Stock View on Great Offshore, Tata Steel, Bharat Forge

ULJK Securities on Great Offshore - Target Rs 664

ULJK Securities has recommended an accumulate rating on Great Offshore with a target of Rs 664 in its September 9, 2008 research report. "Sales are expected to grow at a CAGR of 32% and profit is expected to grow by 21% over FY08-FY10E as contracts are expected to be done at higher day rates. Its EPS is seen at Rs 59.6 in FY09E and at Rs 80.4 in FY10E. At a CMP of Rs 543, the stock trades at a P/E of 9x & 6.6x its FY09E & FY10E earnings respectively. It is trading at EV/EBITDA multiples of 6.5x F2009 and 4.9x F2010. Based on the DCF methodology, we arrive at a share price of Rs 664. We recommend an accumulate rating on the stock with a target of Rs 664," says ULJK Securities' research report.

Religare on Tata Steel - Target price Rs 780

Religare Research has recommended a buy rating on Tata Steel with a target price of Rs 780 in its September 9, 2008 research report. "Tata Steel has historically traded at a forward EV/EBITDA band of 2–6x and at a P/E band of 2–7x across steel price cycles. We have valued the company at an EV/EBITDA multiple of 5x on FY10E–a discount to Asian and European steel players. At our target price, the stock would trade at a P/E of 6.2x one-year forward, Buy,target of Rs 780," says Religare's research report.

Indiabulls Securities on Bharat Forge - Target Rs 320

Indiabulls Securities Research has maintained its buy rating on Bharat Forge with a target of Rs 320 in its September 5, 2008 research report. "We have valued Bharat Forge by using a three stage Discounted Cash Flow (DCF) model with explicit forecast till 2010, middle period forecast between 2011-15, and terminal period from 2016. Free cash flows for the explicit period were calculated based on projects announced by the Company. For the middle and terminal period, cash flows were estimated assuming a free cash flow growth of 15% and 5%, respectively."

"For discounting the estimated free cash flows, we have assumed a WACC of 13.2% based on the cost of equity of 15.5% and cost of debt of 7.4%. This valuation gives us a target price of Rs 320, which is 27.8% more than the current market price of Rs 250.45. Hence, we reiterate our Buy rating on the stock," says Indiabulls Securities' research report.