Stock views on Sadbhav Engineering, Mahindra Lifespace

KR Choksey on Mahindra Lifespace

Mahindra Lifespace (MLS) posted a strong standalone Q3 revenue of Rs 55.7 crore (84% growth y-o-y and 28% q-o-q) and a net profit of Rs 11.3 crore (1.3% growth y-o-y and 1% q-o-q). The company has a very comfortable balance sheet compared to its peers and is cash positive. We expect revenues from SEZs to increase.


Angel Broking on SADBHAV ENGINEERING


Sadbhav Engineering reported topline growth, which was much below our expectations. The company registered 20% y-o-y growth in net sales at Rs 276.7cr (Rs 230.1 crore) against our expectation of Rs341cr. The company’s current outstanding order book ensures revenue visibility for the next few years.

Motilal Oswal Securities on Puravankara Projects, Indiabulls Real Estate

Motilal Oswal Securities on INDIABULLS REAL ESTATE

IBREL had gross cash of around Rs 36,000 cr, including Rs 865 cr investment in ICDs/FMPs. Indiabulls Power Services (IPS), a 71.5% subsidiary of IBREL, is currently working on power project pipeline of 6,772MW. IPS has built a top technical team of 300, having drawn talent from NTPC, SEBs, Tata Power and Reliance Infra.


Motilal Oswal Securities on PURAVANKARA PROJECTS

PPL has disclosed plans to enter the lower mid income housing segment through its 100% subsidiary Provident Housing and Infrastructure (PHIL). In Phase 1, PHIL plans to launch around 65,000 flats at price brackets of Rs 10 lakh to Rs 20 lakh in key cities such as Bangalore, Chennai and Hyderabad.

Stock Views on HDIL, DLF

Motilal Oswal Securities on DLF

WE view DLF as the best managed realty company in India with a robust business model. DLF Assets is close to finalising fund raising of around $450m. This would lower DLF’s receivables and improve liquidity. DAL is also likely to have around 10 mn sq ft of rental portfolio by March 2009, which could yield about Rs 3,000-cr cash flow.


Emkay Research on HDIL


HDIL has ample floor space index and transfer development rights (TDR) avail-able, which ensures better churn of liquidity. The airport slum rehabilitation project is on track and the company has sold 2.3 MSF of TDR generated from the project. HDIL intends to generate another 2 MSF of TDR by March 2009.

Stock views on Hindustan Dorr-Oliver, Titan Industries, Hexaware Technologies, ITC, Reliance Communications, Pantaloon Retail

Macquarie on Pantaloon Retail

Macquarie maintains its ‘Outperform’ rating on Pantaloon Retail, however, it has cut the earnings estimates and target price to reflect the expectations of slowing same-store sales growth and the credit crunch. Same-store sales (SSS) growth for Indian retailers turned negative for the first time in 4Q08. Slowing growth, the spectre of job losses and the high base effect (from the good old days of 2007) impacted sales. The problem was sharper in the high-end product segment versus items for daily consumption. Pantaloon saw its SSS growth improve from -3.6% and -14% in December 2008 to 4% and 12% in January 2009 for value retail and lifestyle retail respectively. Based on the estimates, Pantaloon’s operations can support growth of around 1-2 million sq feet per year with limited external funding. The supply-demand dynamics have led to a rise in retail rents in the last three years. Macquarie expects this to continue and average rents to fall at least another 25% over the next 12 months. We expect Pantaloon to be able to ride this tough period given its high exposure to value retail and planned capital raising by equity dilution or preferential share allotment.


CLSA on Reliance Communications


CLSA maintains the ‘Buy’ rating on Reliance Communications. There was a good response to GSM launch. In January RCom’s added 5 million users, bringing the total to 66 million subscribers. These additions include CDMA and GSM subscribers, accounting for 33-35% of total industry additions, though RCom is yet to release details, including circle-wise breakdowns to the GSM-industry body. RCom has rolled out GSM service across 14,000 towns, while targeting to up dual-network coverage to 24,000 towns and 600,000 villages. However, these schemes coupled with Idea Cellular’s latest offers in select circles may trigger the industry’s growing share of dual SIM and inactive subscribers. We estimate the company will be eligible for incremental 2G spectrum in 14 circles at 11 million new GSM subscribers. Recently, RCom cut its FY09 capex by 15% to $5.3 billion and guided FY10 at $3.2 billion. The firm has $1.7 billion in investments and a net debt-to-equity ratio of 0.64x. CLSA expects a boost to RCom’s valuation with confidence of a successful execution and improving market share in revenue.


HSBC on ITC

HSBC maintains its `Neutral’ rating on ITC with a price target of Rs. 172 per share. Considering the staggered price increase that ITC has been taking this year and that the budget has been delayed from February to June, questions are being raised whether there is one more price increase in the offing. While HSBC estimates a weighted average price increase, including mix effect, 14% has been implemented so far, and the probability of a further increase is small as ITC can manage decent growth in Q1FY10E without price increase, and ITC may not wish to jeopardise volume growth further when it is currently negative. If ITC decides to hike prices it could be implemented in the following order of priority:

• Goldflake Kings is likely to be the first option due to the price inelasticity in this segment.
• Bristol and Flake with price point of Rs 1.9 per stick; since loose buyers already pay Rs 2, trade margins can be cut;
• Goldflake regular though has had high price increases and has strong brand loyalty
• Scissors Regular is a less probable option since plains migration needs to take hold. HSBC derives a fair value of Rs 154 for the high tax and Rs 201 for the low tax scenario. At the target price, the stock will trade at 16.8x FY10E EPS.

Bank of America on Hexaware Technologies

Bank of America retains `Underperform’ rating on Hexaware Technologies. Though results were in line, Bank of America (BoA) was surprised by a very sharp revenue decline guided for 1Q at a negative 16% q-o-q with outlook being the weakest announced so far. This likely reflects high exposure to discretionary spends such as ERP (~29% revenue, -18% q-o-q). Estimates are cut by 5% to factor in a 17% cut in dollar revenues as reflected by weak 1Q revenue guidance and offset by higher margins due to falling rupee. Management highlighted that macro environment has worsened in 4Q; with clients across board rationalising IT spends. BoA expects margins to fall by at least 600 bps during 1Q. Also MTM losses in balance sheet increased to Rs 120 crore from Rs 100 crore q-o-q and are likely to impact CY09/10E profits if a weak rupee persists. Revenue grew 4% q-o-q to $64.4 million in constant currency terms in line with its guidance. Stock rose 40% before results on low valuations. BoA expects 1% earnings growth in CY09E and 8% CAGR over next two years. With 1Q results likely to disappoint and a poor revenue outlook, stock could correct.

EMKAY on Titan Industries

Titan Industries (TIL) is likely to face challenging times ahead on weakening macro economic indicators affecting its watch business, rising gold slowing its jewellery market share gains and its new business initiatives straining cash flows. TIL’s watch business is to report a 1.6% and 5.7% fall in revenues and EBIDTA , espectively in FY10E, and a revival thereafter. Emkay believes that it will be difficult for TIL’s jewellery division to garner market share at a similar pace as in the past, owing to rising gold and falling demand (3.6% in FY11E against 2.9% in FY08). The new business initiatives (precision engineering and eyewear) are still in investment phase, thereby denting TIL’s cash flows and EBITDA. Emkay expects moderation in growth with net revenue, EBITDA and adjusted net profit of TIL to grow at a CAGR of 16.0%, 12.8% & 7.7%, respectively during FY08-11E and an intermediate decline in FY10E. The above valuations are rich especially in the wake of moderation of growth and declining return ratios. We recommend a `Sell’ with a price target of Rs 671.

