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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
1/23
SUNPHARMA :Robust Performance "NEUTRAL" 17th Feb 2014
Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectations with total revenues including other operating incom
at Rs 4312 Cr up 50.5 % YoY led by robust growth in US formulations and Taro business. The stellar performance of company was supporte
well from domestic operations. The US formulation business grew by more 56 % YoY to USD 434 M
.................................................................................................. Pa e : 7-8
State Bank of India : "BUY" 17th Feb 2014
SBINs profitability was declined by 34% YoY largely due to higher provisions and contingencies led by deterioration in asset quality and highe
tax in order to create DTL special reserve as per suggestion by RBI. Banks NII grew by 13.3% YoY led by higher loan growth and stable NIMAsset quality slightly deteriorated with GNPA stood at 5.9% versus 5.8% in previous quarter and net NPA further worsen to 3.2% against 2.9
sequentially due to lower loan loss provisions made. We value bank at Rs.1779/share which is 1.1 times of FY14E book valu
.............................................................................................. ( Page : 2-6)
17th Feb, 201
Edition : 207
IEA-Equity
Strategy
13th Feb 2014
Finolex Cables(FCL) Q3FY14 PAT of Rs. 24.5 crore was below ourestimate owing to lower sales and EBITDA margin. Decline in communicatio
cable segment segments as well as high raw material prices resulted in flat EBITDA growth of 3.2% yoy. Sales rose 5.58% to Rs. 557.55 crore i
the quarter ended December 2013 as against Rs. 528.07 crore during the previous quarter ended December 2012. Third Quarter result wer
marginally below our expectaton which led us to revise our estimate on stock, we cut our EPS forecast for FY14E-15E by 8.6%/4.1%. Even afte
posting marginally below result the stock is quite attractive at current market price of Rs. 81 and left a limited upside of 11%, however w
advised our reader to book a part profit on stock . ......................................... ( Page : 21 - 22)
"Book Partial
Profit "Finolex Cables Ltd:"Reasonable prospects..."
Canara banksperformance was muted all through despite of healthy loan growth. Canara bank was unable to translate its balance sheet growt
in profit & loos account due to lower base rate among peers. Banks asset quality was deteriorating sequentially along with higher fres
slippage. PCR was lowest among peers (without technical write off). We are disappointed with growth parameters of the bank. We have neutra
view on the stock. ..................................................................... ( Page : 16- 20)
Coal India LTD :
CIPLA : "BUY" 14th Feb 2014
Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up 10 % YoY led by healthy growth in export business wit
well support from India operations to. The revenues from export business including formulations and API grew by 36 % to 1509 Cr for th
quarter while domestic business grew by 9% YoY to 1044 Cr. ................................................ ( Page : 9-10)
"BUY" 14th Feb 2014
Earlier we suggested, if earnings falls, then price might go beyond 256, but p/b level may be maintained , else we assume that since th
company is a good dividend paying company with Roe above 30% we assume p/b should remain above 3. We see Coal India at a attractiv
valuation to go long from the current dips. So we stick to our previous estimates and recommend Maintain Buy CIL at price dips with a targe
price of Rs.307/-. ............................................................... ( Page : 13-15)
Somany Ceremics: "Outlook Challenging in near term" "REDUCE" 14th Feb 2014
At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY15E. The company can post RoE of 17.0% and 17.1%
& EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY15E. We are downgrading the rating to "Reduce" and advise investors to book profits at current leve
Over the longer term, we expect the efforts to introduce new ventures, curtail costs and the expected economic revival driven by an uptick
demand in the latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY15E and pric
target to Rs 115. ............................................................ ( Page : 11-12 )
CANARA BANK : "NEUTRAL" 14th Feb 2014
Narnolia Securities Ltd,
India Equity Analytics aily Fundamental Report on Indian Equities
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
2/23
1473
17791776
21
-
1M 1yr YTD
bsolute -10.2 -35.8 -35.8
el.to Nifty -5.9 -37.9 -37.9
Current 4QFY13 3QFY1
omoters 62.3 62.3 62.3
I 8.8 8.9 9.8
I 17.9 17.7 16.7
hers 10.9 11.1 11.2
Financials Rs, Cr
2011 2012 2013 2014E 2015E
NII 32526 43291 44331 49365 58302Total Income 48351 57643 60366 65288 74225
PPP 25336 31574 31081 29105 33401
Net Profit 8265 11707 14105 10241 11765
EPS 130.2 174.5 206.2 149.7 172.0
110126
State Bank of India
Dur ing quar terSBIsprof i tabi l i ty decl ined by 34% largely due to high
prov isio ns and conting encies led by deter iorat ing asset quality and higher t
in order to create DTL special reserve as per suggestio n by RBI. Howev e
bank has seen grow th in loan and deposits wh ich translated into growth
prof it los s to some extent. Due to high er operat ing expenses , operat ing pro
grow th was negativ e despite of 14% grow th in revenue. We value bank
Rs.1779/share which would be 1.1 times of FY14Es book value.
Moderate NII growth led by lower growth in interest earnings assets than
interest bearing liabilities
Bank reported NII growth of 13.4% YoY to Rs.12641 cr lower than our expectation
Rs. 12959 cr largely due to lower interest income from advances than high
deposits and borrowing cost. Total income was grown by 13.7% YoY to Rs.16831
supported by other income growth of 15% YoY to Rs.4190 cr. Other income growwas led by exchange and commission income gain of Rs.2971 cr and forex incom
Rs.643 cr.
Operating profit reported negative growth due to higher operating expenses
led by employee benefit provisions
arket Data
pside
2469/1452
SE Code 500112
SE Symbol SBIN
esult update BUY
MP
arget Priceevious Target Price
kt Capital (Rs Cr)
Please refer to the Disclaimers at the end of this Report.
