Fundamentals: Cairn India saving grace for Sesa Goa this quarter
High profits from its associate Cairn India helped Sesa Goa mitigate the foreign exchange loss.
Here are some views from brokers/analyst on specific companies:
Nirmal Bang has a buy rating on Sesa Goa with a target price of Rs 230. Sesa Goa had a subdued quarter. However, high profits from its associate Cairn India helped Sesa Goa mitigate the foreign exchange loss. Cairn India, an associate company with 20 percent stake, reported a profit after tax of Rs3825.7 crore, a 75 percent QoQ surge, on the back of higher volume and forex gain of Rs866.3 crore
The negatives were the mining ban in Karnataka and logistic constraints in Goa along with temporary restriction of transport of iron ore due to the onset of monsoon in South Goa.
Nirmal Bang has a buy rating on the stock due to positives such as SGL got the Central Empowered Committee's concurrence for the reclamation and rehabilitation plan of its mine in Chitradurgah, Karnataka, for an annual output of 2.29 tonnes. The stock was trading at Rs 183.7.
Emkay has downgraded Idea Cellular to hold rating with a target price of Rs 84, after below expected earnings in the June quarter. Though the traffic on the company's network grew, revenue was weak due to pricing pressure.
The trend is expected to continue and even volume growth is expected to taper down. Sequentially, earnings declined 25 percent. Intense competition, TRAI's regulations aimed at consumer protectionand an increase in service tax also impacted the show. However, a positive is that until 24 July the company has added 3.1 million net subscribers due to implementation of mobile number portabililty. The stock was trading at Rs 79.
Emkay has a hold rating on LIC Housing Finance with a target price of Rs 285. The earnings was lower than Emkay's estimates due to lower loan disbursements to corporates, lower non-interest income and higher borrowing costs. However, a 28 percent year on year growth on individual loan disbursements signifies the ability to withstand competitive pressure.
Increasing disbursement in the discounted category will reduce the benefit of repricing. Management has also been hinting at increased traction in Southern and Eastern India. These regions account for 55 percent of the total business of LIC Housing Finance. Despite all this Emkay retains its hold position on LICHF. The stock showed a 10.71 percent year-on-year growth as against the decline of 10.4 percent showed by Sensex benchmark index. The stock was trading at Rs 241.5.
The shift in the manufacturing unit from high-cost Belgium to low-cost Hungary and Ireland in the European Union is a positive for the company.
LIC Housing Finance has registered a modest rise of 5.4 percent in its standalone net profit in the October-December quarter at Rs 344.35 crore.
LIC Housing Finance which looks to raise funds from QIPs said it is 'examining' opportunities in the Singapore and Malaysian markets as it seeks to expand its overseas presence.