IL&FS Investsmart on Hindustan Dorr-Oliver

IL&FS Investsmart initiates coverage on Hindustan Dorr-Oliver with a ‘Buy’ rating, with a 15-month price target of Rs 55, providing an upside of 104%. HDO has made rapid strides in its core EPC business, engineering a ~5.4x growth in less then four years with significant contribution from the mineral beneficiation and environmental infrastructure business. However, the best is yet to come for HDO as the company is well positioned and has expertise to get into the bigger league with higher ticket contracts. The current order backlog of Rs 700 crore is 2.3xFY08 billings. Based on the pipeline bids, enquiries, and the capex cycle, order accretion is to gain momentum in the next few quarters and grow at 17% CAGR for the next two years. Traction is expected in the award of big ticket contracts in the next few quarters. IL&FS expects higher demand for its proprietary industrial products which is likely to prop the blended margin going forward with ~14% revenue contribution by FY10. HDO has all the characteristics to graduate to the next league and therefore the concerns reflected in the stock price are unwarranted; hence there is a good investment opportunity.

Stocke views on Provogue, Vishal Retail

Angel Broking on VISHAL RETAIL

Vishal Retail (VRPL) is the fastest growing Retail player in India clocking CAGR of around 89% over FY2005-08. It is a niche player with strong focus on the value retailing and caters to consumers in Tier-II and III cities. The company is set to grow its top-line and bottom-line at a CAGR of 40% and 8% over FY2008-10E.


Kotak Securities on PROVOGUE INDIA

Management expects operating margin to remain in the range of 13-14%. It had raised funds to the tune of Rs 9,900cr through stake sale in its step down subsidiary Prozone as well as through convertible warrants and preferential issue to be used for expansion. We like the business model but in near term concerns still exist regarding slowdown in retail and real estate.

Stock views on Marico, Dabur

Angel Broking on DABUR INDIA

During FY2008-10E, we expect Dabur India to post 16.6% compounded annual growth rate in consolidated top line backed by strong growth in international and consumer health divisions, new product launches and roll out of its retail venture. EBITDA should grow by 12.2%. But margins may decline owing to losses incurred in its retail venture and rising input costs.


EMKAY Global Securities on MARICO

Marico reported revenue growth of 30.1% yoy to Rs6,000cr. The discount offered on variants of ‘Saffola’ is negative surprise threatens the premium-brand status. But, with aggressive price hikes undertaken and softening of input prices during the quarter- the spotlight has now shifted towards achieving the target volume growth. It has ability to grow despite challenges in external environment.

Stock views on Nestle, ITC

Motilal Oswal Securities on ITC

ITC’s 2QFY09 results were in line with our expectations. New FMCG business sales grew 29.4% to Rs 7,600 cr. It has been facing considerable headwinds in the cigarette business in the past couple of years. 75-80% filter cigarette conversion and expansion is positive. New FMCG is expected to remain in investment mode in the medium term. Hotels business, however, is likely to witness pressure on sales and profits.


Antique Stock Broking on NESTLE

Nestle’s dominant market share and continued innovation in the milk product category would help this business to grow at steady CAGR of 15%. We expect the prepared dishes and cooking aids category to be a key growth driver for Nestle going ahead led by an increase in penetration levels and launch of innovative variants. The decline in raw material prices would lead to higher profitability.

Stock views on Larsen & Toubro, Ranbaxy, Allied Digital Services, Piramal Healthcare, Infosys, Mahindra & Mahindra

MOTILAL OSWAL on M&M
MOTILAL OSWAL maintains its 'Buy' rating on Mahindra & Mahindra. M&M had earlier mentioned in its post-2QFY09 results that it would be reviewing the Rs7,000-crore capex plan over FY09-12 for a possible reduction. After a review of the capex plans, management has now decided to go ahead with the original capex plan of Rs 7,000 crore without any cuts. Out of the Rs 7,000 crore over FY09-12, Rs 5,000 crore will be invested in the automotive business and Rs 2,000 crore in the non-auto business. In auto business, investment will be made in the Chakan plant (~Rs2,500 crore), product development (Rs 2,000 crore for Xylo, Scorpio's successor, light transport vehicles and lobal product) and further equity contribution in Mahindra Navistar JV (Rs 350 crore). In the non-auto business, it is investing Rs 500 crore in tractors business, Rs 700 crore in logistics business and defence business and Rs 750 crore for setting up world-class research facility at Chennai. Motilal Oswal has downgraded the consolidated earnings estimates by 11.7% for FY09 to Rs 58.7 and by 12.9% for FY10 to Rs 70.6, to factor in lower volumes and downgrade in subsidiary / associate earnings. Notwithstanding short-term challenges, valuations at 4.6x FY09E and 3.9x FY10E consolidated EPS are attractive.


CITIGROUP on INFOSYS

CITIGROUP EXPECTS Infosys' revenues at $1,167m, down ~4% qoq. This assumes marginal decline in volumes, stable pricing and ~4% impact of cross currency. EBIT margins are expected to fall ~150bps qoq. Citigroup forecast basic EPS of Rs 26.63 in line with guidance. Volumes continue to be under pressure with clients cutting back on discretionary projects and Q3 being also impacted due to "holiday project closures". Citigroup has lowered its FY10-11E estimates by ~6% on the back of lower volume/pricing assumptions and cross currency impact in Q3. While the stock price witnessed ~37% erosion in CY08, expected numbers are ~6% below consensus, and consensus is to be revised down further. This could put further pressure on the stock in the near term. The EPS numbers benefit from ~5% INR depreciation assumed in FY09 - in other words, Citigroup is modelling an EPS decline in constant currency terms. With a likely result disappointment and further EPS cuts, the stock could underperform in the near term.


MERRILL LYNCH on PIRAMAL HEALTHCARE


Merrill Lynch reiterates 'Neutral' rating on Piramal Healthcare (PHL). However it revises estimates to factor higher interest cost and lower target price to Rs 280 based on 12x FY10E EPS. PHL's proposed acquisition of Minrad comprises equity consideration (US$6mn), convertible debt redemption (US$30mn) and existing debt (~US2mn). Apart from this, PHL would infuse US$12mn in Minrad for working capital requirement. Post-completion of this acquisition (5th in 2008), PHL's D/E would be ~0.9x which is higher than the industry average. Minrad's acquisition bolsters the US$20mn inhalation anaesthetics business of PHL and broadens its portfolio from two products currently to five (halothane, isoflurane, enflurane, desflurane and sevoflurane). PHL-Minrad combine would be the 3rd largest player in US inhalation anaesthetics market addressing a US$1bn+ opportunity worldwide. Merrill Lynch is relatively conservative and expects the deal to be EPS neutral in FY10. The deal is expected to be closed by FY09-end. PHL's CMO business has mid-teens EBITDA margin which is the lowest among that of its peers.


