Stock views on GMR Infrastructure, Gujarat Apollo, Gayatri Projects

Sharekhan on Gayatri Projects - Target Rs 549

 

Sharekhan is bullish on Gayatri Projects and has recommended buy rating on the stock with a target of Rs 549, in its research report.

"Currently Gayatri Projects is trading at 7.3x and 5.9x its FY2011E and FY2012E earnings respectively and the valuations are attractive given GPL's growth plans. To discount for its AP focus, we have valued the core business at Rs 463 which is 7x (as against 8x for the other mid-cap infrastructure companies in our coverage) FY2012 earnings. The SOTP based price target also includes Rs 37.8 for its six BOT projects (based on the NPV method) and Rs 48.4 for its power project (0.5x of its Rs150 core investment in GEVL). Thus, we initiate coverage on the stock with a Buy recommendation and price target of Rs 549."

 

 

Sushil Finance on Gujarat Apollo - Target Rs 285

 

Sushil Finance is bullish on Gujarat Apollo Industries and has recommended buy rating on the stock with a target of Rs 285, in its research report.

"From traditional growth of 17% for FY06-09A & lull road construction activity, GAI is set to enter a higher league with Revenue and PAT to grow at CAGR of 26% and 22% respectively for FY10E-12E on the back of the fact that year 2010 is Turnaround year for Ministry of Road Transport. There has been remarkable recovery in fresh awarding, which eventually will be reflected in heightened investment activities in road construction sector for the coming years, throwing a big opportunity to the company. GAI is currently trading at a P/E of 6.1x its FY12 estimates."

"We believe, stock to be re-rated going forward amidst its transition into higher growth trajectory, long term debt free balance sheet, higher ROCE & ROE (22% & 24%), industry leader status and continuous thrust on expanding addressable market size. Thus taking into account that the stock has traded at a highest multiple of 10x its forward earnings, we assign it a multiple of 8.5x (a discount of 15%) for its forward earnings to arrive at a target price of Rs 285."

 

 

Karvy Stock Broking on GMR Infra – Target Rs 78

 

Karvy Stock Broking is bullish on GMR Infrastructure and has recommended with a target of Rs 78, in its research report.

"We maintain our BUY rating on GMR Infra with a price target of Rs 78 per share based on SOTP (sum-of-the-parts) valuation, indicating a potential upside of 25% from the current level. We have valued the company using DCF methodology for most of the assets. Accordingly, we have arrived at a value of Rs 78 per share comprising Rs 40 (51% of SOTP) for airports, Rs 27 (35% of SOTP) for power & coal mining, Rs 6 (8% of SOTP) for roads, and the balance representing cash. In our SOTP valuation, we have not factored in projects which are still in the planning stage. In our price target, 40% of the total value is contributed by operational projects and the remaining 60% comes from projects which are at various stages of development."