(Source: Company/Eastwind)
ock Performance
2wk Range H/L
Operating expenses increased by 31.4% YoY to Rs.9212 cr in which employee co
and other operating cost increased by 35% and 25.7% respectively. Employee co
was led by higher provision for pension and gratuity to the tune of Rs. 1355 cr a
against Rs.743 cr in 3QFY13 and Rs.1283 cr in 2QFY14. Adjusting the sam
employee cost increased by 8% YoY. Operating profit was declined by 2.2% YoY
Rs.7618 cr. Cost income ratio increased by 735 bps YoY to 54.7% from 47.4%
3QFY13.
Moderate NII growth, higher operating expenses and higher provision and tax
rate led profit de growth of 34% YoY
SBIs profitability was declined by 34% YoY largely due to higher provisions a
contingencies led by deterioration in asset quality and higher tax rate in order
create DTL special reserve as per suggestion by RBI.
verage Daily Volume
hange from Previous
BIN Vs Nifty
hare Holding Pattern-%
9.44 lakh
fty 6048
"BUY"17th Feb, 2014
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
3/23
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
4/23
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Moderate NII growth led by lower growthinterest earnings assets than interest bear
liabilities
Operating profit reported negative growth d
to higher operating expenses led by employ
benefit provisions
Moderate NII growth, higher operat
expenses and higher provision and tax rate
profit de growth of 34% YoY
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
5/23
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
arterly Performance 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E Variation(%)
erest/discount on advances / bills 26310 25379 22800 15.4 3.7 25937 1.4
ome on investments 8228 8137 7072 16.3 1.1 8303 -0.9
erest on balances wi th Reserve Bank of India 92 106 110 -16.1 -13.0
109 -15.9
ers 241 300 362 -33.3 -19.7 349 -30.9
al Interest Income 34870 33922 30344 14.9 2.8 34699 0.5
ers Income 4190 3278 3648 14.9 27.8 3876 8.1
al Income 39061 37200 33992 14.9 5.0 38575 1.3
erest Expended 22230 21671 19189 15.8 2.6 21739 2.3
12641 12251 11154 13.3 3.2 12959 -2.5
er Income 4190 3278 3648 14.9 27.8 3876 8.1
al Income 16831 15529 14803 13.7 8.4 16835 0.0
ployee 5867 5819 4351 34.8 0.8 6364 -7.8
er Expenses 3345 3399 2661 25.7 -1.6 3737 -10.5erating Expenses 9212 9218 7012 31.4 -0.1 10101 -8.8
P( Rs Cr) 7618 6312 7791 -2.2 20.7 6734 13.1
visions 4150 3029 2668 55.5 37.0 3112 33.3
T 3469 3283 5123 -32.3 5.7 3622 -4.2
1234 908 1727 -28.5 36.0 1087 13.6
Profit 2235 2375 3396 -34.2 -5.9 2535 -11.9
ance Sheet (Rs Cr)
posits 1349940 1292456 1156691 16.7 4.4 1337803 0.9
rowings 189969 188937 148374 28.0 0.5 202402 -6.1estments 426728 398536 359959 18.5 7.1 415135 2.8
n 1148901 1103090 978115 17.5 4.2 1152774 -0.3
et Quality
PA 67799 64206 53458 26.8 5.6
A 37167 32151 25370 46.5 15.6
GNPA 5.9 5.8 5.5
NPA 3.2 2.9 2.6
R(%)(w/o technical write-off) 45.2 49.9 52.5
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
6/23
State Bank of India
Source: Esatwind/Company
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
come Statement 2011 2012 2013 2014E 2015E
erest/discount on advances / bills 59976 81078 90537 102590 120306
come on investments 19826 23949 27200 32037 39720
erest on balances with Reserve Bank of India 236 350 545 415 415
hers 1356 1144 1374 1253 1253
tal Interest Income 81394 106521 119657 136294 161693
hers Income 15825 14351 16035 15923 15923
tal Income 97219 120873 135691 152217 177616
erest on deposits 43235 55644 67465 61066 70226
erest on RBI/Inter bank borrowings 2562 3886 4124 10146 11668
hers 3071 3700 3737 0 0
erest Expended 48868 63230 75326 86929 103391
32526 43291 44331 49365 58302
her Income 15825 14351 16035 15923 15923
tal Income 48351 57643 60366 65288 74225
mployee 15212 16974 18381 22795 25719
her Expenses 7804 9095 10904 13388 15105
erating Expenses 23015 26069 29284 36183 40824
P( Rs Cr) 25336 31574 31081 29105 33401ovisions 17071 13090 11131 14253 16594
T 8265 18483 19950 14852 16808
x 0 6776 5846 4611 5042
et Profit 8265 11707 14105 10241 11765
posits 933933 1043647 1202740 1383151 1590623
ange (%) 16.1 11.7 15.2 15.0 15.0
which CASA Dep 461521 467607 539063 580923 668062
ange (%) 49 45 45 42 42
rrowings 119569 127006 169183 215867 248248
vestments 295601 312198 350927 32037 39720
ans 756719 867579 1045617 1202459 1382828
atio
eld on Advances 7.9 9.3 8.7 8.5 8.7
eld on Investments 6.9 7.9 8.0 7.4 8.0
eld on Funds 7.0 8.4 8.0 0.0 0.0
st of deposits 4.6 5.3 5.6 6.3 6.5
st of Borrowings 4.7 6.0 4.6 4.7 4.7
st of fund 4.6 5.4 5.5 5.4 5.6
luation
OE(%) 12.7 13.9 14.3 9.3 9.8
ok Value 1023 1251 1446 1617 1617BV 2.7 1.7 1.4 0.9 0.9
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
7/23
1M 1yr YTD
bsolute 1.1 57.1 82.9
el. to Nifty 4.7 55.2 70
Current 2QFY14 1QFY1
omoters 63.7 63.7 63.7
22.5 22.8 22.9
I 5.7 3.2 3.1
hers 8.1 10.4 10.4
Financials Rs, Cro
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 4312 4207 2.5 2865 50.5EBITDA 2000 1843 8.5 1275 56.9
PAT 1531 1362 12.4 881 73.8
EBITDA Margin 46.4% 43.8% 260bps 44.5% 190bps
PAT Margin 35.5% 32.4% 310bps 30.8% 480bps
The stock at its CMP of Rs 609 is trading at 22.1x of one year forward FY14E EPS of 27.
and company has posted very strong 3QFY14 results however on account stretch
valuations we do not see much upside to stock and therefore we turn neutral with
650.
