Sharekhan views on Crompton Greaves, ICICI Bank, JP Associates

Sharekhan on Crompton Greaves - Target of Rs 210

Sharekhan has maintained its buy rating on Crompton Greaves with a price target of Rs 210 in its research report.

"The board of Crompton Greaves Ltd (CGL) has decided to buy back the company’s shares and will be meeting on March 24, 2009 to finalise the buy-back exercise. At the current market price, the CGL stock is discounting its FY2010E earnings by 7.4x. In our view, the valuation of the stock is compelling, as it clearly does not capture the growth prospects of the company, and this could have prompted the management to buy back the company’s shares. Furthermore, CGL’s strong balance sheet (a low debt-equity ratio at the consolidated level and net cash position at the stand-alone level) provides the company enough headroom to carry out the process smoothly."

"We believe the domestic power business would be the key revenue driver for the company in the near future (thanks to the increasing spend on power T&D projects in the country). It will also aid CGL to grow its revenues at a compounded annual growth rate of 20.7% over FY2008-10. We maintain our Buy recommendation on the stock with a price target of Rs 210," says Sharekhan's research report.


Sharekhan on ICICI Bank - Target of Rs 505

Sharekhan has maintained its buy rating on ICICI Bank with a price target of Rs 505 in its research report.

"As part of its strategy of focusing on capital preservation and improving asset quality, the bank does not intend to grow its balance sheet aggressively in the coming fiscal. It expects a balance sheet growth in mid single digits for FY2010, with the loan mix likely to shift further away from the retail segment."

"In view of the management, the pressure on the margins is likely to persist till H1FY2010 as the loan mix shifts away from the high yielding retail segment and a larger chunk of the wholesale deposits gets re-priced during the September-December 2009 period, paving the way for some margin expansion during H2FY2010."


Sharekhan on JP Associates - Target of Rs 112

Sharekhan has maintained its hold rating on Jaiprakash Associates with a target price of Rs 112 in its research report.

"We have revised our estimates downward to factor in the delay in the commissioning of cement capacity and the delay in the execution of real estate projects. We continue to value the company using the SOTP valuation methodology and value the stock at Rs 112. We have taken into account the delay in the commissioning of cement capacity in our valuation. Hence, we maintain our Hold recommendation on the stock," says Sharekhan's report.