Stock views on KEC International, AIA Engineering, City Union Bank

Sushil Finance on City Union Bk, target of Rs 32
Key strengths of the Bank are high margins of +3.0%, one of the lowest opex ratio of 38%,well-capitalized with CAR of 12.5% (supported by very high percentage of Tier-I capital of +10%), High CD Ratio of 69%, strong business growth of +30% over FY07-09, Low AFS portfolio of around 20% and high sustainable ROE of 19% supported by high ROA of 1.4%. Key weakness is very low CASA of 19% and lower NPA coverage ratio of 40%. The stock is currently trading at 1.1x FY10E ABV and 5.3x FY10E Earnings with a sustainable ROE of 19%, Buy, " says Sushil Finance's research report.
Sushil Finance on AIA Engineering; target of Rs 315

AIA has a manufacturing capacity of 165,000 TPA and it had plans to expand another 100,000 TPA capacity, preferably a SEZ, to manufacture high chrome mill internals. AIA would be benefited by both replacement and capex led demand in cement, mining and power utilities across the domestic and international markets. AIA generates 75% of its revenues from replacement demand. At CMP of Rs 240, the stock is available at 11.3x its FY11E EPS of Rs. 21.2 & 2.1x its FY11E ABV. 'Buy' with a target price of Rs 315," says Sushil Finance's research report

Angel Broking on KEC International, target of Rs 477

KEC International (KEC) is a global player in the Power Transmission and Distribution (T&D) network. KEC, which recently enjoyed a good inflow of domestic orders primarily from Power Grid Corporation (PGCIL), is well poised to bag more orders from the domestic markets. Further, KEC derives close to 63% of its revenue from its overseas operations and is expected to clock good growth in this space as well. Thus, KEC is set on a high growth path on the back of healthy order book position, stable Margins (registered in spite of a volatile commodity and currency markets) and diversification into the Railways and Telecom Segments, where the government is set make substantial investments. At Rs 373, the stock is trading at 10.2x FY2010E and 7.8x FY2011E Earnings. We initiate coverage on the stock with a buy recommendation and target price of Rs 477,” says Angel Broking's research report.