Stock views on Polaris Software, Adhunik Metaliks, Bharat Heavy Electricals

Hem Securities on Polaris Software - Target Rs 250

Hem Securities is bullish on Polaris Software Lab and has recommended buy rating on the stock with a target of Rs 250, in its research report.

“A review of the market opportunity areas and Polaris offerings and strengths indicates an overall positive outlook for the coming year, with a good mix from current geographic markets as well as new developing markets and business lines. Further, good cash and cash equivalents, efficient acquisition via internal accruals, minimal debt, expanding global presence via strong tie-ups, diversified product portfolio and strong client base including big clients like Axis bank, HDFC bank, ICICI Prudential, AIG and many big global players would fuel revenue growth going forward. In wake of such growth, Polaris Software Lab Ltd. seems to be extremely attractive investment opportunity.”

“Presently, the stock is trading at Rs 180 which is at 13.55 times to its earnings and 2.29 times to its book value. Since the stock offers good opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 250 in medium to long term investment horizon expecting an appreciation of about 40% from the current level of Rs 180,” says Hem Securities research report.


Motilal Oswal on Adhunik Metaliks - Target Rs 147

Motilal Oswal has maintained buy rating on Adhunik Metaliks with a target of Rs 147 in its research report.

“Adhunik Metaliks is an integrated special steel producer and iron ore miner. It is venturing into the power business through its subsidiary, APNR. ADML will be merging group companies Vedvyas and MP Ispat, which will bring 120,000tpa of coke oven capacity and 120,000tpa of sponge iron capacity. Consolidated EPS is likely to grow at a CAGR of 58% over FY09-12 on account of growth in steel production and iron ore mining. The stock is trading at 4.6x FY12E EPS and an EV of 5.2x FY12E EBITDA. We value the stock at Rs 147 per share (EV/EBITDA of 6.5x FY12E). Maintain Buy,” says Motilal Oswal research report.

Motilal Oswal on BHEL - Target Rs 2752

Motilal Oswal is bullish on Bharat Heavy Electricals (BHEL) and has recommended buy rating on the stock with a target of Rs 2752.

“We expect BHEL to witness robust order intake during the next 12-18 months, driven largely by

(i) supportive equity markets, which would enable financial closure for private projects,

(ii) 'National Tariff Policy' stipulation that CPSUs and state entities must award projects by January 2011 to be eligible for CERC methodology of tariff determination,

(iii) bulk ordering of 11 supercritical sets (660MW each) by NTPC and DVC expected in 1HFY11, and

(iv) order award of 6.5-6.9GW from JVs signed by BHEL with state utilities.”

“During FY09-12, we expect BHEL to report earnings CAGR of 28%, in line with revenue CAGR of 28%. We expect adjusted EBITDA margin to expand 167bp during FY09-12, despite 505bp reduction in staff costs (as a percentage of revenues). Other income is likely to grow at a CAGR of just 3.3% till FY12, given decline in customer advances, as execution improves and order intake stagnates. We upgrade the stock to Buy, with a price target of Rs 2,752 per share.”