Category: Equity Research

On the recommendations of Citi, we first initiated coverage on ABG Shipyard 6 months ago. Now Merill Lynch has put a BUY rating on the stock with huge potential for upside. ABG Shipyard is expanding from being a manufacturer of small vessels to vessels of all categories. Order backlog at 7.5x FY08E sales, ten fold jump in capacity by FY12E to drive 63% EPS CAGR in FY07-10E. The stock, trading at 6.6x FY10E EV/EBITDA is attractive relative to peers.

Merill Lynch thinks that – the Govt. may extend a subsidy scheme which is being discussed; but not confirmed; b) ABG’s gets SEZ status for its upcoming shipyard at Dahej providing it substantial tax benefits; and c) Manages to acquire Western India Shipyard that Is still awaiting regulatory approvals. (more…)

With the Indian markets becoming expensive, really especially the SENSEX stocks, Analysts are scrambling to find out new winners. DSP Merill Lynch has upgraded Hero Honda Ltd from neutral to BUY.

After a sharp decline last fiscal, expect margins to reverse trend and increase
140bps over FY07-10 to 13.2%, driven by (1) control over selling expenses, (2) operating leverage on improved volumes, and (3) shift in sales mix to pricier bikes. We believe this would surprise consensus, leading to forecast upgrades. (more…)

SSKI equity research has an outperformer recommendation on Sintex Industries and Unitech Ltd.

Sintex Industries
Sintex Industries (Sintex) has taken another big stride. With established credentials in various unexplored but difficult to penetrate product categories, focus is now on making it big in the composites space. (more…)

Kotak has come up with a BUY recommendation on Strides Acrolab. Strides Arcolab has shut down its loss making manufacturing operation for OTC and neutraceutical in New Jersey, USA. The facility manufactures soft gelatin, used as a protective layer in medicines and food supplements. This is a rational step as the plant was incurring huge losses due to high manufacturing costs, capacity utilization and regulatory issues.

Stride’s most profitable business by segment, namely, sterile injectables (more…)

Analysts covering Cairn Energy in India have different views about its earnings for the next 12 months. Kotak analysts are not so bullish on the prospects of the company while CLSA analysts have upgraded the target price. herei s what they both have to say,
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I-Sec has initiated coverage on Mumbai’s real Estate Developer HDIL with a Strong BUY Rating. On the back of strong project pipeline and imminent upsides from GVK Slum Rehabilitation Scheme (SRS) and upcoming special economic zones (SEZs). HDIL has presence across all key segments – residential, commercial, retail, SEZs and particularly SRS. Presence in prime Mumbai property market adds to the advantage. HDIL has development pipeline of ~120mn sqft (excluding GVK SRS and SEZs).
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