Stock Views on Kalpataru Power, BHEL, Rallis India

Reliance Money on Kalpataru Power - Target of Rs 325

Reliance Money has recommended a buy rating on Kalpataru Power Transmission with a target of Rs 325 in its December 16, 2008 research report. "KPTL has a diversified business portfolio on a consolidated basis. We believe the performance of transmission segment will improve on the back of PGCIL's planned expenditure for grid expansion and rural electrification program. Almost 45% of KPTL's order book is fixed priced, which will help the company in improving margin on the back easing of raw material prices. The order book to FY09E revenues stands at 1.9x, which gives future visibility of revenue. Out of the total order book 40% orders are from international players. We recommend a BUY on the stock with a revised target price of Rs 325," says Reliance Money's research report.


Emkay Global on BHEL - Target of Rs 1520

Emkay Global Financial Services has maintained its buy rating on Bharat Heavy Electricals (BHEL) with a target of Rs 1520 in its November 12, 2008 research report. "Over the recent past BHEL stock has outperformed significantly. It outperformed Sensex by 22.1% over past 3 months and 12.3% over past 1 month. Similarly it has outperformed BSE Capital goods index by 20.2% over past 3 months and by 10.7% over past 1 month. Decent Q1 and Q2FY2009 numbers and significant drop in commodity prices can be attributed to this performance."

"Our earnings estimate for BHEL stands at Rs 73 for FY2009 and Rs 94 for FY2010. The stock trades at 18.7X its FY2009 and 14.6X its FY2010 earnings. Over a longer term we remain positive on BHEL and maintain our BUY with price target of Rs 1520. However we believe that near term order slowdown will impact stock performance," says Emkay Global Financial Services' research report.

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.