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RELIANCE INDUSTRIES LIMITED CMP: 960.00 Upside: 25%Target Price: 1205.00Strong presence in South and West. Robust growth seen in Investment Rationaleprivate labels. Digital format has 1379 stores across 225 cities
•Gross refining margin (GRM) was the highest in last seven years, with net store addition of 81 during Q2FY16. Fashion and coming in at USD 10.6 a barrel during the quarter ended Lifestyle contributes 15% to overall retail sales.September 2015 against USD 10.4 a barrel in the preceding
quarter, which too was ahead of estimates of USD 9-9.5 a barrel.
GRM in the year-ago period was USD 8.3 a barrel. RIL's premium Valuation
over Singapore complex margins widened to USD 4.3/bbl during
the quarter, the highest level since early 2009. The company maintained a rapid pace of construction activity
during the quarter ended September 2015. The Company's world-•Petcoke gasifier with 95% civil work complete is expected to scale petcoke gasification facility and ethylene cracker complex
commission phase-wise in 2016. Also petcoke prices have fallen remains on track for its planned 2016 start-up. In Digital Services,
as much as LNG prices. Therefore, the economics of petcoke it had substantially completed the network roll-out across the
gasification project is still looking good.country and initiated the process of beta testing of network and
•The capital expenditure for the half year ended 30th September platforms, thus we expect the stock to see a price target of Rs 2015 was Rs 52864 crore including exchange rate difference 1205 in 8 to 10 months time frame on a target P/E of 13x and FY17 capitalization. Capital expenditure was principally on account (E) earnings of Rs.92.66.of ongoing expansions projects in the petrochemicals and
refining business at Jamnagar, Dahej and Hazira, Jio Infocomm
and US Shale gas projects.
•The company continues to build towards the roll-out of Jio's
services, with the imminent launch of a range of 4G
smartphones under the 'Lyf' brand aimed at helping build an
ecosystem of handsets compatible with the full range of Jio's
services. Network tests on Jio continue, with initial results
positive.
•The company and RCOM have filed intimation with the DoT for
sharing of 800MHz spectrum in seven cities. The company
reiterated that it intends to launch services, without
elaborating an exact timeframe.
•Reliance Retail expanded its reach with a net addition of 110
stores in Q2FY16 and number of stores at 2857 across 250 cities.
Face Value (Rs.) 10.00
52 Week High/Low 1067/796.75
M.Cap (Rs. in Cr.) 310949.74
EPS (Rs.) 75.27
P/E Ratio (times) 12.75
P/B Ratio (times) 1.43
Dividend Yield (%) 0.95
Stock Exchange BSE
VALUE PARAMETERS
% OF SHARE HOLDING
P/E Chart
` in cr
Actual Estimate
FY Mar-15 FY Mar-16 FY Mar-17
Revenue 375,435.00 300,812.00 344,160.70
EBITDA 37,364.00 41,629.90 49,843.40
EBIT 25,817.00 31,511.00 36,820.50
Pre-tax Profit 30,996.00 33,043.50 37,927.60
Net Income 23,566.00 25,844.90 29,501.40
EPS 80.10 81.87 92.66
BVPS 676.07 786.12 864.08
ROE(%) 11.30 11.00 11.30
Diwali Dhamaka
Foreign
Institutions
Non Promoter Corporate Holding
Promoters
Public & Others
22.46
12.97
3.27
45.21
16.11
1
ZEE ENTERTAINMENT ENTERPRISES LIMITED CMP: 390.70 Upside: 25%Target Price: 487.00performance of channels has helped the ad revenue to grow. On Investment Rationaleincrease in receivables, the management said that it has grown
•Zee Entertainment Enterprises, one of India's leading television in-line with business.
media and entertainment companies, is amongst the largest
producers and aggregators of Hindi programming in the world,
with an extensive library housing over 210,000 hours of Valuationtelevision content.
