Stock Views on Reliance Industries, Tata Consultancy Services, Allied Digital, Grasim Industries, Karuturi Global

ICICI Securities on Reliance Industries - Rating: BUY

ICICI Securities has maintained its buy rating on Reliance Industries in its June 11, 2008 research report. "We are increasing our FY09 and FY10 crude price and exchange-rate estimates as well as building-in lower refining and petrochemical margins for Reliance Industries (RIL). We are also factoring-in an expected delay in commencement of production from the KG D6 block and operations of the Reliance Petroleum (RPL) refinery commencing September ’08. Recent Government decision to keep private companies out of the purview of subsidy sharing is positive. However, we remain positive on the long-term prospects of RIL on the back of impressive earnings growth and attractive E&P portfolio. Reiterate BUY.""We value RIL’s extant petrochemical and refining business at Rs 1381 per share, retail at Rs 140 per share, E&P at Rs 1,168 per share and RIL’s stake in RPL at Rs 343 per share. We also attribute Rs 85 per share value to the company’s SEZ at Haryana, implying fair value of Rs 3,060 per share," says ICICI Securities' research report.

India Infoline on Tata Consultancy Services - Target Rs 875

India Infoline has recommended a buy rating on Tata Consultancy Services with a target price of Rs 875 in its July 17, 2008 research report. "Though the Q1 FY09 performance of TCS was sedate, as expected, and business outlook remains challenging, the stock is likely to outperform in the short-term given the bleak expectations before the results. Over the last three months, TCS has significantly underperformed the sector especially vis-à-vis similar-sized peers, Infosys and Wipro, due to higher uncertainty about its Q1 FY09 performance." "Since April 2008, TCS has delivered a negative return of 12.5% against positive return of 1% in BSE IT and 9% for Infosys. Since announcement of Infosys Q1 FY09 numbers, TCS is down 16% implying further moderation of expectations. Q2 FY09 is likely to be a better quarter for the company with improved growth outlook in the two troubled BFSI clients and as also indicated by healthy hiring in Q1 FY09. We rate the stock as BUY with a target price of Rs 875 implying 20% upside," says India Infoline's research report.

FinQuest Securities on Allied Digital Services - Target Rs 1198

FinQuest Securities has maintained its buy rating on Allied Digital Services with a target price of Rs 1198 in its August 8, 2008 research report. "ADSL reported operating revenue of Rs 896 million for the quarter ended 1QFY09, an increase of 38% YoY from Rs 652 million in the corresponding quarter last year. Its EBITDA grew by 57% YoY to Rs 218 million from Rs 139 million. EBITDA margin expanded by 250bps YoY to 23.6%, attributable to change in revenue mix in favour of Services business, which commands higher EBITDA margin in the range of 50-60%."

"At current market price of Rs 791, ADSL is trading at P/E of 31.9x for FY08 EPS of Rs 24.8. We expect ADSL to trade at 15.6x FY09E and 8.6x FY10E EPS of Rs 50.6 and Rs 92.1 respectively. We maintain BUY recommendation on the stock with price target of Rs 1198 using DCF-methodology, indicating an upside of 51% from the current level," says FinQuest Securities' research report.

Sharekhan on Grasim Industries - Target of Rs 3002

Sharekhan has recommended a buy rating on Grasim Industries with a price target of Rs 3002 in its June 11, 2008 research report. "Considering the poor performance of the sponge iron division in the past, we believe the sale of the business at 6.4x FY2008 EV/EBIDTA will be value accretive for the company. The sale of the sponge iron division will also boost the overall profitability of the company. The proceeds from the sale will enable the company to make fresh investments in its core businesses of cement and VSF. At the current market price of Rs 2192, the stock is trading at 8.8x its estimated FY2009E EPS. Based on our sum-of-the-parts valuation, we maintain our Buy recommendation on the stock with a price target of Rs 3002," says Sharekhan's research report.

Ambit Capital on Karuturi Global - Target of Rs 49

Ambit Capital has maintained its buy rating on Karuturi Global with a revised price target of Rs 49 in its June 10, 2008 research report. "Karuturi Global (KGL) announced its Q4FY08 and full year FY08 results, marginally below our expectations. Despite a strong showing in Q4FY08 that rounded off a very good second half for the company, KGL's performance was below our expectations.However, the company has delivered along expected lines as far as the margins are concerned."

"At its CMP of Rs 22, the stock is currently trading at a P/E of 5.6x and 4.8x our FY09E and FY10E fully diluted EPS estimates respectively. We maintain our 'BUY' recommendation on the stock with a revised price target of Rs 49; indicating 124% upside from CMP," says Ambit Capital's research report.