Stock Views on Pennar Industries, Nitin Fire Protection, Colgate Palmolive

IIFL on Colgate - Target of Rs 429

IIFL has recommended an add rating on Colgate Palmolive (India) with a target price of Rs 429 in its reserach report. "Colgate Palmolive India (CPI) is one of the few consumer-goods companies whose underlying volume growth has accelerated over the last few quarters, clocking 11.5%+ growth in FY09 to date. Minimal price increases, nondiscretionary nature of consumption in oral care and market share gains across the board in its product categories are the key factors driving growth. We expect strong growth to continue, on the back of constant product innovations, sustained brand promotion spends, and the non-discretionary nature of CPI’s products."

" We expect gross margins to expand by 70bps over FY09-11ii as prices of key raw materials such as Sorbitol and packaging materials decline. With reduction in media rates on the anvil, CPI’s advertising expenses would likely remain stable if not go down. CPI’s earnings will also get a boost from the reduction in tax rate as the company produces more out of its tax-free facility in Baddi. We raise our FY09-11 EPS estimates by 4.1-7.2% and TP to Rs 429 (from Rs 400). ADD," says IIFL's research report.

Karvy on Nitin Fire Protection - Target of Rs 239

Karvy Stock Broking has maintained its buy rating on Nitin Fire Protection Industries with a target of Rs 239 in its research report. "Nitin Fire Protection Industries (NFPIL) is expected to report strong set of numbers on YoY basis on back of its CNG cylinder plant that started operations during FY09. We expect the company to report revenue of Rs 698 million as against Rs 396 million, a strong YoY growth of 76%. However on QoQ basis, we expect a marginal growth of 5%, primarily on back of volume growth in CNG cylinder segment. We expect the company to report revenues of Rs 348 million from the fire fighting segment and Rs 350 million from the seamless cylinder business. We continue to maintain our BUY rating on the stock with the price target of Rs 239," says Karvy Stock Broking's research report.

Karvy on Pennar Industries - Target of Rs 33

Karvy Stock Broking has upgraded its rating on Pennar Industries from market performer to buy with a target of Rs 33 in its research report. "For Q3FY09, we expect Pennar Industries Ltd (PIL) to report net sales growth of 11% (YoY) and de growth of 7% (QoQ) to Rs 1598 million. We expect net profit to be around Rs 87.5 million, 13% lower (YoY) and 3% lower (QoQ)."

"We maintain our sales and earning estimates of PIL for FY09 and FY10. Based on earnings, we value PIL at Rs 30 per share (8x of FY10 EPS). To add to that, value from real estate holding, is estimated to be around Rs 3 per share. Hence we retain our target price of PIL at Rs 33 and upgrade our rating from Market performer to BUY due to recent fall in stock price. Currently, PIL is trading at EBITDA multiple of 6xFY09. Our target price also reflects an EBITDA multiple of 6x on FY10," says Karvy Stock Broking's research report.