Stock views on Britannia, Piramal Healthcare, Gwalior Chemicals,

ICICI SECURITIES on EDUCOMP


ICICI SECURITIES has recommended a buy rating on Educomp, citing the increasing education spend by the government. “In the current economic slowdown, we believe that education spend will be the least affected given the increasing importance to education by the government and the private sector. Education spend is the last item to be cut by private households in the current slowdown as it forms a mere 7-8% of the total consumption expenditure,” the brokerage said in a not to its clients. “US-based education companies have considerably outperformed the domestic education-focussed companies in the past one year. We expect the valuation-gap to narrow down and expect Indian education companies to catch up soon,” it added.


ANTIQUE STOCKBROKING on BRITANNIA INDS

ANTIQUE STOCK BROKING has rated Britannia a buy, citing improvement in sales, profits and operating profit margins over the next couple of years. “In view of the expected outperformance of the biscuit industry in a scenario of slowdown and given the company’s consistent value-market share over the last two years, we believe that the stock would trade at a one-year forward PE (price to earnings) of 14x (times),” the brokerage said in its report. The broking firm is of the view that going ahead, Britannia’s sales would be driven by Good Day, which has been growing at 25-30% in the premium category and Tiger brand, which has been growing at 18-20% in the value for money category.


KOTAK SECURITIES on PIRAMAL HEALTHCARE

KOTAK SECURITIES’ private client research has maintained an accumulate rating on Piramal Healthcare, post the acquisition of Minrad International. “We view the acquisition as strategically fit with the PHL’s anaesthetics business model and is reasonably valued at price to sales (2008) of 1.5x,” the brokerage said in a report. After the acquisition, PHL will have products portfolio with all five known inhalation anaesthetics gases, which will help address all global markets along with manufacturing foot print across the US and India. PHL management expects acquisition to be earning accretive (additional EPS Re1/share in FY10) with the revenue of $65 million from Minrad in FY10E.


LKP SHARES on GWALIOR CHEMICAL

LKP SHARES has downgraded Gwalior Chemical Industries to sell from neutral, citing weak profit outlook. “We believe that although the topline growth could be achieved, as it has already done ~60% of estimated sales till Q2FY09, bottom line would falter owing to unstable demand and the losses on account of diminution in raw material values,” the brokerage said in a report.