9:05 PM
BUZIBIZ
Buy Royal Orchid Hotels Ltd - Upside Potential : 50%
NSE Symbol: ROHLTD
CMP : 85.50 Target : 125
Time Frame : 6 months Upside Potential : 50%
Royal orchid is raising Rs 150 crore to fund its new projects will be used to double its total room capacity to 2,000 by the end of the next fiscal through the issue of nonconvertible debentures and/or preferential convertible share warrants, or other financial instruments, including QIP.
The hotels of the Company are situated across the major markets in India giving it an advantage of adequately balanced representation.The Company is adopting multiple marketing strategies in a focused manner as well as has established strictest quality norms in servicing the customers to win their appreciation and loyalty.
The hotel industry is expected to report robust sales growth of 22.1 per cent in 2010- 11. The growth will be driven by higher occupancies and ARRs. With 119 hotels coming up in the four southern states and 11,000 rooms likely to be added to the capacity.
The revenues of the company have gone up from Rs 178.40 million in Q2FY10 to Rs 206.10 million in Q2FY11 showing an increase of 15.52%.The operating profits reported a marginal decline from Rs 34.80 million in Q2FY10 to 32.80 in Q2FY11 while the net profit of the company increased from Rs 15.60 million in Q2FY10 to Rs 24.00 million in Q2FY11 showing a growth of 53.84%. The EPS of the company rose from Rs 0.57 in the same quarter last year to Rs 0.88 in Q2FY11.
At the CMP of Rs 84.85, the stock is trading at a standalone PE of 14.91x and 11.51x its FY11E and FY12E EPS of Rs 5.69 and Rs 7.37,respectively. Since the stock offers good opportunity, we initiate a BUY signal on the stock with a target price of Rs 125.00 in medium to long term investment horizon expecting an appreciation of about 50%.
Buy Bajaj Auto Finance - Upside Potential : 25%
NSE Symbol: BAJAUTOFIN
CMP : 750-760 zone
Target : 900 Time Frame : 6 months
Upside Potential : 25%
Bajaj Finance, one of Indias leading and diversified NBFCs, is engaged in the business of financing two and three wheelers, consumer durables, personal loans, small business loans and mortgages (loan against property). It operates as Bajaj Finserv Lending.
In the quarter gone by, the company ventured into financing of construction equipment and loan against securities. Very recently, it has also announced plans to enter the fast-growing infrastructure financing space, to widen its product line. To begin with, it plans to offer infrastructure loans in the ticket size of Rs. 75 to 150 crore.
The company has a pan-India network of over 63 branches, about 2,300 employees, 2,500 dealerships and a customer base of over 50 lakh.
For FY10, the company�s fund deployment increased by 87% to Rs. 4,585 crore, from Rs. 2,451 crore in FY09. The break-up of the loan deployment during FY10 comprised 30% of two and three wheeler loans, 26% towards mortgage and secured assets, 23% for consumer durables
loan while balance was towards small business and personal loans.
The company�s shareholding pattern is wide-spread, as can be seen from the filing on 30th June 2010, where-in promoters held 50.50%, FIIs held 16.58%, DIIs held 8.59% and Maharashtra Scooters (a Bajaj group company) held 4.48% under non-promoter category.
During FY10, the company registered income from operations of Rs. 910 crore, up 53% from Rs. 595 crore in FY09. Net interest income grew by 64% to Rs. 715 crore from Rs. 435 crore in the previous year. The net profit more than doubled to Rs. 89 crore versus Rs. 34 crore in the
previous year. Net margins also improved steadily by 410 basis points in the 12 months period, to 9.8% from 5.7%.
On equity of Rs. 36.6 crore, EPS for FY10 stood at Rs. 24.43. It declared 60% dividend (Rs. 6 per share) for the year. Return on assets (RoA) improved sharply to 2.8% in FY10, from 1.3% in FY09.
As on 31st March 2010, the company�s receivables under finance i.e. loan book size stood at Rs. 4,026 crore, up 70% from Rs. 2,370 crore 12 months ago. Its networth, as on that date, was Rs. 1,153 crore and total borrowing was Rs. 3,227 crore. The company�s capital adequacy
ratio, as on 31st March 2010, stood at 26%, as against RBI�s requirement of 12%.
During Q1FY11, the company reported very strong growth in its financial performance. During the first three months of FY11, it disbursed Rs. 2,047 crore in loans, recording income from operations of Rs. 296 crore and net interest income of Rs. 224 crore. It earned Rs. 47 crore in PAT during the quarter, on net margin of 15.8%, an improvement of 600 basis points from the FY10 levels.
