Analysis Report: Atul Auto (BUY; Estimated Price: Rs. 980)

Analysis Report: Atul Auto (BUY; Estimated Price: Rs. 980)

About the Company

Atul Auto Ltd. began its operations in 1992 at Rajkot, Gujarat and was founded by Late Mr. Jagjivanbhai Karsanbhai Chandra. Being a relatively younger player in the automobile industry, Atul Auto cleared all the hurdles and has become one of the fastest growing players in the 3 wheeler segment. Moreover in the last five years, the production and turnover has grown by three folds. The company has achieved turnover of Rs. 429.26 Crores (US $ 75.02 Millions) for FY 2013-14. The company has an expanded production capacity of 48,000 units at its Rajkot plant. Local level innovations and process re-engineering are the major factors behind this expansion. The company has been conferred with "IndiaMart - Leaders of Tomorrow Award 2013" in Auto Components sector of West Zone presented by ET Now.

Shareholding Pattern

Cat Code	Category of Shareholder	Number of Shareholders	Total number of shares	Number of shares held in dematerialized form	Total shareholding as a percentage of total number of shares
A	SHAREHOLDING OF PROMOTER AND PROMOTER GROUP	28	11563810	11563810	52.699
B	Public Shareholding
1.	INSTITUTIONS
A	MUTUAL FUNDS/UTI	3	1972634	1972634	8.99
B	Financial institutions/Banks	1	2150	2150	.010
C	Central/state govt.	1	4609	4609	.021
D	Foreign institutional investors	16	720302	720302	3.283
2.	NON- INSTITUTIONS
A	Corporate Bodies (Indian/foreign/Overseas)	255	1200442	1200262	5.471
B	Individuals(Resident/ NRI/ Foreign National)
(i)	Individual shareholders holding Nominal share Capital up to Rs.1 lakh	9290	2971101	2718695	13.540
(ii)	Individual shareholders holding Nominal share Capital above Rs.1 lakh	19	1428564	1401564	6.510
C	Any other-Clr-Mem	242	928392	928392	4.231
	OCB	1	1200	0	.005
	NRI	361	1149996	370468	5.241
	Total Public Share Holding (B)	10189	10379390	9319076	47.301
	TOTAL(A+B)	10217	21943200	20882886	100.00

Economic Eye : Synopsis of Economic Survey 2014-15

Synopsis of Economic Survey

Chapter 1: Introduction

A stable political arena and a supportive external environment are showing a sign of double digit growth for India. After a long time India get this rare opportunity because of easy launch of reforms and challenges in various developed and developing nations. This atmosphere is perfect to encourage investors to put their money though there are some endurable challenges. This survey will mostly will talk about two themes: creating opportunity and reducing vulnerability.

Government is taking various measures like direct benefit transfer to provide growth opportunity in rural India. Four issues which held back Indian private investment are weak corporate balance sheets, an impaired banking system, difficulty of exit, deficiencies of the public private partnership (PPP) model in infrastructure.

Weak corporate balance sheet talks about the higher debt to equity ratio, in which company has obtained the maximum level of debts possible. So, they incur high finance cost and due to it, costs of the goods or services increase. Apart from it, if they further need investments, they will have to bring it through equity and raising capital through equity is costlier compared to debt. This is so because cost of debt is fixed and expected returns on the capital by shareholders (equity) is higher than cost of debt.

 An impaired banking system shows the increasing percentage of NPA (Non-Performing Asset, A classification used by financial institutions that refer to loans that are in jeopardy of default. Once the borrower has failed to make interest or principal payments for 90 days the loan is considered to be a non-performing asset) for Indian banking industry [Refer table 1]. Increasing NPAs lead to less investment as capital is blocked up. This reduces the money circulation in the market and also impacts the profitability of the company.

Easy of exit is equally important as easy of entry. Slow processing of law and judicial system of India obstruct the path of exit whereas other Asian countries like Malaysia, China and Thailand are getting the advantage because of ease entry and exit barrier. Business report of World Bank 2013 says that time taken in years shown in bracket, is good indicator of ease of exit:  India (4.3); China (1.7); Malaysia (1.5) and Thailand (2.7). Though there is an improvement after Companies act, 2013, it is still a way behind the competitive countries. The fact is that no other country needs permission from government to close a business.

