Stock views on Nava Bharat Ventures, Rallis India, GE Shipping

Angel Securities on GE Shipping - Target Rs 396

 

Angel Securities is bullish on Great Eastern Shipping and has recommended buy rating on the stock with a target of Rs 396, in its research report.

"Great Eastern Shipping (Gesco) has emerged almost unscathed from the downturn of the shipping cycle on account of timely purchase and sale of assets and sound mix of time spot ratio. Accordingly, with the bottoming out of the freight rates and asset prices, we expect Gesco to register 49.3% CAGR in Net Profit over CY2010-12E. Further, the company plans to list its wholly-owned offshore subsidiary, Greatship Limited (GIL) by end FY2011E, which we believe will unlock value for the shareholders."

"On NAV basis, the Shipping business fetches Rs 263 per share (10% discount to NAV), while we have valued the Offshore business at 6.5x FY2012E EV/EBIDTA in line with its global peers and fetches Rs 133 per share. Based on our Target Price of Rs 396 the implied EV/ EBITDA, P/BV, P/E multiple works out to 5.7x, 0.9x, and 5.7x respectively, on FY2012E basis. Thus, on account of trading at a significant discount to its global peers, we recommend a Buy on stock," says Angel Securities research report.

 

 

Angel Securities on Rallis India - Target Rs 1611

 

Angel Securities has recommended accumulate rating on Rallis India with a target of Rs 1611, in its research report.

"Given the high probability of a normal monsoon in the current year, the management expects the industry to witness a healthy growth of 10-12% in FY2011E. Rallis India is a major player in the Domestic market; thus, we expect the company to grow at a higher pace than the industry. Additionally, we estimate Rallis India's Export to receive a major leg-up once its new plant at Dahej comes on stream in June 2010. However, as the Dahej plant ramps up and the contribution from exports starts increasing, we expect Rallis's margins to witness some pressure, as exports have a lower margin vis-a-vis domestic sales."

"Overall, we estimate Rallis India to register a CAGR of 18% and 36% in Net Sales and Profit over FY2010-12E, respectively. At the current level, the stock is trading at 13.7x and 10.7x its FY2011E and FY2012E earnings, respectively. We recommend an Accumulate on the stock, with a Target Price of Rs 1,611," says Angel Securities research report.

 

 

Karvy Stock Broking  on Nava Bharat Ventures - Target Rs 550

Karvy Stock Broking is bullish on Nava Bharat Ventures and has recommended buy rating on the stock with a target of Rs 550, in its research report.

"We expect Nava Bharat Ventures EBITDA for Q4FY10 to be ~ Rs 1,432 mn, reflecting a growth of 35% (YoY) and a flat 1% growth (QoQ). EBITDA margin is estimated to be at 42.1%, expansion of 691 bps (YoY) but contraction of 1187 bps (QoQ). We believe led by upward tick in ferro alloy steel prices during Q4 FY10 company is likely to sell higher volume of ferro alloy, resulting into lower stock in trade. Moreover, considering price pressure in sugar, we expect same trend to be recorded in sugar segment. Therefore, we believe EBITDA margin contraction would primarily be on account of decrease in stock in trade."

"We retain our sales and profit estimates of Nava Bharat Ventures for FY10 and FY11. Sales are expected to register a CAGR of 11% for the period of FY10-FY12 while earnings are likely to register a flat growth during FY10-12, as most of the growth initiatives of the company to reflect in numbers from FY13 onwards. Hence, we value the company on SOTP valuation method and arrive at a target price of Rs 550/share and continue to rate it as BUY," says Karvy Stock Broking research report.