INDIAINFOLINE on ALLIED DIGITAL SERVICES

Allied Digital Services (ADSL)'s pan-India presence, direct support model, established remote infrastructure and significant price competitiveness provide an edge against competition in the domestic IMS market. Its marquee clientele includes large customers won from leading Indian offshore vendors. The recent En Pointe Global Services LLC (EPGS) acquisition would significantly increase international IMS revenues apart from driving domestic revenues through offshoring. Further, the SOC services are expected to register exceptional growth driven by increasing compliance requirements globally. The company expects a hefty ~US$100-million revenue contribution from EPGS in FY10. ADSL's operating margin is likely to improve by 150-200bps in FY10 driven by lower solutions revenue share and improving profitability within IMS through offshore shift. IndiaInfoline expect revenues and net profit of ADSL to record a robust CAGR of 61% and 82% respectively over FY08-10E. Higher growth in earnings would be driven by OPM expansion. Given the strong fundamentals, current valuations of 4.7x FY10 P/E and 1.4x FY10 P/BV appear inexpensive.


JP MORGAN on RANBAXY LABORATORIES

GIVEN THE twin uncertainties of the continued US FDA import ban and potential currency exchange losses, JP Morgan remains 'Neutral' on Ranbaxy even though valuations remain attractive for longer-term investors. Ranbaxy, which has a 180-day exclusivity on generic Imitrex (Sumatriptan), has not yet been able to launch the drug in the US as the FDA approval has not yet come through. Sumatriptan First to File is approximately Rs 5/share of the target price. Brand sales of Imitrex were US$1.29 billion in 2007. Given that the generic filing is not from the manufacturing sites where the US FDA had issued warning letters, the launch approval from the US FDA for Sumatriptan is key to see if it is business as usual for Ranbaxy in the US beyond the products in the import ban. Given the large FTF (first to file) pipeline for Ranbaxy, any delay in approvals for Sumatriptan would be negative for the remaining FTF pipeline.


HSBC on LARSEN & TOUBRO

HSBC has downgraded the rating of Larsen & Toubro to 'Negative' over the Satyam stake purchase. HSBC believes this investment is a portfolio investment rather than a strategic one and views this as a negative for L&T. It thinks that the stake is not positive for L&T's subsidiary, L&T Infotech, given that it has a smaller operation versus Satyam's 53,000 employee base. The integration will be a significant issue given L&T Infotech's smaller size. Also, after allegations of misappropriation regarding Satyam's former chairman, integration could expose L&T to litigation. Moreover, there is a lot of uncertainty in terms of any liability for Satyam. HSBC reduces its FY10E PAT estimate by 8%, driven by a lower 4% change in sales and expects a 25.7% revenue CAGR over FY09-11E, driven by the existing order backlog and new orders from infrastructure, power and new verticals. HSBC is reducing its valuation of L&T subsidiaries to Rs 131 per share.

PINC Securities on India Gycols, Dwarikesh Sugar

PINC Securities on DWARIKESH SUGAR INDUSTIRES
It is a mid-sized sugar mfg company with operations across three units in UP. Its capacities for sugarcane crushing stand at 21,500 TCD, distillery at 30 KLPD and cogeneration at 56 MW. Its profitability will come primarily from its 56 MW (saleable) cogen power plants. This, coupled with firm sugar prices, is likely to boost cash flows.


PINC Securities on INDIA GLYCOLS

It is one of the leading manufacturers of glycols and ethylene oxide derivatives, which cater primarily to industries like textiles, agrochem, oil and gas, detergents and paints. In December 2007, it acquired Shakumbari Sugar and Allied Industries for Rs 47 crore, which gave it flexibility in making ethanol through molasses or sugarcane depending on their price cycles.

ICICI Securities on Bajaj Hindustan, Balrampur Chini

ICICI Securities on BALRAMUR CHINI
It reported its Q4SY08 (sugar year) results with a topline growth of 40% to Rs 416.7 crore from Rs 297.8 crore in Q4SY07, supported by volume growth and improvement in price realisations. It currently holds a large sugar inventory, in anticipation of higher sugar prices and it is well positioned to gain in such a scenario. However, disputes over pricing between the industry and the state pose concerns.


ICICI Securities on Bajaj Hindustan

Revenues are expected to rise by 47.4% QoQ to Rs 676.7 crore on account of higher sugar prices and strong growth in volumes. EBITDA margins are expected to improve to 31.4% QoQ on the back of higher sugar and rectified spirit prices. Net profit is expected to stand at Rs 58.5 crore from the loss of Rs 35.5 crore in Q3SY08. Key swing factors are firm sugar prices and the SC ruling on sugarcane prices.

Stock views on Triveni Engineering, Shree Renuka Sugars

India Infoline on SHREE RENUKA SUGARS

In the midst of a weak pricing scenario over the past two years, Renuka Sugars continues to expand through acquisitions and greenfield projects. It will invest Rs 3.5 bn in a 2,000-tpd refinery in Mundra SEZ to be commissioned by 2010. This will take its refining capacity to 6,000 tpd. With sugar prices set to improve by end of 2008-09 crushing season, ongoing capex would boost sugar volumes.


Centrum Broking on Triveni Engineering

Triveni Engineering (TEIL) is among the largest sugar producers in India with a presence in sugar and engineering segments. This makes the stock a strong play in the sugar cycle at relatively lower risk, given its additional presence in engg business. We expect the company to clock 21.9% revenue and 58.1% net profit CAGR over FY08-10E. Sugar prices will rise, given the domestic and global deficit situation.

Stock views on NIIT, 3iInfotech

PINC Research on 3iINFOTECH
The outlook for the fiscal year 2009 remains unchanged as current order book of Rs13.7bn provides visibility. We have estimated organic growth rates of ~15%. We believe that 3i's exposure to the BFSI vertical, a leveraged balance sheet and its ability to fund new growth would continue to be concern areas in the coming quarters.

Angel Broking on NIIT

We expect NIIT to clock a CAGR of 16.6% and 21.4% in top-line and bottom-line respectively, over FY2008-10E. Top-line growth to be driven by the ILS Business, which is expected to grow at a CAGR of 31.2% over the same period. We expect EBITDA Margins to go up to 12.3% in FY2010E as against 10.3% in FY2008, led by operating leverage in the ILS business.

Stock views on Allied Digital, Mphasis

ICICI Securities on ALLIED DIGITAL SERVICES

We expect ADSL to report 16% QoQ revenue growth to Rs1.73bn, including Rs480mn (US$10mn) revenues from the recently acquired EnPointe Global Services (EGS). With margin improvement in EGS and higher proportion of services revenues, we expect EBITDA margin to expand by 120bps QoQ to 20.0%. EBITDA should also increase by 22.9% QoQ to Rs345mn. With lower forex gain, we expect profit after tax to grow 12.7% QoQ to Rs271mn.


Emkay Global Financial Services on MPHASIS


Mphasis remains the best demand story in the sector driven majority by shift of work offshore through the EDS. The proportion of revenues from related parties over the past 4 quarters has increased from 46% to 58%. It reported revenues of Rs 3282 mn, with operating margins at 26.5%, up by ~530 bps from September’08 quarter.

Kotak Securities views on Infosys Technologies, Wipro Technologies

WIPRO TECHNOLOGIES

Wipro is sanguine about pricing being stable. The company’s integrated service model and account management ability should help it to tide over the medium term uncertainty in the demand environment. It has shown an in-line operating performance. With the acquisition of Citi Technology Services for an all-cash consideration of $127mn, it can leverage for other customers in financial services vertical.