With various economic reforms in the pipeline, the overall •During the quarter ended September 2015, the advertising business environment in India is improving. The company hopes
revenues inclined by 35% to Rs 843.31 crore. International that the Media industry will reap the benefits of the improved advertisement revenue was at Rs 73.5 crore. The subscription environment through higher advertisement and subscription revenues grew by 13% to Rs 479.14 crore. Of subscription revenue. The management continues to see the positive results revenue, domestic subscription revenue grew by 11% to Rs of investments. The company will continue to endeavor on this 375.2 crore while international subscription revenues grew by track going forward and pursue new opportunities that will yield 19% to Rs 103.9 crore. long term growth. Companies effort is to entertain audience
•Apart from its flagship Hindi news channels, Zee has content in across the world, thus we expect the stock to see a price target of
nearly every local language, allowing it to gain viewership in Rs 487 in 8 to 10 months time frame on a one year average P/E of
both rural and urban areas. The company is also seeking to 36.66x and FY17 (E) earnings of Rs.13.29.
expand in global markets, as it aims to boost viewership by five
times to become one of the top global players by 2020. The
group is also launching an English news channel through its Zee
Media unit, next year, targeting international viewers.
•The newly launched Hindi GEC &tv continues to build on its
successful launch and has been performing well. The popular
fiction show, Bhabhiji Ghar Pe Hai is now among the best
performing property in its slot.
•On the back of healthy growth in industry on advertisement front
and increase in market share & new channel launches, it was able to
grow by 35%. Ex- &TV growth ad growth was 26% yoy, which was
primarily driven by yield improvement. The management said that
the improvement in the advertisement market would spur the ad
revenue in future.
•The ad E-commence, FMCG, Telcos and Consumer Durables
have helped the ad revenue to grow. Moreover, the good
Face Value (Rs.) 1.00
52 Week High/Low 440.30/299.65
M.Cap (Rs. in Cr.) 37524.73
EPS (Rs.) 11.07
P/E Ratio (times) 35.29
P/B Ratio (times) 10.63
Dividend Yield (%) 0.58
Stock Exchange BSE
VALUE PARAMETERS
% OF SHARE HOLDING
P/E Chart
` in cr
Actual Estimate
FY Mar-15 FY Mar-16 FY Mar-17
Revenue 4,883.70 5,762.60 6,725.40
EBITDA 1,273.70 1,468.10 1,848.00
EBIT 1,186.40 1,418.30 1,554.90
Net Income 977.50 1,052.70 1,313.10
EPS 8.67 10.45 13.29
BVPS 57.78 58.95 68.41
ROE 19.00 21.30 22.90(%)
Diwali Dhamaka
Foreign
Institutions
Non Promoter Corporate Holding
Promoters
Public & Others
48.65
3.482.67
43.07
2.14
2
JAGRAN PRAKASHAN LIMITED CMP: 143.80 Upside: 33%Target Price: 192.00•After posting good set of numbers in Second quarter of current Investment Rationale
fiscal, the management believes that the next two quarters will •Jagran Prakashan Limited is a leading media house of India with also be good. The company will continue to see double digit
interests spanning across newspapers, magazines, outdoor growth in ad revenue and it has passed on the benefit of low advertising, promotional marketing, event management, on newsprint prices to advertisers.ground activities and digital businesses.
•For the quarter ended Sept 2015, advertisement revenue
increased 27% to Rs 388.96 crore. Circulation revenue was up by Valuation3.5% to Rs 99.83 crore. The net profit increased by 61% to Rs
Over the years, the company has gained strong foot print in the 91.28 crore.
media and communications space. Going forward, it is expected •Dainik Jagran's ad growth was driven by mix of yield
to benefit from the expansion in regional language newspaper improvement (50%) and volumes (50%) while growth for other
readership and growth in ad revenue. It enjoys leadership in editions primarily driven by volume increase. October-2015 has
terms of readership among the Hindi language newspapers, we seen better than expected ad growth, management expects at
expect the stock to see a price target of Rs 192 in 8 to 10 months least 10% growth till Diwali. UP has started to get its due share
time frame on a target P/E of 18x and FY17 (E) earnings of with improving national advertisement.
Rs.10.65.
•The performance of Naidunia and Midday continues to be better
than expected. Outdoor business registered a steep growth in
revenues and improved net realization, which was credible in
the given market conditions. The company is happy to report
that its Digital properties are now at number 45 and in News &
Information and Education categories ranking is 6th and 3rd
respectively as per COMSCORE, which augurs well for future.
