from 10.3% in previous quarter. Credit deposits ratio marginally
eclined from 85.3% to 85.1%.
aluation & View
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
15/24
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Moderate NII growth led by lower growthinterest earnings assets than interest bear
liabilities
Operating profit reported negative growth d
to higher operating expenses led by employ
benefit provisions
Moderate NII growth, higher operat
expenses and higher provision and tax rate
profit de growth of 34% YoY
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
16/24
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
arterly Performance 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E Variation(%)
erest/discount on advances / bills 26310 25379 22800 15.4 3.7 25937 1.4
ome on investments 8228 8137 7072 16.3 1.1 8303 -0.9
erest on balances wi th Reserve Bank of India 92 106 110 -16.1 -13.0
109 -15.9
ers 241 300 362 -33.3 -19.7 349 -30.9
al Interest Income 34870 33922 30344 14.9 2.8 34699 0.5
ers Income 4190 3278 3648 14.9 27.8 3876 8.1
al Income 39061 37200 33992 14.9 5.0 38575 1.3
erest Expended 22230 21671 19189 15.8 2.6 21739 2.3
12641 12251 11154 13.3 3.2 12959 -2.5
er Income 4190 3278 3648 14.9 27.8 3876 8.1
al Income 16831 15529 14803 13.7 8.4 16835 0.0
ployee 5867 5819 4351 34.8 0.8 6364 -7.8
er Expenses 3345 3399 2661 25.7 -1.6 3737 -10.5erating Expenses 9212 9218 7012 31.4 -0.1 10101 -8.8
P( Rs Cr) 7618 6312 7791 -2.2 20.7 6734 13.1
visions 4150 3029 2668 55.5 37.0 3112 33.3
T 3469 3283 5123 -32.3 5.7 3622 -4.2
1234 908 1727 -28.5 36.0 1087 13.6
Profit 2235 2375 3396 -34.2 -5.9 2535 -11.9
ance Sheet (Rs Cr)
posits 1349940 1292456 1156691 16.7 4.4 1337803 0.9
rowings 189969 188937 148374 28.0 0.5 202402 -6.1estments 426728 398536 359959 18.5 7.1 415135 2.8
n 1148901 1103090 978115 17.5 4.2 1152774 -0.3
et Quality
PA 67799 64206 53458 26.8 5.6
A 37167 32151 25370 46.5 15.6
GNPA 5.9 5.8 5.5
NPA 3.2 2.9 2.6
R(%)(w/o technical write-off) 45.2 49.9 52.5
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
17/24
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
come Statement 2011 2012 2013 2014E 2015E
erest/discount on advances / bills 59976 81078 90537 102590 120306
come on investments 19826 23949 27200 32037 39720
erest on balances with Reserve Bank of India 236 350 545 415 415
hers 1356 1144 1374 1253 1253
tal Interest Income 81394 106521 119657 136294 161693
hers Income 15825 14351 16035 15923 15923
tal Income 97219 120873 135691 152217 177616
erest on deposits 43235 55644 67465 61066 70226
erest on RBI/Inter bank borrowings 2562 3886 4124 10146 11668
hers 3071 3700 3737 0 0
erest Expended 48868 63230 75326 86929 103391
32526 43291 44331 49365 58302
her Income 15825 14351 16035 15923 15923
tal Income 48351 57643 60366 65288 74225
mployee 15212 16974 18381 22795 25719
her Expenses 7804 9095 10904 13388 15105
erating Expenses 23015 26069 29284 36183 40824
P( Rs Cr) 25336 31574 31081 29105 33401ovisions 17071 13090 11131 14253 16594
T 8265 18483 19950 14852 16808
x 0 6776 5846 4611 5042
et Profit 8265 11707 14105 10241 11765
posits 933933 1043647 1202740 1383151 1590623
ange (%) 16.1 11.7 15.2 15.0 15.0
which CASA Dep 461521 467607 539063 580923 668062
ange (%) 49 45 45 42 42
rrowings 119569 127006 169183 215867 248248
vestments 295601 312198 350927 32037 39720
ans 756719 867579 1045617 1202459 1382828
tio
ld on Advances 7.9 9.3 8.7 8.5 8.7
ld on Investments 6.9 7.9 8.0 7.4 8.0
ld on Funds 7.0 8.4 8.0 0.0 0.0
st of deposits 4.6 5.3 5.6 6.3 6.5
st of Borrowings 4.7 6.0 4.6 4.7 4.7
st of fund 4.6 5.4 5.5 5.4 5.6
luation
E(%) 12.7 13.9 14.3 9.3 9.8
ok Value 1023 1251 1446 1617 1617BV 2.7 1.7 1.4 0.9 0.9
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
18/24
1M 1yr YTD
bsolute 1.1 57.1 82.9
el. to Nifty 4.7 55.2 70
Current 2QFY14 1QFY1
omoters 63.7 63.7 63.7
22.5 22.8 22.9
I 5.7 3.2 3.1
hers 8.1 10.4 10.4
Financials Rs, Cro
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 4312 4207 2.5 2865 50.5EBITDA 2000 1843 8.5 1275 56.9
PAT 1531 1362 12.4 881 73.8
EBITDA Margin 46.4% 43.8% 260bps 44.5% 190bps
PAT Margin 35.5% 32.4% 310bps 30.8% 480bps
SUNPHARMA
Robust Performance
arget Price 650
7%pside
hange from Previous