INFOSYS TECHNOLOGIES

According to the management, a few competitors of Infosys Technologies are turning aggressive on pricing but the pricing is stable for Infosys as yet. However, Infosys may have to cut prices. It has won two deals during 3QFY09. We expect the company to achieve a volume growth of 17.5% in FY09 and continue to rate Infosys as our top pick in the sector.

Stock views on KEC International, Thermax, Info Edge, IVRCL Infrastructure, DLF

HSBC on KEC International

HSBC maintains its `underweight’ rating on KEC International with a target price of Rs 130. The company has reported sales growth of 25% y-o-y to Rs 870 crore in the quarter. EBITDA margin was lower by 625 bps at 8.2% due to forex losses of Rs 16.6 crore and high raw material cost. The company also reported 67% y-o-y increase in interest cost due to debt raised for capex and working capital. Due to working capital and capex requirements, KEC has increased debt to Rs 900 crore while depreciation is lower because part of its assets have been transferred to the books of developers and new assets will be capitalised in FY10E. The stock is trading at FY10E PE multiple of 4.4x and PB of 1x. This compares with peer Jyoti Structures trading at 4.1x/1x and Kalpataru Power trading at 3.8x/0.7x. KEC has higher gearing and lower return ratios, which makes it more expensive than peers. The target price of Rs 130 is the mid-point of a PE fair value of Rs 125 and a PB fair value of Rs 135.


Citigroup on Thermax


Thermax’s revenues declined by 6% y-o-y, led by a decline of 9% y-o-y in the energy segment. Environment segment grew by 14% y-o-y. Margins (adjusted for forex loss) have improved by 137 bps, driven by cost-cutting initiatives. Order book of Rs 4,100 crore is up 40% y-o-y; however, the pace of order book growth has moderated. Management suggested there is “substantial resistance” from clients to finalise orders, especially large-size projects. Some clients have cancelled/slowed execution. According to Thermax, cement and metals sectors’ capex is expected to slow down while the power sector will continue to invest, albeit at a lower level than before. But there are some positives -
1) While risks to order inflows remain, increased power sector exposure should help provide some support to growth.
2) Management has been ahead of the curve and seems geared to handle the downturn; ~293 bps margin improvement for 9MFY09 is commendable, especially since it was against the backdrop of rising input costs and no pass through clauses.
3) The company has no debt and one of the highest RoEs in the sector. Citigroup cuts the target price to Rs 211 from Rs 480 based on 8x FY10E (15x Dec09E earlier). Historically, Thermax has traded on par with BHEL, but in the recent past, has been trading at a widening discount.


CLSA on Info Edge

Revenue growth in Info Edge’s flagship recruitment solutions is down to 1.5% y-o-y from 30%+ at the start of the year as the slump in hiring across all industries has taken its toll. With the customary March quarter budget flush unlikely to happen this year, March 2009 outlook for Naukri looks even weaker. Meanwhile, Info Edge’s realty business continues to face headwinds from the slowing real estate market. A course correction in the matrimony space with establishment of brick and mortar Jeevansathi centres is still in the investment phase and any positive surprises on this front are unlikely in the near term. With over Rs 330 crore of cash and continued leadership of Naukri, Info Edge remains better positioned compared to competitors in a difficult environment. With the slowdown becoming homogeneous, online traffic from recruiters has gone down significantly and recruitment solutions grew only 1.5% y-o-y in the December 2008 quarter. Info Edge’s leadership position in the online recruitment segment and Rs 330 crore of cash pile should help it encounter the economic downturn better than competitors. Also, new initiatives in education and professional networking have long-term potential. However, Info Edge’s valuations (21.5x March 2009) cannot be defended with a 2.3% FY09-11CL EPS CAGR. With visibility for even March 2009 severely constrained, risk to FY10 earnings is high.


Maquarie on IVRCL Infrastructure

IVRCL reported a 22% topline growth but decline in PAT in 3Q09 results. Company reported 22% revenue growth thus translating into strong 39% y-o-y growth for 9MFY09. However, margins came in significantly lower by 230 points in the quarter and have now declined by 100 bps y-o-y in 9MFY09 driven by a higher mix of lower margin projects. PAT declined significantly by 27% y-o-y in the quarter driven partly by margins and partly by very high interest costs of Rs 41.9 crore versus Rs 17.7 crore last year. For 9MFY09, PAT growth has come in at 7% versus our expectations of 4% growth for full year. Interest expense grew to Rs 41.9 crore in the quarter, highest ever for IVRCL, given that debt levels have increased to Rs 1500 crore, resulting in net debt/equity ratio of around 0.8x, which is on the higher side. IVRCL has an order book of Rs1,4300 crore at the end of 3Q09 which provides strong revenue visibility of 3-4 years, highest in the mid-cap construction space. The company has received robust order inflows of Rs 6600 crore in 9MFY09 (+100% y-o-y). Maquarie estimates are at the lowend of the management’s guidance with a 35% topline growth in FY09 and a lower net income growth of 4% due to interest cost pressures.


Morgan Stanley on DLF


Morgan Stanley maintains `underweight’ rating on DLF in view of an extremely weak physical property market, modest stock of on-going projects and, now, prospects of slow improvement in balance sheet (in view of the sharp fall in internal accruals). DLF’s construction starts across biz verticals in F9M09 total upto just 5-6 msf, which is a leading indicator of poor earnings trajectory ahead. Management believes that the current business environment is fluid and uncertain, and therefore, it targets to conserve capital and customize products to suit ongoing economic slowdown. Near term mid-income housing and scale up in rentals will be the areas of focus, whereas, luxury housing and commercial complexes will be slowed. To weather the current credit squeeze, DLF targets to change the maturity profile of its debt portfolio to long term by mid-2009, such that there will be no re-payment obligation for 24-36 months. Out of Rs14800 crore debt, Rs 9000 crore is already long term, with commitments for another Rs 3000 crore.. DLF will restrict its sales to DAL to 12 msf (million square feet), of which 9.5 msf will be completed shortly. It targets to raise roughly $450 million PE capital to part fund the pending receivable (Rs 5400 crore). Valuations don’t appear inexpensive at roughly 1.1x F09 P/B with increasingly slower pace of value unlocking in the land bank. Stock is at a 40% discount to the F09NAV

Stock views on Cummins, Sun Pharma, Infosys

CITIGROUP on INFOSYS TECH
CITIGROUP has cut its price target for Infosys to Rs 1,350 from Rs 1,420 while maintaining a ‘buy’ rating, citing likely disappointments in the company’s third, or October-December, quarter earnings on Monday. “We have lowered our FY10-11E estimates by 6% on the back on lower volume/pricing assumptions and cross-currency impact in Q3,” the bank said in a report. “With a likely disappointment in Q3 numbers and further EPS cuts, the stock could underperform near term,” it added.


BNP Paribas on SUN PHARMA

BNP Paribas has maintained its ‘buy’ rating on Sun Pharma and also its price target of Rs 1,695 after the company initiated an out-of-court settlement with the promoters of Taro to acquire it. “We believe that an increase in consideration by 16-23% for the residual stake doesn’t alter the appeal of the Taro transaction for Sun Pharma,” the bank said in a report. BNP expects Taro’s acquisition to be accretive to Sun’s earnings per share and have a “15% positive impact” on FY10 earnings. “Taro’s operational history has been marred by accounting issues and cash flow problems. Despite these problems, we believe Taro represents a significant synergistic opportunity for Sun Pharma,” it added.


