Indiabulls Securities on Hindustan Petroleum, Bharat Forge

Hindustan Petroleum
Indiabulls Securities Research has upgraded its rating on Hindustan Petroleum Corporation to buy in its November 21, 2008 research report. "HPCL’s net sales for Q2’09 increased 42.7% yoy to Rs 312.1 billion. For Q2’09, Hindustan Petroleum Corporation Limited (HPCL) reported a net loss of Rs 32.2 billion. We have revised our estimates to consider the current macroeconomic and political environment."

"At the current price of Rs 228.5, HPCL’s stock trades at a forward P/E of 14.4x and 6.5x for FY09E and FY10E, respectively. Based on our valuation, we have arrived at a fair price value of Rs 265, implying an upside potential of 16.2%. Thus, we upgrade our rating on the stock to Buy," says Indiabulls Securities' research report.

Bharat Forge - Target of Rs 130

Indiabulls Securities Research has maintained its buy rating on Bharat Forge with a target of Rs 130 in its November 21, 2008 research report. "Bharat Forge (BFL)’s stock has plunged 63%. At the current market price (CMP) of Rs 92.40, the stock is trading at a forward P/E of 8.3x and 8.1x for its FY09E and FY10E earnings, respectively. We have valued BFL by using the DCF valuation methodology, assuming a WACC of 13.1% and a terminal growth rate of 5%."
"Our valuation suggests a target price of Rs 130, which provides a potential upside of more than 40% from the CMP. At the current levels, we believe that BFL is a compelling long-term investment. Hence, we maintain our Buy rating on the stock," says Indiabulls Securities' research report.