Tuesday, January 31, 2012


CWT: IIFL maintains Buy, but reduce TP tp $1.25 from $1.33. Note of strong growth prospects.
Stock price underperformed its peers n STI, possibly due to lower-than-expected coal trading volumes and margins in 2011.

The disappointment is trivial as the coal trading business will account for only 2-6% of 2011-13 profit. MRI Trading, accounting for 27-41% of 2011-13 profit, is progressing well on its growth path. Profit contribution from 79% owned MRI would likely more than double over 2011-13.

Strong growth in the metals trading business and a steady 16% annual profit growth in core logistics and freight forwarding businesses will support 29% EPS CAGR over 2011-13. Overall, house lower 2012-13 EPS by 6-10% for revised base metal price estimates and cut contribution from coal business.

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