Emkay Global views on Bharti Airtel, Bharat Heavy Electricals, ICRA

Bharti Airtel - Target of Rs 1025

Emkay Global Financial Services has maintained its buy rating on Bharti Airtel with price target of Rs 1025 in its November 3, 2008 research report. "Its Q2FY09 results were slightly below our estimates primarily due to higher than expected fall in the mobile ARPU (Q2FY09 ARPU came was at Rs 331 v/s our estimate of Rs 341). The net sales for the quarter grew by 6.3% QoQ to Rs 90.2 billion v/s our estimate of Rs 91.4 billion. Post Q2FY09 results we have reduced our ARPU estimates by 3.2% each and once again increased the subscriber estimates by 3% and 3.6% for FY09E and FY10E respectively. We maintain buy rating with revised price target of Rs 1025 (from Rs1168 earlier) based on DCF value of core business at Rs 906 per share and value of tower business at Rs 119 per share," says Emkay Global Financial Services' research report.

Bharat Heavy Electricals - Target of Rs 1520

Emkay Global Financial Services has maintained its buy rating on Bharat Heavy Electricals (BHEL) with price target of Rs 1520 in its November 3, 2008 research report. "Its of 34.7% yoy to Rs 53.4 billion (against our estimates of Rs51.3 billion) driven by healthy order backlog of Rs 1040 billion. On account of sQ2FY2009 net profit at Rs 6.15 billion is above our expectations primarily because of better than expected topline growth. Net sales witnessed a strong growth lowdown in economic activity, high interest rest and lack of adequate funding for new projects we expect some slowdown in BHEL’s order inflow as well as order execution."

"Consequently we are downgrading our earnings estimates by 3% for FY2009 and 9% for FY2010. Also in order to factor the earnings downgrade and slowdown in order inflow we downgrade our price target for BHEL to Rs 1520, which is based on average of 16X BHEL’s FY2010 earnings, 12X its FY2010 EV/EBIDTA and DCF (WACC of 13.5%)," says Emkay Global Financial Services' research report.

ICRA -

Emkay Global Financial Services has maintained its buy rating on ICRA in its November 3, 2008 research report. "Its net profit of Rs 98 million for Q2FY09 was in line with our expectations driven by strong growth in revenues and improvement in operating leverage. The operating revenues have grown by 32% yoy to Rs 343 million driven by strong growth in the rating services and BPO business. We had valued the company at 15% premium to the Sensex multiple which it self has been derated to 10x. We are revising our price target on the stock to Rs 600, which values the company at 11.5x FY10E EPS (15% premium to the Sensex multiple). We maintain our Buy recommendation on the stock," says Emkay Global Financial Services' research report.