Stock Views on Idea Cellular, Marico, Bharti Airtel

IIFL on Idea Cellular - Target of Rs 112

IIFL has recommended a buy rating on Idea Cellular with a 12 month target of Rs 112 in its September 18, 2008 research report. "Idea Cellular is yet to receive the USD 640 million investment from the private-equity deal done in May this year, and the rupee’s depreciation against the USD will result in a gain exceeding Rs 2 billion for Idea. In FY08, Idea managed its FX exposure better than peers. Idea also sported the best asset turnover, highest depreciation rates and the highest ROE among the big carriers. It raised its market share in FY08 from 8.4% to 9.2% in terms of share of wireless subscribers."

"While minutes of usage increased by 5%, the rate per minute fell by 15%, resulting in a 12% drop in ARPU to Rs 299. At 54%, Idea’s YoY revenue growth rate was equal to that of Bharti. We build in higher cost of imports over the next 2 years and raise WACC to 14% and reduce our DCF target price from Rs 141 to Rs 112. BUY," says IIFL's research report.

Parag Parikh on Marico - Target of Rs 82

Parag Parikh Financial Advisory Services has recommended a buy rating on Marico Industries with a target of Rs 82 in its September 11, 2008 research report. "At the current market price of Rs 58.25 , the stock trades as 16x of FY09 earnings and 14x of FY10 earnings. This seems grossly under priced and a value pick. PPFAS research expects the stock to reach a level of Rs 82 within 18 months to trade at 20x on projected earnings of FY10E. Thereby we rate the stock as a BUY giving an upside of 40%, target of Rs 82," says Parag Parikh Financial Advisory Services' research report.

India Infoline on Bharti Airtel - target Rs 908

India Infoline has recommended buy rating on Bharti Airtel, with a price target of Rs 908, in its report dated September 15, 2008.

"Over the past 12 months DoT has granted spectrum to several new players, which are likely to start operations, aided, partly, by faster network roll out due to infrastructure sharing. However, we believe Bharti is well placed to maintain its leadership position with a strong pan India presence and a 75 million subscriber base and forecast a 36.1% CAGR in earnings over FY08-10E. Valuations appear attractive at EV/EBIDTA of 8.4x and P/E of 12.8x on our FY10E earnings; recommend BUY with a target price of Rs 908", says India Infoline report.