Stock views on Anant Raj Industries, Vivimed Labs, KEI Industries

FinQuest Securities on KEI Industries - Target Rs 49

FinQuest Securities has recommended a buy rating on KEI Industries with a target price of Rs 49 in its research report.

"With capacity expansion in place, growth in infrastructure investments, we expect KEI to return on a strong growth path. We expect the EPS of the company to be at INR 6.1 in FY11E from INR 0.2 in FY09. The company is currently trading at 4.9x and 4.6x its FY11E PE and EV/EBITDA respectively. We rate the stock as 'BUY' with a target price of INR 49.0," says FinQuest Securities' report.


Sunidhi Securities & Finance on Vivimed Labs - Target Rs 120

Sunidhi Securities & Finance has recommended a buy rating on Vivimed Labs with a target price of Rs 120 in its research report.

"Vivimed’s vide range of specialty chemicals, leading global clientele base in the FMCG space, sizable demand of its products, outsourcing potential and improving performance give strong visibility to revenue & profitability in the future. We recommend 'BUY' with a target price of Rs 120 in the medium term," says Sunidhi Securities & Finance's research report.


Motilal Oswal on Anant Raj Industries - Target Rs 194

Motilal Oswal has recommended a buy rating on Anant Raj Industries with a target price of Rs 194 in its research report.

"ARIL has a robust business model with multiple revenue streams and high monetization visibility. We expect revenues to increase at 50% CAGR over FY09- 12 and net profit to increase at 18.2% over FY09-12. The stock trades at 1.1x FY11E BV of Rs 127 and 27% discount to its FY11 NAV of Rs 194, which is attractive compared to industry peers that trade at 1.7x FY11E BV and 2% premium to NAV. We initiate coverage with Buy; our target price is of Rs 194," says Motilal Oswal's research report.

Stock Views Patel Engineering, Federal Bank, Unity Infra

Sushil Finance on Patel Engineering - Target Rs 572

Sushil Finance has maintained its buy rating on Patel Engineering with price target of Rs 572, in its report.

“Patel Engineering has continued its strong performance on quarterly basis and we are confident that it would be able to deliver a strong growth going forward. However, rising interest rates and depreciation expense has slowed down its bottom-line growth.”

FinQuest Securities on Federal Bank - Target Rs 300

FinQuest Securities has maintained its buy rating on Federal Bank, with price target of Rs 300, in its report.

"We expect Fed Banks' profits to grow at a CAGR of 19% over FY09-FY11E leading to ROE of 14% by FY11E. Management has indicated that the merger with CSB (Catholic Syrian Bank) bank will materialise in next six months. We maintain 'Buy' rating with a target price of Rs 300 (1x FY11E ABV)," says FinQuest Securities' report.

Sharekhan on Unity Infra - Target Rs 430

Sharekhan has maintained its buy rating on Unity Infraprojects with a target price of Rs 430 in its research report.

"Unity Infraprojects (Unity)’s Q1FY2010 revenues grew by 24.6% year on year (yoy) to Rs 278.6 crore, which is in line with our expectation. We maintain our 'Buy' recommendation on the stock with the revised price target of Rs 430. At the current market price, the stock is trading at attractive valuation of 6.2x FY2010 and 5.8x FY2011 earnings estimates and 0.8x FY2011 P/BV," says Sharekhan's research report.

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 Divis Labs, South Indian Bank, Tata Tea

Hem Securities on Divis Labs - Target Rs 1370

Hem Securities has initiated a buy rating on Divi's Laboratories with a target price of Rs 1370 in its research report.


"Being a pioneer in the API and CRAMS segment, Divi’s Laboratories has posted tremendous growth over the past few years. With the leadership in dextromethorphan, phenyleffrine, nabumetone and lopamidol, the com-pany is expected to witness surge in its business. Further, with almost completion of massive capex, the company is expected to continue to post excellent financial performance on the back of its successful entry into the high margin nutraceuticals segment. In wake of the growth of the phar-maceutical sector, Divi’s Laboratories Ltd seems to be extremely attrac-tive investment opportunity."


