KRChoksey on Tata Steel, Gujarat State Petronet, Patel Engineering

KRChoksey on Tata Steel - Target Rs 280


KRChoksey has maintained its buy rating on Tata Steel with a target price of Rs 280, in its research report. "Tata steel has recorded decline in sales by 3.9% in Q3FY09 to Rs 4,735.6 crore compared to Rs 4,928.2 Crore in Q3FY08. Top line has declined due to fall in the volumes by 13.8% YoY. PAT was mainly impacted due to increase in the raw material cost. Raw material cost has increased at Rs 1,611.2 crore from Rs 902.3 crore. Various measures have been taken by government to protect steel industry from cheap imports from china and other countries. These measures will help the steel producers in the medium term. However, the major concern will come from Corus operations. We maintain a BUY recommendation on stock with a target price of Rs 280," says KRChoksey'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.


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.