Stock Views on on Infosys Technologies, NTPC, Sadbhav Engineering, Orchid Chemicals

Motilal Oswal on Infosys Technologies - Target of Rs 1640


Motilal Oswal has maintained its buy rating on Infosys Technologies with a target of Rs 1640 in its November 14, 2008 research report. "Infosys reported in-line revenue growth of 5.3% QoQ and 18.9% YoY to USD 1,216 million for 2QFY09. Infosys guided for revenue of USD 4.72 billion-4.81 billion for FY09 v/s its earlier guidance of USD 4.97 billion-5.05 billion, implying 13-15% growth now v/s 19-21% growth earlier. The rupee revenue guidance for FY09 has been changed only marginally to Rs 213 billion-217 billion from Rs 213 billion-216 billion, implying growth of 28-30%. The company has maintained EPS guidance for the year at Rs 101.06 (the higher end), implying growth of 24%."

"We believe operating margins will be stable with a negative bias for 2HFY09. The company hired 17,299 employees in 1HFY09, which is 69% of the total guided gross hires for the year. We reduced our FY09 EPS estimate by 2% to Rs 100.4 and FY10 EPS estimate by 5% to Rs 109.1 and are revising our target price to Rs 1,640 (15x FY10E earnings) due to earnings growth deceleration to 17% over FY08-10 and prevailing uncertainties. Maintain Buy," says Motilal Oswal's research report.


Hem Securities on NTPC - Target of Rs 183


Hem Securities has initiated a buy rating on NTPC with a target price of Rs 183 in its November 15, 2008 research report. "The company has posted decent results for the quarter ended September 2008. The Net sales have surged to Rs 100911 million with a year over year growth of 25.87 per cent. Presently, the stock is trading at Rs 149 which is at 17.65 times to its earnings and 2.18 times to its book value of Rs 68.49. Since the stock seems to offer extremely good investment opportunities, we initiate a ‘BUY’ signal on the stock with a target price of Rs 183 in medium term investment horizon expecting an appreciation of about 22% from the current level of Rs 149," says Hem's research report.


Angel Broking on Sadbhav Engineering - Target of Rs 718


Angel Broking has maintained its buy rating on Sadbhav Engineering with a target price of Rs 718 in its November 12, 2008 research report. "For 2QFY2009, Sadbhav Engineering (SEL) reported Net Sales numbers, which were below our expectations. The company registered 22% yoy growth in Net Sales to Rs 124.2 crore (Rs 101.8 crore) as against our expectation of 41% growth at Rs 143 crore. We value, SEL at 6x FY2010E standalone Earnings assigning Rs 430 per share. We value SEL’s portfolio of BOT assets at Rs 399 crore (Rs 420 crore earlier), contributing Rs 288 per share excluding NSEL Annuity project, which we believe has no value while factoring in current increased cost of financing and arrive at a conservative SOTP Target Price of Rs 718 (Rs 1,036). We maintain a Buy on the stock," says Angel's research report.


Reliance Money on Orchid Chemicals - Target of Rs 176


Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target of Rs 176 in its November 14, 2008 research report. "Orchid Chemicals & Pharmaceuticals Ltd (Orchid) reported 19% growth in consolidated revenues on a higher base to Rs 3484.5 million during Q2FY09. As per revised estimates, we expect the Revenue and profit (excluding forex loss) would grow at a CAGR of 15% and 16%, respectively during FY08-10E. Thus, the revised EPS (excluding forex loss) stands at Rs 14 and Rs 22.9 for FY09E and FY10E, respectively."


"But the positive part of Orchid is that FCCBs have sufficient time horizon for conversion and the company does not hedge its revenues, which could benefit the company from the weakening Rupee scenario in the near term. In line with our changed estimate based on consolidated numbers and in order to align our valuation with market valuation, we are revising our target price. In fact, to capture the market wide correction in valuations, we have reduced the earning multiple by 35% and revise target price to Rs 176 (i.e. 8x FY10E EPS),Buy," says Reliance Money's research report.