"Presently, the stock is trading at Rs 1088.60 which is at 16.92 times to its earnings and 5.68 times to its book value of Rs 191.72. Since the stock offers good opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 1370 in medium to long term investment horizon ex-pecting an appreciation of about 26% from the current level of Rs 1088.60", says Hem Securities' report

FinQuest Securities on South Indian Bank - Target Rs 120

FinQuest Securities has recommended a buy rating on South Indian Bank, with price target of Rs 120, in its report.

"South Indian Bank is trading at an attractive valuation of 0.7x FY10E ABV. Peer banks like KTK Bank, KVB etc continue to trade at 1x FY10 ABV, although operational parameters are comparable with SIB. We therefore believe that SIB’s valuations will catch up with peer banks. Our target price of Rs 120 for the stock (based on DDM model) discounts 1x FY10E ABV. We recommend Buy on the stock," says FinQuest Securities' report.

KRChoksey on Tata Tea - Target Rs 859

KRChoksey has maintained its buy rating on Tata Tea, with price target of Rs 859, in its report.

"More than 70% revenues and 80% of EBIT come from tea business, which is likely to face margin pressure in FY10 as tea prices are likely to remain firm on account of decline in production by 5%. However, with company planning to leverage its tea & coffee brands in other beverage products would help it to diversify and become a complete beverage company. The company plans to focus on six key geographies - Great Britain and Africa, Europe and Middle East, the U.S., Canada and South America, South Asia and Asia Pacific, innovation and distribution going ahead to integrate the business, take advantage of economies of scale. Its recent launch T!ON - an active drink made from fruit juice, tea extracts and ginseng in Chennai has been performing well. At CMP of Rs 728, we maintain our ‘BUY’ recommendation on Tata Tea with a target price of Rs 859, which gives it an upside potential of 18%. At the CMP, the stock is trading at 5.1x FY10E earnings of Rs 143.8," says KRChoksey's report.

Stock views on Federal Bank, Blue Star, ABG Shipyard

Sushil Finance on Blue Star, target of Rs 385

During FY09, Blue Star’s net sales increased by 15% YoY to Rs 25689.5 million. Its EBIDTA increased by 16% at Rs 2725.8 million, while the EBIDTA margins decreased by 100 bps to 10.6%. It’s APAT increased by 22.8% to Rs 1803.1 million. Its EPS for the year stood at Rs 20. BSL has declared a dividend of 180% during FY09. At the CMP of Rs 298, the stock trades at 11.3x its FY11E earnings and 0.7x FY11E BV. Buy with target of Rs 385," says Sushil Finance's report.

Prabhudas Lilladher on ABG Shipyard, target of Rs 230

"Although ABG’s debt increased from Rs 12 billion in Q3FY09 to Rs 15 billion in Q4FY09, the overall finance charge declined from Rs 513 million in Q3FY09 to Rs 302 million in Q4FY09. Besides a change in the accounting policy, LC and bank guarantee charges were lower in the quarter. The company also converted certain working capital loans to commercial paper, thereby leading to a decrease in the average borrowing cost. ABG’s net profits increased by 12.8% YoY and QoQ on account of this saving. ABG currently trades at a PER of 8.9x FY10 and 6.3x FY11 (ex-subsidy). We expect the company’s profits (ex-subsidy) to grow at 16.2% CAGR over the next two years. We maintain our ‘Accumulate’ rating on the stock, with target price of Rs 230," says Prabhudas Lilladher's report.

FinQuest Sec on Federal Bank; target of Rs 300

"Federal Bank is Kerala based bank having a network of 617 branches and business size of INR 550 billion (FY09). The bank is targeting a business of INR 1000 billion by FY11. SME and retail account for 65% of the loan book resulting in higher yield on loans. The bank had raised INR 21 billion via rights issue in FY08. Currently, Federal Bank is trading at 0.9x FY10 and 0.8x FY11 ABV. We have a target price of Rs 300 (1x FY11 ABV) and Buy recommendation on the stock," says FinQuest Securities' report.

Stock views on AIA Engineering, Mcnally Bharat Engineering, KEC International

SKP Securities on Mcnally Bharat Engineering - Target of Rs 103

SKP Securities has maintained its buy rating on Mcnally Bharat Engineering with a target price of Rs 103 in its research report.

