Premium Essay

Equity Research Report

In: Business and Management

Submitted By
Words 18586
Pages 75
Friday 29 June 2007

Change of recommendation

Reliance Industries Earnings to provide a reality check
We downgrade RIL to Sell with a target price of Rs1,300. We believe consensus valuation of its E&P assets is too aggressive. The stock also looks expensive on earnings multiples, given our cautious view on the commodity cycles and belief in rupee appreciation.
Key forecasts
FY05A Revenue (Rsm) EBITDA (Rsm) Reported net profit (Rsm) Normalised net profit (Rsm)¹ Normalised EPS (Rs) Dividend per share (Rs) Dividend yield (%) Normalised PE (x) EV/EBITDA (x) Price/book value (x) ROIC (%)
1. Post-goodwill amortisation and pre-exceptional items Accounting Standard: Local GAAP Source: Company data, ABN AMRO forecasts

Sell n/a Neutral

(from Hold)

Absolute performance Short term (0-60 days) Market relative to region Integrated Oil & Gas

India
Price

Rs1700.00
FY06A 812113 144050 96046.9 96046.9 78.5 10.0 0.59 21.6 17.6 6.60 13.0 FY07F 1053630 182100 115113 115113 94.1 11.0& 0.65 18.1 14.6 4.29 17.5 FY08F 982038 FY09F 927646 660513 126574 75716.4 75716.4 61.8 7.50 0.44 27.5 19.6 5.18 9.74
Target price

181809& 210725% 122300% 137078% 122300 100.0% 12.0 0.71 17.0& 15.0 3.48 10.6 137078 106.8% 14.0% 0.82 15.9& 12.3 2.54 10.3

Rs1300.00

(from Rs1250.00)

Market capitalisation

Rs2.37t (US$57.99bn)
Avg (12mth) daily turnover

Rs1376.07m (US$31.05m)
Reuters Bloomberg

RELI.BO

RIL IN

year to Mar, fully diluted

Limited earnings growth We estimate RIL's EPS at Rs100-113 over FY08-10, growth of just 6% pa. Our FY10 estimates are 26% below consensus on account of our cautious view on refining/petchem margins and assumption of an appreciating rupee (Rs/US$ will average 41 in FY08, 39.35 in FY09 and 38.40 thereafter). Our FY09-10 estimates now assume oil from KG-D6 and higher prices for KG-D6 gas. Impressive execution capability We...

Similar Documents

Premium Essay

It Equity Research Report

...Summer Internship Project Report Understanding the Business Dynamics of four major Indian IT companies, Comparison of their Strategies and Equity Forecasting of a Company Submitted to Mr VinitBolinjkar, Head, Equity Research, Ventura Securities Ltd Dr. Sangeeta Wats 8 June 2013 Prepared by Vaibhav Jha (Roll No A028) Intern at Ventura Securities Ltd, Mumbai MBA Capital Markets 2012-14 batch Narsee Monjee Institute of Management Studies, Mumbai Preface The size of Indian IT Industry is $100 billion. The pace with which different IT companies have been growing vary to a great extent. Even in terms of future guidance, one company hovers around 6-10% vis-a-vis another at 17%. Volatility has seeped into this industry. It is becoming increasingly difficult for the investors to invest in any of the companies, thanks to the sinusoidal growth of some of the bellwether IT companies. An investor needs to do an in depth analysis of the business model being followed by various companies. I need to look into their target geographies, service lines and industries. Scrutinising these parameters along with the valuation of the respective stocks will give a better idea about the future prospect of these companies. In this research, I have taken top four Indian IT companies- TCS, Infosys, Wipro and HCL. An in-depth analysis of each of the companies is done. I have looked into various domains of the companies. IT industry has many service lines- IT Services, Consulting,......

