Indian Equity Research and Investment Strategy
ABN Amro has recommended a BUY on Texmaco Limited with a price target of Rs 1090.
Key Triggers for the Stock are:
The stock is trading above 200 DMA.
ICICI has reiterated an OUTPERFORMER rating on the PTC – Power Trading Corporation.
PTC India’s results for the year ending March 31, 2007 (FY07) were below expectations. Net sales at Rs 3,766.66 crore (estimate: Rs 3,933.54 crore) were impacted due to access factors and real-time transmission congestion. Going forward, we expect PTC’s traded volumes to increase on account of higher utilization from the Tala unit (4 billion units) and significant volumes from long-term agreements starting Sept 2008.
At the current market price of Rs 57, the stock is trading at 10.05x its FY09 earnings, 5.50x on FY09 EV/EBITDA and 2.33x FY09 P/BV. The company’s increased focus on high growth, high-margin long-term trading should help it sustain growth and also improve margins.
ICICI Research has set a price target of Rs 95 per share of PTC India using a DCF valuation and reiterates an OUTPERFORMER rating on the stock. Click here to download PTC report.
Punj Lloyd has bagged a new order worth Rs 122.65 crore from GAIL India for panvel dabhol pipeline project.
IVRCL Infra has bagged two orders. The first project is worth Rs 376.14 crore awarded by Government of Andhra Pradesh for building a tunnel. The second project is worth Rs 6.91 crore awarded by Goa State Infrastructure Development Corporation to construct a swimming pool at Ponda sports complex.
Bharat Seats’ board would meet on 24 May 2007 to consider the sub-division of equity shares from Rs 10 per share into five equity shares of Rs 2 each. Accordingly, the board will accord the proposal to issue bonus shares in ratio of one equity share for every one equity share held (1:1)
Jet Airways has proposed a $400-million rights issue. It is expected to be completed in four months and the money would be utilised for funding aircraft acquisition, Jet Airways Chairman Naresh Goyal said.
JP Morgan in a research report is bearish on the prospects of Moser Baer. Moser reported muted 4QFY07 results, with 5% Q/Q revenue growth and 6% Q/Q EPS growth – low given that Mar quarter is typically seasonally strong.
Management expects normal seasonal weakness in 1HFY08 with pricing pressure in both DVDR and CDR. Management expects PV revenues of US$80-100 million in FY08, slightly lower than our earlier estimates.
JP Morgan’s sum of parts valuation based Dec-07 price target remains at Rs325/share [CMP of Rs 370] and they expect weak performance in 1HFY08 to impact the share price negatively. Further, Moser has announced plans to raise US$150 million that will result in equity dilution or further deterioration of D/E ratios.
Merill Lynch [ML] in a report released just a while ago has retained a Buy on Tech Mahindra Ltd (TML) with a PO of Rs 2125, given strong earnings CAGR of 45% on adjusted EPS basis and robust spend by Telecom service providers.
Merill Lynch has established a Price Objective of Rs2125 is at 0.7PEG (FY08PE to FY07-09e) vs our target PEG of ~1 for leading majors like Infosys, implying a target P/E of 21x. ML believe this is fair given sharp earnings growth of 45% (FY07-09e), robust IT spends by telecom service providers and increasing trend in offshoring. This is the only big league IT company that will grow at such momentum.
ML expects Tech Mahindra to report an EPS of Rs 76 and Rs 106 for FY08 and FY09.