PINC Stock Views on Firstsource Solutions, Garware Offshore, Rohit Ferro Tech, Visa Steel

Buy Visa Steel, target Rs 85

PINC has maintained buy rating on Visa Steel with taret price of Rs 85 in its June 11, 2008 report. "Visa Steel Ltd (VSL) registered excellent growth with revenue rising by 85% to Rs 2.6 billion. OPM expanded by 1,160bps to 17.8% while net profits surged by 30x to Rs 210 million. The key attribute to this robust performance was an overall buoyancy in realisations being witnessed in the commodities. At the CMP of Rs 52, the stock trades at a P/E of 3x and EV/EBITDA of 3.5x FY10 estimates. We see volume growth emanating post completion of the DRI unit in Q1FY09. This, coupled with lower power cost through captive power plant provide ample earnings visibility. We remain positive on the stock and reiterate our ‘BUY’ recommendation with a 12- month price target of Rs 85" accoreing to PINC report.

Buy Rohit Ferro Tech, target of Rs 190

PINC Research has maintained its buy rating on Rohit Ferro Tech with a 12-month target price of Rs 190 in its August 6, 2008 research report. "Rohit Ferro Tech Ltd’s (RFTL) net sales at Rs 3.1 billion for Q1FY09, exhibited a YoY growth of 210%. The primary drivers were volume growth and higher ferro alloy realisations."

"At the CMP of Rs 147, it trades at a P/E of 3x & EV/EBIDT of 3.1x discounting its FY10E earnings, which we believe are low considering the buoyant ferro alloy pricing and ongoing expansion. Hence, we maintain our ‘BUY’ rating with a 12-month price target of Rs 190," says PINC's research report.

Buy Garware Offshore, target of Rs 300

PINC Research has maintained its buy rating on Garware Offshore Services with a target price of Rs 300 in its August 5, 2008 research report. "Garware Offshore Services Ltd’s (GOSL) Q1FY09 results were in line with expectations as net sales rose 52% to Rs 294 million and net profits (excluding extraordinary item) grew by 92% to Rs 99 million."

"GOSL has capitalised on the buoyant uptrend in the offshore service space by timely expansion of its fleet. We are confident of the company achieving its targeted expansion, which should reflect in its performance from H2FY09 onwards. Thus, we maintain our ‘BUY’ recommendation with a 12-month price target of Rs 300," says PINC's research report.

Buy Firstsource Solutions, target of Rs 46

PINC Research has maintained its buy rating on Firstsource Solutions with a revised 12-month target price of Rs 46 in its August 5, 2008 research report. "Firstsource Solutions Ltd. (FSL) reported a better than expected quarter as net sales grew by 8.6% QoQ to Rs 4.0 billion while OPM dipped by 180bps to 14.8% due to wage hikes and higher operating costs. INR depreciation during the quarter led to a notional non cash loss of Rs 801 million linked to USD FCCBs. As a result, net profits were negative. Excluding this, net profits were at Rs 301 million."

"At the CMP of Rs 35, FSL is trading at a P/E of 13.1x and EV/EBIDT of 6.6x our FY09 estimates. Though FSL is operating in an uncertain environment and Q2 numbers would give clear visibility over its outlook, a better than expected Q1, near term revenue visibility and H2 performance historically being better provide positive indicators. Besides these factors, the outsourced BPO market remains underpenetrated and provides an opportunity to FSL to consistently expand earnings going forward. Hence, we maintain our ‘BUY’ recommendation with a revised 12 month price target of Rs 46," says PINC's research report.