Stock views on Petronet LNG, CESC, Asian Paint

Asit.C.Mehta on Asian Paint - Target price Rs 1419

Asit.C.Mehta research ahs maintained buy rating on Asian Paint wih target price of Rs 1419 in its May 13, 2008 research report. "Asian Paints Ltd. (APL) consolidated revenue for Q4 FY08 increased by 18.2% from Rs. 9,589 million in Q4 FY07 to Rs 11330 million in Q4 FY08. Whereas the consolidated revenue for FY08 increased by 20% from Rs 36,699.7 million in FY07 to Rs. 44,043 million. The growth was due to: The quantity sold increased by 18.7% from 481812 tonnes in FY07 to 571,911 tonnes in FY08. Increase in the value of sales due to good market conditions prevailing in domestic and Middle East. At CMP of Rs. 1230.0 the stock is trading at 25.6 x FY09E & 19.9x FY10E earnings per share. With Industry and company’s outlook remaining status quo and in line with our expectations. We maintain a “BUY” recommendation for Asian Paints Ltd. price-objective of Rs 1419 (implying a forward P/E multiple of 23x) on account of robust domestic demand for decorative paints" says Asit.C. Mehta research report.

Angel Broking on CESC - Target price Rs 643

Angel Broking has maintained buy rating on CESC with target price of Rs 643 in its May 13, 2008 report. "We remain positive on the domestic Power Sector and expect it to grow in line with the country’s GDP growth. Our positive stance stems from the fact that peak power demand in excess of 13% gives immense opportunity to players like CESC, who are in a position to tap this huge opportunity on account of their vast experience. Further, with the company also having huge expansion plans which are on track, we believe rapid growth would continue going ahead"

"We expect CESC to record a CAGR growth of 7.6% in Top-line over FY2008-10, while Bottomline would grow at a CAGR of 10.4% in the mentioned period. At the CMP, the stock is trading at 14.9x FY2010E EPS and 1.7x FY2010E P/BV. We have introduced our FY2010 estimates. We have also assigned a lower FY2010 P/BV multiple to the company’s existing Power business at 1.75x (earlier 2.5x FY2009E) owing to drop in relative valuations. Hence, we revise our SOTP Target Price to Rs 643 (Rs 723). Nonetheless, considering that the company is inexpensive in terms of P/BV on FY2010E basis, we maintain a Buy on the stock" according to Angel broking research report.

Angel Broking on Petronet LNG - Target price of Rs 90

Angel Broking has upgraded its rating on Petronet LNG to buy rating with a target price of Rs 90 in its May 9, 2008 research report. "Dahej expansion to 12.5 mmtpa (current 6.5 mmtpa) is slated to come on stream July onwards in a phased manner. Expanded capacity will help Petronet process more Spot volumes till the 2.5mmtpa contracted supplies from Qatar commence October 2009 onwards. For the next 2-3 years, growth will primarily be driven by Spot LNG and the expanded capacity will benefit from the situation."

"The company is now also diversifying into different segments like power, port development, etc., which is expected to generate value over a period of time. We have valued Petronet on DCF methodology with a Cost of Equity of 15.2% (high as it is a high beta stock), Cost of Debt - 10% and WACC - 9.2%. The stock is currently available at 9.8x FY2010E EPS of Rs7.7. Based on our DCF valuation model, we upgrade the stock to a Buy, with a target price of Rs 90," says Angel's research report