Stock Views on Punjab National Bank, Bajaj Auto, ITC

Motilal Oswal on PNB - Target of Rs 721

Motilal Oswal has maintained its buy rating on Punjab National Bank with a price target of Rs 721 in its report.

"Punjab National Bank’s 4QFY09 PAT at Rs 8.7 billion was higher than our estimate of Rs 8.1 billion. We like PNB for its inherent strengths of large branch network in the cash-rich North India, strong liability side of balance sheet, higher sustainable margins, strong tier-I at 9%+ and improved asset quality. We expect momentum to slow down in loan growth and fee income. However; return ratios will remain superior with RoA at 1.3%+ and RoE at 23%+. Post 4QFY09 results, we have increased our EPS estimates by 11-12% for FY10-11. We expect PNB to report EPS of Rs106 in FY10 and Rs124 in FY11. BV would be Rs 494 in FY10 and Rs 585 in FY10. The stock trades at 1.3x FY10E BV and 6.1x FY10E EPS. We have maintained buy rating on the stock, target of Rs 721," says Motilal Oswal's report.

Angel Broking on ITC - Target of Rs 214

Angel Broking has maintained its buy rating on ITC with a target of Rs 214 in its research report.

"For 4QFY2009, ITC posted 1.1% yoy de-growth in Top-line to Rs 3,892 crore. We remain positive on ITC’s strong consumer demand profile, better pricing power, strong cash flows and its ability to channel these flows into new growth opportunities. At the CMP, the stock is trading at 15.3x FY2011E EPS of Rs 12. We maintain a 'Buy' on the stock with a target price of Rs 214. However, higher-than-expected hike in Excise Duty on cigarettes during the next Budget (we have factored in 5% hike for FY2010E) carries downside risks to our estimates," says Angel Broking's research report.

IIFL on Bajaj Auto - Target of Rs 1030

IIFL has maintained its buy rating on Bajaj Auto with a target price of Rs 1030 in its research report.

"Bajaj Auto’s operational 4QFY09 results were much better than the street’s expectations. EBITDA margin adjusted for one-off items expanded 150bps QoQ, driven by a steep decline in raw-material costs (primarily steel and aluminium) and shift in product mix towards the highly profitable 125cc+ segment. Reported PAT was lower than our estimate on account of a Rs 220 million MTM loss on forex contracts taken for hedging exports in FY10. Going forward, we expect margins to expand further to over 18%. Accordingly, we raise our EPS estimate for FY10 by 29% and for FY11 by 20%. We maintain 'BUY' with a price target of Rs 1,030, based on 13x FY10ii EPS," says IIFL's research report.