Kotak Securities on CUMMINS

Kotak Securities’ private client research has maintained its ‘accumulate’ rating on Cummins, citing likely strong earnings in the October-December quarter, or the third quarter. But the brokerage expects the growth to taper off in the fourth quarter. “Due to factors like product price hikes, some softening of material prices, depreciation in rupee and continuing value engineering exercises, we believe there is a strong case for margin expansion in Q3 FY09,” Kotak said in a report.

Stock views on NTPC, Bank of India, Inox Leisure

Ambit Capital on INOX LEISURE

AMBIT Capital has downgraded its rating on Inox Leisure from ‘buy’ to ‘sell’ citing disappointing quarterly numbers as one of the reasons. “Despite strong performance of key movies during the quarter, the company reported poor numbers that were way below our estimates. In our opinion, the company has failed to capitalise on an otherwise strong content supply,” said a brokerage note to clients. The brokerage says that it expects company’s earnings to be under pressure for some time. “Weak macro environment has taken a toll on the occupancies. Moreover, supply of content and screen space is not likely to improve in the forthcoming quarters. Consequently, we expect Inox to report a muted topline growth, going forward,” the note added.


Centrum Broking on BANK OF INDIA

Domestic brokerage house Centrum Broking has maintained its ‘buy’ rating on Bank of India, but lowered target price to Rs 330. According to brokerage’s estimates, the stock is trading at 0.9 times FY10 (estimated) adjusted book value. “We believe BoI would continue to command premium versus its peer PSU banks, primarily due to its strong returns ratios, better asset quality and higher profitability,” a Centrum note to clients said. BoI’s profit after tax for the quarter ended December rose 70% Y-o-Y to Rs 870 crore. “BoI continues to witness strong financial performance on the back of steady Net interest income (NII) and strong non-interest income growth and lower opex. We have raised our PAT estimates for FY09 by 29% and for FY10 by about 28% factoring in higher NII and other income growth.


Goldman Sachs on NTPC

Goldman Sachs has maintained its ‘buy’ rating on NTPC, saying that Central Electricity Regulatory Commission’s final tariff norms for FY10-14 are neutral to positive for NTPC’s earnings outlook, relative to the draft norms announced in September 2008. “We maintain that effective tax rate and economic life of projects are critical

Reliance Money views on Aban Offshore, Glodyne Techno

Reliance Money on Glodyne Techno - Target Rs 328

Reliance Money has recommended a buy rating on Glodyne Technoserve, with 12-month price target of Rs 328, in its report. " Glodyne Technoserve continues to leap forward with impressive financial performance, we estimate an EPS CAGR of 61% over FY08-10E. We believe as 70% of Glodyne business is centered around India that too 79% from infrastructure management space (non-discretionary spend), which makes Glodyne largely immune from any major cut in the global IT spending. We maintain BUY with a 18 months target price of Rs 328, at our target price stock will be valued at 3x FY10E," says Reliance Money's report.


Reliance Money on Aban Offshore - Target Rs 1050

Reliance Money has recommended a buy rating on Aban Offshore, with 12-month price target of Rs 1050, in its report. "Aban Offshore has come out with disappointing set of numbers in Q3FY09. Net sales for Q3 increased by 40% (YoY) and remained flat sequentially at Rs 8.36 billion. PAT was at 2.5 billion (up 354% (YoY) and down 4% sequentially). Aban Offshore is trading at 3.1x FY09 and 1.3x FY10 earning estimates, which is very cheap. We value Aban at 3x FY10 estimates giving us a target price of Rs 1050. We recommend buy on the stock," says Reliance Money's report

Stock views on NTPC, TIL, Allied Digital

India Capital Markets on Allied Digital - Target Rs 420
India Capital Markets has recommended a buy rating on Allied Digital Services with a target of Rs 420 in its research report. "ADSL’s standalone Q3FY09 revenue dipped 7.4% on a sequential basis to Rs 953 million (excluding exchange gains) led by 10.7 % fall in solution business while services were flat at Rs 283 million. Given the current environment, slower growth in the SI business is anticipated. However management has indicated increased opportunities in the maintenance part of the business. We recommend a BUY, target of Rs 420," says India Capital Markets' research report.


SKP Securities on TIL - Target Rs 150

SKP Securities has maintained its buy rating on TIL with a target of Rs 150 in its research report. "Net sales were down by 4.5% to Rs 189.6 crores in Q3FY09 over Q3FY08. PAT for the quarter fell by 30.2% at Rs 5.28 crores on y-o-y basis due to lower other income and higher interest and depreciation charges. To factor in the delay in expansion, reduced operating margins and general economic slowdown, we are revising our price target. However, we maintain our BUY recommendation on the stock with a target price of Rs 150 (previously Rs 300) at 6x FY10E earnings. Early improvement in demand outlook and preponement of its expansion plans remain key upside risks to our price target," says SKP Securities' research report.


Indiabulls Securities on NTPC - Target Rs 221

Indiabulls Securities Research has maintained its buy rating on NTPC with a target price of Rs 221 in its research report. "NTPC’s net sales for Q3’09 increased 20.9% yoy to Rs 112.8 billion. The increase in sales was primarily on account of higher fuel cost which is a pass-on cost for NTPC. We remain positive on NTPC’s long-term performance and its ability to generate consistent returns for its shareholders. Driven by encouraging revised tariff determination norms and other incentives proposed by the Central Electricity Regulatory Commission (CERC), we have increased our target price from Rs 195 to Rs 221 and maintain a Buy rating for the stock," says Indiabulls Securities' research report.

Stock views on Patels Airtemp, Lanco Infratech, PVR

KRChoksey on PVR - Target Rs 180

KRChoksey has recommended a buy rating on PVR, with price target of Rs 180, in its report. "Net Sales at Rs 76.6 crore (up 16.7% Y-o-Y, down 2.8% Q-o-Q). PAT at Rs 4.7 crore (down 23.4% Y-o-Y, down 41.0% Q-o-Q). At the CMP of Rs 88, PVR is trading at 9.9x TTM EPS of Rs 8.9 and at 8.1x FY09E EPS of Rs 10.9. We maintain BUY rating with downward revision in target price from Rs 220 to Rs 180 based on SOTP valuations, an upside of 104.5% from current levels," says KRChoksey's report.


Angel Broking on Lanco Infratech - Target Rs 279

Angel Broking has recommended a buy rating on Lanco Infratech, with price target of Rs 279, in its report. "Lanco’s Top-line, on a Standalone basis, grew 174% yoy to Rs 1,047 cr (Rs 382 cr) in 3QFY2009. During 3QFY2009, on a consolidated basis, EBITDA Margins stood at 12.2% (23.1%). Based on the Sum-of-Parts (SOTP) methodology, we have arrived at a Target Price of Rs 279 (Rs 320) valuing the Core EPC business at Rs 90 (6x FY2010E, EPS), Power business at Rs 165 (using FCFE and/or P/BV), Real Estate at Rs 10 (on NAV basis) and BOT at Rs 14 per share (using FCFE). We maintain a Buy on the stock, with a revised Target Price of Rs 279 (Rs 320)," says Angel Broking's report.


Sharekhan on Patels Airtemp - Target Rs 94

Sharekhan has maintained its buy rating on Patels Airtemp (India) with a target of Rs 94 in its research report. "The net sales grew by 29.1% to Rs 13.4 crore. Stable other income, depreciation and lower interest cost led to a 29.4% growth in the net profit to Rs 1.76 crore. We maintain our Buy recommendation on the stock with a revised price target of Rs 94, valuing the company at 6x FY2010E earnings," says Sharekhan's research report.

