Emkay Global Views on Aban Offshore, Infosys, Nagarjuna Construction

Aban Offshore - Target of Rs 3868

Emkay Global Financial Services has recommended a buy rating on Aban Offshore, with a price target of Rs 3868, in its report dated September 16, 2008.

"At current levels, Aban is discounting its FY2010E earnings by 5.1X, which is a significant 24% discount to the valuations commanded by global drilling majors. However, we believe that Aban’s valuation does not adequately capture Aban’s steeper earnings growth of 123% CAGR (even after the earnings downgrade) as compared to 17% CAGR for its global peers and its superlative RoE of 48% as compared to 24% for global peers. At 5.1X FY2010E earnings, Aban’s valuations are extremely compelling and it more than adequately factors possible softening in Jack up day rates. We continue to believe that the global offshore drilling industry fundamentals are still robust and believe that Aban is the best pick among domestic players. We maintain our BUY recommendation on the stock with a revised price target of Rs 3868 (earlier target of Rs 5400)," says Emkay Global Financial Services' research report.

Infosys - Target of Rs 1836

Emkay Global Financial Services has recommended a hold rating on Infosys Technologies with a target of Rs 1836 in its September 12, 2008 research report."Although the rapid appreciation of the USD V/s the GBP and Euro would impact Infosys’s USD term revenue growth (we estimate that Infosys’s FY09 revenue growth guidance of 19-21% YoY growth could be negatively impacted by 250 bps and Infosys could report USD revenue growth of 18.3% V/s our estimates of 20.8% currently). However Infosys’s earnings estimates could still be upgraded by 4.9% and 4.5% for FY09 and FY10 respectively to Rs 107.2 and Rs 122.6 (if we were to base the estimates at Rs 45/USD for FY09 and Rs 44/USD for FY10 respectively)," says Emkay Global's research report.

Nagarjuna Construction - Target of Rs 154

Angel Broking has maintained its buy rating on Nagarjuna Construction Company with a target of Rs 154 in its September 16, 2008 research report. "Nagarjuna Construction Company (NCC) is on track to emerge as a diversified infra heavyweight with SPVs and Real Estate accounting for 20% of our sum-of-the-parts (SOTP) target price. It is also diversifying into the Metals, Oil and Gas and Power sectors. At Rs113, the stock is trading at valuations of 7.7x FY2010E EPS of Rs 9.5 post adjusting for the BOT projects and Real Estate, which is attractive in view of the good order book position (Rs 14,500 cr) and positive outlook on the Infrastructure sector. We have arrived at a SOTP target price of Rs 154 valuing NCC's core construction business at Rs 114 (12 x FY2010E EPS), BOT business at Rs 18.7 and Real Estate arm at Rs 20.6. We maintain a buy on the stock, with a revised 12-month target price of Rs 154," says to Angel Broking report.