The EPS for the quarter rose to Rs. 12.78, more than half of what was earned in full year of FY10. As on 30th June 2010, its loan book size increased to Rs. 4,937 crore and networth stood at Rs. 1,199 crore,resulting in a book value of Rs. 328 per share.
For FY11, the company is expected to report topline of Rs. 1,200 crore and bottomline of about Rs. 180 crore, resulting in an EPS of close to Rs. 50. At current market price, share price is being discounted by 15.1 times its one year forward earnings. On a PBV basis, it is ruling at a multiple of 2.3 times.
Other NBFCs, which have lately attracted market fancy, including Shriram Transport Finance and M&M Financial Services, are ruling at PE multiples of close to 20 times and at P/B multiples of 4.2 and 3.3 times respectively.
Considering the strong financial performance, new product line and Bajaj group pedigree, share at 755 is recommended as an investment bet, as it has potential to touch 900 in 6 months time.
STOCK BEEPS 16-09-2010
-IndusInd Bank QIP open to raise USD 215-250 million;QIP priced at Rs 234/share
-Religare enters Sri Lankan market by acquiring Bartleet
-Astrazeneca Signs outlicensing deal with Intas Pharma
-Oil PSUs to up ATF prices by average of Rs 699/kL today
-RBI likely to express reservations in giving Jet Airways approval to raise funds via ECB
-Lanco Infra gives power equipment order to China’s Harbin at price of Rs 68.3 lakh/MW
-Prakash Ind to submit new mining plan for its Chotia coal block
-S Kumars raises USD 50 million via QIP, board had passed enabling resolution to raise upto USD 100 million
-JBF Ind to file documents for QIP soon
-Bharti Airtel to sell African tower to Bharti Infratel
-Mudra Lifestyle in talks with Korean Co E-Land group for stake saleT
-Ispat arm to set up Rs 300 crore plant – ET
-Reliance Broadcast acquires Line V of DMRC for a 5 year period
-Vijay Shanthi Builders ventured in to a MoU for Rs. 70 crore project at Chennai
-Ramky Infra IPO opens on September 21, closes on September 23
-Orient Green Power Co IPO opens on September 21, closes on September 24
-Electrosteel Steels IPO opens on September 21, closes on September 24
-Indosolar IPO subscribed 1.55x at closing; QIBs: 1.44x, NIIs: 1.3x and Retail: 1.81x
-Career Point Info IPO opens today, closes on September 21;Price band:Rs 295-310, issue size Rs 115 cr
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NSE Symbol: ROHLTD
CMP : 85.50 Target : 125
Time Frame : 6 months Upside Potential : 50%
Royal orchid is raising Rs 150 crore to fund its new projects will be used to double its total room capacity to 2,000 by the end of the next fiscal through the issue of nonconvertible debentures and/or preferential convertible share warrants, or other financial instruments, including QIP.
The hotels of the Company are situated across the major markets in India giving it an advantage of adequately balanced representation.The Company is adopting multiple marketing strategies in a focused manner as well as has established strictest quality norms in servicing the customers to win their appreciation and loyalty.
The hotel industry is expected to report robust sales growth of 22.1 per cent in 2010- 11. The growth will be driven by higher occupancies and ARRs. With 119 hotels coming up in the four southern states and 11,000 rooms likely to be added to the capacity.
The revenues of the company have gone up from Rs 178.40 million in Q2FY10 to Rs 206.10 million in Q2FY11 showing an increase of 15.52%.The operating profits reported a marginal decline from Rs 34.80 million in Q2FY10 to 32.80 in Q2FY11 while the net profit of the company increased from Rs 15.60 million in Q2FY10 to Rs 24.00 million in Q2FY11 showing a growth of 53.84%. The EPS of the company rose from Rs 0.57 in the same quarter last year to Rs 0.88 in Q2FY11.
At the CMP of Rs 84.85, the stock is trading at a standalone PE of 14.91x and 11.51x its FY11E and FY12E EPS of Rs 5.69 and Rs 7.37,respectively. Since the stock offers good opportunity, we initiate a BUY signal on the stock with a target price of Rs 125.00 in medium to long term investment horizon expecting an appreciation of about 50%.
Buy Bajaj Auto Finance - Upside Potential : 25%
NSE Symbol: BAJAUTOFIN
CMP : 750-760 zone
Target : 900 Time Frame : 6 months
Upside Potential : 25%
Bajaj Finance, one of Indias leading and diversified NBFCs, is engaged in the business of financing two and three wheelers, consumer durables, personal loans, small business loans and mortgages (loan against property). It operates as Bajaj Finserv Lending.
In the quarter gone by, the company ventured into financing of construction equipment and loan against securities. Very recently, it has also announced plans to enter the fast-growing infrastructure financing space, to widen its product line. To begin with, it plans to offer infrastructure loans in the ticket size of Rs. 75 to 150 crore.
