Stock views on Patels Airtemp, Lanco Infratech, PVR

KRChoksey on PVR - Target Rs 180

KRChoksey has recommended a buy rating on PVR, with price target of Rs 180, in its report. "Net Sales at Rs 76.6 crore (up 16.7% Y-o-Y, down 2.8% Q-o-Q). PAT at Rs 4.7 crore (down 23.4% Y-o-Y, down 41.0% Q-o-Q). At the CMP of Rs 88, PVR is trading at 9.9x TTM EPS of Rs 8.9 and at 8.1x FY09E EPS of Rs 10.9. We maintain BUY rating with downward revision in target price from Rs 220 to Rs 180 based on SOTP valuations, an upside of 104.5% from current levels," says KRChoksey's report.


Angel Broking on Lanco Infratech - Target Rs 279

Angel Broking has recommended a buy rating on Lanco Infratech, with price target of Rs 279, in its report. "Lanco’s Top-line, on a Standalone basis, grew 174% yoy to Rs 1,047 cr (Rs 382 cr) in 3QFY2009. During 3QFY2009, on a consolidated basis, EBITDA Margins stood at 12.2% (23.1%). Based on the Sum-of-Parts (SOTP) methodology, we have arrived at a Target Price of Rs 279 (Rs 320) valuing the Core EPC business at Rs 90 (6x FY2010E, EPS), Power business at Rs 165 (using FCFE and/or P/BV), Real Estate at Rs 10 (on NAV basis) and BOT at Rs 14 per share (using FCFE). We maintain a Buy on the stock, with a revised Target Price of Rs 279 (Rs 320)," says Angel Broking's report.


Sharekhan on Patels Airtemp - Target Rs 94

Sharekhan has maintained its buy rating on Patels Airtemp (India) with a target of Rs 94 in its research report. "The net sales grew by 29.1% to Rs 13.4 crore. Stable other income, depreciation and lower interest cost led to a 29.4% growth in the net profit to Rs 1.76 crore. We maintain our Buy recommendation on the stock with a revised price target of Rs 94, valuing the company at 6x FY2010E earnings," says Sharekhan's research report.

Karvy views on Ambuja Cements, Andhra Bank, Bank of India, Shree Cements, PVR

Buy PVR, target of Rs 260

Karvy Stock Broking has maintained its buy rating on PVR with a revised target price of Rs 260 in its August 8, 2008 research report. "PVR declared its 1Q FY09 results which were above our expectations. Net sales grew by 10.4% YoY as against our estimates of a 0.4% in 1Q FY09. This was majorly on account of higher than expected income from advertising and royalty. The net profit for 1Q FY09 declined by 35.3% YoY and grew by 43.7% QoQ as against our expectations of a decline of 61.7% YoY and decline of 14.8% QoQ."

"Considering the foray of PVR into new and promising businesses of production & distribution and lifestyle entertainment and subsequent de-risking of the exhibition business we believe that PVR will emerge as one of the better and stronger players in the multiplex industry. We have valued PVR at 13x FY10E earnings and 1.1x FY2010 sales. Subsequently, we have increased our price estimate on the company from Rs 230 to Rs 260 maintaining our BUY rating on the stock at current levels," says Karvy's research report.

Buy Shree Cements, target of Rs 733

Karvy Stock Broking has recommended a buy rating on Shree Cements with a target price of Rs 733 in its July 16, 2008 research report. "We expect net sales for the quarter ended June'08 would increase by 44.1% yoy to Rs 6.13bn driven by 26.6% growth in despatches and 11.2% growth in realization."

"SCL is currently trading at PER of 5.6x and EV/EBIDTA multiple of 3.3x on FY10E earnings. We had valued the ICL on 4x FY10E EV/EBIDTA and rate the company as BUY with price target of Rs 733," says Karvy's research report.

Buy Bank of India, target Rs 443

Karvy research has maintained buy rating on Bank of India with target price of Rs 443 in its July 17, 2008 report. "In 1st Q FY09, BoI's advances and deposits are expected to grow at 35% and 32% (Y-o-Y); the volume-led growth would result into 32% (Y-o-Y) jump in NII to Rs 12.5 billion. Estimated 24% growth in total other income on the back of fee-income growth and cost containment would lead to 36% growth in operating profit before provisions. Strain on net interest margin, significant de-growth treasury income and higher investment depreciation provisions of Rs 850 million would result in the bank's bottomline grow by 25% (Y-o-Y) to Rs 3.96 billion. The current stock price discounts FY2010 adjusted book value at 0.97x; we rate the stock as a BUY with a price target of Rs 443 at 1.88x adjusted book value FY2010" according to Karvy report.

