TO TAKE OFF SOON:

*TFCI*

DoW had done Breaking News about disinvestment of IFCI stake in TFCI through eAuction in favour of private sector. We had estimated disinvestment to conclude by July. However, it didn't happen. Reason was that IFCI didn't had chairman

Now, as per our fully reliable source, file for selection of IFCI chairman is in PMO which can be cleared anytime soon. And new Chairman can assume office in next 1-2 weeks. Hence, now *TFCI disinvestment can definitely happen latest by September 2017*

AND IT IS ALMOST CERTAIN THAT DISINVESTMENT WILL HAPPEN AT 140+, FOLLOWED BY OPEN OFFER.

Investors can add more now

MOST UNDERVALUED SUGAR STOCK

_Combo of Sugar, TyreCord, Fine Chemicals, API_

DCM SHRIRAM *IND* LTD: TP 700
BseCode 523369 (10FV)

Rationale for Recommendation:

1. Diversified Product range
2. Highly profitable Boom in All divisions
3. *FY17 EPS 70*
4. *FY18EEPS 77*

DSIL is diversified conglomerate engaged in production of SUGAR, TYRECORD, API, FINE CHEMICALS

A. _Daurala Sugar_ : One of the oldest sugar Mills and well-known name in U.P., sugar factory produces Premium Packages Sugar, Sugar Cubes, Sugar Sachets and Pharma grade Sugar. Also has 45000 KL distillery to produce Liquor, ENA

B. _Shriram Rayon's_ : Again one of the oldest and most well known name in Tyre industry, produces Rayon Tyre Yarn/Cord/Fabrics and Nylon yarn
C. _Daurala Organics_: This division produces Organic/Inorganic Chemicals and Drug Intermediates

             FY17.  FY16

Sales. 1506.    1216

PBT.        152     40

PAT.         122      34

Equity.    17.40

EPS Rs *70.19. 19.60*

DSIL reported exceptionally good nos forFY17 with NP of 122cr vs 34cr. Such performance was possible not only due to boom in sugar prices but TYRECORD division too performed much better due to robust demand from tyre industry and improved performance of Chemicals. In fact, *tyre cord industry has become seller mkt with strong pricing power*

_Finance cost is just 2% of Sales which should come down further with increased earnings_

                  FY18E

Sales.    1550

NP.          134

EPSRs.    77.   

DSIL is available at extremely attractive Valuations:

1) *Tdg @ 4.40xFY17eps*

2) *Avlbl @ 4.10xFY18Eeps*

3) BValue Rs 210

Even if DSIL gets modest PERATIO of 9, stock should be 700

( *We repeat Bse code no is  523369*)

CREDIT SUISSE ON LUPIN

*Cuts target to Rs 920*

Maintain Underperform

Q1 weak with disappointment in US sales and India impacted by GST
Fortamet as a molecule continues to lose market share to Glucophage
Lupin's share is down from 70% to 50% now in Glumetza
Inventory days in India halved to 20 days during GST
R&D expense to stay high as Tiotropium DPI Inhaler trials started

*Disastrous Q1: LUPIN*

Lupin should report WORST quarter in years with NP plunging:

1) Lupin Q1 NP can be *370cr, declining 65% YoY 1080cr*

2) Q1NP 370 Cr should be *30% lower than Bloomberg est 550cr and QoQ 549 Cr*

*Deterioration:PNB Q1*

Today PNB can report disappointing financials with all-round deterioration in ASSET Quality

1) *Gnpa should be 13.90% YoY 12.25,%*

2) *Fresh slippage can be 6650cr Vs mkt estimate of 5000cr*

3) GROSS NPA CAN BE 57700+CR

4) _Actually Loss from operations. Small Profit possible only due to Tax write back_

Overall results should be poor than estimates and YoY

Outlook not encouraging as *CAG in its report has observed that PNB has made much less provision than required under RBI guidelines*

FUTURE PROVISIONS CAN INCREASE DUE TO AGEING AND FOR CASES REFERRED TO NCLT UNDER IBC

*CLSA on JSW Steel: BQ Maintain Buy with TP of Rs 300*
Costs rose sequentially partly due to higher-cost coking coal inventory
Management positive on demand, pricing and cost outlook
Price hikes, lagged benefit of input cost decline and higher volumes to drive JSW’s margins
Better pricing/margin visibility due to anti-dumping duties
Tightening Indian steel demand-supply post FY19
Large value-accretive Dolvi expansion coming up in FY21

*Credit Suisse on JSW Steel: BQ Maintain Outperform; TP hiked to Rs 265 from Rs 240*

Results beat on strong performance from subsidiaries
Export prices rising and domestic prices still at a discount
FY18E/FY19E EPS rise 1%/3% due to result beat and higher steel prices
Remain constructive on the back of improving global steel prices