evious Target Price
esult Update NEUTRAL Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectatiowith total revenues including other operating income at Rs 4312 Cr up 50.5 % YoY led
robust growth in US formulations and Taro business. The stellar performance of compa
was supported well from domestic operations as well. The US formulation business gr
by more 56 % YoY to USD 434 Mn while International formulation sales outside US gr
by 16 % YoY to USD 84 Mn. Overall international revenues accounted for more than 75
of total revenues for the quarter. The Sales of branded prescription formulations in Ind
was Rs. 947 Cr up by 20% Yoy from Q3FY13 last year. The API business for the quart
witness some decline with sales falls to Rs 174 Cr translating decline of 17 % YoY.arket DataSE Code
ne Year Price vs Nifty
(Source: Company/Eastwi
126,119
verage Daily Volume 535293
fty 6048
The operating EBITDA for the quarter came at Rs 1975 Cr grew by 57 % YoY and OP
stands at 46 %.There is improvement in OPM by 200 bps during the quarter owing
stronger operating metrics. The RM cost as percentage of sales was 14 % versus 15 %
the same corresponding period last fiscal. The employ cost as percentage of sales was
% in current quarter verses 14% for 3QFY13.The company managed to control its oth
expenses during the 3QFY14 and has dropped by 100 bps at 24 % of the sales.
The net profit for the quarter came at Rs 1531 Cr compared to Rs. 881Cr for Q3 last ye
up 74% YoY. The NPM for the 3QFY14 came at 36%.The other income for the 3QFY4 w
Rs 134 Cr and Tax rate was at 12 %.
The company on its R&D said that in the 3QFY14, ANDA for 5 products were filed. Aft
counting these, and adjusting for filings that were dropped, cumulatively ANDAs for 4
products have been filed with the USFDA (as on December 31, 2013). ANDAs for
products received approvals in the third quarter, taking the total number of approvals to 3
(as on December 31, 2013). ANDAs for 131 products now await USFDA approval, includi
14 tentative approvals.
kt Capital (Rs, Cr)
The management of the company after 3QFY14 results has revised its FY14E reven
guidance to 29 % from 25 % earlier. Guidance is at constant exchange rate. The compafurther said that capex for the FY14 would be on higher side of earlier guidance. The t
rate for the full year would be 15 % and R&D expected to be in the range of 6-8% of t
Sales for the FY'14.
The stock at its CMP of Rs 609 is trading at 22.1x of one year forward FY14E EPS of 27.
and company has posted very strong 3QFY14 results however on account stretch
valuations we do not see much upside to stock and therefore we turn neutral with
650.
Please refer to the Disclaimers at the end of this Report.
ock Performance-%
hare Holding Pattern-%
MP 609
wk Range H/L 650/385
SE Symbol SUNPHARMA
524715
View & Valuation
"NEUTRAL"17th Feb' 14
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
19/24
PM %
(Source: Company/Eastwind)
PM %
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
There is improvement in OPM by 200 b
during the owing to stronger operat
metrics.
The NPM for the 3QFY14 came at 36%.T
other income for the 3QFY4 was Rs 134 Cr
SUNPHARMA
les and PAT Trend (Rs)
(Source: Company/Eastwind)
Total revenues including other operat
income came at Rs 4312 Cr up 50.5 % YoYby robust growth in US formulations a
Taro business.
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
20/24
BUY
1M 1yr YTD
bsolute -4.5 -3 -2
el. to Nifty -1.7 -4.3 -14
Current 2QFY14 1QFY1
omoters 36.8 36.8 36.8
23.8 23.8 23.1
I 10.6 10.9 10.8
hers 28.8 28.5 29.3
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 2282 2347 (2.8) 2070 10.2
EBITDA 403 533 (24.4) 492 -18.1PAT 261 376 (30.6) 338 -22.8
EBITDA Margin 17.7% 22.7% (500bps) 23.8% (610bps
PAT Margin 11.4% 16.0% (460bps) 16.3% (490bps
The stock at its CMP of Rs 381 is trading at 19.58 x of one year forward FY14E EPS of R
19.40.The stock has reacted negatively after 3QFY14 results however we dontsee a
downside risks to our estimates. We further believe that Cipla-Medpro would be earni
accretive in medium to long term horizons and we view the recent correction a good en
point for the stock. We maintain our view BUY for the stock with Target Price of
440.