Words: 8190 - Pages: 33

Premium Essay

Equity Research Report - Lanett

...The Fund @ Sprott Equity Research Lannett Buy, Current: $68.3, Target: $80.83 March , 18, 2015 5-Year Performance Brian Baranowsky $60 BCom Candidate 2019 Finance $50 Sector Analyst $40 5 Price per Share 4 4 3 $30 3 2 $20 2 1 $10 1 Daily Volume Stock Price Aug-14 Feb-14 Aug-13 Feb-13 Aug-12 Feb-12 Aug-11 Feb-11 Aug-10 Feb-10 0 Aug-09 $0 Feb-09 Brian.baranowsky@gmail.com http://fund.ssb.carleton.ca 5 Current Target Price Source: Bloomberg Investment Thesis Past Exponential Growth Expected to Continue Lannett has expanded at a CAGR of 22% over the last 12 years with an exponential increase in FY 2014 where revenue growth amounted to 81.2% YOY. Growth continues to be a priority for management going forward as they have expanded on their generic pharma product line through product development, formed strategic partnerships, and entered into profitable new markets as patents expired on existing branded drugs. Favorable capital structure and huge increase in cash balance allows company to pursue acquisitions or reinvest back into business. Macro economic trends such as aging population, increased access to healthcare and increased healthcare spending stand to increase revenues. High barriers to entry, High Margins Lannetts wholly owned subsidiary Cody Labs is one of only 7 companies in the United States that is licensed by the DEA to import raw commercial poppy straw for conversion into opioid based active pharmaceutical ingredients (API).......

Words: 8577 - Pages: 35

Free Essay

Strong Buy

...HP – STRONG BUY Equity Research • IT • 19 August 2011 • Jyske Markets Accounts This is a case recommendation. The company will be included in our equityresearch universe as long as it holds price potential justifying a BUY recommendation. When this is no longer the case, we will discontinue our coverage although our recommendation is ACCUMULATE, REDUCE or SELL. HP price fall is overdone We restate our STRONG BUY recommendation for HP and see yesterday’s dramatic price fall as an attractive opportunity to buy. This particularly applies to investors who are patient enough to wait for better market conditions/macro-economic improvement. HP lowers its outlook: as feared, HP (like Dell (STRONG BUY) earlier in the week) last night downgraded its full-year outlook. It was, however, a relatively moderate downgrade since the sales forecast was lowered by 1.6% and EPS by 3%. Whereas HP previously guided 2011 sales and EPS at USD 129bn-130bn and USD 5.0, respectively, HP now guides USD 127.2bn-127.6bn and USD 4.82-4.86, respectively. HP’s forecast is still a shade better than we had estimated (USD 127.6bn and USD 4.7). The reduced forecast reflects a sluggish willingness to buy among private business customers and that corporate customers are now more hesitant due to the rising macro-economic uncertainty. For Q4, HP guides sales at USD 31.1bn-32.5bn as well as Non-GAAP EPS of USD 1.12-1.16 compared with consensus at USD 33.9bn and USD 1.30, respectively. In addition, HP......

Words: 2087 - Pages: 9

Premium Essay

Jpmorgan Chase

...Global Social Finance Research 02 May 2012 Volume Growth and Valuation Contraction Global Microfinance Equity Valuation Survey 2012 J.P. Morgan Global Research J.P. Morgan Social Finance Yasemin Saltuk Yasemin Saltuk AC (44-20) 7742-6426 (44-20) 7742-6426 yasemin.x.saltuk@jpmorgan.com yasemin.x.saltuk@jpmorgan.com J.P. Morgan Securities Ltd. J.P. Morgan Equity Research Frederic de Mariz (55-11) 4950-3398 frederic.de.mariz@jpmorgan.com Banco J.P. Morgan S.A. CGAP Jasmina Glisovic Henry González This report is the result of a collaborative effort between CGAP and J.P. Morgan. J.P. Morgan analysts are solely responsible for the investment opinions and recommendations, if any, in this report. See page 21 for analyst certification and important disclosures. J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that See page 21 for important disclosures. the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com Global Microfinance Equity Valuation Survey 2012 Global Social Finance Research 02 May 2012 Background & Acknowledgements Equity capital flows into microfinance have been increasing for many years, with both retail and institutional investors showing interest in this sector of financial services. Despite this......

