Eclerx - The Next Big Returns

Business Profile 
eClerx provides data analytics and customized process solutions to global enterprise clients. It was originally incorporated as a private limited company on March 24, 2000 and converted to a public limited company with the present name on Aug. 28, 2007. 

The company`s portfolio of services comprises data analytics, operations management, metrics management, data audits and reporting services. It provides service solutions using a mix of custom-designed data processes, delivery teams comprising generalists and domain specialists, and in-house software to automate processes. Current customer programs include online marketing support, global program for price monitoring and analytics, financial contract risk management, online bookstore build, catalogue management services, and user manual content development. Services are rendered to clients in the financial services, retail and manufacturing industries. 

The development centers of the company are located in Fort, Sewri and Ghatkopar, all in Mumbai. The company was rated among the Top 20 companies to watch by Business Today magazine in the last three years, amongst a list that included some of the largest Indian companies. It is an active member of industry bodies such as the PPS, Internet Retailer and ISDA. In 2007, the company launched DTCC warehousing support for global banks, which allows banks to move legacy trades to DTCC`s Trade Information Warehouse (TIW) streamlining operational procedures around their historic credit portfolios while reducing their operational risk. 

The company has its operations in India, UK, USA and Ireland. The registered and corporate office of the company is located at Sonawalla Building, First Floor, 29 Bank Street, Fort, Mumbai-400023. 


Financials 
The company announced rise of 2.98% in consolidated net profit on y-o-y basis to Rs 304.13 million, while total income increased 24.58% y-o-y basis to Rs 1.22 billion for the quarter ended March 2012. 

Recent Developments 
13-APR-12 
eClerx Services, through its wholly owned subsidiary eClerx Investments has announced the acquisition of Agilyst, a niche operational and analytics company serving the US Media industry for an undisclosed amount. eClerx has signed definitive agreement with Agilyst. 

24-JAN-12 
eClerx Services has posted consolidated net profit after minority interest of Rs 499.48 million for the quarter ended Dec. 31, 2011 as compared to Rs 359.81 million for the quarter ended Dec. 31, 2010, representing an increase of 38.82%. 

19-OCT-11 
eClerx Services has posted consolidated net profit of Rs 442.44 million for the quarter ended September 30, 2011 as compared to Rs 276.09 million for the quarter ended September 30, 2010, representing a increase of 60.25%. 

18-MAY-11 
eClerx Services has posted a net profit of Rs 295.33 million for the quarter ended Mar. 31, 2011 as compared to Rs 242.34 million for the quarter ended Mar. 31, 2010, reflecting rise of 21.87%. 

28-MAR-11 
Credit rating agency, CRISIL Equities has assigned a CRISIL IER fundamental grade of 4/5 (pronounced four on five) to eClerx Services (eClerx). The grade indicates that the company`s fundamentals are `superior` relative to other listed equity securities in India. 

21-OCT-10 
eClerx Services, India`s first publicly-listed KPO today announced its consolidated results for first half of fiscal 2011. Profit after tax (PAT) for the half year ended Sep. 30, 2010 was Rs 569 million compared with Rs 280 million in the corresponding period in the previous year, a growth of 2.03 times YoY. 

21-OCT-10 
eClerx Services announced a surge of 71.79% in standalone net profit on y-o-y basis to Rs 272.27 million, while net sales rose 31.84% y-o-y basis to Rs 821.65 million for the quarter ended September 2010. 

07-JUL-10 
eClerx Services today announced that it hasstarted operations from today at its new delivery centre situated at Mindspace-Airoli , Kalwa Trans Thane Creek Industrial Area, MIDC, Thane (Airoli Facility). 



Future Plans 
The company will use the proceeds from the initial public offering (IPO) for fund acquisitions, infrastructure investments, and to set up additional facilities.  

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BALAJI AMINES LTD.

Balaji Amines Ltd has informed BSE that the Company have fully commissioned its Chemical Plant on March 15, 2012 for the manufacture of Methyl Amines (Mono-Di-Tri) with the capacity of 100 M.T. per day.

http://www.bseindia.com/stockinfo/anndet.aspx?newsid=1baa21de-52ff-4e53-bd16-8e18beeb4eca

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CRISIL assigns fair value of Rs 200 to Technofab Engg

CRISIL Research has come out with its report on Technofab Engineering . The research firm has initiated coverage on the company with a fundamental grade of 3/5 and assigned a valuation grade of 5/5, in its February 29, 2012 report.