Please refer to the Disclaimers at the end of this Report.
ock Performance-%
hare Holding Pattern-%
kt Capital (Rs, Cr)
View & Valuation
The management of the company after the results said that the Global respiratory u
expects some of launches in the next year. It has set up new global respiratory team dur
the quarter. The Combination inhalers planned to launch in FY'15.Company expects to
more than 5% of Sales on the back of ramp up filings for the FY'15.The Capex is 90
during the quarter and expects to be Rs 400 Cr FY'14. The Rollover Capex of previous ye
is Rs 150 Cr during the year.
ne Year Price vs Nifty
(Source: Company/Eastwi
30,591
verage Daily Volume 617290
fty 6,001
The operating EBITDA for the quarter under review came Rs 403 Cr and OPM at 17.
%.The OPM declines by more than 600 bps YoY due to the increase in the R&D and t
ramp up in the Staff cost during the quarter. The employ cost as percentage of sales stan
at 14 % while it was 12 % for the same time last fiscal. The other expenses as percenta
of sales were 27% for the 3QFY14 versus 25 % in 3QFY13.The other expenditu
increased largely due to rise in R&D expenses and rise in the cost owing to filings a
setting up of the front end during the quarter. The R&D expenses 4.5% of Sales during t
quarter.
450/354
SE Symbol CIPLA
wk Range H/L
arket DataSE Code 500087
The net profits for the quarter came at Rs 261 Cr and NPM stands at 11.43 %. The Rs
Cr Forex gain is included in the other income during the quarter. The tax rate for the quar
was nearly at same rate as in corresponding last quarter at 25 %.
The Company filed 10 ANDA's in the last nine months and got 6 approvals for the sam
period. It has 35 ANDA's under approval as on 31stDecember 2013. The few of t
approval products are commercialized. Cipla Medpro formed as acquisition
Medpro,South Africa last year added 500 Cr to top line and 50 Cr to the operating prof
during the quarter.
arget Price 440
CIPLA
esult Update
MP 381
Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up
% YoY led by healthy growth in export business with well support from India operations
The revenues from export business including formulations and API grew by 36 % to 15
Cr for the quarter while domestic business grew by 9% YoY to 1044 Cr.The growth
export revenues was primarily due to growth in anti-retroviral, anti-cancer, anti-allergic a
anti-biotic segments.15%pside
hange from Previous
evious Target Price
"BUY"14th Feb' 14
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
21/24
CIPLA
usiness Trend
(Source: Company/Eastwind)
The revenues from export business includ
formulations and API grew by 36 % to 15
Cr for the quarter while domestic busin
grew by 9% YoY to 1044 Cr.
evenue Trend %
(Source: Company/Eastwind)
PM & NPM Trend %
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
Net revenues at Rs 2282 up 10 % YoY led
healthy growth in export business with w
support from India operations to.
The OPM declines by more than 600 bps Y
due to the increase in the R&D and the ra
up in the Staff cost during the quarter.
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
22/24
- Soman Ceremics Ltd.
MP 131
rget Price 11595
side -12.2%
21.1%
E Code 531548
E Symbol
61/155
452
3,109
fty 6,001
1M 1yr YTD
solute 13.2 59.9 103.2
l. to Nifty 16.0 58.1 97.6
3QFY14 2QFY14 1QFY14
omoters 63.3 63.3 63.3
2.8 0.8 0.2
1.7 1.9 2.0
hers 32.2 34.0 34.5
Valuations :
Financials Rs, Crore3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 284.5 305.6 -6.9% 267.2 6.5%
EBITDA 17.0 19.4 -12.8% 22.1 -23.3%
PAT 4.8 6.0 -20.5% 8.2 -41.4%
EBITDA Margin 6.0% 6.4% (40) bps 8.3% (230) b
PAT Margin 1.7% 2.0% (30) bps 3.1% (140) b
evious Target Price
SOMANYCERA
ange from Previous
"Outlook Challenging in near term.."
The Q3FY2014 results were weak marked by a double-digit decline in the profit after tax on
back of subdued increase in fuel cost, dollar v/s rupee volatility and a pressure on the mar
The management expect improvement in the demand conditions in the near term and guide
revenue growth of 20% in FY14E-15E, however we expect the revenue growth to
somewhere arround 12-15% and financial performance to remain weak on account of mar
pressure. Consequently, we are downgrading the rating to "Reduce" and advise investors
book profits at current level. Over the longer term, we expect the efforts to introduce n
ventures, curtail costs and the expected economic revival driven by an uptick in demand in
latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our tar
multiple to 10x of FY15E and price target to Rs 115.
