Stock Views on Ranbaxy, Tanla Solutions, Zee Entertainment, Gammon India

Ranbaxy has 2-year target of Rs 700: Eastern Financiers

According to Eastern Financiers, Ranbaxy Laboratories with the change of ownership, Daiichi Sankyo Limited taking over from Malvinder Singh, we expect the company to grow aggressively and develop. So, the possibility of a de-listing of Ranbaxy stock in the future cannot be ruled out. A 2-year price target of Rs 700 looks possible. Settlement with Pfizer is an important catalyst going forward.

Buy Tanla Solutions, target of Rs 360: Prabhudas Lilladher

Prabhudas Lilladher has maintained its buy rating on Tanla Solutions with a target price of Rs 360 in its July 14, 2008 research report. "Tanla Solutions’ Q1FY09 numbers were above our estimates, especially topline, which grew at 16.2% sequentially to Rs 1,669 million. EBITDA for the quarter grew 15.7% sequentially to Rs 804 million, with margins sliding slightly (20bps) to 48.2%. Net profit grew by 12.8% QoQ to Rs 564 million."

"We expect Tanla to report revenue growth of 105.5% and 46.9% and earnings growth of 56.9% and 40.8% in FY09 and FY10 respectively. We maintain BUY rating on the stock with a target price of Rs 360 (10x FY10E earnings), implying 63.9% upside from current levels," says Lilladher's research report.

Add Zee Entertainment, target of Rs 216: IIFL

IIFL has initiated coverage on Zee Entertainment with an 'ADD' rating and a target price of Rs 216 in its July 16, 2008 research report. "Zee Entertainment is a well-entrenched No 2 in the Hindi general entertainment channel (GEC) space. We expect it to deliver 17% earnings CAGR over FY08-11 even after factoring in a slowdown in advertising spends in FY10. This earnings growth will be driven by: 1) strong growth in subscription revenues, driven by a revamp of the domestic cable distribution; 2) acceleration in DTH subscriber addition with entry of new players; and 3) demerger of Zee Next, which will boost FY10ii earnings by 10%. We initiate coverage with an ADD rating and a target price of Rs 216, based on 18x FY10ii EPS," says IIFL's research report.

Buy Gammon India, target of Rs 281: IIFL

IIFL has recommended a buy rating on Gammon India with a 12-months target price of Rs 281 in its August 4, 2008 research report. "Gammon 1QFY09 results disappointed our and street expectations and were much below management guidance in the 4QFY08 earnings call. Suspension of two projects in Kashmir and Assam resulted in tepid revenue growth. Margins contracted more than expected as the proportion of low margin captive projects in revenues increased."

"Gammon has merged its T&D contracting associate, ATSL with itself. Post downward revision in estimates of organic business and inclusion of ATSL financials, the stock is trading at adjusted FY10ii PE of 7.1x. The stock is cheapest among peers. However, consistent performance is required before the stock re-rates. Buy, 12-months target Rs 281," says IIFL's research report.