Muruguppa Group - TII 42% upside buy

Tube Investment India - 42%


Diversified company catering to auto/eng/infra/power/
consumption
• Market leader in most of its businesses
- TI and Hero 75% of market, 50% market share in ‘specials’
- 50% market share for precision tubes
- 64% market share for car doorframes
• New products – super-critical boiler tubes, e-scooters
• Strong earnings growth - 23% EPS CAGR over FY11-13E.
• Adjusted for investments ROCE for FY12E attractive at 23%,
Bicycles +70% ROCE
• Holdings in Cholamandalam (59%) and Mitsui JV in the
general insurance business (74%)
• Market Cap US$0.63bn, ADV <="" p="" shareholding="">
Promoter 51%
• Valuation: SOTP, 6-7x EV/EBITDA and 50% holding company
discount

Report UBS - Top Buy

Buy Fortis Healthcare for 12% Upside

Fortis is the second largest hospital operator which operates
39 hospitals with 2,317 operating beds and 911 beds under
management as of September 2010.
• FOHE has demonstrated an ability to exploit market
opportunities; it acquired Escorts (a 90% stake in 2005),
Malar (a 50% stake in 2007) and Wockhardt (acquired in
December 2009)
• Over FY06-10, its revenue and operating profit recorded a
34% and a 57% CAGR, respectively.
• We expect FOHE to maintain double-digit revenue growth
over FY11-15. With higher revenue and an improving
EBITDA margin (we estimate 14% in FY11 to 18% in FY15)
and a rising net income margin (we estimate 5% in FY11 to
10% in FY15), we forecast a net income CAGR of 38% over
FY10-15.
• Shareholding: promoters – 82%
• Valuation: DCF based methodology using UBS’s VCAM tool
(assume WACC of 12.18% and terminal sales growth rate
of 5.8%).Implied FY13E


Report - UBS