Stock views on JSW Steel, Sintex India

Angel Sec on Sintex India - Target Rs 385

 

Angel Securities is bullish on Sintex India and has recommended buy rating on the stock with a target of Rs 385, in its May 03, 2010 research report.

"We have marginally revised our FY2011E and FY2012E Earnings estimates upwards by 2.3% and 4.2% respectively, due to the strong performance of the Monolithic Segment in 4QFY2010. At Rs320, the stock is trading at 9.1x FY2012E Earnings and 1.7x FY2012E Book Value. Historically, Sintex has traded at 13.4x its one-year forward average (two, three and five-year) P/E, which makes current valuations attractive. Moreover, the company's fundamentals have strengthened with a well-capitalised Balance Sheet, strong Revenue visibility (Monolithic Segment Order Book stands at Rs 2,200 crore) and demand revival in the Domestic Plastic Segment. We maintain a Buy on the stock, with a Target Price of Rs 385," says Angel Securities research report.

P Lilladher on JSW Steel - Target Rs 1431

 

Prabhudas Lilladher has recommended accumulate rating on JSW Steel with a target of Rs 1431, in its research report.

"JSW Steel reported profit of Rs 7.2 billion, ahead of our expectation of Rs 5.9 billion, primarily on account of a one-time gain on translation of foreign currency loans (Rs 960 m) and lower-than-expected tax rate and interest cost. Net revenue grew by 12.6% QoQ to Rs 51.7 billion (expectation of Rs 51.9 billion) on the back of 5.6% rise in realisation (Rs 33,994 v/s Rs 32,194 per tonne) and 6.7% volume growth. Higher rise in realisations, relative to increase in the iron ore cost, increased the EBITDA by 18% QoQ to Rs 12.9 billion (EBITDA per tonne of Rs 8,506 v/s Rs 7,668 QoQ), almost in-line with our expectation of Rs 13.4 billion. Pre-exceptional profit (adjusted for gain on translation) grew by 46% QoQ to Rs 6.4 billion. The performance was above our expectation on the back of lower-than-expected interest cost (Rs 1.94 billion against ours at Rs 2.27 billion) and lower-than-expected tax rate (24% against ours at 30%). Tax rate reduced on account of reduction in surcharge.

"At CMP, stock trades at P/E of 12.1x and 8.1x FY11E and FY12E, while on EV/EBITDA, it trades at 8.x and 5.5x FY11E and FY12E, respectively. We maintain our 'Accumulate' rating on the stock on the back of improved earnings quality associated with higher raw material integration and hassle-free superior volume growth, attractive returns on capital and better shaped balance sheet."