Words: 8856 - Pages: 36

Premium Essay

Gmr Infra Research Report

...Result Update November 14, 2011 Rating matrix Rating Target Target Period Potential Upside : : : : Buy | 32 24 months 29% GMR Infrastructure (GMRINF) | 25 WHAT’S CHANGED… PRICE TARGET........................................................................... Changed from | 35 to | 32 FY12E 7652.8 1820.4 -178.9 FY13E 9689.6 2807.6 168.5 Key Financials (| Crore) Net Sales EBITDA Adj Net Profit FY10 4566.5 1364.3 158.4 FY11 5773.8 1555.5 -131.0 EPS (FY12E).............................................................................. Changed from |0.1 to |-0.5 EPS (FY13E)........................................................................................................Unchanged RATING...............................................................................................................Unchanged Net losses lower than expected… GMR Infrastructure’s (GMR) Q2FY12 net losses were lower than expected largely on account of better-than-expected revenues and margin in the other segment (investment income, project management fees & charter rental income). During the quarter, GMR agreed to sell a 30% stake in GMR Energy (Singapore) implying deal value of ~S$50 million and contributing |1.7/share in our SOTP valuation. We maintain BUY. Q2FY12 losses lower than expected… GMR’s net sales grew 48.3% in Q2FY12 mainly on account of consolidation of the Male Airport (| 225 crore). The net losses came lower at | 62.5 crore vs. our expectation of | 91.1 crore......

Words: 3869 - Pages: 16

Premium Essay

Intellectual Capital Disclosure

...Intellectual Capital Disclosure Practices and Effects on the Cost of Equity Capital: UK Evidence Researchers: Musa Mangena Richard Pike Jing Li Intellectual Capital Disclosure Practices and Effects on the Cost of Equity Capital: UK Evidence by Musa Mangena Richard Pike Jing Li University of Bradford Published by The Institute of Chartered Accountants of Scotland CA House, 21 Haymarket Yards Edinburgh EH12 5BH First Published 2010 The Institute of Chartered Accountants of Scotland © 2010 ISBN 978-1 904574-14-9 EAN 9781904574149 This book is published for the Research Committee of The Institute of Chartered Accountants of Scotland. The views expressed in this report are those of the authors and do not necessarily represent the views of the Council of the Institute or the Research Committee. No responsibility for loss occasioned to any person acting or refraining from action as a result of any material in this publication can be accepted by the authors or publisher. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopy, recording or otherwise, without prior permission of the publisher. Printed and bound in Great Britain by T. J. International Ltd. C 1. ontents Foreword ...................................................................................... i Acknowledgements ......................................................

Words: 14662 - Pages: 59

Premium Essay

Mr. Mishu

...Report on LUX LUX is a Tangible, Non Durable Good on the basis of this classification. LUX and other soaps fall into the category of Convenience Good Report on “Brand Equity Measurement of LUX”. ACKNOWLEDGEMENT We express our sincere thanks to our respectable teacher Mohammad Nazmul Huq for providing us with bighearted support and opportunity for the successful completion of research on: “Brand Equity Measurement of LUX”. We are thankful to our respondents for their responses, class fellows for their support and suggestions, which have proved to be very valuable for this research, without which it would have not been possible to successfully complete the research. LETTER OF TRANSMITTAL 03rd May, 2010 Mohammad Nazmul Huq Assistant Professor, Department of Business Administration, Stamford University Bangladesh. Subject: - Submission of Report. Dear Sir, With due respect and humble submission I would like to state that, we have been required to submit a research report on ‘Brand Equity Measurement of LUX’ as a part of the completion of this course. For all intents and purposes, It was really more than an opportunity to experience how a research should be performed and should be......

