Stock views Glenmark Pharmaceuticals, PSL, Federal Bank

Sharekhan on Glenmark Pharma - Target Rs 319

Sharekhan has recommended a buy rating on Glenmark Pharmaceuticals, with price target of Rs 319, in its report. The stock closed at Rs 261.35 .

"Glenmark has dropped 12% in the year till date (the stock has seen an upside of 21% since we had upgraded our recommendation to Buy from Hold in our report dated October 29, 2009) as compared to the BSE HC Index, which is up 66.5%, and the Sensex, which is up 71.1%. However, with the revival signs gaining visibility in the emerging markets and the domestic markets, where we have seen a staggering growth of 44.6% and 18.4% respectively in H1FY2010.

We expect the cash flow to improve, as the capital expenditure eases and the management attempts to rein in the working capital. This would allow the management to address its high leverage and return to free cash flow territory in FY2010. We believe that the risk-reward ratio is favourable for the stock at the current levels, given an improving macro outlook, which may see the growth rebound in the emerging markets, improving the working capital cycle. Given the healthy business performance expectations and favourable risk-reward ratio, we maintain our Buy recommendation on the stock with a revised price target of Rs 319 (16x FY2011E core earnings for the base business plus Rs 43 per share for the R&D pipeline). At the current market price of Rs 261, the stock trades at 15.1x FY2011E earnings," says Sharekhan report.

SKP Securities on Federal Bank - Target Rs 284

SKP Securities is bullish on Federal Bank and has recommended buy rating on the stock with a target of Rs 284, in its research report.

Federal Bank is set to emerge as a strong private bank through improved performance and growth. FBL has taken various steps to achieve its objective to be the no.1 bank in Kerala. FBL has shown better performance than the industry in the past and we expect it to continue the trend.

"We hereby initiate coverage on Federal Bank Ltd. and recommend buy rating with a target price of Rs 284 (25% upside) in 12 months implying1.02 x and 0.9 x to adj. Book value per share of FY2010 & FY2011 respectively."

SKP Securities on PSL - Target Rs 197

SKP Securities is bullish on PSL and has recommended buy rating on the stock with a target of Rs 197, in its research report.

"PSL is one of the largest HSAW pipe manufacturer with the installed capacity of 1.475 MTPA of pipes. The company have 13 HSAW pipe mills, 11 of which are located in five locations geographically spread throughout India and one each at UAE and USA. PSL also provide pipe coating and other ancillary products and services related to pipe industry.

About 98% of the revenues of the company are derived from domestic market.""At the current market price, the stock is trading at a P/E of 5.4x , 4.8x and 4.1x of FY10E FY11E and FY12E earnings of Rs 27.3 Rs 30.4 and Rs 35.9 respectively. We recommend BUY rating on the stock with a target price of Rs 197/- (34% upside) in 18 months implying a P/E multiple of 5.5x of FY12E earnings," says SKP Securities research report.