Stock views on Dishman Pharma, ONGC, Nitco

Karvy on Nitco - Target of Rs 114
Karvy Stock Broking has maintained its buy rating on Nitco with a target price of Rs 114 in its research report. "We are revising our sales estimates downward by 3% for FY09E from Rs 7,535 million to Rs 7,306 million and by 5.8% for FY10E from Rs 8,988 million to Rs 8,464 million. We are reducing our EBITDA margin estimates for FY09E and FY10E by 10bps and 30bps from our earlier estimates of 12.3% and 11.9% for FY09E and FY10E respectively. Accordingly we are reducing our net profit estimates by 5.8% and 7.6% to Rs 519 million and Rs 568 million for FY09E and FY10E respectively."

"Our revised EPS estimates stands at Rs 16.2 and Rs 17.7 for FY09E and FY10E respectively. Due to the above mentioned reasons, we are reducing our price target on the stock by 21% to Rs 114. We have valued the company's tile business and real estate business at Rs 71 (4x its FY10E EPS of Rs 17.7) and Rs 43 (30% discount to its NPV of Rs 62) respectively. We continue to maintain our BUY rating on the stock," says Karvy's research report

Angel on ONGC - Target of Rs 948

Angel Broking has maintained its buy rating on Oil and Natural Gas Corporation (ONGC) with a target price of Rs 948 in its research report. "ONGC has taken control of Imperial Energy Plc for £1.3bn (USD 1.9bn) after an overwhelming 96.8% of London-listed firm's total shareholders accepted its takeover offer. ONGC Videsh (OVL), the overseas arm of the state explorer ONGC, needed 90% shareholders to approve its deal, which will result in delisting of Imperial."

"Imperial will be delisted from the LSE after it “squeezes out” the remaining un-tendered shares by posting them cheques of the offer amount and telling the shareholders that these un-tendered shares were no longer valid. The deadline for the state-owned firm's £12.50 per share offer closed yesterday. Imperial would be the biggest overseas ever acquisition by OVL. ONGC would lend close to USD 1bn to fund the transaction at 5.96% interest rate. The entire acquisition and subsequent delisting may take two to three weeks. ONGC Chairman, R.S.Sharma owed the acquisition to the Government support, which has seen OVL in the past seven years increase its number of projects to 39 in 17 countries, from just a single project in Vietnam. We maintain Buy on the stock with a target price of Rs 948," says Angel's research report

Karvy on Dishman Pharma - Target of Rs 225

Karvy Stock Broking has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target price of Rs 225 in its research report. "We reiterate our "BUY" rating on Dishman Pharmaceuticals and Chemicals (Dishman) on back of strong revenue traction from its highmargin Contract Research and Manufacturing services (CRAMS) business and Solvay's Vitamin D & Chemicals business with greater earnings visibility."

"We expect revenues and earnings to grow at a CAGR of 31.4% and 27% from FY08 to FY10E driven primarily from the high margin CRAMS segment. The stock is currently available at P/E of 5.9x on FY10E basis. We are downgrading our price target on back of compressed valuations by 11.1% to Rs 225 on 9.53x FY10E diluted EPS of Rs.23.6. We continue to rate the stock as a "BUY"," says Karvy's research report.