8:32 PM
BUZIBIZ
-Coal india Issue price at Rs 245 a share, Price at upper end of price band
-SC dismisses L&T appeal on NTPC tender
-SEBI have tightened rules on preferential issue to promoters
-Red Fort Cap invests Rs 120 crore in Parsvnath Developers
-ONGC may go off sell off list as govt plans to cap disinvestment target at Rs 40,000 crore this year
-Results today: Central Bank, Dena Bank, Deepak Fertiliser, Dish TV,Gujarat Alkalies, HCL Infosystems, JB Chemical, Jindal Steel, JSW Steel, MRPL, Marico, NTPC, Raymond, SRF, Sterlite, Tamil Nadu Petro,Tech Mahindra, TV18, Ultratech Cem, United Phosphorous, Voltas
Delivery Buy :
Comapny:- Balkrishna Industries
NSE Symbol:- BALKRISIND
CMP:- 750
Target :- 900
Time Frame:- 6 Months
Balkrishna Industries Ltd (BIL) is a niche tyre manufacturer of specialty/off highway tyres for use in agriculture, mining and construction sector. Almost 90% of its revenues are generated from exports to Europe (50%), US (20%), Middle East, Africa, Australia,Asia. With global tyre majors focusing primarily on the automotive business, we expect BIL to increase its global market share in the OTR segment to 6% (currently 3%) over the next three years. BIL�s
capability to customize and its vast experience will provide additional traction.
BIL has earmarked capex of Rs14bn for the next three years for capacity expansion through 1) setting up a greenfield plant at Gujarat with the capacity of 250T/day and 2) increasing the capacity of Aurangabad facility to 105T/day from 85T/day currently. These expansions will come on stream over the next couple of years and will place BIL in a better position to service strong demand growth expected in US and Europe.
BIL imports 70% of its rubber (major raw material) requirement at zero duty through advance licensing scheme. Furthermore, the prices of BIL�s products are ~30% cheaper than competitors, which provide sufficient headroom to raise prices in inflationary times. This leads
to higher OPM (~20%) for the company compared to <~15% OPM for its domestic peers.
FY10 was an exceptional year for BIL with a 24% OPM and three-fold jump in PAT. We believe BIL will revert to its historic average OPM of 19-20%. The company is likely to deliver a 23.7% revenue CAGR over FY10-12. With superior return ratios, a healthy balance sheet (D/E of
0.7x) and 17% PAT growth in FY12, we find the stock attractively valued at EV/EBIDTA of 5.2x and P/E of 5.9x on FY12 estimates. We recommend a BUY with a target price of Rs900.
-SC dismisses L&T appeal on NTPC tender
-SEBI have tightened rules on preferential issue to promoters
-Red Fort Cap invests Rs 120 crore in Parsvnath Developers
-ONGC may go off sell off list as govt plans to cap disinvestment target at Rs 40,000 crore this year
-Results today: Central Bank, Dena Bank, Deepak Fertiliser, Dish TV,Gujarat Alkalies, HCL Infosystems, JB Chemical, Jindal Steel, JSW Steel, MRPL, Marico, NTPC, Raymond, SRF, Sterlite, Tamil Nadu Petro,Tech Mahindra, TV18, Ultratech Cem, United Phosphorous, Voltas
Delivery Buy :
Comapny:- Balkrishna Industries
NSE Symbol:- BALKRISIND
CMP:- 750
Target :- 900
Time Frame:- 6 Months
Balkrishna Industries Ltd (BIL) is a niche tyre manufacturer of specialty/off highway tyres for use in agriculture, mining and construction sector. Almost 90% of its revenues are generated from exports to Europe (50%), US (20%), Middle East, Africa, Australia,Asia. With global tyre majors focusing primarily on the automotive business, we expect BIL to increase its global market share in the OTR segment to 6% (currently 3%) over the next three years. BIL�s
capability to customize and its vast experience will provide additional traction.
BIL has earmarked capex of Rs14bn for the next three years for capacity expansion through 1) setting up a greenfield plant at Gujarat with the capacity of 250T/day and 2) increasing the capacity of Aurangabad facility to 105T/day from 85T/day currently. These expansions will come on stream over the next couple of years and will place BIL in a better position to service strong demand growth expected in US and Europe.
BIL imports 70% of its rubber (major raw material) requirement at zero duty through advance licensing scheme. Furthermore, the prices of BIL�s products are ~30% cheaper than competitors, which provide sufficient headroom to raise prices in inflationary times. This leads
to higher OPM (~20%) for the company compared to <~15% OPM for its domestic peers.
FY10 was an exceptional year for BIL with a 24% OPM and three-fold jump in PAT. We believe BIL will revert to its historic average OPM of 19-20%. The company is likely to deliver a 23.7% revenue CAGR over FY10-12. With superior return ratios, a healthy balance sheet (D/E of
0.7x) and 17% PAT growth in FY12, we find the stock attractively valued at EV/EBIDTA of 5.2x and P/E of 5.9x on FY12 estimates. We recommend a BUY with a target price of Rs900.
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