Stock Views on PUNJAB NATIONAL BANK, TITAN INDUSTRIES

STANDARD CHARTERED on TITAN INDUSTRIES

Standard Chartered initiates coverage on Titan Industries with `Outperform' rating and a 12-month price target of 4,406 implying significant upside of 30%. Titan's bold moves to enter uncharted waters have played out well - its revenue and profit have reported CAGR of 23.5% and 29.2% respectively, over FY00-10. Titan's strong brand equity, wide reach, excellent design capabilities and experienced management are likely to further strengthen its position. StanChart estimates sales and EPS CAGR of 25.7% and 36.7% respectively, over FY10-13E. At FY12E P/E of 28.3x, Titan trades at about 17% premium to its five-year median P/E of 24.1x. Strong growth profile, robust earnings growth and improving return ratios are likely to ensure that Titan continues to command a premium valuation.

MACQUARIE on PUNJAB NATIONAL BANK

Macquarie maintains 'Neutral' rating on Punjab National Bank, however, they lower their target price by 10% to 1,200 on account of lower sustainable RoE due to higher opex.. PNB, to maintain its margins consistently at high levels, gives us the confidence that its strong return ratios are here to stay. PNB reported 8% Y-o-Y increase in net profits to 1,090 crore, in line with the estimates. PNB continues to witness NPL increases and slippage ratio at 1.9%, though lower than 2.7% seen in Q1FY11, is still high and same as Q2FY11. The bank has one of the largest restructured assets portfolios at 6.5% of total advances - higher than the industry average of 5%. Management has indicated that the total liability for the second option of pension has been revised upwards to 3,600 crore compared to their earlier estimated figure of 2,500 crore. Exposure to microfinance and 2G licenses for smaller telecom companies are very small and stand at 1,000 crore and 550 crore respectively.