Stock Views on Tech Mahindra, Tata Steel, Reliance Industries, Jindal Saw

Emkay Global on Tech Mahindra - Target Rs 320

Emkay Global Financial Services has maintained its buy rating on Tech Mahindra with a target of Rs 320 in its December 3, 2008 research report. "We revise our estimates for currency assumptions (we base H2FY09 estimates at GBP/USD of 1.5 and 1.4 for FY10/FY11, USD/INR at Rs 47/USD and Rs 46/USD for H2FY09/FY10 and FY11 respectively). We note that Tech M’s estimated volume growth could all be nullified on account of currency alone during FY10."

"We expect TechM to report earnings of Rs 60.9 and Rs 66.7 in FY10 and FY11 respectively. Despite expecting 14% decline in earnings during FY10, we believe that inexpensive valuations limit any significant downside from current levels. We maintain BUY with a revised target price of Rs 320, based on 6x adjusted FY10 earnings of Rs 53.4," says Emkay Global Financial Services' research report.


Motilal Oswal on Tata Steel - Target of Rs 361


Motilal Oswal has maintained its buy rating on Tata Steel with a target of Rs 361 in its December 3, 2008 research report. "Consolidated 2QFY09 adjusted PAT increased 256% YoY to Rs 51.7 billion v/s estimate of Rs 27.2 billion. Reported PAT of Rs 47 billion includes forex loss of Rs 4 billion. Net sales increased 36% YoY to Rs 442 billion driven largely by price increase. Tata Steel will continue to pursue its expansions at Jamshedpur and Orissa because these are high return projects. The stock trades at P/E of 1.9x FY10E and EV/EBITDA of 3.7x FY10E. Maintain Buy, target of Rs 361," says Motilal Oswal's research report.


Angel on Reliance Industries - Target Rs 1880


Angel Broking has maintained its buy rating on Reliance Industries with a target price of Rs 1880 in its December 5, 2008 research report. "The government has asked Reliance Industries (RIL) to supply natural gas from the company's eastern offshore D6 fields to the beleaguered Dabhol power plant, a segment that gets top preference for gas allocation along with fertiliser units. A Petroleum Ministry statement said that gas to the Ratnagiri Gas and Power (Dabhol) plant would be within the overall allocation of 18 mmscmd for the Power Sector, while detailing customers for the initial 40 million standard cubic meters per day of gas to be produced from Krishna Godavari basin D6 field."

"It has been decided that RGPPL be supplied 1.4 mmscmd during January to March 2009 and 2.7 mmscmd during April to September 2009, subject to commencement of production, within the overall allocation of power sector (18 mmscmd). Regarding pricing, it has been decided that D6 gas would be sold to all customers at the rate of $4.2 per million British thermal unit (mmBtu) if crude oil price averaged greater or equal to $60 per barrel in the year preceding the sale. As per the gas utilisation policy approved by the Empowered Group of Ministers (EGoM), Reliance is to first supply gas to existing gas-based urea plants and then give 3 mmscmd to LPG plants. Thereafter, up to 18 mmscmd of gas was to be given to gas-based power plants that were lying idle/under-utilised or likely to be commissioned during 2008-09. We maintain a Buy on RIL, with a target price of Rs 1,880," Angel's research report.


Asit C. Mehta on Jindal Saw - Target of Rs 530


Asit C. Mehta has maintained its buy rating on Jindal Saw with a revised target price of Rs 530 in its October 29, 2008 research report. "In Q3CY08, JSL’s sales increased to Rs 14,855.3 million. from Rs 14,286.1 million in Q3CY07. Sales growth was low at 4%, as JSL sold its US operations in 2007, which contributed 30% to sales in Q3 CY2007. We believe that the company will benefit in the near term on account of the capex incurred in the pipes segment. We therefore maintain positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 530, which is equivalent to a P/E multiple of 7 times to its FY10E EPS," says Asit C. Mehta's research report.