Delhi-based EPC player Technofab Engineering Ltd (Technofab) has carved out a niche for itself in power, water, oil & gas and industrial infrastructure. It has a strong clientele and has been getting repeat orders from clients like NTPC , BHEL and NPCIL. A well-diversified order book of Rs 10.2 bn (2.8x TTM revenues), low gearing (due to IPO in June 2010) and low inventory days place Technofab on a strong footing in the industry. The company has also been focussing on overseas markets and has seen good traction in order flows from these markets. However, we believe this exposes it to logistic challenges. CRISIL Research assigns Technofab a fundamental grade of 3/5, indicating that its fundamentals are good relative to other listed securities in India.

Order book (2.8x TTM revenues) provides healthy revenue visibility

Technofab's current order book is Rs 10.2 bn (2.8x TTM revenues), which provides strong revenue visibility for the next 24-30 months. The order book has been boosted by strong order intake in the year till date, which has been particularly robust as it has received orders worth ~Rs 7.4 bn compared to ~Rs 4.5 bn in entire FY11. However, ~15% of the order book is slow/non-moving.

Varied order book limits concentration risk but overseas risk exists

Technofab's order book is well diversified across segments - power (45%), water (23%), oil & gas (14%), industrial infrastructure (14%) and electrical (4%). Also, ~50% of its current order book comprises overseas markets in Africa (Ghana, Mozambique, Ethiopia, Zambia, Kenya, and Malawi) and the Asia-Pacific region (Bangladesh and Fiji) which shields the company from a domestic slowdown. However, the company could face inherent political risks and logistical challenges.

Low gearing - one of the lowest in the industry

As of September 2011, Technofab's gearing was 0.2x, low compared to peers' average of 2.1x, following the IPO in July 2010. A comfortable balance sheet with low gearing provides ample room for Technofab to fund future growth without the need for equity dilution.

Revenues to grow at a three-year CAGR of 26%

We expect revenues to register a three-year CAGR of 26% to Rs 5.8 bn in FY14 driven by a strong order book. EBITDA margin is expected to increase marginally by 20 bps in FY13 to 13% and remain at a similar level in FY14. Adjusted PAT is expected to increase at a CAGR of 18% to Rs 419 mn in FY14. EPS is expected to increase from Rs 24.6 in FY11 to Rs 40.0 in FY14.

Valuations - current market price has strong upside

We have used the price-to-earnings (P/E) method to value Technofab and have assigned a multiple of 5x to FY14 earnings. Accordingly, we have arrived at a fair value of Rs 200 per share. At the current market price, we initiate coverage on Technofab with a valuation grade of 5/5.

To read the full report click on the attachment on the link

http://www.moneycontrol.com/news/crisilresearch/crisilassignsfairvaluers200totechnofabengg_675463.html

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL's opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

Source: Moneycontrol

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Buy Diamond Power Infra; target Rs 175: Sunidhi Securities

Sunidhi Securities is bullish on Diamond Power Infrastructure (DPIL) and has recommended buy rating on the stock with a target price of Rs 175 in its February 23, 2012 research report.

"Diamond Power Infrastructure (DPIL) introduced the Aerial Bunched Cables (ABC), a combination of Aluminum Conductors, Polyethylene Insulated Conductors and Alloy Conductors. DPIL is engaged in five business verticals-cables (low, high and extra high voltage), conductors, transformers, towers and various EPC projects-where it undertakes planning, designing and commissioning of turnkey transmission and distribution projects. With more than 100 distributors across 16 Indian states, DPIL selling its products under 'Dicabs' brand is one of the fastest growing EPC companies in the country. DPIL had invested Rs 12.5 crore in Apex Electricals (power transformer manufacturer with a capacity of more than 12,500 MV, manufacturing up to 220 KV class) as part of the rehabilitation scheme. Its induction as Apex Electricals' promoters makes DPIL as one of the largest transformer companies in India. DPIL has an installed capacity to manufacture 34,300 km of low voltage cables annually that can transmit power of up to 1.1KV. Similarly, it also has manufacturing capacity of 5,800 km of high voltage cables with a carrying capacity of up to 132KV and extra high voltage cable of 2,000 km which can transmit over 220KV."