Stock views on Dabur India, BEML, Lloyd Electric

KRChoksey on BEML - Target Rs 426

KRChoksey Research has maintained its buy rating on BEML with a target price of Rs 426 in its research report. "Net Sales of the company increased marginally by 1.7% (YoY) to Rs 632.9 crore due to slowdown in economy. On back of diversified business model, rich cash reserves (Rs 125.1 per share), healthy order book, railway business initiatives, we maintain our BUY rating on the stock, target of Rs 426," says KRChoksey's research report

IIFL on Dabur India - Target Rs 111

IIFL has upgraded its rating on Dabur India to buy with a target price of Rs 111 in its research report. "Dabur’s steady volume growth in recent quarters is particularly important in an environment of increasingly constrained pricing power. Dabur took minimal price hikes in 2008 (4-5%) and is not encumbered by categories with stagnant/declining volumes. As such, there is no pressure to take price cuts. The company’s domestic volumes have grown 8-11% YoY in each of the last eight quarters. Issues in underperforming businesses such as hair-oil and toothpastes have been addressed, and the effects are already visible in hair oils."

"An expanding international business footprint and the integration of Fem Care from the next fiscal will lend further support to Dabur’s growth momentum. With softening input prices and a pull-back in retail rollout plans, margins will get a respite even as ad spends may be marginally scaled up. Dabur has underperformed its HPC peers by 35% over the last one year on concerns that we see abating. We upgrade the stock to BUY from REDUCE with a target price of Rs 111 based on one-year forward earnings," says IIFL's research report

Angel Broking on Lloyd Electric - Target Rs 40

Angel Broking has recommended a buy rating on Lloyd Electric, with price target of Rs 40, in its report. "Lloyd Electric (Lloyd) reported 35.6% yoy decline in Top-line to Rs 102.2 cr (Rs 158.7 cr) in 3QFY2009 primarily due to lower Sales volume owing to sluggish demand for white goods. For 3QFY2009 Net Profits declined by a substantial 85.3% to Rs 2.1 cr (Rs 14.4 cr) primarily due to fall in Top-line and pressure on OPMs. The company enjoys excellent positioning in the Indian AC market and we believe that the stock has limited down side from current levels. We maintain a Buy on the stock, with a revised Target Price of Rs 40 (Rs 61)," says Angel Broking's report.

Stock views on Texmaco, GMR Infrastructure, Sun Pharma

KRChoksey on Sun Pharma - Target Rs 1260
KRChoksey Research has maintained its buy rating on Sun Pharmaceutical Industries with a target price of Rs 1260 in its research report. "In Q3FY09, the company’s sales have increased marginally by 14.2% on a Y-o-Y basis to Rs 918.3 crore on the back of decline in the Caraco, the US subsidiary sales by 32%. We maintained our BUY rating to the stock with a target price of Rs 1260.0, implying an upside potential of 19.0%. At the target price, the stock would be valued at 15.5x FY09E EPS of Rs 81.4," says KRChoksey's research report


Prabhudas Lilladher on GMR Infrastructure - Target Rs 81

Prabhudas Lilladher has recommended an accumulate rating on GMR Infrastructure with a target price of Rs 81 in its research report. "We initiate coverage on GMR Infrastructure with an Accumulate rating and a SOTP-based one year target price of Rs 81. Over the past few years, this company has emerged as one of the leading infrastructure developers with key interest in airports, power and road assets. We believe that GMR, though on a learning curve, will be a major beneficiary from the huge investments committed in the 11th plan, and growing aviation sector," says Prabhudas Lilladher's research report.


SKP Securities on Texmaco - Target Rs 117

SKP Securities has maintained its buy rating on Texmaco with a target price of Rs 117 in its research report. "Net sales were up by 3.7% to Rs. 166.5 crores in Q3FY09 over Q3FY08. For nine months, sales were up by 18.2% to Rs. 568.7 crores. Contribution of heavy engineering division in revenues moved up marginally to 81.7%. Results are in line with our expectations and we maintain our BUY recommendation on the stock with a target price of Rs 117 in 12 months," says SKP Securities' research report.

Stock views on Balaji Telefilms, Jyoti Structures, Rolta

ULJK Securities on Rolta - Target Rs 190

ULJK Securities has recommended a buy rating on Rolta India with a target price of Rs 190 in its research report. "The company is confident of achieving its target of guidance of Rs 14.80 billion- Rs 15 billion and the PAT levels at Rs. 3.20 billion- Rs 3.30 billion. The order book position of the company is about Rs 15.90 billion. We expect the growth will most likely be driven by capturing the market in the GIS/EDA space for infrastructure space. We are initiating coverage with BUY recommendation, target of Rs 190," says ULJK Securities' research report


Reliance Money on Jyoti Structures - Target Rs 85

Reliance Money has recommended a buy rating on Jyoti Structures with a target of Rs 85 in its research report. "The overall Q3FY09 performance of Jyoti Structures Ltd (JSL) remains below our expectation. JSL witnessed a top line growth of 25% YoY to Rs 4330.7 million in Q3FY09. However higher borrowing cost along with increase in other expenditure negatively impacted the bottom line which saw a drop of 10.4% YoY during the quarter to Rs 180.6 million. The order book inflow has slowed down during the quarter which has raised concerns, but we remain confident on margins for next two years. We keep our BUY recommendation with a revised price target of Rs 85," says Reliance Money's research report.


Angel Broking on Balaji Telefilms - Target Rs 52

Angel Broking has downgraded its rating on Balaji Telefilms with a target of Rs 52 in its research report. "For the quarter, Topline de-grew 36.8% yoy to Rs 50.6 cr (Rs 80 cr) on a Standalone basis. In terms of Earnings, the company registered a decline of 97% yoy in Standalone Bottom-line to Rs 0.6 cr (Rs 18.8 cr) as a result of sharp Margin contraction. We have downgraded our rating on the stock to Accumulate from Buy, with a revised Target Price of Rs 52 (Rs 103), assigning a lower P/E multiple of 7x FY2010E factoring in higher uncertainty on its programming slate and lower Earnings growth," says Angel Broking's research report.

Stock views on Oriental Bank of Commerce, Sanghvi Movers, Everonn Systems

Angel Broking on Everonn Systems - Target Rs 242
Angel Broking has recommended a buy rating on Everonn Systems with a price target of Rs 242 in its research report. "Everonn Systems recorded a strong 49.5% yoy growth in its consolidated Revenues in 3QFY2009 to Rs 43.5 cr (Rs 29.1 cr). We expect Everonn to record robust CAGRs of 68% and 61% in Top-line and Bottom-line respectively, over FY2008-10E. Given the company’s strong growth trajectory and the fact that it has consistently out-performed our estimates, apart from its strong positioning to leverage on the significant opportunities for growth prevalent in the Indian Education Sector, we upgrade the stock from Neutral to buy, with a target price of Rs 242, implying a P/E of 11x FY2010E EPS," says Angel Broking's research report


Asit C. Mehta on Sanghvi Movers - Target Rs 84

Asit C. Mehta has maintained its buy rating on Sanghvi Movers with a target of Rs 84 in its research report. "Net Sales increased from Rs 644.0 million in Q3 FY08 to Rs 887.5 million in Q3 FY09, registering Y-o-Y growth of 37.8%. Net profit margin have decreased from 27.6% in Q3 FY08 to 27% in Q3 FY09 despite higher EBIDTA margins due to higher cost of borrowings. We continue to maintain our BUY recommendation and a target price of Rs 84, which is equivalent to a forward P/Bv of 0.8x to its FY10E Book value of Rs 105," says Asit C. Mehta's research report.


