More: About Us | Feedback | Privacy


Peninsula Land to Outperform - ENAM

Thursday, August 30, 2007

ENAM Securities Research is recommending Peninsula Land as an outperformer with a price target of Rs 719.

Peninsula has applied for necessary approvals to change the land usage for its Dawn Mills property, in Lower Parel, from commercial to an IT Park, thereby doubling the FSI and saleable area to ~1.2mn sq. ft., resulting in a significant upside in our valuations. The selling prices at Sewri currently range between ~Rs 13,000 psf to 14,000 psf (Ashok Gardens project) and at Kurla, between ~Rs 13,500 psf to 14,500 psf (Peninsula Technopark project). The company expects to receive Rs 25-27bn in revenues over the next 3 years from Dawn Mills Project.

ENAM believes that the company is a high quality real estate player in Mumbai with a strong focus on the commercial segment. At CMP of Rs 450, the stock trades at a significant discount of ~29% to NAV of Rs 637.

ENAM's base Case Target for the Stock is Rs 719 and the bear case target is Rs 550 based on Sum of Parts Evaluation.

Read the full article

Published by Webmaster @ 8:56 AM IST.

Buy Reliance communications - IDBI Capital

Wednesday, August 29, 2007

IDBI Capital has initiated coverage on Reliance Communications with a Target Price of Rs 669.

The domestic telecom market grew by 58% YoY in FY07 itself, where-in 66.51m subscribers were added, taking the total subscriber base to 225.21m. RCOM, which has 17.2% market-share currently, is targeting a 21% market-share by FY09. Acquisition of Yipes Communications for Global Expansion.

Controversial hiving off of its tower subsidiary into a separate division in April 2007. Recently it sold a 5% stake in its tower subsidiary at US$ 337.5m to a consortium of 7 investors. This puts valuation of the subsidiary at Rs.270,000m. RCOM also plans to list its global subsidiary FLAG in a couple of quarters. FLAG is the largest private
submarine cable system in the world.

Sum Of the Parts Valuation [SOTP]
RCOM’s core business on DCF basis and the tower business on EV/subscriber basis. DCF valuation gives the core business value at Rs.534/share. Adding to this the value of tower business at Rs.135/share, we arrive at a fair value of Rs.669/share, upside of 35% from the current price of Rs.495. At the CMP Rs.495, the stock is trading at a PE multiple of 20.4x on FY08E EPS of Rs.24.3 and 15.8x of FY09E EPS of Rs.31.4/share.

Kindly note that Citigroup analysts valued the tower business at a price much below the Rs 135 / share which IDBI is valuing it at.

Read the full article

Published by Webmaster @ 9:23 AM IST.

Buy Maruti Udyog Ltd - Motilal Oswal

Tuesday, August 28, 2007

Motilal Oswal has reiterated BUY recommendation on Maruti Udyog Ltd with a price target of Rs 1,188. Passenger vehicle (PV) segment maintained its healthy growth in 1QFY08. This indicates the imperviousness of the PV industry to temporary negative factors like higher interest rates and tightness in bank financing. The structural factors sustaining the robust growth in PVs are still in place and we expect volumes to grow at 16.5% CAGR over FY07-10. As the leading player in the industry, Maruti would be a key beneficiary.

Despite a series of price cuts across its product range, competitive pressure and cost inflation, Maruti has consistently expanded its margins over the past three years (220bp over FY04-07). Estimated volume growth is at 16.4% CAGR over FY07-10; aggressive model launches could result in positive surprises. Margins would expand from 15.3% in FY07 to 15.9% in FY08, despite consolidation of the Manesar plant. EPS is estimated to be at at Rs67.7 for FY08 and Rs79.2 for FY09. The stock is attractive at 11.5x FY08E EPS and 9.8x FY09E EPS.

Read the full article

Published by Webmaster @ 11:40 AM IST.

Cairn + Zee Entertainment to Underperform - Kotak Securities

Monday, August 27, 2007

Indian government has approved Cairn Energy India's plan to construct a crude oil pipeline to evacuate crude oil from its Rajasthan block RJ-ON-90/1. The cost of the pipeline (US$500 mn net to Cairn) is treated as part of the upstream capex and Cairn will recover both capex and opex related to the pipeline as part of the overall production sharing contract for the block.

