Indian Equity Research and Investment Strategy
Goldman Sachs has upgraded Aban Offshore’s price target to Rs 3450 from Rs 2,900. Goldman believes potentially higher than expected contract renewal rates could be positive catalysts for Aban.
At 8.5X ’08E P/E & 6.9X EV/DACF, Aban’s valuation remains one of the most attractive in the sector. COSL stock is currently the most expensive among all the oil services stocks globally at 24.8X ’08E P/E & 15.9X EV/DACF. Goldman Sachs raises 12-m DCF-based TP on Aban to Rs 3,450 (from Rs2,900); keep Buy.
Merill Lynch has downgraded India’s IT Service Provider – Mastek to a SELL. Order intake push-out for two quarters and growing attrition, suggests competitive headwind. Post a 19% EBIT level miss this quarter Merill cut estimates by 8% and 4% for FY08 & FY09. Though at 9x FY08E PE, Merill sees more potential downside given subdued FY07-09 EPS CAGR forecast of 12%.
Merill Lynch’s top picks in Small Cap IT are Rolta and Firstsource. Target Price for Rolta is Rs540 is set at 14x FY09e PE at 7% discount to target multiple for Infotech Enterprises. For Firstsource, Target Price of Rs105 is at 22x FY09E PE at a PEG of 0.9 and current FY08 PE of 25x.
The IPO of Central Bank of India was subscribed 62.07 times. Retail participation was also extremely good. Here is the final Tally.
| Sr.No. | Category | No.of shares offered/reserved | No. of shares bid for | No. of times of total meant for the category |
| Qualified Institutional Buyers (QIBs) | 45600000 | 4063677240 | 89.1157 |
| Non Institutional Investors | 7600000 | 528778260 | 69.5761 |
| Retail Individual Investors (RIIs) | 22800000 | 369421620 | 16.2027 |
All retail application of 960 shares @ cut off are likely to get 60 shares, but may go in for a lottery too. Check back for the status of allotment here.
The allotment status of Everonn Allotment status can be checked here.
Punj Lloyd has been awarded a contract by Reliance Gas Transportation & Infrastructure (RGTIL) for its east-west pipeline project for laying of pipeline & associated facilities.
The value of the contract is Rs 498 crore, which is inclusive of the Rs 180.16-crore placed earlier by RGTIL with the company. The work is scheduled to be completed by December 2007 end.
Crompton Greaves’ net profit rose 89.1% to Rs 68.76 crore in Q1 June 2007 over Q1 June 2006. Sales moved up 21% to Rs 896.07 crore in Q1 June 2007 over Q1 June 2006. Crompton Greaves’ principal activities are broadly classified into four strategic business units: power systems; consumer products; industrial systems and other.
Tata Power Company’s net profit moved up 56.09% to Rs 190.20 crore in Q1 June 2007 over Q1 June 2006. Sales rose 9.80% to Rs 1511.48 crore in Q1 June 2007 over Q1 June 2006.
Suzlon Energy’s net profit declined 53.8% to Rs 89.4 crore in Q1 June 2007 over Q1 June 2006. Total income dipped 8.85% to Rs 862.9 crore in Q1 June 2007 over Q1 June 2006.
As on date, the company said it has orders worth Rs 13,496.83 crore comprising Rs 1,711.21 crore domestic orders and Rs 11,785.62-crore export orders.
JP Morgan and Citigroup have upgraded ITC to a BUY previously from hold with a price target of Rs 195.
After 40% underperformance over the last 12 months, risk-reward looks favorable. Investors are focusing too much on cigarette volumes; we estimate that even if volumes were to decline by 5%, cigarette EBIT would increase 8% in FY08. ITC’s price hikes are heavily loaded in favor of its mid segment brands (~65% of volumes)
Target price increase to Rs195 from Rs130 reflects 1) rolling forward target P/E from FY08E to FY09E, given that we are approaching mid FY08E and expect valuations to start reflecting FY09E; 2) increase target multiple from 15x to 20x, toward the higher end of historical trading bands.
ITC Q1 Profit stands at Rs 783 crore up from Rs 652 crore a year ago [Up 20.2%]. Sales up from Rs 2850 crore to Rs 3325 crore.