Please refer to the Disclaimers at the end of this Report.
ock Performance-%
hare Holding Pattern-%
MP 609
wk Range H/L 650/385
SE Symbol SUNPHARMA
524715
View & Valuation
The operating EBITDA for the quarter came at Rs 1975 Cr grew by 57 % YoY and OP
stands at 46 %.There is improvement in OPM by 200 bps during the quarter owing
stronger operating metrics. The RM cost as percentage of sales was 14 % versus 15 %
the same corresponding period last fiscal. The employ cost as percentage of sales was
% in current quarter verses 14% for 3QFY13.The company managed to control its oth
expenses during the 3QFY14 and has dropped by 100 bps at 24 % of the sales.
The net profit for the quarter came at Rs 1531 Cr compared to Rs. 881Cr for Q3 last ye
up 74% YoY. The NPM for the 3QFY14 came at 36%.The other income for the 3QFY4 w
Rs 134 Cr and Tax rate was at 12 %.
The company on its R&D said that in the 3QFY14, ANDA for 5 products were filed. Aft
counting these, and adjusting for filings that were dropped, cumulatively ANDAs for 4
products have been filed with the USFDA (as on December 31, 2013). ANDAs for
products received approvals in the third quarter, taking the total number of approvals to 3
(as on December 31, 2013). ANDAs for 131 products now await USFDA approval, includi
14 tentative approvals.
kt Capital (Rs, Cr)
The management of the company after 3QFY14 results has revised its FY14E reven
guidance to 29 % from 25 % earlier. Guidance is at constant exchange rate. The compafurther said that capex for the FY14 would be on higher side of earlier guidance. The t
rate for the full year would be 15 % and R&D expected to be in the range of 6-8% of t
Sales for the FY'14.ne Year Price vs Nifty
(Source: Company/Eastwi
126,119
verage Daily Volume 535293
fty 6048
evious Target Price
esult Update NEUTRAL Sun Pharmaceuticals Industries limited posted 3QFY14 results above street expectatiowith total revenues including other operating income at Rs 4312 Cr up 50.5 % YoY led
robust growth in US formulations and Taro business. The stellar performance of compa
was supported well from domestic operations as well. The US formulation business gr
by more 56 % YoY to USD 434 Mn while International formulation sales outside US gr
by 16 % YoY to USD 84 Mn. Overall international revenues accounted for more than 75
of total revenues for the quarter. The Sales of branded prescription formulations in Ind
was Rs. 947 Cr up by 20% Yoy from Q3FY13 last year. The API business for the quart
witness some decline with sales falls to Rs 174 Cr translating decline of 17 % YoY.arket DataSE Code
SUNPHARMA
Robust Performance
arget Price 650
7%pside
hange from Previous
"NEUTRAL"17th Feb' 14
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
8/23
SUNPHARMA
les and PAT Trend (Rs)
(Source: Company/Eastwind)
Total revenues including other operat
income came at Rs 4312 Cr up 50.5 % YoYby robust growth in US formulations a
Taro business.
PM %
(Source: Company/Eastwind)
PM %
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
There is improvement in OPM by 200 b
during the owing to stronger operat
metrics.
The NPM for the 3QFY14 came at 36%.T
other income for the 3QFY4 was Rs 134 Cr
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
9/23
BUY
1M 1yr YTD
bsolute -4.5 -3 -2
el. to Nifty -1.7 -4.3 -14
Current 2QFY14 1QFY1
omoters 36.8 36.8 36.8
23.8 23.8 23.1
I 10.6 10.9 10.8
hers 28.8 28.5 29.3
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 2282 2347 (2.8) 2070 10.2
EBITDA 403 533 (24.4) 492 -18.1PAT 261 376 (30.6) 338 -22.8
EBITDA Margin 17.7% 22.7% (500bps) 23.8% (610bps
PAT Margin 11.4% 16.0% (460bps) 16.3% (490bps
arget Price 440
arket DataSE Code 500087
The net profits for the quarter came at Rs 261 Cr and NPM stands at 11.43 %. The Rs
Cr Forex gain is included in the other income during the quarter. The tax rate for the quar
was nearly at same rate as in corresponding last quarter at 25 %.
The Company filed 10 ANDA's in the last nine months and got 6 approvals for the sam
period. It has 35 ANDA's under approval as on 31stDecember 2013. The few of t
approval products are commercialized. Cipla Medpro formed as acquisition
Medpro,South Africa last year added 500 Cr to top line and 50 Cr to the operating prof
during the quarter.
ne Year Price vs Nifty
(Source: Company/Eastwi
30,591
verage Daily Volume 617290
fty 6,001
The operating EBITDA for the quarter under review came Rs 403 Cr and OPM at 17.
%.The OPM declines by more than 600 bps YoY due to the increase in the R&D and t
ramp up in the Staff cost during the quarter. The employ cost as percentage of sales stan
at 14 % while it was 12 % for the same time last fiscal. The other expenses as percenta
of sales were 27% for the 3QFY14 versus 25 % in 3QFY13.The other expenditu
increased largely due to rise in R&D expenses and rise in the cost owing to filings a
setting up of the front end during the quarter. The R&D expenses 4.5% of Sales during t
quarter.