Karvy Stock Broking on Oriental Bank of Commerce - Target Rs 213


Karvy Stock Broking has maintained its buy rating on Oriental Bank of Commerce with a target price of Rs 213 in its research report. "In Q3FY09, Oriental Bank of Commerce reported NII growth of 41% (Y/Y) to Rs 5.7 billion compared to our estimates of Rs 5.3 billion; higher than our estimates mainly due higher yield on advances and contained cost of deposits. We decrease our target price by 4.8% to Rs 213 and maintain our BUY rating on the stock with a target price of Rs 213 at 0.8x FY2010 adjusted BV. At current price the stock quotes at 0.49x ABV FY2010,' says Karvy's research report.

Angel Broking views on Sadbhav Engineering, Bartronics, Oriental Bank

Angel Broking on Bartronics - Target Rs 99

Angel Broking has maintained its buy rating on Bartronics India with a target of Rs 99 in its research report. "Bartronics India (BIL) reported an impressive 95.5% yoy growth in its 3QFY2009 Top-line. During 3QFY2009, BIL reported a 665bp yoy expansion in EBITDA Margins. Going ahead, we expect BIL to record a CAGR of 62.5% in Top-line and 32% in Bottom-line over FY2008-10E. We maintain a Buy on the stock, with a revised Target Price of Rs 99 (Rs 178), implying a P/E of 4x FY2010E adjusted EPS (6x earlier)," says Angel Broking's research report

Angel Broking on Oriental Bank - Target Rs 197

Angel Broking has maintained its buy rating on Oriental Bank of Commerce with a target of Rs 197 in its research report. "Deposits increased to Rs 91,374 cr (a yoy growth of 22.8%) while Advances increased to Rs 65,617 cr (a yoy growth of 26%). Net Interest Income (NII) growth was also robust at 41% yoy for the second successive quarter following several quarters of underperformance on this count. For 2QFY2009, OBC delivered Net Profit growth of 26% yoy to Rs 252 cr. We maintain a Buy on the stock, with a Target Price of Rs 197," says Angel Broking's research report.

Angel Broking on Sadbhav Engineering - Target Rs 559

Angel Broking has maintained its buy rating on Sadbhav Engineering with a price target of Rs 559 in its research report. "Sadbhav Engineering (SEL) reported topline growth, which was much below our expectations. The company registered 20% yoy growth in net sales to Rs 276.7 cr (Rs 230.1 cr) as against our expectation of Rs 341 cr. We value SEL at 6x FY2010E standalone Earnings assigning Rs 271/share. We value SEL’s BOT portfolio at Rs 378 cr (Rs 420 cr earlier) contributing Rs 288/share excluding the NSEL Annuity project, which has not been factored in our valuation due to the increased cost of financing. Our conservative revised SOTP target price works out to Rs 559 (Rs 718). We maintain a buy on the stock," says Angel Broking's research report.

Emkay Global views on BHEL, HUL, ICICI Bank

Emkay Global on ICICI Bank - Target Rs 720

Emkay Global Financial Services has recommended a buy rating on ICICI Bank, with price target of Rs 720, in its report. "ICICI Bank reported net profit of Rs 12.7 billion, in line with our estimates. However, the operational performance was weaker with less than expected growth in NII and sharp dip in the fee income. The core operating profit declined by 9.2% yoy and 26.4% qoq. We maintain our BUY recommendation on the stock with price target to Rs 720," says Emkay Global Financial Services' research report.


Emkay Global on BHEL - Target Rs 1450

Emkay Global Financial Services has recommended a buy rating on BHEL, with price target of Rs 1450, in its report. "BHEL Q3FY2009 net profit at Rs 7.9 is sharply below our expectations primarily because of slower than expected topline growth - 16.7% yoy growth in gross turnover to Rs 64.5 billion (our estimate Rs 69.56 billion). On the order flows management said that for FY2009 it expect fresh order inflows of close to Rs 600 billion as earlier expectation of Rs 500 billion. Also the management expects benefits of falling commodity prices to be witnessed from Q4FY2009. In order to factor the earnings downgrade, we lower our price target for BHEL from earlier Rs 1520 to Rs 1450, Buy" says Emkay Global Financial Services' report


Emkay Global on HUL - Target Rs 305

Emkay Global Financial Services has maintained its buy rating on Hindustan Unilever with a target of Rs 305 in its research report. "In Q4FY09, HUL reported a robust 16.8% yoy growth in its revenues to Rs 43.1 billion. Lower interest income and other income in the quarter resulted in 19.2% yoy growth in adjusted net profit to Rs 6.1 billion. We maintain our earnings estimates for CY08E and CY09E at Rs 9.3 and Rs 11.7. We maintain our ‘BUY’ rating with price-target of Rs 305, valuing HUL at 26X CY09E earnings i.e. average of 10-year long-term and 5-year short-term multiple," says Emkay Global Financial Services' research report.

Stock views on Glenmark Pharma, Shree Cements, Bharat Electronics

Asit C. Mehta on Bharat Electronics - Target Rs 1037

Asit C. Mehta has initiated a buy rating on Bharat Electronics with a target price of Rs 1037 in its research report. "We have valued the stock using the price to book value multiple. Historically, the stock has traded at a discount of approximately 30% to the price to book value multiple of its foreign peers. This could be mainly due to the large size of its peers. Therefore we have assigned a Price /Book Value multiple of 1.8 (which is consistent with the valuation of its foreign peers) to the FY10 book value of Rs.579.5. We, therefore initiate coverage on Bharat Electronics Ltd with a “BUY” recommendation for a target price of Rs 1037," says Asit C. Mehta's research report.


SKP Securities on Shree Cements - Target Rs 900

SKP Securities has maintained its buy rating on Shree Cements with a target of Rs 900 in its research report. "Net sales were up by 25.6% to Rs 665.4 crores in Q3FY09 over Q3FY08. PAT up by 269% on y-o-y basis at Rs 129.3 crores in Q3FY09. We maintain our BUY recommendation on the stock with a target price of Rs 900 at 8x FY10E earnings in 12 months against the current valuation of 4.5x FY10E earnings," says SKP Securities' research report.


ULJK Securities on Glenmark Pharma - Target Rs 191

ULJK Securities has maintained its buy rating on Glenmark Pharma with a target of Rs 191 in its research report. "Net revenue of Rs 5813.9 million was 39% short of our estimate while EBITDA saw a sharp decline of 47% YoY mainly on account of sharp currency devaluation and delay in US product approvals. We believe that the company’s growth will be hampered because of global slowdown and increasing interest rate scenario. We cut our EPS target for FY10 by 27% and reiterate a Buy with a target price of Rs 191 (from Rs 430)," says ULJK Securities' research report

Stock views on Texmaco, Amtek Auto, ICSA

PINC Research on Texmaco - Target Rs 65

PINC Research has maintained its buy rating on Texmaco with a target of Rs 65 in its research report. "Texmaco’s Q3FY09 results were in line with expectations as net sales rose by 3.6% YoY due to the benefit of excise reduction to Rs 1.6 billion. The growth was led by the Heavy Engineering segment (wagons, process and hydromechanical equipment) which grew 13% to Rs 1.8 billion. We maintain our ‘BUY’ recommendation with a 12-month price target of Rs 65," says PINC's research report.


