Wipro Research: Bank of America Rating: Buy CMP: ' 420 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.
Petronet LNG Research: J P Morgan Rating: Overweight CMP: ' 111 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. Crompton Greaves Research: Credit Suisse Rating: Outperform CMP: ' 318 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. Tech Mahindra Research: Motilal Oswal Rating: Neutral CMP: ' 728 Motilal Oswal maintains 'Neutral' rating on Tech Mahindra with a target price of Rs736, based on 12x FY12E earnings. Tech Mahindra's Q2FY11 operating performance was above estimates with EBITDA at 21.7% up 290 bps Q-o-Q. Rupee revenues were marginally above estimates at Rs1,235 crore, up 8.9% Q-o-Q. Overall rupee revenues grew 8.9% Q-o-Q excluding pass-throughs due to: (i) 4.5% Q-o-Q growth in volumes, and (ii) about 4.5% impact of cross currency movements. Quarterly annualised attrition rate of 30% in Q2FY11 is a key concern. It resulted in a net decline of 1,260 in the employee count despite a healthy demand environment and hiring activity. Sustaining healthy Q2FY11 margin performance appears challenging due to: (1) high attrition rates, (2) currency headwinds and (3) the impact of an onshore wage hike. The estimates are largely unchanged after the results, as Motilal Oswal sees continued attrition and currency volatility as key risks to sustenance of operating out-performance in the current quarter. Mundra Port Research: UBS Investment Rating: Neutral CMP: ' 152 UBS initiates 'Neutral' rating on Mundra Port. Mundra Port's Q2 revenues were '410 crore, operating profit '270 crore and PAT of '210 crore. Interest/depreciation costs were lower and other income was higher than the estimates. Also, results were impacted by a one-off item of '30 crore, pertaining to additional handling expenses on a new fertilizer-handling facility that was constructed last quarter. Adjusting for that, EBITDA margins would be 73% and PAT would be '240 crore. MPSEZ handled 12.6 mt in Q2FY11, led by container tonnage, coal and fertiliser. Volumes across categories witnessed strong growth. Crude volumes declined 28% y-o-y, due to pipeline works for the expansion project at IOC's Panipat refinery. H1FY11 volumes were up 26% y-o-y at 25.2 mt, led by coal (+52% y-o-y, 6.5mt) and container tonnage (+34% y-o-y, 7.2 mt). UBS' valuation comprises '132 for the port, '15 for the SEZ and '8 for investments. -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
