PINC Stock Views on Firstsource Solutions, Garware Offshore, Rohit Ferro Tech, Visa Steel

Buy Visa Steel, target Rs 85

PINC has maintained buy rating on Visa Steel with taret price of Rs 85 in its June 11, 2008 report. "Visa Steel Ltd (VSL) registered excellent growth with revenue rising by 85% to Rs 2.6 billion. OPM expanded by 1,160bps to 17.8% while net profits surged by 30x to Rs 210 million. The key attribute to this robust performance was an overall buoyancy in realisations being witnessed in the commodities. At the CMP of Rs 52, the stock trades at a P/E of 3x and EV/EBITDA of 3.5x FY10 estimates. We see volume growth emanating post completion of the DRI unit in Q1FY09. This, coupled with lower power cost through captive power plant provide ample earnings visibility. We remain positive on the stock and reiterate our ‘BUY’ recommendation with a 12- month price target of Rs 85" accoreing to PINC report.

Buy Rohit Ferro Tech, target of Rs 190

PINC Research has maintained its buy rating on Rohit Ferro Tech with a 12-month target price of Rs 190 in its August 6, 2008 research report. "Rohit Ferro Tech Ltd’s (RFTL) net sales at Rs 3.1 billion for Q1FY09, exhibited a YoY growth of 210%. The primary drivers were volume growth and higher ferro alloy realisations."

"At the CMP of Rs 147, it trades at a P/E of 3x & EV/EBIDT of 3.1x discounting its FY10E earnings, which we believe are low considering the buoyant ferro alloy pricing and ongoing expansion. Hence, we maintain our ‘BUY’ rating with a 12-month price target of Rs 190," says PINC's research report.

Buy Garware Offshore, target of Rs 300

PINC Research has maintained its buy rating on Garware Offshore Services with a target price of Rs 300 in its August 5, 2008 research report. "Garware Offshore Services Ltd’s (GOSL) Q1FY09 results were in line with expectations as net sales rose 52% to Rs 294 million and net profits (excluding extraordinary item) grew by 92% to Rs 99 million."

"GOSL has capitalised on the buoyant uptrend in the offshore service space by timely expansion of its fleet. We are confident of the company achieving its targeted expansion, which should reflect in its performance from H2FY09 onwards. Thus, we maintain our ‘BUY’ recommendation with a 12-month price target of Rs 300," says PINC's research report.

Buy Firstsource Solutions, target of Rs 46

PINC Research has maintained its buy rating on Firstsource Solutions with a revised 12-month target price of Rs 46 in its August 5, 2008 research report. "Firstsource Solutions Ltd. (FSL) reported a better than expected quarter as net sales grew by 8.6% QoQ to Rs 4.0 billion while OPM dipped by 180bps to 14.8% due to wage hikes and higher operating costs. INR depreciation during the quarter led to a notional non cash loss of Rs 801 million linked to USD FCCBs. As a result, net profits were negative. Excluding this, net profits were at Rs 301 million."

"At the CMP of Rs 35, FSL is trading at a P/E of 13.1x and EV/EBIDT of 6.6x our FY09 estimates. Though FSL is operating in an uncertain environment and Q2 numbers would give clear visibility over its outlook, a better than expected Q1, near term revenue visibility and H2 performance historically being better provide positive indicators. Besides these factors, the outsourced BPO market remains underpenetrated and provides an opportunity to FSL to consistently expand earnings going forward. Hence, we maintain our ‘BUY’ recommendation with a revised 12 month price target of Rs 46," says PINC's research report.

KRChoksey vliews on Tata Motors, IVRCL Infrastructure, Wockhardt, Dishman Pharmaceuticals

Buy Dishman Pharmaceuticals, target of Rs 356

KRChoksey Research has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target price of Rs 355.8 in its August 1, 2008 research report. "In Q1FY09, the company’s sales have increased by 40.4% on a y-o-y basis to Rs 235.9 crore. The net profit of the company rose by 28.7% y-o-y to Rs 27.7 crore against Rs 21.5 crore."

"At the CMP of Rs 298.7, the stock is trading at 19.9x TTM EPS of Rs 15.0 and 13.0x FY09E EPS of Rs 22.9. We maintain our BUY recommendation with a target price of Rs 355.8, implying an upside potential of 21%. At the target price, the stock would be valued at 15.5x FY09E EPS of Rs 22.9," says KRChoksey's research report.

Buy Wockhardt, target of Rs 250

KRChoksey Research has maintained its buy rating on Wockhardt with a target price of Rs 250 in its July 31, 2008 research report. "In Q2CY08, the company’s sales have increased by 48.3% on a y-o-y basis to Rs 935 crore. The net profit of the company rose merely by 4% y-o-y to Rs 106.3 crore against Rs 102.4 crore."

"At the CMP of Rs 187, the stock is trading at 5.3x FY07 EPS of Rs 35.25 and 4.8x FY08E EPS of Rs 39.1. We maintain our BUY recommendation with a target price of Rs 250, implying an upside potential of 33%. At the target price, the stock would be valued at 6.4x FY08E EPS of Rs 39.1," says KRChoksey's research report.

Buy IVRCL Infrastructure, target of Rs 381

KRChoksey Research has maintained its buy rating on IVRCL Infrastructure and Projects with a target price of Rs 381 in its July 31, 2008 research report. "We expect IVRCL to register strong growth in top-line as a result of robust order book position providing revenue visibility over the next 2-3 years. Moreover, central and state government’s urge to develop irrigation projects augurs well for IVRCL having order backlog of Rs 9,800 crore (66.2% of total order book). However we anticipate pressure on operating and net profit margins in the immediate future due to increase in raw material and interest expenses."

"We therefore downgrade our target price from Rs 526 to Rs 381, however, maintaining a BUY rating. At the target price the stock would be valued at 21.5x FY09E EPS of Rs 17.72, implying an upside potential of 26.2%," says KRChoksey's research report.

Buy Tata Motors, target of Rs 634

KRChoksey Research has recommended a buy rating on Tata Motors with a target price of Rs 634 in its August 1, 2008 research report. "Net sales grew by 14.4% y-o-y to Rs 6928.4 crore against Rs 6056.8 crore in Q1FY08. The sales growth was on the back of 3.65% y-o-y growth in volumes and strong growth in the realizations of 10% y-o-y."

"We recommend a BUY on the stock with a target of Rs 634 arrived through the SOTP process. At the target price the company would be trading at 11x its FY09E EPS of Rs 57.47 representing an upside potential of 60% from current levels. These calculations, however, do not take into account the recent JLR acquisition which we believe would be strongly EPS accretive, as we are awaiting the numbers for JLR to be disclosed by Tata Motors to evaluate it," says KRChoksey's research report.