Stock Views on CROMPTON GREAVES, PETRONET LNG, WIPRO

BANK OF AMERICA on WIPRO

While Wipro's results were in line with estimates, Wipro IT results are a tad below expectation, mainly due to greater than expected forex hit. Unlike peers who had about 100 bps positive currency tailwind, Wipro had a 120 bps negative hit, due to old hedges. Volume grew only a tad lower than peers, but paled versus TCS. Going ahead, Bank of America sees three positives: Greater forex hedges places Wipro better in the appreciated rupee environment, and strong Q3 revenue guidance of 5.5% q-o-q at upper end and attrition peaking in August should help capture greater demand. Hit from compensation increase on RSU and promotion costs were in line at 130 bps q-o-q. At 6.6% q-o-q volume growth, it was just a tad short of the 7% posted by Infy but revenue growth looks more muted at 6% q-o-q due to offshore shift and Wipro's cashflow hedge accounting whereby the forex hedge hit reflects in revenue too, unlike in the case of peers.

J P MORGAN on PETRONET LNG

JP Morgan maintains `Overweight' rating on Petronet LNG. Petronet LNG reported Q2 earnings of 130 crore, ahead of estimates, driven by robust volumes and stable margins. Volumes were up 11% sequentially, as PLNG was able to bring in increased spot cargos - the KG-D6 production cap and a shutdown at the PMT fields off the western coast were the key drivers. While PMT production is to recommence shortly, the commissioning of GAIL's new pipeline systems would enable PLNG to continue to bring in additional volumes. While the stock has softened post results, particularly on the news of PMT production recommencement, continuing volume strength is to underpin stock performance. JP Morgan adjusts FY12 earnings about 15% post management guidance on interest capitalisation. JP Morgan assumes a beta of 1.1, risk-free rate of 8%, market risk premium of 6.0%, and cost of debt of 9.5%. Key risks are project delays at Kochi, and lower than projected LNG volumes.

CREDIT SUISSE on CROMPTON GREAVES

Credit Suisse maintains `Outperform' rating on Crompton Greaves. September quarter reflected a mixed trend for Crompton Greaves. While consolidated PAT (10.5% Y-o-Y) was marginally below CS estimates, it was in line with a toned down consensus estimate. Sales were impacted by slower growth in domestic T&D (transmission and distribution) and the translation impact of Euro depreciation on international sales. Sales growth in domestic T&D was muted. With management having highlighted a likelihood of slower sales booking in domestic T&D in Q1 continuing into Q2, weak revenues in Q2 may not surprise the Street. A catch up is however anticipated in H2, as per prior management guidance. International T&D performance is tracking ahead with sales up 13% Y-o-Y in H1, as against a guidance of 5% growth. Domestic consumer business is also tracking ahead of guidance.