Stock views on South Indian Bank, Cipla, Hero Honda

IIFL on Hero Honda - Target Rs 1730

IIFL has maintained its add rating on Hero Honda Motors with a target price of Rs 1730 in its research report.

"Hero Honda’s 1QFY10 results were in line with our expectation. EBITDA margin expanded 500bps YoY and 100bps QoQ to 17%, thanks largely to lower raw-material costs (down 400bps YoY), better realisations (price hike and model mix) and increased production at Haridwar. Going forward, we expect margins to decline 100bps as the company purchases raw materials on spot basis (prices of key raw materials, steel and aluminium, have risen in the last few months). We raise our FY10 and FY11 earnings estimates by 15% and 18% respectively, as we revise our FY10 volume growth estimate to 20% from 12% earlier. We maintain ADD with a revised target price of Rs 1,730," says IIFL's research report.


KRChoksey on Cipla - Target Rs 286

KRChoksey has recommended a hold rating on Cipla with a target price of Rs 286 in its research report.

"The topline of the company is inline with our expectation and posted a turnover growth of 14% Y-o-Y backed by better performance from both its domestic as well as exports business. The domestic sale of the company has shown an increase of about 11.3% whereas Export sales grew by 14.3%. We believe the sales of the company were mainly driven by good performance from its domestic as well as exports business. The net profit of the company was impacted by an increase in interest cost (an increase of 186%). 'Hold', target of Rs 286," says KRChoksey's research report.


Angel on South Indian Bank - Target Rs 135


Angel Broking has recommended a buy rating on South Indian Bank with a target price of Rs 135 in its research report.

"South Indian Bank (SIB) is one of the better-performing old private sector banks. Largely concentrated in the semi-urban areas of the Southern states of India, SIB's profitable, cost-efficient and technologically up-to-date network constitutes a reasonably attractive standalone franchise. The Bank's Deposit franchise includes a niche NRI customer base that contributes a meaningful 17% of deposits and gives it a distinguishing cost advantage over several of its peers. At the same time, the Bank is trading at the cheapest valuations among peers. We value the stock at 0.9x FY2011E ABV to arrive at a target price of Rs 135, implying an upside of 26% from current levels. We Initiate Coverage on the stock with a 'Buy' recommendation," says Angel's research report.