Stock views on Federal Bank, Blue Star, ABG Shipyard

Sushil Finance on Blue Star, target of Rs 385

During FY09, Blue Star’s net sales increased by 15% YoY to Rs 25689.5 million. Its EBIDTA increased by 16% at Rs 2725.8 million, while the EBIDTA margins decreased by 100 bps to 10.6%. It’s APAT increased by 22.8% to Rs 1803.1 million. Its EPS for the year stood at Rs 20. BSL has declared a dividend of 180% during FY09. At the CMP of Rs 298, the stock trades at 11.3x its FY11E earnings and 0.7x FY11E BV. Buy with target of Rs 385," says Sushil Finance's report.

Prabhudas Lilladher on ABG Shipyard, target of Rs 230

"Although ABG’s debt increased from Rs 12 billion in Q3FY09 to Rs 15 billion in Q4FY09, the overall finance charge declined from Rs 513 million in Q3FY09 to Rs 302 million in Q4FY09. Besides a change in the accounting policy, LC and bank guarantee charges were lower in the quarter. The company also converted certain working capital loans to commercial paper, thereby leading to a decrease in the average borrowing cost. ABG’s net profits increased by 12.8% YoY and QoQ on account of this saving. ABG currently trades at a PER of 8.9x FY10 and 6.3x FY11 (ex-subsidy). We expect the company’s profits (ex-subsidy) to grow at 16.2% CAGR over the next two years. We maintain our ‘Accumulate’ rating on the stock, with target price of Rs 230," says Prabhudas Lilladher's report.

FinQuest Sec on Federal Bank; target of Rs 300

"Federal Bank is Kerala based bank having a network of 617 branches and business size of INR 550 billion (FY09). The bank is targeting a business of INR 1000 billion by FY11. SME and retail account for 65% of the loan book resulting in higher yield on loans. The bank had raised INR 21 billion via rights issue in FY08. Currently, Federal Bank is trading at 0.9x FY10 and 0.8x FY11 ABV. We have a target price of Rs 300 (1x FY11 ABV) and Buy recommendation on the stock," says FinQuest Securities' report.