Stock Views on Rallis India, Orchid Chemicals, Welspun Gujarat

Emkay Global on Rallis India - Target of Rs 518

Emkay Global Financial Services has recommended a buy rating on Rallis India with a target of Rs 518 in its November 12, 2008 research report. "The company has shown a consistent growth in the past with improvement in the EBITDA margins, increased number of new launches, improving operational efficiency and increased thrust on exports. We believe that EBITDA margins of 15.5% will be sustainable in future with less pressure from raw material cost due to overall fall in the commodity prices."

"We expect EPS of Rs 52 and Rs 64.8 for FY09E and FY10E. The company also has ‘hidden assets’ like excess land bank and a minority stake in Advinus, one of the finest pharma research organizations in India. Based on this, we are revising our price target to Rs 518 (from Rs 550 earlier) which is 8XFY10E earnings with a BUY rating," says Emkay Global Financial Services' 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.

Asit C. Mehta on Welspun Gujarat - Target of Rs 190

Asit C. Mehta has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target price of Rs 190 in its November 13, 2008 research report. "WGSRL has an order book of USD 2 billion, which provides revenue visibility until FY10. Current orders sufice current capacity. As new capacity becomes operational, the company should attract orders. However, with the current global credit crisis we expect new orders to come in at a slower pace."

"We believe that the company will benefit in the near term on account of the capex it has incurred in the pipes segment. We therefore maintain a positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 190, which is equivalent to a P/E multiple of 5 times its FY10E EPS," says Asit C. Mehta's research report.