Stock Views on Nava Bharat Ventures, Jubilant Organosys, Infosys

FinQuest Sec on Nava Bharat Ventures - Target Rs 396

FinQuest Securities has recommended a buy rating on Nava Bharat Ventures, with price target of Rs 396, in its report.

"We expect realignment of business strategy to be value accretive and will lead to re-rating of the stock. We expect NBVL to be treated as Power generation utility as power will contribute 60% to topline in FY12E and the company will attain 1125 MW of power capacity by FY14E. We don't expect any expansion in Ferro alloys and sugar. Our SOTP valuation gives a target of INR 396. The company is currently trading at 4.4x and 3.0x its FY11E PE and EV/EBITDA respectively. We rate the stock as 'BUY'," says FinQuest Securities' report.

Karvy Stock Broking on Jubilant Organosys - Target Rs 210

Karvy Stock Broking has maintained its buy rating on Jubilant Organosys, with a price target of Rs 210, in its report.

"Jubilant Organosys has set a goal to grow its revenue and profit by 1.5x and 2x respectively in the next three years which will be on back of greater asset efficiency. The company has set a target of 30 % ROE for FY 2013E. We downgrade our EPS for FY 2010E by 16.3 % to Rs 18 and by 3 % to Rs 26 for FY 2011E on account of lower other income, higher interest cost, amortisation on account of foreign currency translation reserve and higher tax. We decrease our price target by 2.3 % to Rs 210 based on 8x FY 2011E. The overhang on stock does remain on account of the FCCB repayment of USD 270 mn by CY 2011. We maintain our 'BUY' rating on the stock, with price target of Rs 210," says Karvy Stock Broking's research report.

Reliance Money on Infosys - Target Rs 1985

Reliance Money has recommended a hold rating on Infosys Technologies, with price target of Rs 1985, in its report.

"In the last three odd months, most of the IT stocks had a sharp run up owing to smart rally in the domestic market, however there is not much improvement at the micro levels, nevertheless there is a marked improvement in the risk appetite and optimism towards a early 2010 recovery in the sector. We believe, Infosys with its robust business model coupled with strong margin management is well placed to take early advantage of the curve. In terms of stock price, we expect a near term correction after a sharp 28% run in the stock price in last three months. We recommend 'HOLD' on Infosys with a price target of Rs 1985, at our target price stock would be valued at 20x FY10E and 17x FY11E," says Reliance Money's report.

Stock Views on Balaji Telefilms, Ranbaxy, Jyothi Structures, Hindalco Industries

MERILL Lynch on Balaji Telefilms - TARGET PRICE: RS 177

MERILL Lynch has maintained its “underperform” ratings on Balaji Telefilms. Recently, the STAR Group (STAR) had said it would sell 25.99% stake in BTL to the promoters or parties nominated by it at Rs 190 per share in 240 days. This implies that Balaji would be free to do programming for STAR’s rivals in certain time slots. “However, given the dominance of STAR Plus in the Hindi general entertainment (GE) space, we believe that the incremental opportunity could have lower ratings and higher costs. We think it is fraught with lower margins, lower RoE, and therefore, not positive for Balaji,” the Merrill note to clients said. “We believe earnings in Balaji’s core content business is set to slow — 12% CAGR (FY08-10 estimated) against a robust 27% (FY05-07),” the note added, citing limited prime time slots left for programming in the Hindi GE space, weak ratings on STAR Plus, entry into lower margin movies and higher costs on political intervention in labour matters as the reasons.

UBS on Ranbaxy - TARGET PRICE: RS 511

UBS has downgraded its ratings on Ranbaxy from “neutral” to “sell” , citing the ongoing investigation by the US Food and Drug Administration as a major concern. “We believe the ongoing US investigation is unlikely to be resolved in the short term and that negative publicity and heightened scrutiny are likely to result in slower product approvals in the US and other markets. We, therefore, now value Ranbaxy’s core business in line with tier-II Indian generic companies at 18 times adjusted forward earnings,” the UBS note to clients said. UBS has slashed its price target for Ranbaxy to Rs 511 from Rs 593 earlier and lowered its earlier earning per share estimate for 2008 by nearly 33% to Rs 12.78. “Our lower 2008 forecast is primarily due to FX translation loss on FCCBs,” the UBS note to clients added, also mentioning that the business outlook for the company remained “challenging”. “We believe Ranbaxy continues to face challenges in the EU market and that 10-12% year-on-year (Y-o-Y) represents the best case organic revenue growth for the company,” the note said.

MF Global on Jyothi Structures - TARGET PRICE: RS 192

MF Global has recommended a “buy” on Jyoti Structures, citing strong order flows, and an export focused business model which exposes the company to fewer operational risks. The brokerage expects JSL to report a 41% compounded annual growth in revenues between FY08-10 (estimated) and a 39% CAGR in earnings. According to MF Global, the company plans to invest more than Rs 600 million (FY09E) to strengthen its export presence in areas like the Middle-East and Africa. “The capex would mainly be towards buying construction equipment and CNC machines,” the MF Global note to clients says. MF Global expects the company to outperform its peers in a rising input cost scenario. It expects an inflow growth of 25% each during FY09E and FY10E and any positive surprise with respect to inflows would lead to a further increase in profit after tax for JSL.

ENAM Securities on Hindalco Industries - TARGET PRICE: RS 182

ENAM Securities has assigned an “underperformer” ratings to Hindalco as it feels the company’s proposed rights issue is diluting the growth of the company Hindalco is planning a rights issuance of three shares for seven existing shares at Rs 96 per share. “This is in contrast to the earlier envisaged one share for every three shares around Rs 120 per share and is round 30% discount to FY08 book value per share. The issuance hints at a sense of urgency for fund raising, given tight capital market conditions, to retire $3-billion bridge debt that expires in November 2008,” the Enam note to clients said. “We reduce our FY09 and FY10 earnings per share estimate to Rs 17.5 (Rs 19.9 earlier) and Rs 22.7 (Rs 24.4 earlier), respectively, to reflect more-than-anticipated rights dilution at lower price and attendant net interest impact,” the note added.