Reduce
Result highlights :
esult update
are Holding Pattern-%
ock Performance-%
arket Data
erage Daily Volume
For Quarter Ended 2QFY14
For the quarter ended September 2013, Somany Ceramic registered 6.5% rise in sales to
284.5 crore.
OPM fell 230 basis points to 6.0% taking OP down 8.3% to Rs 17.0 crore.
Other income also rise 77.8% to Rs 48 lakh and interest cost decreased 8.9% to Rs 4.6 crore. As depreciation increased 9.1% to Rs 5.7 crore, PBT fell 41.1% to Rs 7.1 crore.
Taxation fell 40.3% to Rs 2.3 crore (tax incidence grew from 32.5% to 32.9) and PAT fell 41.
to Rs 4.8 crore.
For Nine Month Ended 9MFY14
For the nine month ended December 2013, Somany Ceramic registered 18.7% rise in sales to
848.8 crore.
However, OPM dived from 8.5% to 6.4% taking OP down 10.7% to Rs 54.5 crore.
Other income jumped 28.1% to Rs 1 crore and interest cost decreased 8.2% to Rs 13.8 crore.
As depreciation increased 8.7% to Rs 16.5 crore, PBT fell 20.3% to Rs 25.2 crore.
Taxation fell to 15.5% to Rs 8.6 crore but tax incidence grew from 32.1% to 34.0% which fin
kt Capital (Rs Crores)
wk Range H/L
Management is expected to achive a top-line growth of arround 20-25% in FY14E.Management Guidence FY14E
(Standalone) (Source: Company/Eastwind Resea
Please refer to the Disclaimers at the end of this Report.
At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY1
The company can post RoE of 17.0% and 17.1% & EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY1
We are downgrading the rating to "Reduce" and advise investors to book profits at curr
level. Over the longer term, we expect the efforts to introduce new ventures, curtail costs a
the expected economic revival driven by an uptick in demand in the latter part of FY2015
boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY
and price target to Rs 115.
yr Forward P/B
"Reduce"13th Feb' 14
Narnolia Securities Ltd,
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
23/24
Please refer to the Disclaimers at the end of this Report.
mmount in crore) (Source: Company/Eastwind)
Soman Ceremics Ltd.
ey financials :
urce: Company/Eastwind Research) (Figures In crore)
Narnolia Securities Ltd,
ARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E
erformance
evenue 446 542 720 879 1054 1250 1438
ther Income 2 3 1 1 3 3 3
otal Income 448 545 721 880 1056 1253 1440
BITDA 42 56 68 74 86 83 95
BIT 28 41 50 56 65 59 75
EPRICIATION 14 15 17 18 21 24 26
TREST COST 16 13 17 21 20 17 17
BT 14 31 34 36 48 44 60
AX 5 10 11 11 15 14 19
eported PAT 9 20 24 25 33 30 41
vidend 1 2 3 3 5 6 6
PS 2.5 5.9 6.9 7.3 9.4 8.7 11.9
PS 0.4 0.7 0.8 0.9 1.4 1.9 1.9
eild %
BITDA % 9.5% 10.3% 9.4% 8.4% 8.1% 6.6% 6.6%
BT % 3.0% 5.6% 4.8% 4.1% 4.5% 3.5% 4.2%
PM % 2.0% 3.8% 3.3% 2.9% 3.1% 2.4% 2.9%
arning Yei ld % 28.5% 18.8% 18.0% 19.5% 14.6% 6.6% 9.1%
vidend Yeild % 3.9% 2.2% 2.1% 2.5% 2.2% 1.4% 1.4%
OE % 13.5% 24.6% 23.0% 20.1% 21.3% 17.0% 19.4%
OCE% 12.3% 13.8% 15.7% 16.6% 17.8% 9.8% 12.0%
osition
et Worth 65 83 104 126 153 177 211
otal Debt 138 162 158 151 142 130 130
apital Employed 202 245 262 276 295 307 341
o of Share 3 3 3 3 3 3 3
MP 9 31 38 38 65 131 131
aluation
ook Value 18.8 24.0 30.1 36.5 44.4 51.2 61.2
/B 0.5 1.3 1.3 1.0 1.5 2.6 2.1
t/Coverage 1.7 3.1 2.9 2.7 3.3 3.4 4.4
/E 3.5 5.3 5.6 5.1 6.8 15.0 11.0
et Sales/CE 2.2 2.2 2.8 3.2 3.6 4.1 4.2
et Sales/Equity 6.9 6.6 6.9 7.0 6.9 7.1 6.8
8/13/2019 Investment Funds Advisory for Today: Buy Stock of J&K Bank with Target Price Rs 1525
24/24
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