PINC Securities on India Gycols, Dwarikesh Sugar

PINC Securities on DWARIKESH SUGAR INDUSTIRES
It is a mid-sized sugar mfg company with operations across three units in UP. Its capacities for sugarcane crushing stand at 21,500 TCD, distillery at 30 KLPD and cogeneration at 56 MW. Its profitability will come primarily from its 56 MW (saleable) cogen power plants. This, coupled with firm sugar prices, is likely to boost cash flows.


PINC Securities on INDIA GLYCOLS

It is one of the leading manufacturers of glycols and ethylene oxide derivatives, which cater primarily to industries like textiles, agrochem, oil and gas, detergents and paints. In December 2007, it acquired Shakumbari Sugar and Allied Industries for Rs 47 crore, which gave it flexibility in making ethanol through molasses or sugarcane depending on their price cycles.

Stock Views on HTMT Global, ABG Shipyard, Idea Cellular

PINC Securities on HTMT Global

PINC has initiated coverage on HTMT Global Solutions with a ‘buy’ rating as it feels that the company has a well-established presence in the domestic market and that its future acquisitions would help it to tap global market opportunity. “HTMT was one of the early players to tap the domestic market, which now contributes around 19% of sales with Airtel being a client since 2005 and contributing 15% of sales,” says the report. PINC also believes that future acquisitions would enable Hinduja Group company HTMT to vouch for a pie of the untapped potential that the outsourced BPO market offers. Although PINC expects modest growth rates going forward. Valuations, it feels, are at a significant discount to peers while net cash on the books of Rs 259 per share is currently greater than the CMP of the stock, which offers value at a cheap price.

Asit C Mehta on ABG Shipyard

Asit C Mehta has maintained a ‘buy’rating on ABG Shipyard even while revising its target price downwards after the company reported a drop in the net profit in the second quarter and its interest cost also went up significantly. The report highlights the point that ABG Shipyard’s PAT reduced from Rs 341.1 million in Q2FY08 to Rs 260.8 million, registering a decline of 23.5%. “The decline in PAT is mainly on account of higher interest costs,” says the report. The broking house even expects future order inflows to slow down for the company due to the ongoing credit crisis. “Although there exists replacement demand for offshore vessels, fleet owners/carriers may delay their investments in new ships due to the crisis, says the report. Considering the outlook on future order inflows, the outfit has lowering its target P/E multiple. “At current market price ABG is trading at an attractive P/E multiple of 4.6 time FY09E earnings (excluding subsidy) and 2.7 times FY10E earnings (excluding subsidy),” says the report. The target price has been lowered from Rs 365 to Rs 264.

Credit Suisse on Idea Cellular

Credit Suisse has upgraded Idea Cellular’s rating to ‘outperform’ while lowering the price target from Rs 95 to Rs 60. The foreign broking firm has changed its estimates to factor in the company’s expansion into nine new circles and the acquisition of Spice, among other reasons. Credit Suisse has also taken cognisance of the increasing competitive pressures and has reduced its estimates on Idea’s core 11 circles. “This leads to an estimated EPS decline of 39% and 40% in FY09 and FY10, respectively,” says the report.