Cairn Energy factors in US$780 mn of additional value (20% of base valuation of Cairn's 70% stake in the block for potential upward revision to reserves). Cairn will likely provide updates on its crude reserves/production profile by end-2007 in terms of (1) outcome of further EOR studies including ASP simulation and pilot project for Mangala and (2) conversion of current contingent resources to reserves including 'tight' oil in Mangala Barmer Hill, Vijaya/Vandana/NR.

At US$60/bbl crude price in perpetuity from 2013E, our DCF-based 12-month fair valuation for Cairn stock would come to Rs154. At US$70/bbl in perpetuity, the same would increase to Rs166. Kotak Maintains an Underperform rating on Cairn Energy with a target price of Rs 140 based on DCF Model.

Zee Entertainment Enterprise Limited [ZEEL] has reportedly increased its prime-time ad rates for its flagship Zee TV channel by 15-20% and non-prime time rates by 40% following the 15%-25% increase in March 2007. The increase in ad rates for Zee TV will likely help ZEEL achieve our projected 24% growth in ad revenues for FY2008E and partially support ZEEL's current rich valuations.

A 37% increase in ad revenues for FY2008E for Zee TV on the back of a 45% increase in ad revenues in FY2007E. The key to sustenance of ZEEL's multiples would be (1) continued high ratings for Zee TV particularly after start of new competing channels and (2) continued improvement in domestic pay-TV subscription revenues.

ZEEL stock trades at 32.5X FY2008E EPS of Rs8.7 and 24.5X FY2009E EPS of Rs11.5. Kotak maintains an underperform rating on the stock with a price target of Rs 230.

Update on ZEEL from Merill Lynch [ML]:
ML reiterates a BUY with Price Objective of Rs 400 is at 30x 1-yr forward PER – 7% discount to current multiples & in-line with Indian media average.

Read the full article

Published by Webmaster @ 1:05 PM IST.

Buy Jyoti Structures - HSBC

HSBC Global Research in a report has said that it is overweight on Jyoti Structures Limited with a price target of Rs 254.

The stock corrected 10% in last week's trading. This fall should be taken as an opportunity to buy the stock. HSBC is positive for the following reasons.
The new target price - INR254 is the mid-point of DCF fair value INR201 and PE multiple based fair value of INR307. You can send comments and suggestions to feedback @ dalalstreet.biz

Read the full article

Published by Webmaster @ 9:13 AM IST.

Exit Cipla - Citi Research

Saturday, August 25, 2007

Citigroup Research has recommended an Exit on India's premier pharmaceuticals company Cipla. Citi's target price is Rs 191 a modest 11% over CMP of Rs 171.

Cipla indicated that its PAT may be lower in FY08 due to rupee appreciation, higher cost of imports from China and pricing pressures. Cipla plans to incur capex of around Rs9.5bn over FY08-09 primarily on its facilities in Sikkim, Goa and Indore. With profitability under pressure this will take a heavy toll on return ratios.

Guidance of 10-12% sales growth and lower profits in FY08; tie up for 125 products across 10 partners in the US/ 94 ANDAs filed and expects to file 20-25 in FY08. Cipla is a steadily growing company, thus P/E based valuation is the right tool for the company. Target price of Rs191 is based on 20x June 08E earnings. Historically, the stock has traded at 15-30x forward earnings. Although Cipla is an Indian pharma major, Citi believe it should trade at a marginal discount to peers in the sector, justified by the lower value addition to the business.

Update on Aug-29th:
Citi has downgraded the target price of Cipla to Rs 165 and also revised EPS estimates for FY08 to Rs 7.93 a fall of 7.7%.

Read the full article

Published by Webmaster @ 8:47 PM IST.

Hold or Add Bartronics - HDFC Securities

Friday, August 24, 2007

HDFC Securities which advised a BUY on Bartronics India Ltd [BIL] at Rs 98 is asking its investors to HOLD the stock at Rs 175 levels or BUY additional quantity in the price range of Rs 121 to Rs 143.

Bartronics reported sales of Rs. 25.43 cr in Q1FY08 vs. Rs. 12.27 cr in the corresponding quarter last year. This jump of 107% can be attributed to the doubling of sales in the AIDC segment. AIDC sales mainly comprise of Barcoding and the RFID (Radio Frequency Identification) business. This quarter, RFID sales contributed about 35% topline and the remaining 65% of revenue was from the traditional barcoding business.

EBITDA margins have remained in the same range y-o-y, where as sequentially they have dropped by 720 basis points. This is because in Q4FY07, RFID contributed 52% to net sales vis-a-vis 35% in this quarter. Thus, a fluctuation of margins may be observed quarter on quarter, but the margins on a whole year basis could remain steady in the 25% - 28% range. About 40% of BIL's revenue this quarter was through exports. The strengthening of the Indian Rupee vis-a-vis the dollar does not impact BIL's performance significantly because BIL has a natural hedge as it currently imports the chips and hardware.

As of June 2007, BIL is an almost debt free company except for a term loan of Rs. 5 cr and working capital loans of about Rs. 11 cr from the Bank of Baroda.

Read the full article

Published by Webmaster @ 1:47 PM IST.

Hold Nagarjuna Constructions - Kotak Sec

Thursday, August 23, 2007

Kotak Securities after speaking to the management of Nagarjuna Constructions Company [NCC] maintain a HOLD on the stock with a target price of Rs 213. CMP - Rs 186.

The company is quite positive of achieving the targeted revenue growth for the current fiscal year. NCC expects to improve the operating margins for the current financial year as well, going forward. The company expects a 25% YoY jump in the order inflows as compared to last year. With a current order book of Rs.78 bn, we expect the revenues of the company to grow at a CAGR of 32% between FY07-FY09.

On the flip side, NCC being on high growth trajectory has availed hug quantum of loans for working capital and capex which will lead to larger outflow towards interest payment.

At the current market price of Rs.186, the stock is trading at 20x and 15.9x on P/E multiples and 10.9x and 9.2x on EV/EBITDA multiples on FY08 and FY09 estimates. Adjusted with BOT and land development valuations, it is trading at 16.9x and 13.4x on P/E multiples on FY08 and FY09 estimates.

Read the full article

Published by Webmaster @ 10:18 AM IST.

Citi Revises Patni's Target Downwards

Tuesday, August 21, 2007

The market is down 400 points while Patni Computers is up by 5%. What's happening ? Citigroup in a report released this morning has recommended a BUY on Patni Computer Services with a possible M&A story cooking behind the scenes.

Patni trades at a ~50% discount to Satyam on a one-year forward EV/EBITDA basis, has 25% of its market cap in cash and equivalents, and has underperformed the BSE IT index by ~17% over the past two months. It is a high cash position of $300 Million. Expect a recurring earnings CAGR of ~14% over the next three years, slower than those of peers.

Patni at 7x 2007E EV/EBITDA is at deep discounts to its large peers (Infosys is at 19x and Satyam at 14x) and lower than its mid-cap peers (8-10x). Citi sees an upside bias from current levels, with M&A a possible trigger.

Citi has revised the target for Patni from Rs 565 to Rs 525 based on a 20% target-multiple discount to Patni's closest peer, Satyam. Target price equates to 15x 2008E earnings.

Read the full article

Published by Webmaster @ 2:25 PM IST.

Kotak Upgrades BHEL to Outperform

Monday, August 20, 2007

With strong order book and continued flow, Kotak Securities has upgraded the stock of BHEL to Outperfrom and set a target price of Rs 1,825.

BHEL has received orders for two supercritical units of 800 MW each at OBRA power station. BHEL is also picking up a 50% equity stake in the project, which may have tilted the scales in its favor. Ordering activity for XIth plan requirements is very strong, with BHEL winning orders for 7,850 MW in FY2008 so far. BHEL could have near-term order inflows of about 19,819 MW for the XIth plan projects that have not been ordered yet, based on the market share that BHEL has recorded so far in the XIth plan projects.

Kotak revises earnings estimate for FY2008E and FY2009E to Rs65.9 (from Rs61.4 earlier) and Rs82.4 (from Rs74.2 earlier). Sales during the same period is expected to be Rs 221 bn and Rs 268 bn with EV/EBITDA of 13.6 and 10.7 respectively. They set a target price of Rs1,825 based on DCF model.

Citigroup has a target price of Rs 1,923 on BHEL.

Read the full article

Published by Webmaster @ 11:55 AM IST.

Reliance Industries - Outperformer by CLSA

Friday, August 17, 2007

CLSA Asia Pacific Research has an outperform rating on Reliance Industries Ltd with a price target of Rs 1,875. The target is actually revised downwards from Rs 1,995 which CLSA had set on August-2nd of this year.

The analyst compares RIL with that of US peers. Concern E&P valuation for Reliance (which assumes that it discover 75-80tcfe of additional in-place resources) pegs asset value at $3.5/boe on recoverable resources. North American natural gas E&Ps discount $16/boe on 1P reserves but trade at a more modest $4.5/boe on recoverable resources. They also operate in a higher profitability regime given better realisations. Further, the 8x P/CF multiple that forms the basis of our going concern value is 55% higher than the 5-5.4x P/CF that these peer discount.

The sum of parts valuation is as below.
Reliance was upgraded to BUY by Deutsche Bank earlier this week with a price target of Rs 2,130.

Read the full article

Published by Webmaster @ 10:02 PM IST.

Punjab National Bank - BUY

Thursday, August 16, 2007

Kotak Securities is recommending buying Punjab National Bank [PNB] at current levels Rs 481, with a target price of Rs 680, potential upside of 40%.

PNB is well positioned to capitalize on growth opportunities in the Indian market. PNB is expected to have a loan growth of 21.5% and 19.7% in FY08E and FY09E, respectively. In the same period, deposits are expected to rise 17.7% and 16.1%, respectively, and investments are expected to rise 8.2% and 8.4% in FY08E and FY09E, respectively.

Valuations:
PNB is expected to grow its earning by 24.3% and 25.2% in FY08E and FY09E, respectively. Full year profit is estimated to be at Rs.19.14 bn and Rs.23.97 bn for FY08E and FY09E, respectively resulting into an EPS of Rs.60.70 and Rs.76.01. The adjusted book value is estimated to be Rs.344.55 and Rs.416.49, for FY08E and FY09E, respectively.

Read the full article

Published by Webmaster @ 12:43 PM IST.

Buy Mercator Lines - ICICI Direct

Wednesday, August 15, 2007

ICICI Direct's research team recommends a BUY on Mercator Lines Ltd - MLL with a price target of Rs 85 [CMP Rs 57, potential for 47% returns]It is the second largest private sector shipping company in India.

MLL has charted out an expansion plan of Rs 1,000 crore for acquiring dry bulk carriers through its Singapore subsidiary. MLL will benefit from the rising dry bulk charter rates as the rates are expected to remain firm on account of sustained momentum in commodity movement from developing economies of China and India.

MLL has placed an order for construction of a new offshore rig at a cost of Rs 810 crore, which is expected to be delivered in Q1FY09. Offshore activity for oil and gas exploration is likely to remain at a high.

The company is expected to improve its operating margins going ahead from 26% in FY07 to 33-35% in FY08E and FY09E. On fully diluted equity of Rs 23.23 crore, we expect MLL to report a consolidated EPS of Rs 10.1 for FY08E and Rs 14.2 for FY09E. MLL trades at 4.1x it FY09E consolidated earnings and is available at a significant discount to peers like Shipping Corporation of India and Great Eastern Shipping. The stock is likely to be re-rated at 6x its FY09E earnings with a target price of Rs 85.

Dalal Street. Biz:
Kindly note that Citigroup has terminated coverage on Shipping Corporation of India and Great Eastern Shipping citing low investor interest in the stock.

Read the full article

Published by Webmaster @ 10:06 AM IST.

Moderate returns from Axis Bank - Citigroup

Tuesday, August 14, 2007

Citigroup just a while ago in a research report revised the target price for UTI-Axis Bank to Rs 675 with Outperform rating.

UTI Bank has now formally changed its name to Axis Bank. Citi raised target price to Rs675 (Rs560), on the back of a] new capital and rolling forward valuation benchmark valuations to FY09 (FY08); b] revised earnings (up 5%-2% FY08E-FY09E); c] relatively higher loan and fee growth momentum. Bank is expected to have higher asset growth momentum and broader business mix, through new initiatives in credit cards, international, wealth, distribution businesses and forays in private equity and institutional broking.

On the flip side, AXBK is more than doubling its capital base; but will it add value? – Returns on shareholder equity – No. Axis Bank has pulled back after a sharp 44% move over the quarter and capital raising. Returns over the next 12 months is expected to be moderate with a price target of Rs 675.

Read the full article

Published by Webmaster @ 5:15 PM IST.

Buy Aban Offshore + HCL Technologies - Citigroup

Citigroup research has revised the target price of Aban Offshore from Rs 2850 to Rs 3530. Deficits in several international markets should, however, result in absorption of newbuilds entering the market over the next 9-12 months without impacting day rates. The long-term outlook for the sector remains solid, with steadily rising long-term oil price expectations.

Citi has revised FY08E EPS downwards by 21% to factor in delays to the drilling schedules of a couple of rigs. FY09E EPS remains relatively unchanged, while they have modestly increased our FY10E EPS forecasts by 5%. Aban's EPS is expected to be Rs 101 and Rs 354 for FY08 and FY09 respectively.

Citigroup analyst has maintained a BUY on HCL Technologies with a target price of Rs 400. HCL Tech's Q4FY07 results were in-line with expectations - higher than expected revenue growth (+9.2% qoq in US$-terms) but lower than expected margins (~170bp qoq) resulted in EBITDA of $85m (as against expectation of $86m). Margins were lower on account of INR - net income was significantly higher due to forex gains.

Infrastructure services reported another strong quarter with revenues growing 18% qoq. IT Services reported sequential growth of 7.6% qoq. Volume growth was 6.5% qoq.

HCL Tech management guided to ~30% growth for FY08 and indicated that margin expansion should continue. HCL Tech now has ~Rs.33 per share of cash and dividend yield of 2.5%. EPS growth over the next two years is likely to be very modest and the company is expected to report and EPS of Rs 18.34 and Rs 21.85 for FY08 and FY09 ending in June, respectively.

Read the full article

Published by Webmaster @ 1:35 PM IST.

Buy Ranbaxy - Edelweiss Equity

Edelweiss India Equity research has upgraded Ranbaxy Labs from Accumulate to BUY with a target price of Rs 418.

The branded generics segment, which is likely to be Ranbaxy's key growth driver in the near term, is extremely lucrative in terms of margins. We expect almost 65% of the company's growth in CY08E to be driven by the branded generics business. With reduced dependence on the (plain vanilla) generics business (down to 23% in CY08E from ~29% in CY06), Ranbaxy's profitability would improve significantly, going forward.

Upsides from Valtrex and Lipitor opportunities in 2009-end and 2010,respectively, are extremely attractive, but have not been priced in the stock. At CMP of INR 370, the stock trades at 17.6x our CY08E base business earnings. Using SOTP methodology to value the base business at INR 418 and the combined Lipitor and Valtrex opportunities at INR 58 per share. This implies a potential upside of ~28% from the current level.

Read the full article

Published by Webmaster @ 12:11 PM IST.

Kotak Positive on DLF

Monday, August 13, 2007

Kotak Securities has initiated coverage on the prospects of India's largest Realty player - DLF.

DLF, with 615 mn sq. ft of land acquired or under acquisition at low cost, is best positioned to participate in the strong growth we expect in the Indian real estate sector. Concurrently, DLF's extensive experience in the commercial and retail sectors (it has developed 10 mn sq.ft) should help accelerate its aggressive plans for developing office space, shopping malls, SEZs and hotels.

Kotak estimates March 2009 NAV for DLF at Rs670/share. DLF's net income is expected to increase to Rs112 bn in FY2010E from Rs19 bn in FY2007 driven by increase in revenues to Rs221 bn from Rs39 bn. More specifically, (a) DLF is to develop and sell 31 mn sq. ft of developed in FY2010E, up from 8 mn sq. ft in FY2007; (b) DLF to have 26 mn sq. ft of assets under lease by FY2010; and (c) DLF’s new initiatives (SEZs, hotels) to start contributing to revenues over the next few years.

DLF's fully diluted EPS is expected to be Rs 37.5 for FY 08 and Rs 55 for FY 09. Kotak has set a price target of Rs 710, 5% premium to its NAV.

One should be very careful while investing in Realty stocks because the sector is overheated today and Indian Realty Stocks are the most expensive in the world according to S&P report. Further, FIIs have sold the following Realty stocks - DLF, Mahindra Gesco, Atlanta and Unity Infra.

Update from Citigroup:
Citigroup research has also initiated coverage on DLF with a BUY rating and a price target of Rs 725.

DLF is India's largest developer with an emerging pan-India presence. We initiate with a Buy/Medium Risk rating and a Rs725 target price, based on a 25% premium to an estimated core NAV of Rs530 and ascribing Rs62 for other asset holdings and new JV businesses. The premium is based on DLF's sizeable land bank; higher leverage to office, IT Parks/IT SEZs and retail mall assets.

DLF's strengths are 1] Focus on scale with a portfolio mix of ~615m sq.ft spread across top-tier cities; 2] strong cash reserves in this liquidity strained environment, 3] a de-risked business model, with JVs in construction and hotels aiding growth, and 4] a robust earnings CAGR of 81% for FY07-10E.

Read the full article

Published by Webmaster @ 2:00 PM IST.

Buy Parsvnath Developers - Religare

Friday, August 10, 2007

Ranbaxy Group promoted Religare, in a research report initiating coverage on PAN India Realty Developer Parsvnath Developers has put a BUY recommendation with a price target of Rs 512.
Parsvnath is expected to report topline of Rs 2,574 crore for FY-2008 and Rs 4,324 crore for FY-2009. Corresponding bottom line is expected to be Rs 555.7 crore and Rs 970 crore giving a fully diluted EPS of Rs 31.1 and Rs 54. Parsvnath Developers is trading at a P/E multiple of mere 10.8 and 6.2 on projected earnings way below the industry average of 17.3 and 14.8. Buy with a price target of Rs 512.

Read the full article

Published by Webmaster @ 6:47 AM IST.

Shipping Corporation of India - SELL / Exit

Thursday, August 09, 2007

Citigroup research has terminated coverage on Shipping Corporation of India Limited due to lack of investor interest in the stock.

Given global shipping team's expectations of a stablisation in charter rates over 2007 / 10E in the tanker and the dry bulk segments, we expect SCI's earnings to decline moderately over FY07-10E.

Final recommendation for the security is Sell/Medium Risk (3M) with a target price of Rs 171. Target price for SCI is calculated by using simple average of the long-term P/BV and the current NAV. Fair-value NAV/share is Rs204. SCI's long-term average P/BV is 0.68x. The share price trades within a fairly steady band of +/-1 standard deviations. At an FY08E P/BV of 0.68x, the fair value is Rs138. SCI's EPS is expected to fall to Rs 30.09 and Rs 27.46 for FY 08 and FY 09 respectively.

Read the full article

Published by Webmaster @ 8:48 AM IST.

Shriram Transport Finance - Outperformer

Shriram Transport Finance Company Limited delivered strong quarterly results on the back of strong asset growth. In addition to this, a marginal decline in the cost of funds also came in as a surprise. On the flipside, a wait and watch approach towards securitising its new CV loan book and more aggressive provisioning make us revise our estimates marginally downwards. RoAs continue to move up and we expect them to reach 3% by the end of this fiscal. UTI Securities upgrades target price to Rs. 195 and assign an 'Outperformer' rating to the stock.

Preowned CV disbursements grew 77.4% yoy, while new CV disbursements grew at 3.8% yoy. On a QoQ basis, new CV loan disbursements have declined by 30.5% while they have grown by 3.8% on a YoY basis.The quarter continued to witness increase in the share of institutional funds (from 67% to 78% yoy) in the borrowing book of the company. Reduction in the cost of funds, which was at 10.3% during the quarter, was a positive surprise.

Earnings per share (EPS) are expected to grow at a CAGR of 55% over the next two years. The company is expected to deliver RoA of 3% and 3.5% for FY08E and FY09E respectively and RoE of 27% and 29% for FY08E and FY09E respectively. The stock currently trades at 2.2X FY08E and 1.7X FY09E Adjusted Book Value (ABV). One year target price of Rs. 195 for the stock implying a 18% upside.

Read the full article

Published by Webmaster @ 8:38 AM IST.

Buy WS Industries - Sharekhan

Wednesday, August 08, 2007

Sharekhan Equity Research has raised the price target of WS Industries a small cap company from Rs 75 to Rs 108.

Q1FY2008 WS Industries' (WSI) top line grew by 21% to Rs.47.7 crore, which was slightly above expectation.The profit after tax (PAT) increased by 142.4% to Rs3.95 crore; the PAT growth was higher mainly due to a decrease in both the interest cost, which dropped by 9% year on year (yoy) to Rs1.72 crore, and the depreciation cost, which fell by 4.6% to Rs9 crore yoy. A healthy order book of Rs190 crore, which is about 1.15x its FY2007 revenues.

WSI's realty subsidiary at the current realisable value of Rs3,500 per square feet. Taking WSI's current 59% stake in the realty venture, Sharekhan arrives at a value of Rs29 per share, which gives us a fair value of Rs108 per share of WSI. Sharekhan is positive on the stock and maintain Buy recommendation with a revised price target of Rs108.

Read the full article

Published by Webmaster @ 9:52 PM IST.

Kotak Stock Recommendation - List

Tuesday, August 07, 2007

Here is the list of stocks Kotak Research has recommended in the past and they have followed up on the same. We are not comfortable with the entire list for variety of reasons - Management, Growth etc or our analyst may have not thoroughly studied the stock. The filtered list of stocks with Target price quoted by Kotak is as follows.
Buy small quantities of PNB, if you don't have any, for really long term [5 years] and HOLD them tight.

Read the full article

Published by Webmaster @ 9:50 AM IST.

PTC + Mphasis - Recommendation Follow Up

Power Trading Corporation - PTC was recommended by ICICI Securities Research. In a follow up report they have reiterated a BUY with a price Target of Rs 96 within 3-4 months.

We had recommended Mphasis last month. Citigroup in a report released just a while ago has recommended a BUY on the stock with a price target of Rs 400.

Mphasis reported consolidated numbers (Mphasis + EDS India) after the merger with EDS India. Revenue at Rs.5.32b was up 6% qoq (up 14% in US$ terms) while net profit was Rs.513m (-19% qoq) – negative swing of ~Rs.145 qoq in forex line. Mphasis (ex EDS) reported revenues and net profits of Rs.3.55b and Rs.410m as against our expectation of Rs.3.54b and Rs.297m.

Target price of Rs400 is based on 24x FY09E EPS. We believe P/E remains the most appropriate valuation measure given Mphasis' profitable record and high earnings visibility.

Read the full article

Published by Webmaster @ 9:34 AM IST.

HDFC Sec Bullish on Wockhardt

Monday, August 06, 2007

HDFC Securities in a Research Report has put a BUY recommendation on Wockhardt with a price target of Rs 570. Last week, we had reported that Citigroup also had a BUY recommendation on Wockhardt with a Price Target of Rs 530.

HDFC Securities is bullish on Wockahrdt's prospects, especially in the European market where it is the largest Indian company. Currently, the company derives more than 50% of its revenue from the European market. It has also ramped up its US business by introducing a number of generic products here. Last year, its US business grew by more than 50% and is expected to perform extremely well in the next two years on the back of strong New Drug Applications which are in pipeline.

Wockhardt is also active in New Chemical Entity research. Its proprietary molecule, WCK 771 is currently in phase II. The company has started capitalizing on the opportunity offered by CRAMS (Contract Research And Manufacturing).

Wockhardt is expected to report an EPS of Rs. 35.1 for CY07 and Rs 43.9 for CY08. The stock currently trades at a forward PE of 10.6x and 8.5x respectively. The stock is trading at a steep discount to its peers. HDFC Securities recommends a BUY, with a price target of Rs 570 based on a PE of 13x on the CY08 expected EPS of Rs 43.9

Read the full article

Published by Webmaster @ 7:15 PM IST.

Top picks from Sharekhan

Sharekhan Research has released a list of top stock picks. However, we are not comfortable with the entire list and here the ones which we recommend from it.

HCL Technologies:
At the current market price the stock trades at 14.3x FY2008 and 12.5x FY2009 estimated earnings (which is around 33% discount to valuation of Infosys). Target Price Rs 396.

Bharti Airtel Ltd:
At the current market price the stock trades attractively at 26.0x FY2008 and 20.6x FY2009 earning estimates. Target Price Rs 1,100.

HDFC Bank:
At the current market price the stock is quoting at 20.9x FY2009E earnings per share, 8x FY2009E pre-provision profits and 3.1x FY2009E book value. Buy with a price target of Rs 1,355.

ITC:
At the current market price the stock trades at 21.2x FY2008 and 17.5x FY2009 estimated earnings. Target Price Rs 200.

JP Associates:
The company is the largest private sector hydropower player and is currently sitting on a huge construction order book of Rs7,200 crore. Taking cognisance of the government’s target of achieving 50,000MW in hydropower electricity by 2012. Target Price Rs 1,061

Maruti Suzuki Udyog:
At current levels, the stock is trading at 11.5x its FY2009E and is available at an EV/EBIDTA of 6.8x. Buy with a price target of Rs 921.

Read the full article

Published by Webmaster @ 12:57 PM IST.

Sell HT Media - Citi

Friday, August 03, 2007

Citigroup has downgraded the stock of HT Media to SELL from BUY after a disappointing first quarter of FY-2008 with a Target Price of Rs 212.

Earnings growth for HT Media is slowing, partly because of new investments, but also because fixed costs have continued to increase rapidly. In 1Q FY08 it reported the slowest growth of the last two years.

HT Media's fixed cost base compares unfavorably to other Indian media companies. While it has made some new investments, the extent of increase in fixed costs is too high. Employee costs rose 400bps over the last three years, despite revenues doubling, which is surprising given high operating leverage inherent in media businesses.

1QFY08 results were below expectations. Even after adjusting the 500bps impact on margins due to new investments, EBITDA grew only 7.1% (33% adjusted for new business investments), the slowest over the last two years.

Citi reduced EPS estimates for FY08-09E by 10.3-12.2%. At 27xFY09E P/E, HT Media trades at an 80% premium to its regional print media peers, which is excessive. HT Media is likely to report an EPS of Rs 6.64 and Rs 8.49 for FY-2008 and FY-2009 respectively.

Read the full article

Published by Webmaster @ 12:31 PM IST.

Citi retains BUY on Gokaldas Exports

Thursday, August 02, 2007

Gokaldas Exports Q1-FY08 revenues grew a healthy 18% YoY, but EBITDA and earnings declines of 7% and 22% yoy, respectively, were lower than estimates. EBITDA margin also declined 220bps YoY to 8% - adverse impact of 9% appreciation in rupee in the quarter.

Gokaldas has taken steps to counter the rupee appreciation 1) Negotiating higher prices for future orders, 2) increase usage of imported raw materials, benefit is expected to flow from 2Q, 3) focus on a richer product mix. Gokaldas management is focused on Building order book of Rs2.5bn for 2QFY08, contrary to sector's decline and Enriching product mix with entry into suits, innerwear, workwear.

Gokaldas Exports offers the best exposure to the garment outsourcing theme. With Gokaldas' large capacity, good relationships with global brands and healthy order-book position, we believe the company is well positioned for growth. Target price of Rs285 is based on 12x FY-08E P/E. EPS estimates are Rs 23.8 and Rs 27.5 for FY08 and FY09 respectively.

Read the full article

Published by Webmaster @ 2:39 PM IST.

Buy Sterlite + Hindustan Zinc

Wednesday, August 01, 2007

Citigroup has initiated coverage on Sterlite Industries with a BUY 1M [Medium Risk] rating and a price target of Rs 910, potential upside of 45% from CMP of Rs 621.

Sterlite is a conglomerate producing non-ferrous metals – zinc,aluminium and copper. Zinc is Sterlite's best-performing business. Prices have been relatively subdued this year, but supply from China to moderate over the coming months, enabling prices to recover in 2HFY08 to ~US$4,400/t. Citi sees upside to FY09E forecasts, based on buoyancy in zinc and lead prices. Despite flat aluminium prices, Citi expects moderate earnings growth in Balco, in which Sterlite currently owns 51%.

Sterlite operates a copper smelter for which the key profit driver is TC/RC margins, which are expected to halve from FY07 levels to 14-15c/lb, and EBITDA from Rs11.6bn in FY07 to ~Rs8bn in FY08E-FY09E. Given this, and sector re-rating, Citi values Sterlite Industries stock at a P/E of 10x FY09E, a premium to historical valuations.

Hindustan Zinc Ltd [HZL]:
Citi has initiated coverage on Hindustan Zinc with a BUY recommendation and a price target of Rs 1155, potential upside of 62%.

HZL is a fully integrated, low-cost zinc producer which meets all zinc concentrate requirements internally; offering exposure to the robust zinc price outlook. HZL also offers volume growth, scope for cost cutting, and exposure to buoyancy in lead prices.

Production costs are low as 90% of ore is sourced from its low-cost Rampura Agucha mine. Ongoing capex should enhance zinc capacity by 63% from 411,000t to 669,000t by 1Q FY09, useful at a time when zinc prices are likely to revive.

Based on outlook and sector re-rating due to global M&A, our target is Rs1,155 based on a P/E of 10x FY09E.

Comments and Suggestions can be sent to - feedback @ DalalStreet.Biz

Read the full article

Published by Webmaster @ 12:01 PM IST.