Words: 3483 - Pages: 14

Premium Essay

Bpi Relatorio Analista

...the bank holds 35% interest. The bank operates its business through a network of 654 retail branches 39 investment centers, 5 specializing in home loans branches. Key Executives Name Fernando Ulrich Antonio Domingues Antonio Farinha Morais Jose Pena do Amaral Manuel Ferreira da Silva Chairman Deputy Chairman Director Director Director Title Key Competitors Name Mercantil Servicios Financieros, C.A. Banif SGPS SA Banco Comercial Portugues SA Bank of Alexandria SAE Banco Espirito Santo S.A. Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Share Data Banco BPI S.A. Price (EUR) as on 27-Aug-2012 EPS (EUR) Market Cap (million EUR) Enterprise Value (million EUR) Shares Outstanding (million) Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Financial Performance 0.60 -0.29 498 259 1,382 Source: Annual Report, Company Website, Primary and...

Words: 7544 - Pages: 31

Premium Essay

Strategic Brand Management

...this, very little attention has been paid to the subject in business education. To address this, Strategic Brand Management is an advanced elective that addresses important branding decisions faced by an organization. Its basic objectives are: 1) to increase understanding of the important issues in planning and evaluating brand strategies; 2) to provide the appropriate theories, models, and other tools to make better branding decisions; and 3) to provide a forum for students to apply these principles. Specifically, we will cover: • Building customers’ brand knowledge • Generating brand identities and value propositions • Using the marketing mix to effectively deliver the brand to the marketplace • Measuring brand equity • Creating a comprehensive and effective brand architecture • Managing brands over time Course Organization and Administration: Strategic Brand Management is...

Words: 3393 - Pages: 14

Premium Essay

Student

...Stock Report | November 2, 2013 | NYS Symbol: KO | KO is in the S&P 500 Coca-Cola Co (The) S&P Recommendation STRONG BUY GICS Sector Consumer Staples Sub-Industry Soft Drinks Key Stock Statistics (Source S&P, Vickers, company reports) 52-Wk Range $43.43– 35.58 Trailing 12-Month EPS $1.93 Trailing 12-Month P/E 20.5 $10K Invested 5 Yrs Ago $20,900 Price Performance 30-Week Mov. Avg. 12-Mo. Target Price 45 40 35 30 55555 Price $39.61 (as of Nov 1, 2013) 12-Mo. Target Price $44.00 Investment Style Large-Cap Growth Summary The world's largest soft drink company, KO also has a sizable fruit juice business. S&P Oper. EPS 2013E S&P Oper. EPS 2014E P/E on S&P Oper. EPS 2013E Common Shares Outstg. (M) 2.09 2.27 19.0 4,433.2 Market Capitalization(B) Yield (%) Dividend Rate/Share Institutional Ownership (%) $175.597 2.83 $1.12 61 Beta S&P 3-Yr. Proj. EPS CAGR(%) 0.52 9 Qualitative Risk Assessment 10-Week Mov. Avg. Relative Strength GAAP Earnings vs. Previous Year Up Down No Change Volume Above Avg. Below Avg. STARS LOW MEDIUM HIGH Our risk assessment for Coca-Cola Company reflects the relatively stable nature of the company's end markets, its dominant market share positions around the world, and our view of its strong balance sheet and cash flow. 2-for-1 25 Quantitative Evaluations S&P Quality Ranking D C BB B+ AA A+ A+ Vol. Mil. 120 80 40 0 5 1 J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A......

