Stock views on SREI Infra, Infosys Technologies, ITC

Karvy Stock Broking  on ITC - Target Rs 286

 

Karvy Stock Broking is bullish on ITC and has recommended buy rating on the stock with a target of Rs 286, in its research report.

"Finance Minister has thrown a negative surprise with the quantum of hike in excise duties during the Union budget 2010. Restructured excise duties on cigarettes and other tobacco products make the products dearer by 11%-18% against the industry estimates of 6%-8%.  After the recent price hike of 7% over its select brands, we estimate that ITC would now make its tobacco portfolio dearer by another 8%-10% in phased manner to pass on the excise burden, which it has been doing efficiently over the years, thanks to its dominant pricing power. "

"We expect ITC's topline and bottom-line to grow at a CAGR of 15.9% and 18.9% respectively over FY09-11E. At the current market price, stock is trading at 22.4x and 20.1x its FY10E and FY11E Earnings of Rs.10.9and 12.2 respectively. Owing to the recent plunge in the stock price, we are upgrading our rating to buy from market performer with a price target of Rs 286," says Karvy Stock Broking research report.

Prabhudas Lilladher on Infosys - Target Rs 3,250:

 

Prabhudas Lilladher has come out with a research report on Infosys Technologies. The firm has upgraded Infosys to buy from accumulate and revised the target price to Rs 3,250.

The report says, "According to the management, IT budget is expected to be flat with a positive bias. The management, though, was positively surprised by the final outcome of the IT budget since they last spoke about it in the quarterly result. We believe that the current momentum in the strong demand would help the company to deliver revenue growth in mid single-digit in the US dollar term. We expect the company to take a conservative stance for the guidance of FY11 and guide a growth of 10-12%."

"Infosys has got the smallest exposure to Europe as compared to its peers and ~90% of that is from UK. The company is unfazed by trouble in Europe and hence, not witnessing any weakening in deals pipe-line. The company continues to ramp-up team with local hires in its European operation as they hired CEO for Germany and in the process to hire one for France,"  according to Prabhudas Lilladher report.

The report also says, "The management was optimistic as the deal pipeline has improved over the last quarters. The company gained due to vendor consolidation and continues to see good traction in large business transformational deals. According to our channel check, the company is in the process of winning one large contract from leading telecom players in New Zealand (NZ) and two contracts on cloud computing in the range of US$70-80m. Australia and NZ contributes about 5% of total revenue and continues to deliver strong growth opportunities."

 

"We continue to remain optimistic about improved demand environment for Indian IT Services, wherein the Tier-1 company would be benefitted. We rollover our model to FY12 and revise the target price to Rs 3,250, a target multiple of 24x FY12e. We upgrade Infosys to buy from accumulate."

 

Firstcall Research on SREI Infra - Target Rs 90

Firstcall Research has recommended a buy rating on SREI Infrastructure, with price target of Rs 90, in its report.

At the current market price of Rs 74.85, SREI Infra is trading at 5.51x and 4.39x for FY10E and FY11E respectively. Price to Book Value of the stock is expected to be at 0.67x and 0.58x respectively for FY10E and FY11E. Earning per share (EPS) of the company for the earnings for FY10E and FY11E is seen at Rs 13.60 and Rs 17.06 respectively. The top line and bottom line of the company are expected to grow at a CAGR of 13% & 14% over 2008A to 2011E. SIFL is the only private sector Infrastructure financing NBFI. The company has a customer base of over 15,000, over Rs 8,000 crore in assets under management and total capital base of over Rs 700 crore. The company has a network of 61 offices in India and 3 offices in Russia to conduct international operations. Srei Infrastructure Finance was awarded with an order to develop a light-rail transit system in Kolkata. The project is worth USD 1.2 billion and will be completed within four-five years. Srei has taken the initiative of building rural infrastructure in the country on an information and technology platform under the National e-Governance Plan of the Government of India. On the basis of EV/EBITDA, the stock trades at 1.12x for FY10E and 1.00x for FY11E. We recommend to 'BUY' this stock at a Target Price of Rs 90 for medium to long term investment," says Firstcall Research report.