"With an order book of Rs 2200 crore which is 2xFY09 revenues and bidding for Rs 4075 crore worth of orders we feel the company is poised to manage healthy growth rates over the next 2-3 years. Though managing the debt component will be a challenge for the compnay we believe falling raw material prices and low interest rates will aid the company in managing its debt prudently. We feel the company will be able to manage to grow at CAGR of 30-35% over the next 24 months on the basis of current order book and expected orders. We maintain a buy on the company with a target price to Rs 103/- in 15 months implying a p/e multiple of 8x FY10 earnings," says SKP Securities' research report.

FinQuest Securities on KEC International - Target of Rs 368

FinQuest Securities has recommended a buy rating on KEC International with a price target of Rs 368, in its report.

"KEC plans to expand its Railway business by entering into areas like tracking, signaling and railway platforms. We expect KEC to report an EPS of Rs 37.7 and Rs 46.3 for FY10 and FY11 respectively. Given the strong pipeline of orders, and earnings growth visibility over the next two years, we believe valuations are attractive. It is currently trading at 6.3x its FY11 EPS. We initiate coverage with a buy rating on the stock with a target price of Rs 368," says FinQuest Securities' report.

Sunidhi Securities on AIA Engineering - Target of Rs 235

Sunidhi Securities & Finance has recommended a buy rating on AIA Engineering with a price target of Rs 235, in its report.

"Although there has been some slowdown witnessed due to global factors, with the Asian hunger for metals growing, mining activity too is expected to go up. Companies have increased their exploration budgets and fresh capacities are coming up in sectors such as steel, aluminum and copper. AIAEL also expects to enter the mining segment where the market potential is 10 times bigger than cement. At the CMP of Rs 190, the share is trading at a P/E of 10.2 on FY09E and 8.4 on FY10E. We recommend buy with a target of Rs 235 in the medium term," says Sunidhi Securities & Finance's research report.

Stock views on Exide Industries, LIC Housing Finance, Thermax

Sharekhan on Thermax - Target Rs 422

Sharekhan has recommended a buy rating on Thermax, with a price target of Rs 422, in its report.

"Thermax has been witnessing slower order inflow on account of a significant cut in the capital expenditure (capex) of India Inc. Recent data shows that cement and metal sectors will be relatively much stable business environment. The revival of capex plans in these two industries in particular could strengthen the order inflows for the company in the future. Thermax' leadership in the captive power generation equipment space and its agreement for utility boiler could also provide a significant boost to its order inflows. We maintain our Buy recommendation on the stock with a revised price target of Rs 422 (12x FY2011E EPS). At the current market price the stock discounts our FY2010E EPS 13.3x and enterprise value (EV)/earnings before interest, depreciation, tax and amortisation (EBIDTA) of 6.6x," says Sharekhan's report.

FinQuest Securities on LIC Housing Fin - Target of Rs 512

FinQuest Securities has recommended a buy rating on LIC Housing Finance with a target price of Rs 512 in its research report.

"Post interest rate cuts and correction in property prices (especially in big cities), the demand for housing loans is picking up. Last two months (March and April) the disbursements grew by 42% and 34% respectively for the company which indicates strong trend. Further correction in property prices coupled with easing of interest rates will boost the demand. We expect disbursemnts to grow at a CAGR of 22% for the company over FY09-11E."

"We expect company's loan book to grow at CAGR% of 22% over FY09-FY11E led by drop in the interest rates and correction in property prices. Net interest margins are expected to remain stable at 3% despite lending rate cuts. Current valuations of 1.1x FY11 BV is attractive considering higher RoE's (26% & 27% for FY10, FY11), better asset quality and huge growth potential in the housing finance segment. We have a target price of INR 512 for the stock which is 1.3xFY11 BV. We recommend 'Buy' on the stock," says FinQuest Securities' research report.

Parag Parikh on Exide Industries - Target of Rs 72.6

Parag Parikh Financial Advisory Services has maintained its buy rating on Exide Industries with a target price of Rs 72.6 in its research report.

