Angel Broking views on Axis Bank, HDFC Bank, Orchid Chemical

Angel Broking on Axis bank - Target of Rs 859

Angel Broking has maintained its buy rating on Axis Bank with a target price of Rs 859 in its research report.

"Axis Bank had been gradually re-rated from sub 1x P/ABV multiples up to April 2003, with a median P/ABV of 2.8x since April 2007, as the market continued to recognise and reward its transformation into a strong Private Sector Bank with an attractive potential for wealth creation. At current valuations, the stock is once again trading at sub 1x P/ABV multiples on exaggerated concerns regarding asset quality and top management continuity, which we believe offer substantial margin of safety even based on our worst case sensitivity analysis. We maintain a Buy on Axis Bank, with a target price of Rs 759, implying an upside of 91%," says Angel Broking's research report.

Angel Broking on HDFC Bank - Target of Rs 1666

Angel Broking has maintained its buy rating on HDFC Bank with a target price of Rs 1,666 in its research report.

"At current valuations, HDFC Bank is trading below its six-year median P/ABV multiple. We believe the Bank is among the most competitive banks in the Sector and is poised to maintain its profitable growth over the long term. We believe the Bank's competitive advantages, driving gains in CASA marketshare and traction in multiple Fee Revenue streams, can support up to 5% higher core sustainable RoEs vis-à-vis sectoral averages over the long term, creating a material margin of safety in our target valuation multiples. We maintain a Buy on HDFC Bank, with a target price of Rs 1,666, implying an upside of 41%," says Angel Broking's research report.

Angel Broking on Orchid Chemical - Target of Rs 198

Angel Broking has maintained its buy rating on Orchid Chemicals and Pharmaceuticals with target price of Rs 198 in its research report.

"Orchid Chemicals and Pharmaceuticals announced that it has bought back bonds worth USD 25.7 million out of the total outstanding FCCB of USD 194.7million as on date, and was in the process of extinguishing the same. The funding has been done through ECB. Post this transaction, the company would have FCCBs worth around USD 169 million of which USD 19.7 million is payable in FY2011 and USD 149.3 million in FY2012. The company intends to purchase additional bonds from the market and extinguish them from time to time. We believe the transaction per se will not materially alter the company’s current Debt/Equity ratio of 3x.
We maintain a Buy on the stock, with a target price of Rs 128 as the stockcontinues to trade at 11.8x FY2009E and 3.9x FY2010E adjusted Earnings. We believe launch of Piperacilin-Tazobactum in Europe would be a key positive trigger for the stock in the near term," says Angel Broking's research report.