Oberoi Realty
Research: Morgan Stanley
Rating: Outperform
CMP: Rs 249.60

Oberoi Realty''s March 2011 quarter results were below estimates. Total income was up 58% year-on-year but it fell 33% sequentially due to lumpy recognition of the Exquisite I project. Its operating margin compressed 1,000 basis points (down 760 basis points sequentially) to 54%. Net profit was up 30% year-on-year to Rs 136 crore (down 33% q-o-q). This was below our estimate of Rs150 crore (largely on account of lower sales in Splendor - six units sold in Q4 versus 91 units of unsold inventory). Splendor, Splendor Grande (28% recognised, 29% sold), Exquisite I, and investment assets were the key drivers of the topline. Income from lease assets remained flat sequentially while income from hospitality (Westin) grew 21%. We retain our `Outperform'' rating on the stock in view of its preparedness to unlock value in its quality land bank, strong balance sheet, and reasonable valuation (25% discount to estimated net asset value).

Bharat Electronics
Research: Royal Bank of Scotland
Rating: Buy
CMP: Rs 1780

Bharat Electronics (BEL) reported a turnover of Rs 5,630 crore in FY11. This was 5% lower than our forecast of Rs 5,800 crore. The company''s net profit for FY11 was Rs 800 crore, up 8% year-on-year. BEL doubled its order book in the past year from Rs 1,1400 crore to Rs 2,3600 crore. The company''s largest recent order was the Rs 3,600 crore order for Akash missiles. BEL says it is looking for an order book worth Rs 70,000 crore in the next three years. Even if half of that materialises, it would mean orders worth Rs 35,000 crore over the next three years. The company expects orders of Rs 10,000 crore in FY12, including an additional Akash order of Rs 12,000 crore (along with an order from Bharat Dynamics Ltd, an unlisted defence public sector unit). We believe BEL is the best way to play the Indian defence story and we maintain our `Buy'' rating.

ICICI Bank
Research: Bank of America ML
Rating: Buy
CMP: Rs XXX

The earnings of Rs 1,450 crore (up over 44% year-on-year) in the March 2011 quarter were in line with estimates. They were driven by a better-than-expected rebound in topline (up 23%). Margins expanded by 10 basis points (bps) year-on-year and sequentially to 2.7% due to re-pricing of domestic loans. Loan growth was strong at 19.4% from the year-ago figure (5% sequentially) led by corporate and overseas businesses. Provisions were 16% lower than estimated, as asset quality was sustained with no accretion of new non-performing assets. Current account and savings account (CASA) deposits rose to 45.1% from 44.2% in the previous quarter and 41.7% a year ago. The bank successfully leveraged its expanding distribution. Core fees were up 18% year-on-year, largely driven by corporate and international fees. We estimate earnings growth of 35% and 25% in FY12 and FY13 respectively, driven by 19-20% topline growth led by 20 bps margin expansion between FY11 and FY13, as loans would re-price and margins in overseas business would increase.

GSK Consumers
Research: Nomura
Rating: Buy
CMP: Rs 2222

GSK Consumers reported PAT of Rs 111 crore for the March quarter of FY11, slightly below Nomura''s expectation due to lower sales. During the quarter, the company reported net sales of Rs 727 crore, 8.5% lower than Nomura''s estimate. Nomura maintains a `Buy'' rating on GSK Consumers Healthcare. According to Nomura, though loss of momentum in volumes is a concern, the good news is that the profitability has been stable. Gross margin improved by 143 bps year-on-year to 62.9%. Topline momentum has started to pick up as per the management and should return to a medium-term sustainable rate over the rest of 2011. The company is guiding for an 8-9% input cost inflation for 2011, which is significantly ahead of what they saw in March quarter 2011. Going forward, the company expects to maintain gross margins at best and not improve it from 2010 levels. Nomura believes in the long-term story of GSK Consumers.

Godrej Consumer Products
Research: JP Morgan
Rating: Neutral
CMP: Rs 384

JP Morgan maintains a ''Neutral'' rating on Godrej Consumer Products. For the March quarter of FY11, GCPL reported net sales, EBITDA and PAT growth of 96%, 65% and 54% respectively. Given a host of acquisitions done over last year, consolidated results for the company are not comparable on a y-o-y basis. While sales growth was marginally better than estimates, EBITDA margins (-330 bps y-o-y) came in lower than expectations. Higher other income (+195% y-o-y, includes Rs 10 crore of interest accrued on ESOPs) led to earnings coming in 5% ahead of estimates. Domestic sales increased 17% year-on-year driven by 13%, 18% and 17% sales growth for soaps, hair colour and household insecticides respectively. Volume growth stood at 9%, 11% and 17%, respectively. Nomura has given a price target of Rs 430 based on a one-year forward earnings multiple of 21x, which is at a 10% premium to the historical five-year average.