450/354
SE Symbol CIPLA
wk Range H/L
CIPLA
esult Update
MP 381
Cipla Limited posted its 3QFY14 results with its standalone net revenues at Rs 2282 up
% YoY led by healthy growth in export business with well support from India operations
The revenues from export business including formulations and API grew by 36 % to 15
Cr for the quarter while domestic business grew by 9% YoY to 1044 Cr.The growth
export revenues was primarily due to growth in anti-retroviral, anti-cancer, anti-allergic a
anti-biotic segments.15%pside
hange from Previous
evious Target Price
The stock at its CMP of Rs 381 is trading at 19.58 x of one year forward FY14E EPS of R
19.40.The stock has reacted negatively after 3QFY14 results however we dontsee a
downside risks to our estimates. We further believe that Cipla-Medpro would be earni
accretive in medium to long term horizons and we view the recent correction a good en
point for the stock. We maintain our view BUY for the stock with Target Price of
440.
Please refer to the Disclaimers at the end of this Report.
ock Performance-%
hare Holding Pattern-%
kt Capital (Rs, Cr)
View & Valuation
The management of the company after the results said that the Global respiratory u
expects some of launches in the next year. It has set up new global respiratory team dur
the quarter. The Combination inhalers planned to launch in FY'15.Company expects to
more than 5% of Sales on the back of ramp up filings for the FY'15.The Capex is 90
during the quarter and expects to be Rs 400 Cr FY'14. The Rollover Capex of previous ye
is Rs 150 Cr during the year.
"BUY"14th Feb' 14
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
10/23
evenue Trend %
(Source: Company/Eastwind)
PM & NPM Trend %
(Source: Company/Eastwind)
Please refer to the Disclaimers at the end of this Report.
Net revenues at Rs 2282 up 10 % YoY led
healthy growth in export business with w
support from India operations to.
The OPM declines by more than 600 bps Y
due to the increase in the R&D and the ra
up in the Staff cost during the quarter.
CIPLA
usiness Trend
(Source: Company/Eastwind)
The revenues from export business includ
formulations and API grew by 36 % to 15
Cr for the quarter while domestic busin
grew by 9% YoY to 1044 Cr.
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
11/23
- Soman Ceremics Ltd.
MP 131
rget Price 11595
side -12.2%
21.1%
E Code 531548
E Symbol
61/155
452
3,109
fty 6,001
1M 1yr YTD
solute 13.2 59.9 103.2
l. to Nifty 16.0 58.1 97.6
3QFY14 2QFY14 1QFY14
omoters 63.3 6 3.3 63.3
2.8 0.8 0.2
1.7 1.9 2.0
hers 32.2 34.0 34.5
Valuations :
Financials Rs, Crore3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 284.5 305.6 -6.9% 267.2 6.5%
EBITDA 17.0 19.4 -12.8% 22.1 -23.3%
PAT 4.8 6.0 -20.5% 8.2 -41.4%
EBITDA Margin 6.0% 6.4% (40) bps 8.3% (230) b
PAT Margin 1.7% 2.0% (30) bps 3.1% (140) b
Management is expected to achive a top-line growth of arround 20-25% in FY14E.
Management Guidence FY14E
(Standalone) (Source: Company/Eastwind Resea
Please refer to the Disclaimers at the end of this Report.
At the current CMP of Rs. 131, the stock is trading at a PE of 15.1x and 11.0x of FY14E and FY1
The company can post RoE of 17.0% and 17.1% & EPS of Rs. 8.7 and Rs. 10.8 FY14E and FY1
We are downgrading the rating to "Reduce" and advise investors to book profits at curr
level. Over the longer term, we expect the efforts to introduce new ventures, curtail costs a
the expected economic revival driven by an uptick in demand in the latter part of FY2015
boost its fortunes. In the interim period, we are reducing our target multiple to 10x of FY
and price target to Rs 115.
yr Forward P/B
are Holding Pattern-%
ock Performance-%
arket Data
erage Daily Volume
For Quarter Ended 2QFY14
For the quarter ended September 2013, Somany Ceramic registered 6.5% rise in sales to
284.5 crore.
OPM fell 230 basis points to 6.0% taking OP down 8.3% to Rs 17.0 crore.
Other income also rise 77.8% to Rs 48 lakh and interest cost decreased 8.9% to Rs 4.6 crore. As depreciation increased 9.1% to Rs 5.7 crore, PBT fell 41.1% to Rs 7.1 crore.
Taxation fell 40.3% to Rs 2.3 crore (tax incidence grew from 32.5% to 32.9) and PAT fell 41
to Rs 4.8 crore.
For Nine Month Ended 9MFY14
For the nine month ended December 2013, Somany Ceramic registered 18.7% rise in sales to
848.8 crore.
However, OPM dived from 8.5% to 6.4% taking OP down 10.7% to Rs 54.5 crore.
Other income jumped 28.1% to Rs 1 crore and interest cost decreased 8.2% to Rs 13.8 crore.
As depreciation increased 8.7% to Rs 16.5 crore, PBT fell 20.3% to Rs 25.2 crore.
Taxation fell to 15.5% to Rs 8.6 crore but tax incidence grew from 32.1% to 34.0% which fin
kt Capital (Rs Crores)
wk Range H/L
evious Target Price
SOMANYCERA
ange from Previous
"Outlook Challenging in near term.."