"During Q3FY12, standalone net profit surged by 5.3% to Rs 30.8 crore (Rs 29.2 crore) on 42.4% higher sales of Rs 539 crore (Rs 379 crore). OP and NP margin stood at 11.4% and 5.7% as against 13.6% and 7.7% respectively in Q3FY11. (YoY) During 9MFY12, standalone net profit advanced by 6.5% to Rs 93.9 crore on 23% higher sales of Rs 1365.0 crore. OP and NP margin stood at 12.8% and 6.9% Vs 14.1% and 7.9% respectively in 9MFY11. DPIL has acquired 6.3MW Windmills near Kandla, Gujarat from Suzlon Energy. It took this decision as after commencement of the wind power capacity company's power bills will get setoff and will result in large tax break. This is company's green initiative, which is focusing on alternate sources of energy to meet its energy demand."

"DPIL today has emerged from a conductor company to a full circle integrated EPC company, having presence in cables, conductors, transformers and transmission towers. Headquartered in Vadodara, DPIL has manufacturing presence across 9 units, all located in Vadodara. DPIL focused on higher value EPC projects and even forged joint ventures with three highly respected companies in the industry, which will enable it to bid for higher KV EPC contracts. In terms of segmental revenues, Cables division accounts for nearly 31% of the total revenues, followed by EPC division with 28% cent of the share. Owing to the sustained demand for HT and LT cables, the cables division nearly tripled its net revenues in FY11 over FY10. The growth was largely driven by increased demand for HT cables, which also translated into higher margins. With the capacities online, the focus would be to ensure efficient running of operations, across the segments. DPIL's value-added products, coupled with larger capacities and improved realisations will enable it transcend the next level of sustained growth. On the industry front, DPIL expects robust demand for all its products on account of better economic sentiment and government's ongoing thrust on the power sector. DPIL will steadily consolidate its presence in EPC space to cater to higher KV contracts; thereby improving further on the company's order book which also reflects optimism. At the CMP of Rs 127, the share is trading at a P/E of 3.6x on FY12E. We maintain BUY with a target of Rs 175 in the medium term," says Sunidhi Securities research report.

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Just a word of caution.

Greek's fine capability to simply splurge money endangering Eurozone in quick sand, US's snail speeded economic recovery, China's secretive game plan, national political war, Iran's stubborn play leading the crude prices to space, ballooning fiscal deficit, enormous expectations from the budget. In short enormous UNCERTAINTY. Worst is not yet over.

Since the PIIGS issue became an intergral part of our global survival, I have pondered over the thought that, how big an economic catastrophic event can a small sovereign nation like Greece subject the world to. The answer always seemed foggy, since the Eurozone issue has transformed into something like a three dimensional chess. Seems very complex and mindblowingly complicated.

Another question that pops up in my mind is that when a common man who is in deep debt

(his entire monthly income also falls short to pay up his monthly interest payments), asks for more debt, how many banks are willing to provide him with more capital, with more debt? The answer would be none. Why? Because the banks have their risk management policies in place and they adhere to it while giving out loans. Do they follow the same policies while lending out to a sovereign nation? The answer is a painful no. Painful not just for the banks but for many throughout the globe. Why? Because the simple lending and relending fuels a small wave to become a massive tsunami which is quite disasterous to everyone around.

Now lets get back to how a small nation like Greece's debt issue is proving time and again to be so economically sensitive. The problem is that no one knows what will be the possible repurcussions on Greece and the domino effect on the other Eurozone nations as well as the global economy in case of default or for that matter even a bailout.

If it is bailed out by agreeing to the terms and conditions of trioka, Greece's debt to GDP ratio will come down from 160% to 120% by 2020. Still, is 120% of debt to GDP ratio sustainable? With severe austerity measures, will it be able to honor its future debt repayments? Its a big question mark, because chains of habit are too hard to be broken. The same habits that has got Greece to such a harsh fate. In order to bail out Greece, the private creditors have agreed to a 70% haircut for the Greek bonds. Can ECB do away with a 70% haircut? The answer is again a no because if will prompt other debtor nations to ask for a bailout too. And there are indeed other Eurozone nations standing in line for a possible bailout. Its quite messy and extremely frustrating.

Next comes US. Just a thought, how many of us actually remember US's debt woes amidst Eurozone's debt woes. I would say very few. Can ignorance at this level be a bliss? I say, ignorance in this case can be brutally fatal. US's debt has reached a level of 15.3 trillion, a level equal to its GDP and the economic recovery is frustratingly slow and the debt is expected to grow at a much faster rate than the GDP. The 2008 crisis led by Lehman was of mere $600 billion dollars and its repurcussions pushed US in such huge debt. Imagine a multifold severe crisis in US, even before people have come out of the 2008 crisis. My mind gives up because the severity will be exponentially dangerous.