Words: 11973 - Pages: 48

Premium Essay

Skur

...Report Date: March 24, 2016 Price as of 03/24/2016 Idexx Laboratories Inc. $75.59 Consolidated Issue Listed on NASDAQ Global Select Market: IDXX HOLD We project that IDEXX will perform in line with the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement. Reiteration 3/24/16 Previous Rating Buy (9/27/14 - 10/03/14) 52-Week Price Range $61.96 - $82.03 NEUTRAL neutral very negative Annual Dividend Yield -- Relative Valuation very positive Earnings Strength very negative Market Capitalization $6.77 Billions EPS increased from $2.03 to an estimated $2.09 over the past 5 quarters indicating an improving growth rate. Analyst forecasts have recently been raised. Company recently reported better than expected results. Annual Dividend Rate -- NEGATIVE neutral very positive Operating Earnings Yield of 2.8% ranks above 39% of the companies covered by Ford. Industry Medical Supplies & Equip Price Movement very negative NEUTRAL neutral very positive 1-year price down 0.9%: POSITIVE 1-quarter up 3.6%: NEGATIVE 1-month up 4.9%: NEUTRAL IDEXX Laboratories develops, manufactures and distributes products and provides services for the veterinary, bioresearch, water, livestock, poultry and dairy markets. The company’s Companion Animal Group operating......

Words: 2578 - Pages: 11

Premium Essay

Valuation of Idea Cellular

...Equity Research Report 19th July 2012 Idea Cellular Limited CMP:INR81.4 Stock Information IDEA.NS/ IDEA.BO Sector Telecom Market Cap.(INR Mil) 280,832 Avg. Daily Volume 1,560,228 Beta 0.94 PE Ratio 38.7 52 Week High/Low 103.7/65.6 SENSEX/Nifty 117266.6/4159.0 Price Perfromance Idea 1 Month 3 Month 6 Month 12 Month 10.2% -6.1% 0.5% 5.4% S&P CNX 500 1.9% -2.8% 4.9% -9.2% “Rating:Hold (on watch)” Target Price: INR96 Our DCF valuation indicates upside of almost 18% from current price level in next 12 months but consideration of potential regulatory cost makes it unattractive at the moment. We should rather wait for regulatory uncertainty to get over. Key Highlights  Tariff rates: We see strong likelihood for tariff hike across the board after auction is completed in August 2012 as current price of spectrum and prevalent low tariff make the business unviable.  Market share: Since small operators have shifted their focus on cash conservation and margin improvement, incremental market share of top three players have increased considerably. Idea ranks second after Airtel in terms of market share of new subscribers addition.  Negativity: Recently telecom players have been going through uncertain times due to pressure from different corners: regulatory, operationally and financially. We believe this negativity has already been accounted in current price. However, sensitivity to Idea’s balance sheet of expected cash outflow is high due to smaller balance sheet size...

Words: 2418 - Pages: 10

Free Essay

Equity Research Outsourcing Sample Tomtom

...Independent Equity Research AskAnalyst.com Chisinau, Moldova info@askanalyst.com +373-796-24706 Initiation of Coverage 26 September 2005 TomTom NV Eurolist: “TOM2” Rating: Buy Price target: 45.9 EUR Quote 52-Week Range Recent Price Market Cap Shares Outstanding 09/26/05 35.86 $3,673.0 Mn 102.4 Mn € ’mn Revenue EBITDA Net Income Total Assets Total Debt Shareholders’ Equity Debt/Equity ROE ROA EPS P/E 2003A € 39.1 10.4 6.2 21.0 0.0 7.6 0.0 134% 48% € 0.06 2004A € 192.4 44.5 27.7 91.1 0.0 37.8 0.0 122% 49% € 0.26 2005E € 562.7 131.4 95.5 399.2 0.0 249.6 0.0 66% 39% € 0.86 41.8 2006E € 1,115.4 244.6 170.6 698.3 0.0 422.2 0.0 51% 31% € 1.53 23.5 We are initiating coverage of TomTom with BUY rating. The company has entered the commercialization phase after several years of development and reported tremendous growth of revenue, profits and cash flows. The company has the right product in the right place and at the right time, excellent operating and distribution capabilities, strong management team and a skyrocketing market. In addition, the company has excellent opportunities to outperform the market in terms of growth, as currently it is the leader on the European market, has the best product according to various research entities and sufficient cash resources to acquire smaller competitors and to finance the growth. TomTom’s expansion initiatives will provide it with stronger revenue streams from U.S., Australia, Eastern Europe and Asia. Moreover, TomTom has......

