Investor's Eye: Update - Aditya Birla Nuvo

 

Investor's Eye [November 12, 2014]  Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE     Aditya Birla Nuvo Recommendation: Buy Price target: Rs2,000 Current market price: Rs1,816   Strong performance; Maintain Buy     Key points Aditya Birla Nuvo Ltd (ABNL)'s Q2FY2015 result is not directly comparable on a Y-o-Y basis, as the last year's performance included ITES business, which was sold off in May 2014. Excluding the impact and on a like-to-like basis, the overall performance was very healthy with a revenue growth of 15% YoY. Led by efficiencies in business verticals, the overall operating profit grew by 34% YoY, while the net earnings grew surged by 75% on a Y-o-Y basis. On a reported basis, the revenue grew by 1.6% YoY; while operating profit and the net earnings grew by 26% and 56% respectively. The company sounded confident on its non-banking finance business and continues to nurture its plans to grow the loan book size. It has forayed into the housing finance business and has started lending; further, the company has also entered into the health insurance business. On the life insurance vertical, it sounded positive on the product portfolio front and expects revival in the business with revival on the macro economy front, while on the lifestyle segment it has mentioned that the competitive intensity has increased and 2HFY2015 would remain challenging for the overall lifestyle-led businesses. ABNL's strong positioning in each of its business verticals it operates in (life insurance, telecom, lifestyle and asset management), along with its quest for profitable growth and attractive valuation which makes us maintain our Buy rating on the stock with a price target of Rs2,000 (arrived using sum-of-the-parts approach valuing each business vertical). Click here to read report: Investor's Eye    Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Regards,  The Sharekhan Research Team

 

This e-mail message may contain information, which is confidential,  proprietary, legally privileged or subject to copyright. It is intended  for use only by the individual or entity to which it is addressed. If you  are not the intended recipient or it appears that this mail has been  forwarded to you without proper authority, you are not authorized to  access, read, disclose, copy, use or otherwise deal with it and any such  actions are prohibited and may be unlawful. The recipient acknowledges  that Sharekhan Limited  or its subsidiaries, (collectively "Sharekhan "),  are unable to exercise control or ensure or guarantee the integrity  of/over the contents of the information contained in e-mail transmissions  and further acknowledges that any views expressed in this message are  those of the individual sender and no binding nature of the message shall  be implied or assumed unless the sender does so expressly with due  authority of Sharekhan . Sharekhan does not accept liability for any  errors, omissions, viruses or computer problems experienced as a result  of this email. Before opening any attachments please check them for  viruses and defects. If you have received this e-mail in error, please  notify us immediately at mail to: mailadmin@sharekhan.com and delete this  mail from your records.