Angel Broking on Amtek Auto - Target Rs 110

Angel Broking has maintained its buy rating on Amtek Auto with a target of Rs 110 in its research report. "For 2QFY2009, Amtek Auto (AAL) reported 24.6% de-growth in Net Sales to Rs 241.3 cr (Rs 319.9 cr). The company reported a substantial 86.3% yoy decline in Net Profit to Rs 5.4 cr (Rs 39.2 cr) for the quarter. We maintain a Buy on the stock with a revised 18-month Target Price of Rs 110, which values the company at 0.5x FY2010E BV (adjusted for FCCB interest impact)," says Angel Broking's research report.


India Capital Markets on ICSA - Target Rs 150

India Capital Markets has maintained its buy rating on ICSA India with a target of Rs 150 in its research report. "ICSA reported a modest sequential top line growth (lowest since Q1 08) of 8.8% to Rs 3.04 billion. Revenue from the infrastructure business increased by nearly 39% while embedded solution dipped by 5%. PAT margins were further dented by increase in interest cost, though the effective decline was over 200 bp after factoring a 200 bp respite in the tax provision."

"The ongoing slowdown in the economy is bound to affect the power distribution utility given the fall in demand across industries. Our revised target price is Rs 150 at which the stock will trade at FY10E P/E of 3x and EV/EBITDA of 2x. We maintain BUY," says India Capital Markets' research report.

Stock views on Nava Bharat Ventures, City Union Bank, Patel Engineering

KRChoksey on Patel Engineering - Target Rs 182

KRChoksey is bullish on Patel Engineering and has recommended buy rating on the stock with a target price of Rs 182, in its report. We anticipate company to report a healthy growth in Q4 it is generally the strongest quarter. However going forward in FY10 we expect company’s sales to remain muted due to slowdown in order inflow and delays in project execution owing to liquidity crunch. On the margin front we expect the company to sustain the current margins mainly due to fall in raw material prices. However, we expect the net profit margins to improve marginally from H2FY10, due to reduction in cost of debt."

"At the CMP of Rs145 the stock is trading at a 5.2x its TTM EPS of Rs 28 and 4.3x its FY10 EPS of Rs.33.9. Due to lack of clarity on the execution of real estate projects we have valued PEL’s land bank at cost of Rs 200 crore, which gives us a value of Rs 33.3per share. We recommend a BUY on the stock with a target price of Rs 182. At the target price of 182, the stock will be trading at 5.4x FY010E EPS," says KRChoksey research report.


Karvy Stock Broking City Union Bank - Target Rs 23

Karvy Stock Broking has recommended a buy rating on City Union Bank with a target price of Rs 23 in its research report. "In Q3FY09, City Union Bank (CUB) reported 32% growth (Y/Y) in net interest income to Rs 650 million compared to our estimates of Rs 558 million; higher than our estimates mainly due to higher expansion in yield on funds (of 94 bps) compared to that of in cost of funds (of 70 bps) and much higher credit-deposit ratio at 71% (against 63% in Q3FY08). We cut our price target by 25.8% to Rs 23; we rate the stock as a BUY with a price target of Rs 23 at 1.09x adjusted book value FY10," says Karvy's research report.


KRChoksey on Nava Bharat Ventures - Target Rs 207

KRChoksey has maintained buy rating on Nava Bharat Ventures with a target of Rs 207 in its report. "Nava Bharat Ventures Q3FY09 net sales are gone up by 13.2% (YoY) to Rs 285.3 crore. Its PAT increased by 34.3% (YoY) to Rs 101.1 crore. We are cutting our FY09E and FY10E earning estimates by 2.3% & 7.6% (YoY) to Rs 54.9 & Rs 59.8 on account of slowdown in economy and correction in Ferro Alloy business. In Q3FY09, company’s ferro alloy business segment has disappointed on results. But we believe company’s power business would compensate the situation in coming time."

"At CMP, stock is trading 1.78x on TTM earning of Rs 61.1 and 1.82x on FY10E earning of Rs 59.8. On back of company’s diversified business model, power business initiatives, substantial land value holding at Hyderabad & Secundrabad, we maintain our BUY rating on the stock. Though we are cautious of ferro alloys business slow down, but w e believe the concerns are heavily discounted in the stock price,"says KRChoksey's research report.

Stock views on FAG Bearing, Gujarat State Petronet, CEAT

Angel Broking on CEAT - Target Rs 40
Angel Broking has downgraded its rating on CEAT from buy to accumulate with a price target of Rs 40, in its research report. "Ceat clocked a low 4% yoy growth in turnover to Rs 584.2 cr (Rs 561.8 cr) during 3QFY2009. The company registered Net Loss for the third quarter in a row. Its 3QFY2009 Net Losses stood at Rs 21.6 cr (Profit of Rs 19.2 cr). The Tyre industry, which reeled under high input costs in the last two quarters, is set to benefit from the major decline in the prices of raw materials."

"We have revised our EPS estimates downwards for FY2009E and FY2010E by Rs 17.3 & Rs 1.1 respectively, on account of the Margin and Volume pressure. At the CMP, the stock is trading at 3.7x FY2010E Earnings and 0.3x FY2010E BV. Angel Broking downgrade the stock from Buy to Accumulate with a target price of Rs 40," says Angel Broking's report.


KRChoksey on GSPL - Target Rs 36

KRChoksey has maintained its buy rating on Gujarat State Petronet (GSPL) with a target of Rs 36 in its research report. "GSPL reported net sales of Rs 110.6 crore, up 6.2% y-o-y & -1.0% q-o-q. PAT was down 9.7% y-o-y and 2.6% q-o-q due to lower operating p rofit and other income. We maintain a BUY on the stock with target price of Rs 36, giving an upside potential of 20%. At the target price the stock would be valued at 4.2x its FY10E CEPS of Rs 7.1, and 1.5x P/BV," says KRChoksey's research report.


Angel Broking on FAG Bearing - Target Rs 350

Angel Broking is bullish on FAG Bearing and has recommended buy rating on the stock with a target of Rs 350, in its report. "FAG Bearings’ prospects are derived from demand arising in the Capital Goods and Automobile industry. We believe industry valuations are likely to remain subdued in the near term due to overall slowdown in the sector. The company posted CAGR of 14% and around 30% in Revenue and Profit over the last five years, respectively. Going ahead, over CY2008-10E, we conservatively model, volumes to record a CAGR of 7-8%, which will drive around 9-10% growth in Revenues and around 10% growth in Net Profit in the mentioned period. We believe Revenue growth will be largely driven by higher contribution from new products."

"We bank on the company’s strong fundamentals of consistently recording high RoE and RoCE. Further, its debt free status would help it post better Bottom-line growth amidst a high Interest Rates regime. At the CMP of Rs 261, the stock is quoting at 4.5x CY2009E Earnings, which is much lower than its historical P/E of around 14x. We maintain a Buy on the stock, with a Target Price of Rs 350 owing to its debt free status and strong Balance Sheet, which would act as a cushion in overall industrial slowdown," says Angel Broking's research report.