LAKSHMI VILAS BANK LTD Q3 FY17 - BUY LAKSHMI VILAS BANK LTD reported strong third quarter results with PAT or Net Profit galloping at 70% growth rate YOY. PAT for the December quarter stood at Rs. 784 Mn compared to Rs. 461 Mn same period previous year. Sequential growth was equally strong at 21% in the current Q3 FY17. Net Interest Income, difference between interest earned and expended was at Rs. 1906 Mn in the current quarter against Rs. 1671 Mn corresponding quarter previous year, expanding 14% YOY. Net Interest Margin indicating core profitability of bank’s operations at 2.72% seems to be stable in a demonetization hit quarter. Gross NPAs as a percentage of Gross Advances edged up 96 basis points YOY at 2.78%, Net NPAs as a percentage of Net Advances was reported at 1.82% in the current Q3 FY17.  One basis point is 0.01%. Provisions & contingencies were curtailed at Rs. 481 Mn declining 23% QOQ and 17% yearly. Double digit growth was visible in treasury reporting Rs. 2695 Mn revenues rising 84% YOY. Both Retail & Corporate stood at Rs. 3766 Mn & Rs. 2308 Mn respectively growing 7% in the current quarter. CASA ratio at 21.42% jumped 484 basis points YOY due to demonetization impact. CASA deposits increased from Rs. 39683 Mn in Q3 FY16 to Rs 59435 Mn in current December quarter, jump of 50% YOY. Other income or non interest revenue accounting 17% of the total income of the bank rose at a whopping 117% YOY at Rs. 1502 Mn in current Q3 FY17 buffeting the Bank’s income in the demonetization hit quarter. Deposits outpaced Advances moving at 16% yearly and 4% QOQ. Advances also exhibited demonetization impact by growing negatively QOQ whereas on yearly basis, rise was 8.50% in the current December quarter. Cost income ratio of bank improved to 49.70% in the current December FY17 against 55.17% corresponding quarter previous year. LVB has performed well with respect to NII & high profitability and is more focused on obtaining a high quality loan book, but robust expansion is the need of the hour to enter the next level of highly competitive Indian Private Sector Banking. LAKSHMI VILAS BANK with the market cap of Rs. 29584 Mn is a long term growth opportunity for retail investors. We recommend BUY for the stock for medium and long term investment with a target price of Rs. 225. Disclaimer                                                                               The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report. The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected. The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments. We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever. The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice. This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk. The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

HINDALCO INDUSTRIES LTD RESEARCH REPORT - Q3FY17

HINDALCO INDUSTRIES LTD (Standalone)- Q3 FY17 HINDALCO Industries Ltd reported another stellar performance with revenue growing at 14% & EBDITA jumping 64% YOY in the current December quarter. Profit After Tax was reported at Rs. 3205 Mn in current Q3 FY17 against Net Loss of Rs. 328 Mn same period previous year. Revenue or Income from Operations stood at Rs. 99148 Mn in the current quarter against Rs.87159 Mn in Q3 FY16. Revenue also witnessed stable 4% sequential growth in the current December quarter driven by increase in average realization for both Aluminium and Copper, along with weaker rupee and higher aluminium volumes. Aluminium & Copper revenues grew by 9% & 19% respectively in the current Q3 FY17. EBDITA was reported at Rs. 14052 Mn in Q3 FY17 against Rs. 8589 Mn corresponding quarter previous year. Other Income increased 20% yearly whereas on sequential basis there was a decline of 35%. Other Income was reported at Rs. 2200 Mn in the current Q3 FY17. Higher volumes, higher LME, rationalized cost structure due to benign input costs YOY, enhanced coal security and captive reserves led to EBDITA improving phenomenally by 432 bp at 14.17% in the current December quarter. Net Profit Margin was reported at 3.23% in Q3 FY17. Hindalco Industries Ltd receives 50% of its revenue from Aluminium segment which grew 9% YOY. Copper segment also contributed the same growing 19% YOY on account of higher copper realization but was partially negated by lower byproduct prices of Sulfuric acid and di ammonium phosphate. The company continues to focus on deleveraging itself and has made pre-payment of Rs. 34200 Mn in January 2017 against the outstanding project term loans. Hindalco with market cap of Rs. 389211 Mn is the industry leader in the Indian Aluminium industry and is poised for higher growth with strong demand from power, transportation, housing & packaging sectors. In addition to that industries such as solar power, aerospace, defence, railways, metro & smart city projects offer long term growth opportunities to Indian Aluminium industry.  The company is focused on 3Cs, customer centricity, cost control and cash conservation which will lead to long term stability & profitability. We recommend BUY for the stock for medium & long term investment with PE multiple of 26.97 x FY17E & 24.15 x FY18E with a target price of Rs. 285. Disclaimer                                                                               The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report. The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected. The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments. We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever. The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice. This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk. The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