The company has a pan-India network of over 63 branches, about 2,300 employees, 2,500 dealerships and a customer base of over 50 lakh.
For FY10, the company�s fund deployment increased by 87% to Rs. 4,585 crore, from Rs. 2,451 crore in FY09. The break-up of the loan deployment during FY10 comprised 30% of two and three wheeler loans, 26% towards mortgage and secured assets, 23% for consumer durables
loan while balance was towards small business and personal loans.
The company�s shareholding pattern is wide-spread, as can be seen from the filing on 30th June 2010, where-in promoters held 50.50%, FIIs held 16.58%, DIIs held 8.59% and Maharashtra Scooters (a Bajaj group company) held 4.48% under non-promoter category.
During FY10, the company registered income from operations of Rs. 910 crore, up 53% from Rs. 595 crore in FY09. Net interest income grew by 64% to Rs. 715 crore from Rs. 435 crore in the previous year. The net profit more than doubled to Rs. 89 crore versus Rs. 34 crore in the
previous year. Net margins also improved steadily by 410 basis points in the 12 months period, to 9.8% from 5.7%.
On equity of Rs. 36.6 crore, EPS for FY10 stood at Rs. 24.43. It declared 60% dividend (Rs. 6 per share) for the year. Return on assets (RoA) improved sharply to 2.8% in FY10, from 1.3% in FY09.
As on 31st March 2010, the company�s receivables under finance i.e. loan book size stood at Rs. 4,026 crore, up 70% from Rs. 2,370 crore 12 months ago. Its networth, as on that date, was Rs. 1,153 crore and total borrowing was Rs. 3,227 crore. The company�s capital adequacy
ratio, as on 31st March 2010, stood at 26%, as against RBI�s requirement of 12%.
During Q1FY11, the company reported very strong growth in its financial performance. During the first three months of FY11, it disbursed Rs. 2,047 crore in loans, recording income from operations of Rs. 296 crore and net interest income of Rs. 224 crore. It earned Rs. 47 crore in PAT during the quarter, on net margin of 15.8%, an improvement of 600 basis points from the FY10 levels.
The EPS for the quarter rose to Rs. 12.78, more than half of what was earned in full year of FY10. As on 30th June 2010, its loan book size increased to Rs. 4,937 crore and networth stood at Rs. 1,199 crore,resulting in a book value of Rs. 328 per share.
For FY11, the company is expected to report topline of Rs. 1,200 crore and bottomline of about Rs. 180 crore, resulting in an EPS of close to Rs. 50. At current market price, share price is being discounted by 15.1 times its one year forward earnings. On a PBV basis, it is ruling at a multiple of 2.3 times.
Other NBFCs, which have lately attracted market fancy, including Shriram Transport Finance and M&M Financial Services, are ruling at PE multiples of close to 20 times and at P/B multiples of 4.2 and 3.3 times respectively.
Considering the strong financial performance, new product line and Bajaj group pedigree, share at 755 is recommended as an investment bet, as it has potential to touch 900 in 6 months time.
STOCK BEEPS 16-09-2010
-IndusInd Bank QIP open to raise USD 215-250 million;QIP priced at Rs 234/share
-Religare enters Sri Lankan market by acquiring Bartleet
-Astrazeneca Signs outlicensing deal with Intas Pharma
-Oil PSUs to up ATF prices by average of Rs 699/kL today
-RBI likely to express reservations in giving Jet Airways approval to raise funds via ECB
-Lanco Infra gives power equipment order to China’s Harbin at price of Rs 68.3 lakh/MW
-Prakash Ind to submit new mining plan for its Chotia coal block
-S Kumars raises USD 50 million via QIP, board had passed enabling resolution to raise upto USD 100 million
-JBF Ind to file documents for QIP soon
-Bharti Airtel to sell African tower to Bharti Infratel
-Mudra Lifestyle in talks with Korean Co E-Land group for stake saleT
-Ispat arm to set up Rs 300 crore plant – ET
-Reliance Broadcast acquires Line V of DMRC for a 5 year period
-Vijay Shanthi Builders ventured in to a MoU for Rs. 70 crore project at Chennai
-Ramky Infra IPO opens on September 21, closes on September 23
-Orient Green Power Co IPO opens on September 21, closes on September 24
-Electrosteel Steels IPO opens on September 21, closes on September 24
-Indosolar IPO subscribed 1.55x at closing; QIBs: 1.44x, NIIs: 1.3x and Retail: 1.81x
-Career Point Info IPO opens today, closes on September 21;Price band:Rs 295-310, issue size Rs 115 cr
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