"Exide Industries (EIL) has reported a flat top-line growth of 1% for Q409. Net Revenues for the company stood at Rs 7,983 million v/s Rs 7,913 million for Q4 '08. With a surge in taxation, PAT for the company stood 13.6% higher at Rs 2,844 millio for FY09 v/s Rs 2,503 millio for FY08. Exide Industries had recently acquired two lead smelting plants (Tandon Metals and Leadage Alloys) which now contribute 28% of total lead requirement for the company. This captive sourcing of lead and lead alloys will have a positive impact on the company's overall margins. Maintain 'BUY' on the stock with a target price of Rs 72.6/- (16x FY10E earnings and Rs 6.3/- value of investment in ING Vysya Life Insurance)," Parag Parikh Financial Advisory Services' research report.

Stock Views on CIPLA, Gujarat State Petronet, Praj Industries, Jaiprakash Associates,

BRICS Securities on CIPLA

BRICS Securities has initiated coverage on Cipla with a ‘buy’ rating. The brokerage expects Cipla to maintain its leadership position in the Indian formulation market in coming quarters. “Thirdquarter results came in as a positive surprise. Revenue (up 22% Y-o-Y) was in line and recurring net profits (up 28% Y-o-Y) were above our expectations, led by falling raw material prices. This, coupled with growing presence in export markets, should enable the company to report a 16% earnings growth in the next fiscal,” a Brics Securities report said. Amidst concerns like reclusive management and volatile past earnings, Cipla’s continues to perform well. The company is the top-most player in this segment, and has a strong portfolio in the chronic therapy segment. Given its strong domestic share and continued strength in overseas generics business, we recommend a buy on the stock, the report added.

BNP Paribas on GUJARAT STATE PETRO

BNP Paribas has assigned a ‘buy’ rating on Gujarat State Petronet on expectations of an upside in gas transmission volumes and higher return on capital employed (RoCE) as a result of new new tariff regulations. “We believe that GSPL is a long-term play on rising natural gas supplies, with the next fiscal (FY11) being the inflexion year. We expect Gujarat State Petronet’s gas volumes to increase 26.8% between FY08 and FY11 driven by its contracts with RIL and Torrent Power,” a BNP Paribas report said. Petroleum and Natural Gas Regulatory Board’s (PNGRB) new tariff regulations prescribe a pre-tax RoCE of 18.2% for gas transmission utilities. Factoring in the impact of these regulations into our estimates, we expect adjusted pre-tax RoCE to improve to 21.6% in the next fiscal, the report added.

Indiabulls Securities on JAIPRAKASH ASSO

Indiabulls Securities has downgraded Jaiprakash Associates with a ‘sell’ rating, citing weak business environment and highly-leveraged business module. Around 80% of the company’s sales come from businesses that have been adversely impacted by the credit crunch. “The cement, construction, real estate, and hotels segments are facing strong headwinds, as demand has slowed down tremendously and credit availability remains weak. We believe the situation is not likely to improve in the near-to-medium term,” a report said. Considering the current balance sheet position of the company and the funding arrangement related to ongoing expansion plans, the brokerage expects the debtto-equity ratio to increase in coming quarters. Meanwhile, the possibility of further negative news flow cannot be ruled out in coming quarters, especially with regard to real estate, cement, and construction sectors, the report added.

Finquest Securities on PRAJ INDUSTRIES

Finquest Securities believes that Praj Industries could immensely benefit from the mandate adopted by EU Parliament of 10% bio-fuels blending in all transport fuels by 2020. Such a move by the European Union will entail additional 12-14 billion litres capacity for ethanol, a Finquest report said. The brokerage has rated Praj Industries an ‘outperformer’. “The US has preponed its renewable fuel targets of 11 billion gallons from 2012 to 2009. This move is expected to support capacity build-ups. We expect net revenue to grow by 10% in FY10 as a result of the demand from European Union and the US,” the report added. Amongst key negatives, the order book of Praj Industries declined by 19% Q-o-Q, due to delay in decision-making and credit problems at the clients end as well as some previous orders turning non-executable.