DREDGING CORPORATION OF INDIA LTD - BUY

Dredging Corporation of India Limited, or DCI, is engaged in the business of dredging which involves maintenance dredging, capital dredging, beach nourishment, land reclamation, shallow water dredging, Project Management consultancy and Marine construction. The company is a Mini Ratna category- I PSU with its head office at Visakhapatnam. The current market price of the company spiked up today in morning trade as government stake sale is speculated in the market. The company would definitely benefit from government selling its majority stake and DCI moving to the private sector (in-case of a majority stake sale).

The current Profit After Tax for the December quarter stood at Rs. 140 Mn against Net Loss of Rs. 196 Mn same period previous year. Income from Operations was reported at Rs. 1519 Mn in the current quarter compared to Rs. 1614 Mn corresponding quarter previous year. Though Income from Operations have declined 6% YOY, the company has reduced its operating cost 25% and finance cost by 5% YOY. It would be a win-win situation for both the government & the company as witnessed by the 10% intraday rise in the stock price. The government with stake of about 73% may get a sizeable chunk of its disinvestment target and DCI would benefit from privatization. Irrespective of disinvestment by the government, the stock is attractive for long term investment as DCI is the leader in the Dredging industry in India and would benefit from the government initiatives being undertaken with respect to various projects for inland waterways and increase in merchandise trade. We recommend BUY for the stock with a target price of Rs. 550 for medium & long term. 

Disclaimer                                       

                                      

The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

APOLLO TYRES LTD RESEARCH REPORT - Q3 FY17

APOLLO TYRES LTD- Q3 FY17 (Consolidated) APOLLO TYRES Ltd rebounded with double digit revenue growth in December quarter along with both PAT & EBDITA exhibiting positive growth. After a lackluster September quarter, Income from Operations or Revenue grew 16% YOY and 12% sequentially at Rs. 37037 Mn in the current December quarter. EBDITA followed with the same sequential growth but with a lower yearly growth rate of 3%. EBDITA was reported at Rs. 5367 Mn compared to Rs. 5193 Mn corresponding quarter previous year. Rising rubber prices, crude and addition of Reifencom having  lower margins impacted company’s overall yearly EBDITA margins in the current quarter.  Reifencom revenue for the quarter is about €65 million. PAT was seen at Rs. 2957 Mn against Rs. 2790 Mn corresponding period previous year rising 6% YOY with quarterly growth of 14% in the current December quarter.  Other Income jumped 4 times and was reported at Rs 373 Mn against Rs. 105 Mn same quarter previous year strengthening the company’s bottom-line. High operating cost rising 18% YOY dented Net Profit & EBDITA Margins which stood at 7.98% & 14.49% in the current December quarter. Both margins were under pressure yearly but QOQ, Net Profit & EBDITA Margin improved 15 & 8 basis points respectively. One basis point is 1/100th of a percentage. With respect to geographical segmentation of revenue, Europe & Americas increased 54% YOY contributing 31% of total revenues followed by Other geographies jumping 48% & APMEA at a dismal growth of 2% on yearly basis in the current Q3 FY17.  The truck tyres contribute 43%, passenger car tyres 40% of total revenues and the balance by light truck, farm and other categories. Apollo Tyres Ltd with market cap of Rs 93202 Mn is a major player in commercial vehicle, passenger vehicle, off-road and two wheeler tyres and is a well positioned global Indian brand. The company witnessed strong growth in OEM, passenger car, truck & bus segments YOY whereas commercial segment exhibited de-growth. Demonetization did not impact much but it did reduce Chinese imports helping the Indian tyre industry as a whole. The company has performed well in-spite of high raw material prices & crude which impacted its margins in the current quarter. Raw material prices are expected to move northwards in the coming quarters and thus the company needs to undertake price increase of about 6-7% to defend its margins. We recommend BUY for the stock for medium & long term investment with PE multiple of 7.79 x FY17E & 7.13 x FY18E with a target price of Rs. 285. Disclaimer                                                                               The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment. The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report. The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected. The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments. We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever. The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice. This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk. The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

EXIDE INDUSTRIES LTD RESEARCH REPORT - Q3 FY17