Buy Andhra Bank, target Rs 108

Karvy research has maintained buy rating on Andhra Bank with target prie of Rs 108 in its July 17, 2008 report. "In 1st Q FY09, we assume that the Andhra Bank's advances and deposits would grow by 24% and 26.3% (Y-o-Y). The bank's net interest income (NII) would grow marginally by 2.5% (Y-o-Y) to Rs 3.7 billion and operating profit before provisions would grow by 6.3% (Y-o-Y) to Rs 2.37 billion. Higher depreciation provisions on investments of Rs 550 million would led to 18.8% (Y-o-Y) decline in net profit to 1.14 billion. Strain on net interest margin would be due to lower CASA share, higher cost of funds and lower yield on advances. We expect healthy growth in total fee income but treasury income could report degrowth. Total net income is expected to grow by 5.6% (Y-o-Y) to Rs 5.0 billion. At current market price, the stock is available at 0.65x ABV FY2010; we rate the stock as a BUY with a price target of Rs 108 at 1.34x adjusted book value FY2010" according to Karvy report.

Ambuja Cements an outperformer

Karvy Stock Broking has rated Ambuja Cements as an outperformer with a target price of Rs 101 in its July 16, 2008 research report. "For the quarter ending June 08, we expect the net sales would go up by 6.6% yoy to Rs 15.6 billion. Volume has shown a muted growth of 1.4% to 4.44 million tones due to export ban. Average realization would go up by 5.2% to Rs 3517 per tones."

"At the current market price of Rs 79 the company is trading at PER multiple of 10.2x and EV/EBIDTA multiple of 6.1x on CY09E earnings. We had valued the company on EV/EBIDTA multiple of 7.5x and rate the company as an outperformer with price target of Rs 101," says Karvy's research report.

KRChoksey views on PVR, DLF, Unitech

Buy PVR

KRChoksey Research has recommended a buy rating on PVR in its August 4, 2008 research report. "Net sales for the Q1FY09 were up by 10% Y-o-Y to Rs 60.2 crore. The growth of 10% was mainly driven by F&B income ( 10% Y-o-Y to Rs12.4 crore) and Advertisement & Royalty income (Y-o-Y 62% to Rs 9.0 crore)."

"At CMP of Rs 173, the stock is trading at 21.9x TTM EPS of Rs 7.9. We recommend investors to BUY the stock, with our price target under review," says KRChoksey's research report.


Buy DLF, target of Rs 615

KRChoksey Research has recommended a buy rating on DLF with a target price of Rs 615 in its August 4, 2008 research report. "Sales grew 24% y-o-y to Rs 3,810.6 crore in Q1FY09. There was a 12% decline in q-o-q sales due to the seasonal effect as sales in Q1 are historically sluggish. Operating margins were lower by 1020 basis points y-o-y on account of revenue from middle income segment. Net Profit was Rs 1,864 crore, a growth of 23% y-o-y but 14% lower on a q-o-q basis."

"We believe DLF’s strong balance sheet and its robust business model makes it one of the best investments in Indian Real Estate. We recommend a BUY with a target price of Rs 615. At the target price the stock would be valued at 12.1x FY09E EPS of Rs 50.65, implying an upside potential of 19.4%," says KRChoksey's research report.


Buy Unitech, target of Rs 191

KRChoksey Research has recommended a buy rating on Unitech with a target price of Rs 191 in its July 31, 2008 research report. "Top-line was mainly driven by sales from the residential properties which accounted for 70% of revenue. Sales in Q1FY09 were Rs 1,031.67 crore, an increase of 19.2% on a y-o-y and a decrease of 11.1% on q-o-q basis."

"We recommend a BUY with a target price of Rs 191. At the target price the stock would be valued at 14.05x FY09E EPS of Rs 13.59, implying an upside potential of 16.5%," says KRChoksey.

Take Your PICK: Part II - MID CAP STOCKS

GSK Consumer (CMP: Rs 620): The company has a leadership position in the malted beverages space, strong set of core brands (Horlicks & Boost) and rich parentage (new launches from global portfolio). These are expected to help GSK sustain robust growth. Moreover, surplus cash and investments of Rs 400 crore coupled with attractive valuations make it one of the best value plays in the consumer domain.

PVR (CMP: Rs 174): The company’s superior management bandwidth, integrated business model and strong set of properties (in terms of location) make it the most preferred play in the movie exhibition space. Moreover, its entry into new allied businesses such as food courts and bowling alleys coupled with recent dilution in its movie production business is likely to lead to re-rating of the stock.

Bartronics India (CMP: Rs 179): The company operates in the automatic identification and data capture (AIDC) solutions segment and is set to leverage the strong growth expected in the retail sector. It is the only smart cards manufacturer in India and this segment is expected to surge on strong demand from the telecom, banking and government sectors. In the wake of strong growth prospects of the company, the stock offers great value.

Jain Irrigation (CMP: Rs 464): The company is a proxy play on the increasing government focus on agriculture and micro irrigation and the booming infrastructure in the country. It would also benefit from the acquisitions it made over the last couple of years, which will be in addition to the company’s organic growth initiatives. Thus, the long-term prospects of the company are robust.

Piramal Healthcare (CMP: Rs 310): The company is an early entrant into the CRAMS space. Over the last couple of years, it has consolidated its presence in the segment, which now contributes 50% of its overall revenues. Considering its robust pipeline, the company is expected to post robust growth in the years to come.

This article is fron the research house of Angel Broking