>Jindal Steel and Power Ltd.(Deutsche Bank AG)

A High Conviction Buy
{Ticker: JSP IN, JNSP.BO; Target Price: INR 4150/sh (33% upside)}
1. A low cyclical business
2. Adding capacities at a fast pace
3. New ventures are very profitable
4. Operational captive coal block a competitive advantage
5. Cost savings, volume growth in steel and power drives PAT
6. Stock performance does not capture low cyclicality
7. Our TP of INR 4150, based on SOTP and DCF approach, implies 33% upside potential
– TP implies exit P/E of 19.7x FY10e for power and 10xFY10e for steel - a discount to peers
– Only large power utility trading at a near 20% discount to NPV
8. Headline P/E is misleading due to conservative accounting policies
9. Key risks include: delays in implementation, imposition of a regulatory cap on spot power rates
below INR 4/unit and fall in global fuel prices by over 40% from current levels

To read full report :-Jindal Steel and Power Ltd.(Deutsche Bank AG)

>Sesagoa(Morgan Stanley)

Upgrade to OW; Rs280 price target implies ~23%
upside. The change in our stance, despite the recent
sharp run-up in the stock price, is driven by: 1) Iron ore
prices are looking much stronger than we anticipated
earlier; demand looks set to increase further with
gradually rising utilization of steel mills; and 2) Sesa’s
growth plans will accelerate in the next two years with
solid addition to its reserves and resources and a
meaningful reduction in production costs. We project a
CAGR of 28% for ore sales volume and an EPS CAGR
of 12.4% for F2009–12, although we acknowledge some
upside risk to this figure.
Raising F2010–11E EPS by 53-97%: In line with our
global mining team’s assumptions, we now estimate a
rollover in iron ore contract prices in F2011 vs. a forecast
10% decline earlier. We have also increased our spot
price estimates by 58% for F2010 and 46% for F2011.
We include Sesa’s recent acquisition of Dempo Mining,
valued at Rs20/share, in our analysis. Any news on
further exploration success or an accretive acquisition in
India could boost the stock price further.
Spot iron ore prices on an uptrend: Spot prices,
although still 50% below 2008 peak levels, have
increased ~25% in the last month to US$110/t CIF
China. With the likelihood of better global steel demand
in the next 3-4 quarters, steel production should pick up,
keeping ore prices strong. Sesa stock trades at a P/E of
7.7x and EV/EBITDA of 3.5x on our F2011 estimates,
which seems undemanding relative to 14x and 6.6x,
respectively, for iron ore players in our global coverage.

To read full report:-Sesagoa(Morgan Stanley)

>Indian Telecom(HSBC)

􀀗 New players at a structural disadvantage
– their spectrum is less efficient
􀀗 Rising competition may cause near-term
price disruption; Tata-DoCoMo’s persecond
plan is most revenue-destructive
􀀗 Bharti remains our top pick and MTNL
our top sell
We analyse the new players and their strategies, and we look
at the trends in 1Q FY10 results. We find the following:
􀀗 As the price war intensifies, investors should focus on
revenue market share and revenue growth, not
subscriber market share.
􀀗 The Tata-DoCoMo plan to charge per second (rather
than per minute) is the most disruptive; if all the telcos
followed suit – one already has – we estimate it would
lower the sector’s revenue c10-15%.
􀀗 Newcomers are operating on the less efficient 1,800
MHz spectrum, which requires more base stations
(major telcos use 900 MHz).
􀀗 Aircel’s access to funding is negative for the established
players; Etisalat’s strong balance sheet is a concern, but
its launch is still 12-18 months away.
􀀗 Incumbents’ better-than-expected results over the past
few quarters have been driven by margin improvements.
However, this trend may not be sustainable given the
increasing competition. Margin pressure may impact capex
spending; incumbents could lower capex guidance.
􀀗 We remain cautious on the sector given the rising
competitive intensity. Bharti Airtel remains our top pick.
We remain Neutral (V) on Idea Cellular and Underweight
(V) on RCOM, MTNL, and TTML.

To read full report:- Indian Telecom(HSBC)