The Q3FY2014 results were weak marked by a double-digit decline in the profit after tax on
back of subdued increase in fuel cost, dollar v/s rupee volatility and a pressure on the mar
The management expect improvement in the demand conditions in the near term and guide
revenue growth of 20% in FY14E-15E, however we expect the revenue growth to
somewhere arround 12-15% and financial performance to remain weak on account of mar
pressure. Consequently, we are downgrading the rating to "Reduce" and advise investors
book profits at current level. Over the longer term, we expect the efforts to introduce n
ventures, curtail costs and the expected economic revival driven by an uptick in demand in
latter part of FY2015, to boost its fortunes. In the interim period, we are reducing our tar
multiple to 10x of FY15E and price target to Rs 115.
Reduce
Result highlights :
esult update
"Reduce"13th Feb' 14
Narnolia Securities Ltd,
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
12/23
Please refer to the Disclaimers at the end of this Report.
mmount in crore) (Source: Company/Eastwind)
Soman Ceremics Ltd.
y financials :
urce: Company/Eastwind Research) (Figures In crore)
Narnolia Securities Ltd,
ARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E
erformance
evenue 446 542 720 879 1054 1250 1438
ther Income 2 3 1 1 3 3 3
otal Income 448 545 721 880 1056 1253 1440
BITDA 42 56 68 74 86 83 95
BIT 28 41 50 56 65 59 75
EPRICIATION 14 15 17 18 21 24 26
TREST COST 16 13 17 21 20 17 17
BT 14 31 34 36 48 44 60
AX 5 10 11 11 15 14 19
eported PAT 9 20 24 25 33 30 41
vidend 1 2 3 3 5 6 6
PS 2.5 5.9 6.9 7.3 9.4 8.7 11.9
PS 0.4 0.7 0.8 0.9 1.4 1.9 1.9
eild %
BITDA % 9.5% 10.3% 9.4% 8.4% 8.1% 6.6% 6.6%
BT % 3.0% 5.6% 4.8% 4.1% 4.5% 3.5% 4.2%
PM % 2.0% 3.8% 3.3% 2.9% 3.1% 2.4% 2.9%
arning Yei ld % 28.5% 18.8% 18.0% 19.5% 14.6% 6.6% 9.1%
vidend Yeild % 3.9% 2.2% 2.1% 2.5% 2.2% 1.4% 1.4%
OE % 13.5% 24.6% 23.0% 20.1% 21.3% 17.0% 19.4%
OCE% 12.3% 13.8% 15.7% 16.6% 17.8% 9.8% 12.0%
osition
et Worth 65 83 104 126 153 177 211
otal Debt 138 162 158 151 142 130 130
apital Employed 202 245 262 276 295 307 341
o of Share 3 3 3 3 3 3 3
MP 9 31 38 38 65 131 131
aluation
ook Value 18.8 24.0 30.1 36.5 44.4 51.2 61.2
/B 0.5 1.3 1.3 1.0 1.5 2.6 2.1
t/Coverage 1.7 3.1 2.9 2.7 3.3 3.4 4.4
/E 3.5 5.3 5.6 5.1 6.8 15.0 11.0
et Sales/CE 2.2 2.2 2.8 3.2 3.6 4.1 4.2
et Sales/Equity 6.9 6.6 6.9 7.0 6.9 7.1 6.8
-
8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
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Coal India LTD.
261
307
33018%
-7%
533278
176226 Fluctuation in Domestic and international coal price impacted coal offtake
17622
6001
1M 1yr YTD
solute -1.3 -21.2 -21.4
l. to Nifty 2.8 8.8 8.6
Rescheduling Date of hearing stands a key concern
3QFY14 2QFY14 1QFY14
omoters 90.0 90.0 90.0
5.5 5.5 5.4
2.4 2.3 2.3
hers 2.1 2.2 2.4
Realization gain on Revised Coal Price
Financials : Q3FY14 Y-o-Y % Q-o-Q % Q3FY13 Q2FY1
Net Revenue 16928 -2.3 9.8 17325 1541
EBITDA 4104 -4.3 46.9 4288 279Depriciation 442 5.2 -10.7 420 49
Interest Cost 10 0.0 25.6 10
Tax 1930 4.9 36.6 1839 141
PAT 3894 -11.4 27.6 4395 305(In Cr
1
kt Capital (Rs Crores)
372/238
fty
Meanwhile, Coal India Ltd is likely to get additional revenue of Rs 2,119 Crore in this fisca
on account of revision in dry fuel prices.CIL (Coal India Ltd) has revised and rationalize
the basic notified prices of all the grades of non-coking coal except GI, G2 and G5.Th
estimated additional revenue due to revision of basic notified price for the curren
financial year is Rs 2,119 cr. Though the incremental revenue is a positive sign but it fai
to change our previous valuation.
erage Daily Volume (Nos.)
Please refer to the Disclaimers at the end of this Report.
ock Performance-%
are Holding Pattern-%
yr Forward P/B
Source - Comapany/EastWind Research
In this quarter the international coal price were relatively down by 9% against Q2FY1
while the domestic coal price were showed upward movement. So the Major domesti
consumers of coal imported coal at lower price, hence it impacted the off takes anrevenue of CIL slipped -2% YOY and unable to meet the target off takes. Govt decisio
related labor strikes impacted the productions of CIL too. Sequential increase in tax rat
further contracted the NPM%. From January we have seen a recovery in internationa
coal price which is positive sign for CIL.
Competition Appellate Tribunal stays Rs 1,773 Crore fine on CIL, and will decide on th
matter on next hearing 16th April 2014 (Rescheduled from 11th Feb 2014). The quantum
of penalty Rs 1,773.05 Crore is equal to three per cent of the PSU's average turnover fo
the last three years. We believe, A Rs 1800-crore fine could possibly mean less profits fo
the company and less dividend income for its owners. But as the main owner, th
government, will pocket this amount in the form of a fine, it will not be poorer in an
way.
arket Data
E Code
COALINDIA
CIL reported Rs.16928 Cr Sales (-2% YOY) against Rs.17325 Cr in Q3FY13 due to poor o
takes of the coal during the quarter. Q3FY14 PAT slipped to -11% to Rs.3894 Cr again
Rs.4395 Cr in Q3FY13.Q3FY14 EBIDTA/ton remained flat YOY at Rs.350/ton while it
increased 36% through QOQ. EBIDTA margin corrected in this quarter to 24% from 18% iQ2FY14.Depriciation slipped 11% to 442Cr against 495 Cr in Q2FY14, moderating th
burden on EBIDTA.
