Sushil Finance views on Mangalam Cement, Avaya GlobalConnect, Ahluwalia Contracts

Sushil Finance on Mangalam Cement - Target Rs 235

Sushil Finance has recommended buy rating on Mangalam Cement with a target of Rs 235, in its research report.

"Mangalam Cements (MCL), a B.K. Birla Group company, manufactures Cement and Portland Pozzolana Cement (PPC) using the dry process and markets them under the brand names of Mangalam and Birla Uttam. The manufacturing units of the company namely Managalam Cement and Neer Shree Cement are both located at Morak in the Kota district of Rajasthan. The company has a very strong Balance Sheet with zero Net Debt & Net Cash of Rs 285 million and we expect it Net Cash accruals to grow to Rs 2084 million by FY11. At the CMP, the stock trades at an attractive valuation of 3.9x its FY11 earnings and EV/EBIDTA of 1.2x FY11E, with high FY11 ROE of +20%," says Sushil Finance research report.

Sushil Finance on Avaya GlobalConnect - Target Rs 245

Sushil Finance has recommended buy rating on Avaya GlobalConnect with a target of Rs 245.
"Avaya GlobalConnect, with its best in class communications products & solutions and alliances with global technology leaders, is uniquely positioned to offer high-quality solutions to enterprises across industries. Recently, the Company has taken several measures to reduce its operating cost and has developed many industry-specific solutions, which are well-accepted by its customers. These continuous efforts have started benefiting the Company, while in Q4FY09 its profitability has improved significantly. Going forward, we expect AGC’s consolidated APAT to grow by 36.5% & 22.7% in FY10E and FY11E respectively."

"At the CMP, the stock is trading at an attractive valuation of 9.1x & 7.4x its FY10E & FY11E earnings of Rs. 20 & Rs. 24.5 respectively. Moreover, AGC has strong balance sheet with high net cash and is available at an attractive 2.3x FY11E EV/EBITDA. We recommend “BUY” rating on the stock, with a price target of Rs 245, at which the stock would quote at PER of 10x based on FY11E Earnings," says Sushil Finance research report.

Sushil Finance on Ahluwalia Contracts - Target Rs 228

Sushil Finance has recommended buy rating on Ahluwalia Contracts with a target of Rs 228, in its research report.

Ahluwalia Contracts, ACIL has a strong order book of Rs 53 billion and its order-book to bill ratio is likely to improve further in near future. This gives a clear visibility to the earnings of the company for more than two years. Its strategy to increase infrastructure order book would ensure growth until a demand revival is seen in the retail and commercial projects. We expect the company to grow at a CAGR of 30% for next two years. At CMP , the stock is trading 14x FY11E EPS of Rs.14 & 10x FY12E EPS of Rs 19. Given its strong order book, strong balance sheet and proven track record of the management of timely execution of the projects, ACIL is well poised to ride the construction boom in the country and thus we initiate coverage with a Accumulate rating on the Company with a target price of Rs 228 (based on 12x its FY12E EPS of Rs 19).