Words: 4712 - Pages: 19

Free Essay

Analysis of a Mm Security

...Action Notes Pipelines, Power & Utilities Recommendation: Risk: 12-Month Target Price: 12-Month Total Return: Market Data (C$) Current Price 52-Wk Range Mkt Cap (f.d.)($mm) Dividend per Share Dividend Yield Avg. Daily Trading Vol. (3mths) $31.58 $25.51-$32.87 $24,000.8 $0.98 3.1% 1,487,005 December 760.0 750.0 63.7% $10.36 13.4% September 12, 2011 Equity Research 1 of 4 HOLD Unchanged LOW C$33.00 Unchanged 7.6% Linda Ezergailis, P.Eng. 416 983 7784 linda.ezergailis@tdsecurities.com Robert Hope, CFA 416 983 9717 robert.hope@tdsecurities.com Enbridge Inc. (ENB-T, ENB-N) C$31.58 Enbridge to Twin the Athabasca Pipeline for $1.2 billion Event Enbridge has announced that it will twin the southern portion of its existing Athabasca crude oil pipeline between Kirby Lake, AB and Hardisty, AB at an expected cost of $1.2 billion. Impact POSITVE. We estimate the expansion will contribute $0.04 of EPS on an annualized basis when volumes ramp up although we expect it will not contribute to earnings until 2015. Details Athabasca Expansion – Twinning Overview: • Overview: Enbridge has announced that it will install a new twin 345km, 36” liquids pipeline beside its existing Athabasca pipeline between Kirby Lake and Hardisty, Alberta. • Volumes: The twin line will accept volumes from oil sands projects in the Kirby area. We note that Enbridge’s Christina Lake Lateral, which services Cenovus’ and ConocoPhillips’ Christina Lake Enhanced Oil Project, delivers into the......

Words: 2911 - Pages: 12

Premium Essay

Nestle

...Initiating Coverage March 23, 2012 Rating Matrix Rating Target Target Period Potential Upside : : : : Buy | 5074 12-15 months 10 % Nestlé India (NESIND) Strong brand dominance to rule growth… CY13E 16.8 18.0 19.0 19.0 | 4604 YoY Growth (%) (YoY Growth) Net Sales EBITDA Net Profit EPS (Rs) CY10 21.9 20.8 25.0 25.0 CY11 19.8 24.3 17.5 17.5 CY12E 18.8 17.3 22.4 22.4 Current & target multiple P/E (Adjusted) Target P/E EV / EBITDA P/BV Price / Sales RoNW RoCE CY10 53.0 59.9 35.3 51.9 7.1 95.7 131.2 CY11 43.6 51.0 29.2 34.8 5.9 75.5 62.3 CY12E 37.7 41.7 24.7 24.2 5.0 64.1 64.6 CY13E 31.7 35.0 20.8 18.1 4.3 57.1 67.0 Stock Data Bloomberg/Reuters Code Sensex Average volumes Market Cap (| crore) 52 week H/L Equity Capital (| crore) Promoter's Stake (%) FII Holding (%) DII Holding (%) NEST.IN / NEST.BO 17,361.7 6,515.0 44,389.8 4588 / 3501 96.4 62.8 10.9 8.0 Comparative return matrix (%) Return % HUL ITC GSK Nestle 1M 2.9 4.6 5.3 2.9 3M 9.1 (3.1) 7.8 9.8 6M 5.8 19.3 15.1 4.8 12M 25.2 47.9 29.2 22.7 Nestlé India Limited (NIL), the undisputed leader of instant noodles (~88% share by volume in FY11) and milk products segment in India, is largest food company in country. Its strong brands, ‘Maggi’, ‘Cerelac’, ‘Nescafe’ and ‘KitKat’ have become synonymous with the respective categories. Despite increasing competition in the segments (noodles, milk products and chocolate), NIL’s strong brand value has helped it to consistently maintain its volume growth (~12% CAGR FY04-11). Going......

Words: 11244 - Pages: 45