On the expenditure side contractual expenses increased ~20% to Rs.154/ton from
Rs.128/ton in Q2FY14.Powerfuel cost and other expenses per ton remained flat, whil
cost of project per ton decreased to Rs149/ton from Rs.206/ton in the previous quarter
Poor Realization of Coal India showed little uptick like 2% to Rs.1445/ton.E Symbol
wk Range H/L
side
ange from Previous
esult Update
MP
rget Price
evious Target Price
"Buy"14th Feb' 14
Narnolia Securities Ltd,
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
14/23
FY11 FY12 FY13 FY14E
50234 62415 68303 69960
7573 5123 6556 8372
1755 2013 2333 2591
4580 4901 5802 604920481 26705 27943 28943
40390 40857 50219 53705
9843 21558 18084 16255
1673 1969 1813 1860
79 54 45 34
5595 6484 7623 7310
10868 20588 17356 17921
33 51 36 40
FY10 FY11 FY12 FY13
431 431 436 452
416 425 433 4651073 1183 1441 1468
404744 390243 377447 364736
1066 1105 1155 1240
14
vg Man Power (in numbers)
oductivity Per Man
oal Offtake in MT
epriciation
terest Cost
x
AT
OE %
PERATING MATRIX
al Production in MT
venue Generation From unit Ton
ew & Outlook
L PERFORMANCE
et Revenue from Operation
ost Of Projects & Contractual
wer and fuel
ntractual expensesmployee benefit Expence
penditure
ITDA
Coal India LTD.
e revised our estimates due to sequential poor production and off takes of CIL. We
pect modest increase in sales volumes growth during FY2013-15 on account of poor
f take capabilities of CIL. Management showed his confidence about their coal
oduction target and coal off take target for FY2014E, in previous quarter, which is2mt and 492mt respectively. But Due to sequential poor production and off take we
vised the target to 464mt and 475mt respectively. Also, we expect CILsmargins to
cline during FY2014 due to lower e-auction realizations and higher staff costs/other
penses. We are expecting flat sales growth for 2014.Coal India Ltd sprang a positive
rprise by reporting higher-than-expected realizations as well as earnings before
terest, tax, depreciation and amortization (Ebitda). Average price realizations
creased by 2.3% sequentially to Rs.1,444.87 per tonne which is positive sign for future
owth.
arlier we suggested, if earnings falls, then price might go beyond 256, but p/b level
ay be maintained , else we assume that since the company is a good dividend paying
mpany with Roe above 30% we assume p/b should remain above 3. We see Coal India
a attractive valuation to go long from the current dips. So we stick to our previous
timates and recommend Maintain Buy CIL at price dips with a target price of Rs.307/-.
ecommendation
Narnolia Securities Ltd,
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15/23
FY10 FY11 FY12 FY13
6316 6316 6316 6316
20956 26998 34137 42156
27273 33314 40453 48472
343 1334 1305 10781620 33 0 0
2545 22461 28271 31144
772 645 829 837
1404 12387 15595 20447
5443 8490 9785 12385
0 779 759 712
12035 12065 12681 12754
2211 2057 1848 3496
610 845 1017 1181
4402 5586 6071 5618
2169 3419 5663 10480
39078 45806 58203 62236
8066 11180 13478 16189
17921 21646 24688 25479
FY10 FY11 FY12 FY13
0.0 5.7 5.5 4.0
0.0 17.3 32.6 27.5
4.9 22.8 29.2 52.7
1.7 4.3 4.3 4.2
1.0 3.7 3.1 2.8
FY10 FY11 FY12 FY13
10727 12819 16323 15948-131 -3822 3565 -6839
10596 8997 19888 9109
950 697 -10410 -1833
2163 2911 -7382 -7852
13708 12606 2095 -575
Down 21% from its 52week High
Up 14% from its 52 week Low
15
sh from Operation
rading At :
anges In Working Capital
et Cash From Operation
sh From Investment
sh from Finance
et Cash Flow during year
ATIOS
B
S
ASH FLOWS
ebtor to Turnover%
editors to Turnover%
ventories to Turnover%
sh and bank balances
S PERFORMANCE
are capital
serve & Surplus
tal equity
ng-term borrowingsort-term borrowings
ng-term provisions
ngible assets
pital work-in-progress
ng-term loans and advances
ventories
ade receivables
Coal India LTD.
ade payables
ort-term provisions
tal liabilities
tangibles
ort-term loans and advances
tal Assets
Narnolia Securities Ltd,
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
16/23
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CANARA BANK
anksloan grew by 32% YoY led by retail sector growth of 55% YOY followed by SME
6% YoY), Infrastructure (24% YoY). Within infrastructure loan growth, power generation
nd transmission growth was strong at 63% YoY. Deposits grew by 1% YoY and 4% QoQ
which current and saving account deposits grew by 19% and 16% YoY respectively. In
eposits profile, term deposits de-grew by 3% YoY which was took flat growth in overall
eposits as share of term deposits reduce to 77% from 80% in last quarter. CASA ratio
as declined by 123 bps QoQ to 23%. Credit deposits ratio for the quarter stood at
0.4% versus 71.8% in previous quarter and 67.4% in last quarter.
