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.