MSFL Research
Ahluwalia Contracts (Sell)
CMP: Rs 54.70
Ahluwalia Contracts' Q4FY12 reported revenues was down 32 per cent y-o-y at Rs 390 crore (10 per cent lower than our expectation). Ahluwalia continued its dismal performance during the quarter and reported loss at the operating level. This resulted in net loss of Rs 27.8 crore (as against our expectation of net profit of Rs 4.6 crore). With the interest rate expected to remain high in H1FY13, the business environment for real estate is likely to remain weak and we do not foresee any meaningful improvement in next two quarters. Though the order inflow has been encouraging at Rs 470 crore during the quarter, factoring a weak scenario we have built in lower order inflows of Rs 1,400 crore and operating margins at six per cent levels for FY13E. We expect company to continue to witness cost overrun pain over next two quarters. We believe that stock will continue to underperform and re-rating may happen only on signs of improved execution rate and stable operating margins which is unlikely in next two quarters.
Edelweiss Research
eClerx Services (Buy)
CMP: Rs 635
Target: Rs 810
We recently met the eClerx Services (eClerx) management for a business update and outlook going forward. While it stated that growth in H1FY13 could moderate due to delays in decision making, discussions with clients over longer time horizon indicate momentum will continue and growth is will pick up in H2FY13. Although demand is expected to remain moderate in H1FY13, we expect growth to pick up in H2FY13, and remain confident on eClerx's cost-oriented business model.