Looking at China, I absolutely have no views, because of its secretive nature. The great wall of China was indeed built with a clear intention, not let the outsider know what is going on inside. I being an investor, would never put a single money in such a country, but unfortunately all don't think the same. Some of the greatest investors have their huge bets on China. But I believe in one thing, something that goes up rapidly have to face the strong forces of gravity. Now will it be a hard landing or a soft one for China, time will tell.

Coming back to us, India, like any globalized economy, is not immune to the global woes. In addition to it, there are many internal back drags. To begin with, we have an embarrassing political war going on, which puts India in a very bad shape in front of the world. This is a total dampener especially when we operate in a global economy and have to put our best foot forward to derive the maximum utility off this global reach. Our fiscal deficit for the first 9 months of the current financial year have already far exceeded the budgeted 4.6%, owing to the skyrocketing crude prices (owing to Libya unrest and now Iran's stubborn act), fuel subsidy, fertilizer subsidy and many more dampeners. The expectations from the forthcoming budget are at a peak, fulfilling all those peaked out expectations will indeed be a very difficult task.

In midst of all the gloom, I still bet high on India. But be cautious, place your bets carefully. Srategize by keeping the worst case scenario in your mind. Because, we unlike China are not dependent on exports, we have a huge internal demand to cater to. We need to harness that strength to derive the maximum growth. We can write our own fate and not let our fate be in someone else's hands. Play safe. Play well.

Source: http://purvismultibaggerstockideas.blogspot.in/

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Investor's Eye: Special - Q3FY2012 FMCG earnings review; Update - Retail

 

Investor's Eye [February 21, 2012]  Summary of Contents SHAREKHAN SPECIAL Q3FY2012 FMCG earnings review  Key points Volume growth momentum sustained: Q3FY2012 was yet another quarter of strong top line growth for the fast moving consumer goods (FMCG) companies, with the volume growth momentum sustaining during the quarter. Despite a gloomy macro-economic environment almost all the FMCG companies under our coverage (except for Zydus Wellness and Tata Global Beverages Ltd [TGBL]) posted a steady volume growth during the quarter (Hindustan Unilever Ltd [HUL]-about 9% year on year [YoY]; Marico-about 16% YoY; GSK Consumer Healthcare [GSK Consumers]-about 11% YoY; Bajaj Corp-about 20% YoY) sustained during the quarter. The improvement in rural penetration, innovations and renovations in portfolios along with adequate media spends were some of the key drivers of growth for the FMCG companies. The growth in rural India was ahead of that in urban India for most of the FMCG companies under our coverage.  Gross margins improved sequentially: The quarter saw the FMCG companies witnessing a sequential improvement in their gross profit margin (GPM), as the prices of the key inputs declined from their highs in the recent past. HUL continues to curtail its advertisement spends to show a better picture at the operating level while companies like Marico and GSK Consumers continued to support their brands and new launches with brand building and promotional activities. With a strong top line growth, the higher other income aided the FMCG companies under our coverage (ITC, GSK Consumers, Bajaj Corp) to post a robust bottom line growth during the quarter. HUL, Marico and GCPL beat Street's expectation: It was yet another quarter when HUL beat our as well as the Street's expectations by posting a robust operating performance. HUL's top line grew by 16.4% YoY with a volume growth of 9.0% YoY during the quarter. The operating profit margin (OPM) improved substantially due to the trimming of advertisement spends, which aided the operating profit and the adjusted profit after tax (PAT) to grow by 41.9% YoY and 30.3% YoY respectively during the quarter. Marico maintained its above 20% organic revenue growth in Q3FY2012. This was driven by mid-teen volume growth on the back of a strong volume growth in the domestic consumer business. The consolidated top line of Marico grew by 29.4% YoY. However, higher depreciation charges and tax outgo led to a 13% year-on-year (Y-o-Y) bottom line growth (ahead of our expectation). Godrej Consumer Products Ltd (GCPL) results are ahead of our expectation mainly on account of an exponential top line growth an OPM of around 20% (which is better than expected). Outlook and valuation We expect the top line growth of the FMCG companies to sustain in strong double digits, driven by a mix of sales volume and price increases in the coming quarters. The prices of commodities (the key raw materials for FMCG companies) have remained volatile in the past few months. If these correct from the current levels, we can see a substantial improvement in the margins in the coming quarters. Also, going ahead any significant correction in the commodity prices might cause the FMCG companies to shift their focus back on improving the sales volume growth.  We retain our view of remaining selective in the FMCG space with preference for the companies having a strong balance sheet, better earnings visibility and decent valuations from the current levels. Hence we maintain our penchant for ITC and GSK Consumers among the large-caps, and for GCPL and Bajaj Corp in the mid-cap space. We also like Marico largely on account of its sustained strong performance in the domestic market and a three-pronged strategy of driving growth by entering into categories through new product launches, acquisitions in the domestic as well as international markets, and enhancing the reach of the existing portfolio. SECTOR UPDATE Retail      India on the cusp of a consumer revolution-collaboration the way forward We attended the Confederation of Indian Industry (CII)'s "National Retail Summit 2012" recently. The summit was represented by leading veterans from the fast moving consumer goods (FMCG) and retail industries as well as consultants and investment stalwarts. The following are the key takeaways from the summit: All the speakers from the FMCG as well as retail segment unanimously agreed that India is on the cusp of a consumption revolution that is yet to make inroads (approximately Rs3.6-trillion consumption opportunity by 2020). Many categories in food as well as fashion either do not exist in India today or have very low penetration, thus paving the way for increasing categories and robust category growth (a case in point mentioned was of chocolate where India's one-year consumption equals Brazil's one-day consumption). As players discussed the opportunity that exists, they also spoke of the challenges to be faced, like inadequate supply chains, logistic issues, and the ever discerning and ever changing consumer and the more complex shopper. The discussion ended with the participants agreeing for a collaborative effort between FMCG and retail stakeholders that would aid India to unleash the consumption wave. Speakers across verticals spoke on various topics, we present below some of the thoughts that flowed during the summit.  We remain bullish on India's consumption space: The FMCG and retail players are both in a sweet spot to cash in on this great opportunity through a collaborative effort, creating newer categories and newer products for consumption. Food, education, leisure and healthcare are the segments to see a revolution (growing 3-4x from the current levels). Thus, we maintain our bullish view on the consumption space. Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a postition in the companies mentioned in the article.