argin compression on account of higher cost of fund
M compressed by 15 bps YoY to 2.21 largely due to lower loan yield 70 bps YoY
hereas cost of fund increased by 120 bps YoY. Higher cost of fund was due to higher
st of bulk deposits. However declining share of bulk deposits and increasing CASA
tio restricted to escalate funding cost. Yield on loan declined by 70 bps YoY despite of
ealthy loan growth was due to lower base rate among peers.
ealthy loan growth led by retail sector
aluation & View
anara banks performance was muted all through despite of healthy loan growth.
anara bank was unable to translate its balance sheet growth in profit & loos account
ue to lower base rate among peers. Banksasset quality was deteriorating sequentially
ong with higher fresh slippage. PCR was lowest among peers (without technical write
f). We are disappointed with growth parameters of the bank. We have neutral view on
e stock.
aluation Band
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
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18/23
Moderate growth in NII was due to margin
compression
Higher opex and moderate NII growth led
muted operating profit growth
Profitability declined due to moderate NII
growth, higher provisions and higher tax rat
CANARA BANK
hart Focus
Please refer to the Disclaimers at the end of this Report.
Narnolia Securities Ltd,
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8/13/2019 Investment Funds Advisory Today- Buy Stock of State Bank of India and neutral view on Sun Pharmaceuticals Ind
19/23
Please refer to the Disclaimers at the end of this Report.
CANARA BANK
uarterly Performance
Narnolia Securities Ltd,
arterly Result 3QFY14 2QFY14 3QFY13 % YoY % QoQ 3QFY14E % Variation
erest/discount on advances / bills 7360 6964 5958 23.5 5.7 7298 0.9
ome on investments 2575 2597 2460 4.7 -0.9
2701 -4.7
erest on balances with Reserve Bank of India 149 93 127 17.1 60.3 216 -30.8
ers 0 0 0 - -13.5 0 -
al Interest Income 10084 9654 8544 18.0 4.4 10214 -1.3
ers Income 851 773 846 0.7 10.1 1006 -15.3
al Income 10935 10427 9390 16.5 4.9 11220 -2.5
erest on deposits 7311 6923 6307 15.9 5.6 0
erest Expended 7857 7463 6556 19.8 5.3 7608 3.3
2227 2191 1988 12.0 1.6 2606 -14.5
er Income 851 773 846 0.7 10.1 1006 -15.3
al Income 3078 2964 2834 8.6 3.9 3612 -14.8
ployee 873 933 831 5.1 -6.3 1127 -22.5
er Expenses 614 607 486 26.3 1.2 751 -18.3
erating Expenses 1488 1539 1317 12.9 -3.4 1878 -20.8
P( Rs Cr) 1591 1425 1516 4.9 11.6 1734 -8.2
visions 1052 674 626 68.0 56.0 700 50.3
T 539 751 891 -39.4 -28.2 1034 -47.8
130 125 180 -27.8 4.0 258 -49.7
t Profit 409 626 711 -42.4 -34.6 775 -47.2
ance Sheet
posits 408924 391613 323963 26.2 4.4 400424 2.1
SA(%) 23.1 24.3 20.0 0.0
n 287700 281104 218242 31.8 2.3 291913 -1.4
estments 130359 119481 118835 9.7 9.1 127099 2.6
et Quality
PA 8,074 7,475 6,090 32.6 8.0
A 6870 6459 5134 33.8 6.4
GNPA 2.8 2.7 2.8 NPA 2.4 2.3
R(%) (w/o technical write-off) 14.9 13.6
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Please refer to the Disclaimers at the end of this Report.
CANARA BANK
Narnolia Securities Ltd,
come Statement 2010 2011 2012 2013 2014E 2015E
terest Income 18752 23064 30851 34078 39193 47413
terest Expense 13071 15241 23161 26199 30682 35244
I 5681 7823 7689 7879 8511 12169
hange (%) #DIV/0! 37.7 -1.7 2.5 8.0 43.0
on Interest Income 2858 2703 2928 3153 3817 3817
otal Income 8538 10526 10617 11032 12328 15986
hange (%) #DIV/0! 23.3 0.9 3.9 11.8 29.7
perating Expenses 3478 4419 4674 5142 5947 7194
e Provision Profits 5061 6107 5943 5890 6381 8792
hange (%) #DIV/0! 20.7 -2.7 -0.9 8.3 37.8
ovisions 2039 2081 1860 2218 3347 3565
BT 3021 4026 4083 3672 3034 5228
AT 3021 4026 3283 2872 2399 3869
hange (%) 45.8 33.2 -18.5 -12.5 -16.5 61.3
alance Sheet
eposits( Rs Cr) 234651 293973 327054 355856 409234 470620
hange (%) #DIV/0! 25 11 9 15 15
which CASA Dep 68261 83117 79611 86061 102878 118310
hange (%) #DIV/0! 22 -4 8 20 15
orrowings( Rs Cr) 8441 14262 15525 20283 24439 28105
vestments( Rs Cr) 69677 83700 102057 121133 133305 168631
ans( Rs Cr) 169335 212467 232490 242177 293034 339919
hange (%) #DIV/0! 25 9 4 21 16
atio
vg. Yield on loans 8.2 8.0 10.1 10.1 9.6 10.0
vg. Yield on Investments 6.6 6.9 6.9 7.5 7.7 7.5
vg. Cost of Deposit 5.2 4.8 6.7 7.1 7.0 6.9
vg. Cost of Borrowimgs 9.3 7.0 7.7 4.7 7.0 7.0
aluation
ook Value 358 452 512 562 639 710
MP 410 627 474 393 214 214
BV 1.1 1.4 0.9 0.7 0.3 0.3
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V- Finolex Cables Ltd.