•The sector which has contributed to advertisement revenue
growth are automobile, white goods and online shopping
companies. Auto did excellently. Online shopping also did well
but the company has not carried every company ads to protect
rates. Retail on local side is picking up.
•With strong franchise across various media platforms, market
position and operating performance duly backed by financial
prudence, the company is very well poised to next level of
growth.
Face Value (Rs.) 2.00
52 Week High/Low 154.40/107.50
M.Cap (Rs. in Cr.) 4700.99
EPS (Rs.) 8.15
P/E Ratio (times) 17.64
P/B Ratio (times) 4.14
Dividend Yield (%) 2.43
Stock Exchange BSE
VALUE PARAMETERS
% OF SHARE HOLDING
P/E Chart
` in cr
Actual Estimate
FY Mar-15 FY Mar-16 FY Mar-17
Revenue 1,725.40 2,105.50 2,350.00
EBITDA 450.60 576.00 644.10
EBIT 347.00 462.70 520.60
Pre-tax Profit 338.00 451.20 508.50
Net Income 227.70 311.90 352.70
EPS 7.30 9.46 10.65
BVPS 34.69 42.52 47.59
ROE(%) 21.70 24.40 23.30
Diwali Dhamaka
Foreign
Institutions
Non Promoter Corporate Holding
Promoters
Public & Others
14.99
12.7
9.2660.76
2.3
3
Foreign
Institutions
Non Promoter Corporate Holding
Promoters
Public & Others
25.71
0.06
0.9
69.92
3.42
ALLCARGO LOGISTIC LIMITED CMP: 345.65 Upside: 30%Target Price: 448.00•The company is providing warehousing services to Snapdeal. It Investment Rationale
will help to develop business in the NCR region. The deal •Allcargo Logistics provides integrated logistics solutions. The
happened some months ago. company offers specialized logistics services across multimodal
•It posted a net consolidated profit of Rs.72.5 crore for the July-transport operations, container freight station operations and September quarter compared to Rs.63.6 crore a year earlier.project & engineering solutions.
•With the intention of touching a $2-billion (roughly Rs. 13,020
crores) revenue target by 2020, the company will be investing Valuation$500 million (around Rs 2,410 crore) in the next three-five years
The company is also one of the fastest growing service providers towards organic as well as inorganic growth of its business. For in the contract logistics space. With these capabilities, it is well its overall acquisitions, company plans to raise funds partly placed to provide an unparalleled coastal shipping service which through internal accruals and also via debt in the overseas adds value to its customers' logistics requirements, we expect market.the stock to see a price target of Rs 448 in 8 to 10 months time
•Recently, the company has has acquired two additional vessels frame on a current P/E of 15.85x and FY17 (E) earnings of
aggregating 24,000 DWT for an undisclosed sum for its coastal Rs.28.26.
shipping business. With this, Allcargo now owns a total of five
cargo vessels making it one of the largest players in the logistics
industry. The main criterion for this acquisition was to cater to
the growing requirements not only of coastal shipping but
regional trade and commerce as well.
•Alibaba, the biggest e-commerce company in the world has tied
up with Allcargo Logistics' overseas subsidiary to ship less-than-
container load (LCL) consignments to India, a move that will
mean faster deliveries for the Chinese etailer's customers in
India.
•Recently, the company is setting up a container freight station
facility at Kolkata Port. The objective of setting up the said
facility is to avail the opportunity of covering growing container
traffic of eastern parts of the country. The facility will also be
strategically located to serve EXIM business of bordering areas
of Eastern Region including Nepal and Bhutan.
•The company plans to build logistics parks at Narendra Modi's
ambitious smart cities.
Face Value (Rs.) 2.00
52 Week High/Low 378.50/246.80
M.Cap (Rs. in Cr.) 4356.84
EPS (Rs.) 21.81
P/E Ratio (times) 15.85
P/B Ratio (times) 2.28
Dividend Yield (%) 0.58
Stock Exchange BSE
VALUE PARAMETERS
% OF SHARE HOLDING
P/E Chart
` in cr
Actual Estimate
FY Mar-15 FY Mar-16 FY Mar-17
Revenue 5,618.00 6,144.70 7,011.70
EBITDA 475.40 562.10 657.20
EBIT 318.00 426.70 545.20
Pre-tax Profit 317.10 403.90 520.00
Net Income 239.90 299.30 361.30
EPS 19.00 23.50 28.26
ROE(%) 13.00 14.50 15.00
Diwali Dhamaka
4
JB CHEMICALS AND PHARMACEUTICALS LIMITED (JBCPL) CMP: 271.75 Upside: 38%Target Price: 376.00Africa. It has been able to increase its footprint in South Africa Investment Rationaleand SADC countries due to excellent performance of Biotech.
