>Cement Sector (ANAGRAM)

Volumised Growth: All India cement production and dispatch witnessed healthy growth of 8.6% and 8.7% YOY, respectively. North and East regions witnessed strong volume growth, however overall volume growth was dragged down due to sluggish growth in West and Central. All India capacity utilization was 92% in Feb 09 against 95% in Feb 08. The capacity utilization rate recorded in Central region was highest at 97% and South recorded the lowest utilization rate of 88%.

Policy Updates: Providing relief from the impact slowdown, Government announced reduction in excise duty and service tax by 2%. The general excise duty on bulk cement has been reduced from 10 percent to 8 percent, the rate of service tax cut from 12 percent to 10 percent. Proposed excise duty of 8% ad valorem or a specific duty of Rs 230 per tonne, whichever is higher, benefits of which would be passed on to end users resulting in price reduction of Rs 3.50 - 4.50 / per bag.

Prices: Rising demand from the country's semi-urban regions and the housing sector is likely to keep cement prices firm for the next few months. The demand for the building materials, which saw a sudden spurt in November-December, has not been affected by the continuing economic slowdown

Coal Price Dips: Average coal prices for Feb were at USD 72/tonne. Prices decreased 6% compared to Jan. The Baltic Dry Index was up by 80% in Feb compared to Jan.

Outlook: The government is likely to go ahead with the promised infrastructure projects, which have got financial closure, as elections will be held soon. This would certainly push the demand. The industry is doing better than general expectations. The demand scenario is expected to remain buoyant till April-May, thereby keeping the prices firm. UltraTech, Grasim, India Cement and Madras Cement are likely to add capacities to the tune of 13 million tonnes in the next three months.

To see full report: CEMENT SECTOR

>Sun TV (AMBIT CAPITAL)

We recently met with the Sun TV management, following are the key takeaways

• Q4FY09 revenue growth estimated at 24% YoY
• No impact of slowdown on advertisement revenues
• DTH segment and increasing addressability to bolster revenue growth
• Revenues from analogue cable segment to grow at 4-5% annually
  

Topline to reach Rs103.8bn in FY09 According to the management, Sun TV's Q4FY09 revenues are expected to grow at 24% YoY to Rs30.6bn. In line with this growth, the company's revenues for FY09 are estimated to touch Rs103.8bn, an upside of 19.3% over FY08. View on advertisement revenues

• Sun TV claimed that it has not yet witnessed any slowdown in its advertisement revenues

• The company indicated that its advertisement slots were booked two months in advance Sun TV believes that if the overall ad revenues for the industry drops, the company will also suffer from lower growth in ad revenues. Nevertheless, according to the management, the company's ad revenues would continue to grow, albeit at a slower pace, but not turn negative in the near term.

• A key positive for the company is that more than 50% its ad revenues come from the FMCG sector that is expected to grow at 10-12% per annum over the next two years.

• Sun TV faces high regional concentration risk as it derives more than 50% of its ad revenues from Tamil Nadu. This remains a key concern.

Radio business Sun TV expects its radio business to breakeven in FY11; losses for FY10 are estimated to stand at Rs600mn.

Movie Segment For FY10, Sun TV's movie budget is estimated to be in the Rs700-800mn range for 9-10 small and medium budget movies. In addition, the company is also planning a big budget movie (amounting to Rs700mn) during FY10.

To see full report: SUN TV

>Suzlon Energy Ltd. (ANAGRAM)

Suzlon Energy is the fifth largest wind energy player in the world, with 10.5% market shares around the globe. Already among the top five, Suzlon's Vision to be a technology leader to be among the top 3 wind energy companies in the world. To deliver and to end solution, Suzlon has developed expertise in R&D, manufaturing, marketing & sales, EPC project delivery and lifetime operations & maintenance services for Wind turbine. It has developed a range of wid turbine models ranging from 350KW to 2.1MW. It operates in more than 20 countries around the globe.

Investment positive

Positive Policy Development in USA

The house of democrats has passed a USD787 billion economic stimulus plan. A tenth of the USD787 billion will be alloted to enviromental endeavors. This package is supposed to stimulate the economy and create jobs. Following are some of the measures which will boost alternative source of energy:-

• The bill makes a provision of $6 billion in loan gurantees for renewable energy projects.

• The package has also crafted a news 30% tax credit for equipment and facilities that produce renewable energy generating materials.

• Plan also includes US$6.3 billion for energy efficiency and conversation grants, and another fund of US2.5$ billion for energy efficiency and renewable energy research.

To see full report: SUZLON ENERGY

>Transformer Sector (EMKAY)

The growth engine of the transformer sector, fuelled by supply shortage and input cost inflation during FY03-FY08, is likely to splutter in FY10E. The strong buoyancy during the FY03-09E period triggered off a series of ambitious capacity expansion plans by exisiting players and entry of new players in the market. With an 80% addition in installed capacity in FY07-10E period, we expect the transformer industry to reel under overcapacity. We expect an oversupply of 14% of installed capacity or 45,012 MVA- highest in last 9 years, despite optimistic demand assumptions.

With an absence of momentum drivers and room for downward revision in earnings estimates, we give thumbs down to the transformer sector. Our transformer universe is expected to report disappointing performance with a 24% decline in net profit in FY10E. We expect ROE and ROACE to decline by 1800 bps and 1300 bps to 17% and 14% respectively during FY08-10E. Our transformer universe is available at a PER of 4.7 x FY10E and PBV of 0.7xFY10E, at a premium to a bouquet of companies with similar demand drives.

To see full report: TRANSFORMER SECTOR