Stock Views on Reliance Industries, Tata Consultancy Services, Allied Digital, Grasim Industries, Karuturi Global

ICICI Securities on Reliance Industries - Rating: BUY

ICICI Securities has maintained its buy rating on Reliance Industries in its June 11, 2008 research report. "We are increasing our FY09 and FY10 crude price and exchange-rate estimates as well as building-in lower refining and petrochemical margins for Reliance Industries (RIL). We are also factoring-in an expected delay in commencement of production from the KG D6 block and operations of the Reliance Petroleum (RPL) refinery commencing September ’08. Recent Government decision to keep private companies out of the purview of subsidy sharing is positive. However, we remain positive on the long-term prospects of RIL on the back of impressive earnings growth and attractive E&P portfolio. Reiterate BUY.""We value RIL’s extant petrochemical and refining business at Rs 1381 per share, retail at Rs 140 per share, E&P at Rs 1,168 per share and RIL’s stake in RPL at Rs 343 per share. We also attribute Rs 85 per share value to the company’s SEZ at Haryana, implying fair value of Rs 3,060 per share," says ICICI Securities' research report.

India Infoline on Tata Consultancy Services - Target Rs 875

India Infoline has recommended a buy rating on Tata Consultancy Services with a target price of Rs 875 in its July 17, 2008 research report. "Though the Q1 FY09 performance of TCS was sedate, as expected, and business outlook remains challenging, the stock is likely to outperform in the short-term given the bleak expectations before the results. Over the last three months, TCS has significantly underperformed the sector especially vis-à-vis similar-sized peers, Infosys and Wipro, due to higher uncertainty about its Q1 FY09 performance." "Since April 2008, TCS has delivered a negative return of 12.5% against positive return of 1% in BSE IT and 9% for Infosys. Since announcement of Infosys Q1 FY09 numbers, TCS is down 16% implying further moderation of expectations. Q2 FY09 is likely to be a better quarter for the company with improved growth outlook in the two troubled BFSI clients and as also indicated by healthy hiring in Q1 FY09. We rate the stock as BUY with a target price of Rs 875 implying 20% upside," says India Infoline's research report.

FinQuest Securities on Allied Digital Services - Target Rs 1198

FinQuest Securities has maintained its buy rating on Allied Digital Services with a target price of Rs 1198 in its August 8, 2008 research report. "ADSL reported operating revenue of Rs 896 million for the quarter ended 1QFY09, an increase of 38% YoY from Rs 652 million in the corresponding quarter last year. Its EBITDA grew by 57% YoY to Rs 218 million from Rs 139 million. EBITDA margin expanded by 250bps YoY to 23.6%, attributable to change in revenue mix in favour of Services business, which commands higher EBITDA margin in the range of 50-60%."

"At current market price of Rs 791, ADSL is trading at P/E of 31.9x for FY08 EPS of Rs 24.8. We expect ADSL to trade at 15.6x FY09E and 8.6x FY10E EPS of Rs 50.6 and Rs 92.1 respectively. We maintain BUY recommendation on the stock with price target of Rs 1198 using DCF-methodology, indicating an upside of 51% from the current level," says FinQuest Securities' research report.

Sharekhan on Grasim Industries - Target of Rs 3002

Sharekhan has recommended a buy rating on Grasim Industries with a price target of Rs 3002 in its June 11, 2008 research report. "Considering the poor performance of the sponge iron division in the past, we believe the sale of the business at 6.4x FY2008 EV/EBIDTA will be value accretive for the company. The sale of the sponge iron division will also boost the overall profitability of the company. The proceeds from the sale will enable the company to make fresh investments in its core businesses of cement and VSF. At the current market price of Rs 2192, the stock is trading at 8.8x its estimated FY2009E EPS. Based on our sum-of-the-parts valuation, we maintain our Buy recommendation on the stock with a price target of Rs 3002," says Sharekhan's research report.

Ambit Capital on Karuturi Global - Target of Rs 49

Ambit Capital has maintained its buy rating on Karuturi Global with a revised price target of Rs 49 in its June 10, 2008 research report. "Karuturi Global (KGL) announced its Q4FY08 and full year FY08 results, marginally below our expectations. Despite a strong showing in Q4FY08 that rounded off a very good second half for the company, KGL's performance was below our expectations.However, the company has delivered along expected lines as far as the margins are concerned."

"At its CMP of Rs 22, the stock is currently trading at a P/E of 5.6x and 4.8x our FY09E and FY10E fully diluted EPS estimates respectively. We maintain our 'BUY' recommendation on the stock with a revised price target of Rs 49; indicating 124% upside from CMP," says Ambit Capital's research report.