Stock views on Repro India, Everonn Systems, Sobha Developers, Wipro

LKP Shares on Repro India
LKP Shares has maintained its buy rating on Repro India in its research report. "Q2-FY’09 witnessed revenue growth of 43% yoy and EBIDTA grew 48% yoy led by exports, which accounted for 64% of Q2 revenues. Repro had earmarked Rs 145 million out of its IPO proceeds to fund its SEZ and this SEZ at Surat would be fully operational during Q4 of the current fiscal for which Repro has taken an additional foreign currency loan of USD 7 million of which USD 5.5 million has already been expended."

"We estimate revenues of Rs 350 million from the SEZ during this fiscal and Rs 800 million next fiscal. Repro trading at 3xFY’10E earnings is held 73% by the Promoters and 7% by Institutional Investors. We re-iterate BUY on the stock," says LKP Shares' research report.

HDFC Securities on Everonn Systems

HDFC Securities has maintained its buy rating on Everonn Systems India in its research report. "Everonn’s Q2FY09 standalone revenues jumped 49% YoY. We expect Everonn to record revenue CAGR of 63.3% and PAT CAGR of 61.5% over FY08 to FY10E, making it the second fastest growing company under our coverage. We believe that Everonn’s revenue mix will shift towards the high margin ViTELS segment, thereby improving overall profitability and ROCE."

"In FY08, ViTELS segment contributed 41% to overall revenues and 50% to EBITDA. Considering the market scenario, converting the warrants at Rs 720 per share will be a concern going forward. However, the company has Rs 800 million as cash on its books as on Q2FY09. Considering the growth prospects of the company we maintain our ‘BUY’ rating on the stock," says HDFC Securities' research report.


Emkay Global on Sobha Developers - Target of Rs 155


Emkay Global Financial Services has maintained its buy rating on Sobha Developers with a target of Rs 155 in its research report. "Net revenues decreased by 9.3% YoY to Rs 3.0 billion. PAT decreased by 13.0% YoY to Rs 490 million. We are revising our NAV estimates to Rs 367 / share (previous Rs 973), due to a) increase in cost of funds b) delay in projects c) factoring current net debt d) decrease in average realisations and rentals from commercial properties and e) increase in cap rate. We however maintain our BUY rating on the stock with target price of Rs 155 (earlier Rs 554) based on 60% discount to NAV and 2x EV / EBITDA of its contractual income," says Emkay Global Financial Services' research report.

Anand Rathi on Wipro - Target of Rs 325

Anand Rathi Securities has recommended a buy rating on Wipro with a target price of Rs 325 in its research report. "Wipro has built considerable scale in the IMS space (largest practice among Indian IT companies) and has been able to build on the leads. Wipro has undertaken several initiatives, such as hiring at a slower pace and focusing on internal processes, which have resulted in revenue growth overtaking volume growth. Wipro trades at 9.6x FY09 and 10.8x FY10 estimated earnings."

"We rate it a Buy with a target price of Rs 325 at a target PE multiple of 11.8x its one-year forward earnings. At our target price, the stock would trade at 7.6x EV/EBITDA our one-year forward estimates. Our DCF valuation for Wipro assumes an 8.5% risk-free rate, a 6% risk premium and a 3% terminal growth rate. The DCF-based fair value, after taking estimated growth till FY10 and 11% growth during FY10-15, is Rs 320," says Anand Rathi's research report.