Stock Views on Federal Bank, TRF, Bharti Airtel

Motilal Oswal on Federal Bank - Target of Rs 277

Motilal Oswal has maintained its buy rating on Federal Bank with a price target of Rs 277 in its report.

"Federal Bank’s 4QFY09 results were significantly below our expectations. NII growth was lower than we had estimated, tax rate was higher than we had expected. Strong tier-I ratio, higher provision coverage, and lower C/I ratio of 35% are the bank’s key strengths. We expect Federal Bank to report EPS of Rs 33 in FY10 and Rs 39 in FY11. We estimate 14% earnings CAGR over FY09-11. RoA should remain strong at1.4% over FY09-11. However, excess capital would restrict RoE at 13%. The stock trades 7.1x FY10E EPS and 0.9x FY10E BV of Rs 277. We have maintained buy rating on the stock, target of Rs 277," says Motilal Oswal's report.


Emkay Global on TRF - Target of Rs 692

Emkay Global Financial Services has maintained its buy rating on TRF with a price target of Rs 692 in its report.


"TRF gave positive surprise in Q4FY09 with better-than expected operational performance. Its revenues grew by 41% yoy to Rs 2.4 billion led by sustained pick up in order booking in Project division, operating margins up 210 bps yoy to 15.5%, net profit growth at 55% yoy to Rs 239 million. TRF is sitting on strong order backlog of Rs 13.6 billion, up 33.5% yoy basis. There is ‘Project’ to ‘Product’ mix of 98:2, in favor of Project Orders. We revise our consolidated FY10E earnings upwards by 10.7% to Rs 104.9/Share and introduce FY11E earnings of Rs125.9/Share. We maintain our ‘BUY’ rating with revised target price of Rs 692, valuing at 6X 1-year forward PER," says Emkay Global Financial Services' research report.


Angel Broking on Bharti Airtel - Target of Rs 903

Angel Broking has recommended an accumulate on Bharti Airtel with a price target of Rs 903 in its report .

"Bharti Airtel is India's leading provider of GSM-based mobile services with 96.7 million subscribers at the end of April 30, 2009. In fact, in May, the company crossed 100 million subscribers. Bharti Airtel, in order to acquire a 49% stake in MTN Group, would have to fork out a gross of USD 6.8 billion at ZAR 86 per MTN share. On the other hand, the company would see an inflow of USD 2.9 billion from MTN Group as part payment towards purchase of a 36% post-transaction economic interest in Bharti. Thus, the net cash outflow required would be to the tune of approximately USD 3.9 billion."

"MTN Group is a South Africa-based communication service provider offering cellular-based services and business solutions. MTN has operations in 21 countries across Africa and the Middle East and is one of the largest emerging market mobile operators globally. Bharti Airtel is likely to trade volatile until the final result of the discussions between the two parties is out. Nonetheless, we believe this is a bold and necessary move being attempted by Bharti and investors would have to be patient and take a longer-term approach to reap the fruits of such a deal. We recommend an 'Accumulate' on Bharti with a target price of Rs 903," says Angel Broking's report.