MP 81
rget Price 90
evious 73
side 11%
ange from 0%
E Code 500144
E Symbol
wk Range 41/92
kt Capital 1,238
erage Daily 94,300
fty 6,084
1M 1yr YTD
solute (4.1) 46.7 78.0
l. to Nifty (2.7) 43.7 71.0
3QFY14 2QFY14 1QFY14
omoters 35.8 35.8 35.8
1.8 1.1 1.0
9.8 10.2 10.5
hers 52.5 52.9 52.8
Financials Rs, Crore
3QFY14 2QFY14 (QoQ)-% 3QFY13 (YoY)-%
Revenue 563.1 593.1 -5.1% 534.3 5.4%
EBITDA 44.3 76.4 -42.0% 42.9 3.2%
PAT 24.5 80.0 -69.4% 24.0 2.1%
EBITDA Margin 7.9% 9.3% (140) bps 8.0% (10) bp
PAT Margin 4.3% 12.8% (850) bps 4.5% (20) bp
(Standalo
Please refer to the Disclaimers at the end of this Report.
(Source: Company/ Eastwind Research)
We cut our earnings estimates to factor volume decline in electrical & communication ca
segment, margin decline in copper rod segment and losses in the others segment. Consequen
we cut our earnings estimates by 8.6% for FY14E (Rs. 11.6/Share) and 4.1% for FY15E (
12.6/Share). At the CMP of Rs. 81 stock is trading at PE of 7.0/6.4 of FY14E/15E. We revised o
rating on stock from "Buy" to "Hold". However owing to slower pace of economic growth furt
we advised our readers to book part profit on stock and hold the balance with a target price
Rs. 90
"Reasonable prospects..."
esult update
yr Forward P/B
are Holding Pattern-%
ock Performance-%
Book Partial Profit
Valuation :
FCL being one of the leading players in the cable industry seems well placed to capture hu
opportunities considering the strengths & the industry in which the Company is operat
Derivative losses coupled with bleak performance by communication cable segment were
major reasons for de-rating of the stock in past which in our view seems to have been overdo
The companysLT division is doing very well, they have recently entered into HT and Extra H
Voltage (EHV) cable verticals. The company has market share of around 15-16 percent in b
electrical and telecommunication verticals. Further the company has approved setting u
captive 5 MW solar power plant at its manufacturing facilities at Urse, Pune at an estimated c
of Rs 40 crore.
Outlook :
arket Data
Finolex Cables (FCL) Q3FY14 PAT of Rs. 24.5 crore was below ourestimate owing to lower sa
and EBITDA margin. Decline in communication cable segment segments as well as high r
material prices resulted in flat EBITDA growth of 3.2% yoy. Sales rose 5.58% to Rs. 557.55 cr
in the quarter ended December 2013 as against Rs. 528.07 crore during the previous qua
ended December 2012. Third Quarter result were marginally below our expectaton which
us to revise our estimate on stock, we cut our EPS forecast for FY14E-15E by 8.6%/4.1%. E
after posting marginally below result the stock is quite attractive at current market price of
81 and left a limited upside of 11%, however we advised our reader to book a part profit
stock
The copper rods segment was initially set up as backward integration for the cables segment. T
excess production after captive consumption is sold off to third parties at market price. Howev
owing to thin and declining margins from third party transactions, FCL is gradually reducing
exposure to the segment. The contribution of the segment to the top-line has decreased fr
21% in FY2010 to ~5% currently. This trend is expected to continue, thereby improving toverall EBIT margin of the company.
FINCABLES
"Book Partial Profit"13th Feb' 14
Narnolia Securities Ltd,
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Please refer to the Disclaimers at the end of this Report.
Finolex Cables Ltd.
y financials :
urce: Company/ Eastwind Research)
Narnolia Securities Ltd,
PARTICULAR 2009A 2010A 2011A 2012A 2013A 2014E 2015E
Performance
Revenue 1342 1619 2036 2064 2271 2315 2500
Other Income 51 24 26 36 24 47 42
Total Income 1392 1643 2062 2100 2295 2362 2542
BITDA 100 195 174 175 229 241 258
BIT 61 157 135 135 182 191 205
Depriciation 39 37 39 39 47 50 53
ntrest Cost 32 19 19 26 12 14 14
BT -30 89 107 109 171 234 233
TAX 5 32 22 11 26 56 56
Derrivative Loss -109 -74 -34 -36 -23 10 0
Reported PAT -35 58 85 98 145 178 185
Dividend 3 9 11 12 18 23 23
PS -2.3 3.8 5.6 6.4 9.5 11.6 13.1
DPS 0.2 0.6 0.7 0.8 1.2 1.5 1.5
Yeild %
BITDA % 7.4% 12.0% 8.5% 8.5% 10.1% 10.4% 10.8%
NPM % -2.5% 3.5% 4.1% 4.7% 6.3% 7.5% 7.3%
arning Yeild % -12.0% 7.4% 11.7% 20.6% 20.9% 14.3% 16.2%
Dividend Yeild % 1.0% 1.2% 1.5% 2.6% 2.6% 1.9% 1.9%
ROE % -6.0% 9.0% 11.9% 12.3% 15.7% 16.5% 15.4%
ROCE% -4.0% 6.3% 8.7% 10.1% 13.1% 14.3% 13.7%
Position
Net Worth 596 643 717 800 924 1079 1249
Total Debt 296 275 260 172 184 160 160
Capital Employed 892 918 978 972 1109 1239 1409
No of Share 15 15 15 15 15 15 15
CMP 19 51 47 31 46 81 81
Valuation
Book Value 39.0 42.0 46.9 52.3 60.4 70.6 81.7
/B 0.5 1.2 1.0 0.6 0.8 1.1 1.0
nt/Coverage 1.9 8.4 7.0 5.2 14.6 13.6 14.6
/E -8.3 13.4 8.5 4.9 4.8 7.0 6.4
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