Sharekhan views on KSB Pumps, Indian Hotels, Bharti Airtel

Sharekhan on KSB Pumps
Sharekhan has maintained its buy rating on KSB Pumps in its research report.

"KSB Pumps has reported a strong top line growth of 31.4% to Rs175.4 crore for Q4CY2008. However, its margins declined on both year-on-year (y-o-y) and sequential bases on account of a change in the product mix and a greater contribution of the project business in the earlier quarters. KSB Pumps is likely to spend about Rs 200 crore over the next four years to raise its capacities. Looking at its almost debt-free status, funding of the same is not likely to be an issue, though we would try to get an update from the management regarding any changes in its capex plans. We maintain our Buy recommendation on the stock while we put the price target of the stock under review," says Sharekhan's research report.


Sharekhan on Indian Hotels - Target of Rs 82

Sharekhan has maintained its buy rating on Indian Hotels Company with a price target of Rs 82 in its research report.


"A significant slowdown in business and leisure travel has led the occupancies of the hotel industry to fall from 75% to 58% year on year (yoy) and the average room rate (ARR) decline by 17% yoy in January 2009. As for the hotel industry, we believe the occupancies and ARRs of Indian Hotels Company will also remain under pressure in Q4FY2009 and FY2010,
however the addition of new room inventory should help drive growth in FY2010. We maintain our buy recommendation on the stock with our price target of Rs 82," says Sharekhan's report.


Sharekhan on Bharti Airtel - Target of Rs 789

Sharekhan has maintained its buy rating on Bharti Airtel with a price target of Rs 789 in its research report.

"As per media reports, American Tower Corporation (ATC) is all set to acquire India-based independent tower company, Xcel Telecom. The deal, if it materialises, can give us certain indications of the ruling valuation of the domestic tower company and be used as a yardstick to value Bharti Airtel’s tower business."

"If we use the Rs 0.52 crore per tower valuation of Xcel Telecom to value the 61,355 towers of Bharti Infratel as on December 2008, the value for Bharti Airtel works out to Rs 31,814 crore and that for Bharti Airtel’s 92% stake in its tower subsidiary works out to Rs 154.2 per share. This is much ahead of the value of Rs 112 per share taken by us in our price target for the stock based on the discounted cash flow method. We maintain our Buy recommendation on the stock with a price target of Rs 789 per share," says Sharekhan's research report.