•JBCPL, one of India's leading pharmaceutical companies, Recently, it has approved the acquisition of 21,94,030 (51%)
manufactures and markets a diverse range of pharmaceutical ordinary shares in Biotech Laboratories (Pty.) Ltd., subject to
formulations, herbal remedies and APIs (active Pharmaceutical necessary approvals and definitive agreements to be entered
ingredient). It exports too many countries worldwide with a into with the seller.
strong presence in Russia, Ukraine, CIS countries and South
Africa.
•It has a strong R&D and regulatory set-up for the development Valuationof new drug delivery system and formulations, filing of ANDAs
The company accords high priority to domestic formulations (Abbreviated New Drug Application) and DMFs (Drug Master
business, which offers significant value proposition. During the File).
current year, the company plans to continue to pursue focus on •The company is ranked 35th in the Industry (IMS MAT March harnessing potential of the existing products, launch new
2015) with the it's three brands viz. Rantac (anti-peptic products selectively and achieve increased productivity .Thus, it ulcerant), Cilacar (calcium channel blocker) and Metrogyl is expected that the stock will see a price target of Rs.376 in 8 to (amoebicides), featuring among top 300 brands (IMS MAT March 10 months time frame on a target 3 year average P/E of 16.56x 2015) in terms of value. and FY17 EPS of Rs.22.70.
•The increasing fund allocation by the government for public
health and an increasing investment by the private sector in
hospitals make the institutional business more attractive. It,
with several injectable products in its portfolio, expects to well
expand the business in this segment.
•It's wide geographical presence in international markets and
strong product portfolio with high growth brands and strong
marketing capability gives a positive outlook for overall
business of the company. The supply agreement with Cilag
GmbH International ('Cilag'), a wholly owned subsidiary of
Johnson & Johnson, has been functioning smoothly.
•It has a consistent, strong free cash flow annually, with a low
debt-equity of 0.1x.
•Biotech Laboratories Pty. Ltd. ('Biotech'), a South African
marketing and distribution company in which it holds 49%
equity stake, is amongst the top 15 Pharma companies of South
Face Value (Rs.) 2.00
52 Week High/Low 318.05/180.00
M.Cap (Rs. in Cr.) 2300.32
EPS (Rs.) 8.25
P/E Ratio (times) 32.87
P/B Ratio (times) 2.31
Dividend Yield (%) 5.16
Stock Exchange BSE
VALUE PARAMETERS
% OF SHARE HOLDING
P/E Chart
` in cr
Actual Estimate
FY Mar-15 FY Mar-16 FY Mar-17
Revenue 1,120.70 1,282.80 1,495.70
EBITDA 192.80 215.40 274.10
EBIT 154.10 170.30 226.00
Pre-tax Profit 145.50 200.40 256.90
Net Income 100.40 150.30 192.70
EPS 11.84 17.70 22.70
ROE(%) 10.00 18.00 22.00
Diwali Dhamaka
Foreign
Institutions
Govt Holding
Non Promoter Corp. Hold.
Promoters
Public & Others
6.03
3.76
03.51
55.77
30.94
5
SMC Global Securities Limited is proposing, subject to receipt of requisite approvals, market conditions and other considerations, a further public offering of its equity shares and has filed the Draft Red Herring Prospectus with the Securities and Exchange Board of India (“SEBI”) and the Stock Exchanges. The Draft Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and on the websites of the Book Running Lead Manager i.e., ICICI Securities Limited at www.icicisecurities.com and the Co- Book Running Lead Manager i.e., Elara Capital (India) Private Limited at www.elaracapital.com . Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, please see the section titled “Risk Factors” of the aforementioned offer document.
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Diwali Dhamaka