Regards, The Sharekhan Research Team myaccount@sharekhan.com Manage your newsletter subscriptions

 

--
Regards
Tushar N Surekha
KPMG

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Balaji Amines plans Rs 70cr capacity expansion

Balaji Amines rallied as the company planned to invest Rs 70 crore in its Solapur unit expansion. The company has been planning to implement a hotel project worth Rs 40 crore in Solapur currently.

The company looks to expand the capacity of Methyl Amines from existing 22,000 tonne per annum capacity to 55,000 tonne per annum (adding more than 33,000 tonne per annum Methyl Amines capacity).

State Bank of Hyderabad will fund around Rs 48 crore for the expansion and rest will be from internal accruals, said D Ram Reddy, director commercial of Balaji Amines.

The production of Methyl Amines is scheduled to streamline by January 2012. Another product Di-Methyl Amine Hydrochloride would come into production by April 2012. The third product Dimethyl Formamide will come into stream by July 2012, he told CNBC-TV18 in an interview.

Reddy further indicated that the first plant of Methyl Amines, which will start by January, will contribute to the last quarter with a three-month revenue for the current year.

As the amount of Rs 48 crore would be via debt, the total debt on the books will be around Rs 79 crore from loans.

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Diamond Power to spend Rs 753 cr to expand production setup

Moneycontrol Bureau

Diamond Power Infrastructure plans to spend Rs 753 crore to expand its current manufacturing plant to produce conductors and medium voltage cables at Vadodra.

The expansion is to be completed over 30 months in three phases beginning April 2013.

Diamond Power said it will fund the investment via mix of rupee term loan, external commercial borrowings and supplier credit aggregating to Rs 440 crore and the rest will be via internal accruals.

Of the planned Rs 753 crore investments, Diamond Power said it is already investing Rs 50 crore in a 6.3 mw windmill project, which is expected to go on stream in March this year.

The company plans to expand its conductors manufacturing capacity to 150,500 mtpa from 50,500 mtpa at present. It will increase its rod manufacturing capacity to 122,000 mtpa from 32,000 mtpa currently.

Additionally, it aims to put up additional three lines, each with an installed capacity of 2,500 kms, in medium voltage cables. This will increase its capacity to 12,700 kms, Diamond Power said on Tuesday.

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