Stock view on Aban Offshore, Tata Chemicals, Axis Bank

Asit C. Mehta on Aban Offshore - Target of Rs 2932

Asit C. Mehta has recommended a buy rating on Aban Offshore (AOL) with a target of Rs 2932 in its September 23, 2008 research report. "We expect AOL’s sales to grow at a CAGR of 58% and PAT to grow at a CAGR of 294% from FY08 to FY10E. Addition of new rigs and renewal of contracts is expected to lead AOL’s growth in FY09E and FY10E. At the CMP of Rs 2380, AOL is trading at 7.9x its FY09E EPS and 4.9x its FY10E EPS. Considering average P/E multiple of 6.4x for the international players, we recommend Buy on “Aban Offshore Ltd.” for a target price of Rs 2932, which is equivalent to a forward P/E multiple of 6x to AOL’s FY10E EPS of Rs 488.7," says Asit C. Mehta's research report.

Karvy Stock Broking on Tata Chemicals - Target of Rs 441

Karvy Stock Broking has maintained its buy rating on Tata Chemicals with a target of Rs 441 in its September 23, 2008 research report. "The consolidated net sales and net profit of Tata Chemicals is expected to grow at CAGR of 29.4% and 37.4% during FY08-10E on the back of organic growth as well as inorganic growth. At the current market price of Rs 272 the stock is trading at 10.7xFY09E and 7.3xFY10E expected earnings. Hence, we maintain our target price of Rs 441 and rate the stock as a BUY.," says Karvy Stock Broking's research report

Anand Rathi Securities on Axis Bank - Target of Rs 790

Anand Rathi Securities has recommended a buy rating on Axis Bank with a stoploss of Rs 675 and with a target of Rs 790. "We suggest buying this stock at around current price with a Stop Loss of Rs 675 with the target of Rs 790. Accumulate more if it comes close to the support level. If it moves above Rs 790 level then it can even touch Rs 840 Levels," says Anand Rathi's research report.

Stock Views on Indiabulls Real Estate, OnMobile Global

Deutsche Securities on Indiabulls Real Estate - TARGET PRICE: RS 300

Deutsche Securities has initiated coverage on Indiabulls Real Estate with a ‘hold’rating as it feels the company has limited track record in execution. Weakness in the Mumbai office market for highend office properties, and a large free float — which allows much larger head-room for “borrowing” and selling short — are downsides for the stock. According to a Deutsche Bank note, Indiabulls’ revenue growth would be driven by volumes and stake sale of associate and/or subsidiaries. “We expect a revenue CAGR (compound annual growth rate) of 41% over FY08 to FY11 (estimated). We expect EBITDA margins to drop from 72% in FY08 to 55% in FY11 (estimated), mainly driven by higher costs (land, construction, employees, SG&A). Further, we expect the tax rate to increase from around 28% in FY08 to nearly 30% in FY11 (estimated). Thus, while we expect volume growth (around 40%), we expect PAT (profit after tax) to grow by only a 19% CAGR over FY08-11 (estimated),” the note to clients said. However, the Deutsche Bank note added that the demerging and listing of its forays in power and retailing would drive growth and shareholder value in the near term. Meanwhile, SEZs, townships and annuities from com-pleted projects will drive long-term growth, it added.

Citigroup Global on ONMOBILE GLOBAL - TARGET PRICE: RS 630

Citigroup Global Markets has initiated coverage on OnMobile Global with a ‘buy’ rating saying OnMobile Global is India’s largest VAS (valueadded services) operator (35% share) in a rapidly growing market [FY08-11 (estimated) CAGR at 51%. The estimated 36% EPS (earnings per share) CAGR over FY08-11 (estimated), was due to the company’s increasing international presence, said Citi. “Though it ap-pears high in the current environment, we believe our target PE (price to earning) of 25x Mar-10E is justified by OnMobile’s strong growth prospects and is in line with the multiple for comparable peers,” the note added. According to the Citi note, the domestic VAS has gradu-ated from being a glorified sub-set of p-to-p SMS to a well-demarcated segment.