Stock views on Jindal Steel, Zicom, Maharashtra Seamless

IIFL on Jindal Steel, target of Rs 2884

"Jindal Steel and Power (JSPL) is expanding its power generation capacity from 1,333MW to 5,000MW by FY13ii. We believe that given the sustained peak power deficit in India and resultant high power prices (which are up 125% since FY04), its strategy to sell power through short-term PPAs will pay off handsomely, like the 1,000MW plant of its subsidiary Jindal Power (PAT of 15bn, RoE of 93% in FY09, the first year of operations). We forecast consolidated earnings will register a CAGR of 11% through FY12ii, despite weak steel prices, aided by 21% CAGR growth in power business profit. A unique revenue model (vertical integration + opportunistic sale of power) and visibility on expansion makes JSPL a good play on peak power deficit, Add," says IIFL's reports.

Sushil Finance on Zicom, target of Rs 145

"Zicom has got strong software capabilities relating to the security business. It has also integrated all the multiple security applications into one coordinated hardware and software package. The company has secured various Government projects including Mumbai City Surveillance, Bangalore City Surveillance, Kolkata Metro, Mumbai Western Railway. During 9MFY09, the Company has delivered a decent performance. Its consolidated revenues, EBITDA and net profit after minority interest stood at Rs. 2,719.1 million, Rs. 353 million & Rs. 134.1 million respectively. It has posted an EPS of Rs. 10.6 for the period under review. The stock currently trades at 7.2x its FY10E earnings and 1.0x FY10E BV. 'Buy' the stock with target of Rs 145," says Sushil Finance's report.
Sushil Finance on Maharashtra Seamless, target of Rs 335

"Maharashtra Seamless Ltd. (MSL) is one of the largest manufacturers of seamless tubes with a production capacity of 350 000 tons MSL also manufactures ERW pipes. The total unexecuted Order Book of the Company as at Mar. ‘09 stands at Rs 5,700 million, to be executable over the next one year. The company has net cash of around Rs. 5,000 million in its books. The company plans to productively use the cash partly to fund its capacity expansion plans & to meet its working capital requirements over the next 2 years. At the current market price the company is trading at 7 4x its FY09EPS of Rs 36 and 1 4x. Buy the stock with target of Rs 335," says Sushil Finance's report.