Government is facing challenges to provide growing demand of better infrastructure service. As available source of getting fund from traditional source to implement many projects at a time is quiet impossible, Government is looking PPP as alternative choice to improve infrastructure. But problems lies in some generic issues like inadequate transparency of procedures, inappropriate risk allocation, improper project appraisal, cost and time overruns, overlapping of regulatory independence and dearth of good governance. The focus is more on private sector investment because it will lead to high and sustainable growth rate. 

India is following the growth path of major economies who were adopted manufacturing and trade as the growth engine in era of post-war period. It is also experienced that the employment elasticity (Employment elasticity is a measure of the percentage change in employment associated with a 1 percentage point change in economic growth) of manufacturing sector is more than any other sector. This is the sole aim of encouragement manufacturing sector.

Analysis Report : DLF Ltd. (Estimated Price : Rs. 121.67 per share)

INTRODUCTION:

DLF’s primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure around businesses, segments and geographies, mitigates any down-cycles in the market. From developing 22 major colonies in Delhi, DLF is now present across 15 states- 24 cities in India.

Development Business:

The development business of DLF includes Homes and Commercial complexes. The development business at present has 247 msf of development potential.

Annuity Business:

The annuity business consists of rental businesses of offices and retail. The company has land resource of 48 msf for retail and office development.

DLF got a hit by economic slowdown, resulting into slipping of GDP growth from 9.7% in 2010 to 4.3% in 2013. This slowdown was largely attributed to the slowdown in policy initiatives during the recent parliamentary elections. Besides that, high interest regime, enforced to rein in inflation had an impact on slowing down of investments.

According to RBI and contingent upon the desired inflation outcome, real GDP growth is projected to pick up from a little below 5 per cent in 2013-14 to more sustained levels which will help in bringing more growth to the overall economy.

The newly formed government has given some signals of moving along development agenda that will push for reforms and are necessary to revitalize the economy.

The Company visualizes a pick-up in real estate demand beginning from the second half of FY’15.

THE INDIAN REAL ESTATE SECTOR:

The year 2013-14 proved to be a challenge for real estate sector due to poor macro economic conditions, slowing income growth, high cost of borrowing both for industry and consumers, inflation and slowdown in policy initiatives. But instead of this, the Indian real estate sector may benefit from the formation of stable government, positive market sentiments and growth prospects for all business.

According to the Economic Survey of India, 2012-13, the real estate sector contributed 5.9% of the India’s total GDP in 2011-12, registering a growth of 7.2% from the previous year, which clearly signifies the important contribution of the sector towards the economy.

ANALYST REPORT: MARUTI SUZUKI: BUY( ESTIMATED PRICE Rs.4748.48)

ANALYST REPORT: MARUTI SUZUKI: BUY(ESTIMATED PRICE Rs.4748.48)

Introduction:

Maruti Suzuki India Limited, formally known as Maruti Udyog Limited, is founded in 1981. It is a subsidiary of Japanese automobile and motorcycle manufacturer Suzuki. In the Indian markets, Maruti Suzuki has approximately 44.8% share in Passenger vehicles and 51.9 % share in the car segment, which makes this company a market leader. At present, company has 14 car models which include Alto 800, Alto K10, Wagon R, Celerio, StingRay, Ritz, Swift, DZire, Ertiga, Omni, Eeco, Gypsy, Grand Vitara, and Ciaz.   

Shareholding Pattern:

Category of Shareholders Promoters and Promoters Group	No. of Shareholders	Total No. of Shares	% of Total Shares
Foreign Bodies Corporate	1	169788440	56.21
Public Shareholding Institutions
Mutual Funds/UTI	364	20229842	6.7
Financial Institution/Banks	62	24611986	8.15
Foreign Institutional Investors	562	66498881	22.01
Non- Institution
Bodies Corporate	1515	13982802	4.63
Individuals	97911	6096940	2.02
Others	2455	871169	0.28
Total	102870	302080060	100

..

Business Description: