Category: Equity Research

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.

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.

Automotive Axles Ltd (AAL) reported a whopping 57.1% growth in net sales to Rs 157.4 crore while net profit surged 41.8% to Rs 14.4 crore for the quarter ending March 31, 2007 (Q2FY07). EBITDA margins dipped marginally from 17.9% to 17.2%.

ICICI Research had projected an EPS of Rs 37.5 for FY07 and the company has delivered an EPS of Rs 18.5 in the first six months. ICICI is confident the company will achieve an estimated revenue growth of 26.7% (CAGR) and net profit growth of 25.7% over FY06-08E.

ICICI maintains revenues estimates and reiterate OUTPERFORMER rating with a target price of Rs 716. Read the entire report here.

ZIL [Zuari Industries Ltd] has been trading in a narrow range for the last 3 weeks and is showing signs of breaking out of the range. Further the short and medium term moving averages have converged around the current price and are moving up.

Current Price : Rs169
Target Price : Rs201
Upside : 19%

Here are the excerpts from TCS Analysts Meet. No slowdown in BFSI; Robust demand environment. TCS management reiterated its view on the pricing uptick being on track – new clients are coming at 5-10% higher price point. TCS indicated that deal flow remains strong and lot of smaller deals (US$20-50 mn) were being awarded by existing clients.

TCS is expected to report an EPS of Rs 53, Rs 63 and Rs 74 for FY08, FY09 and FY10 respectively. With dollar under severe pressure from Indian Rupee, we maintain a BUY target on TCS but with a lower price target of Rs 1550. 21% upside from current levels.

HDFC Ltd 4Q beat JP Morgan [JPM] estimates; Profit was 7% higher, mainly from better fee growth and a lower cost-to-income ratio. JPM raised May08 price target is Rs1,824, which implies 9% upside from the current price. JPM retained OW rating given firm business dynamics and defensive nature of the stock.

Subsidiaries add 30% to sum of parts: 56% of subs value from HDFC Bank, 31% from the life company, and 10% from the mutual fund. Stock catalysts are likely to be continued market share increases at the expense of competitors, as well as value unlocking in ICICI’s insurance holding company.

HDFC is expected to report an EPS of Rs 74 and Rs 90 for FY08 and FY09.

DalalStreet. Biz recommend a Blind BUY on this stock whenever their is a market correction. You can expect 25-30% returns YoY.