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.

Angel Broking Views on Exide Industries, Patel Engineering, Bajaj Auto

Angel Broking on Patel Engg - Target Rs 545

Angel Broking has recommended a buy rating on Patel Engineering, with price target of Rs 545, in its report.

"We have valued Patel Engineering on SOTP methodology. We have assigned its Core Construction business a PE of 12x FY2011E EPS of Rs 36.8. Its Real Estate arm has been valued at a huge discount, using the NAV method, at Rs 103/share. In the recent past, the stock had witnessed a sharp appreciation, in line with its construction peers. We believe that, at the current levels, PE is available at reasonable valuations. At CMP, the stock is trading at 11.6x its FY2011E EPS of Rs 36.8, on a consolidated basis without considering its real estate venture. We recommend a Buy on the stock, with a Target Price of Rs 545," says Angel Broking's report.

Angel Broking on Bajaj Auto - Target of Rs 1230

"For Q1FY2010, Bajaj Auto (BAL) clocked Net Sales of Rs 2,339 cr (Rs 2,311 cr), up 1.2% yoy, which was in line with our expectation. Total volumes for the quarter declined 11.7% yoy while average realisations per vehicle improved substantially by almost 10.7% yoy primarily due to the change in product mix and better performance by the 125cc-plus Segment. During 1QFY2010, BAL witnessed a substantial 793bp yoy jump in EBITDA Margins to 19.5% (11.6%). Before Extraordinary items, Net Profit stood at Rs 317.5 cr (up 81.3% yoy) and exceeded our expectations. On a qoq basis too, Margins improved by almost 834bp. We maintain an Accumulate on the stock with a revised Target Price of Rs 1,230 (Rs 1,016 earlier), " says Angel Broking's report.

Angel Broking on Exide Industries - Target of Rs 81

"Exide Industries, India’s largest Auto Battery manufacturer, for 1QFY2010 clocked 0.3% yoy decline in Net Sales to Rs 903.5 cr (Rs 906.5), which was better than our estimate of Rs 797 cr on the back of better qoq growth in Total Volumes during 1QFY2010. During 1QFY2009, Exide witnessed a 665bp yoy increase in EBITDA Margins owing to a 1,002bp yoy fall in Raw Material costs, which accounted for around 58.2% of Sales (68.2% in 1QFY2009). The company reported 48.9% yoy increase in Net Profit to Rs 122.4 cr during the quarter. Interest cost fell 96.3% yoy to Rs 0.4 cr including Exchange gains of Rs 1.03 cr. We upgrade our EPS estimate for the company to Rs 5.5 (Rs4.2 earlier) and Rs 6.0 (Rs 5.2 earlier) for FY2010E and FY2011E, respectively. We maintain an Accumulate rating on the stock, with a revised Target Price of Rs 81 (Rs74)," says Angel Broking's report.

Stock views on Crompton Greaves, Indian Overseas Bank, Patel Engineering

IIFL on Crompton Greaves - Target of Rs 151

IIFL has recommended an add rating on Crompton Greaves with a target price Rs 151 in its research report.

"We met Crompton’s management post the announcement of share buyback and investment in group company Avantha Power & Infrastructure Ltd (APIL). The management views these initiatives as the best use of cash on the parent balance sheet, as the company has slowed down its own capex plans. These two initiatives would result in cash outflow of Rs 4.51 billion during FY10."

"Deleveraging the subsidiary balance sheets or cash conservation in a downturn would have been a more prudent strategy, in our view. However, the management was sanguine on the outlook of both domestic and overseas power T&D businesses and expressed confidence on the cash generation ability of existing businesses. In our view, more clarity on APIL’s financial details and development plans would be required to improve investor sentiment on the related party transaction. "ADD" target price of Rs 151," says IIFL's research report.

Sunidhi Securities on IOB - Target of Rs 60

Sunidhi Securities & Finance has recommended a buy rating on Indian Overseas Bank with a price target of Rs 60 in its research report.

"Indian Overseas Banks' total business as on December 31, 2008 rose from Rs 1,33,413 crore as at end December 2007 to Rs 1, 62, 575 crore-a growth of 22%. Total deposits grew by 15% to Rs 90, 866 crore from Rs 78, 791 crore. Advances spurted 31% in Q3FY09 to Rs 71, 709 crore from Rs 54, 6222 crore (YoY). As at December 31, 2008 IOB’s CASA (current accounts saving accounts) is marginally down to 29.23% from 30.93% (YoY)."

"During Q3FY09, total income rose 40% to Rs 3204 crore and net profit by 26% to Rs 388 crore. NIM and NP margin stood at 3.14% % and 12.4% respectively. Its balance sheet grew by 31% to Rs 19, 747 crore (YoY). We recommend BUY with a target of Rs 60 in the medium term," says Sunidhi Securities & Finance's research report.

Karvy on Patel Engineering - Target of Rs 305

Karvy Stock Broking has maintained its buy rating on Patel Engineering Company with a price target of Rs 305 in its research report.

"Patel Engineering has bagged an order worth of Rs 7.99 billion from the Narmada Valley Development Authority for Bargi Diversion Project in joint venture with SEW Construction Ltd. The company's stake in the project would be around 60% which will translate the order inflow of Rs 5 billion. The project would be executed in three years and provide the EBIDTA margin of around 15%. We have excluded the real estate value from our valuation due to no clarity on development plans and revise the price target downward. We have valued the core business of the company using EV/EBITDA methodology by providing 20% discount to its historical trough multiple of 5.5x. We re-iterate our BUY rating with downgraded price target of Rs 305," says Karvy Stock Broking's research report.

Stock Views on Punjab National Bank, Patel Engineering, Dr Reddys Laboratories

Prabhudas Lilladher on PNB - Target of Rs 682

Prabhudas Lilladher has upgraded its rating to accumulate on Punjab National Bank, PNB with a price target of Rs 682 in its report dated .

“Punjab National Bank’s (PNB's) Q4FY09 PAT grew by 59.2% YoY at Rs 8.66 billion. This was higher than our estimate of Rs 7.1 billion and also the market estimates, largely led by lower provisions and high treasury gains. We have discontinued giving a significant discount (Rs 40 per share for its commercial real estate exposure of Rs 60 billion). Equity capital is currently again available to real estate companies as capital markets have improved. Hence, we feel debt exposure to real estate companies should not attract any significant discounts."

"At the CMP, the stock is trading at 1.4x FY10 P/BV, 1.5X FY10E P/ABV and 6.5xFY10E P/E in-line, with its peer group banks. However, it has one of the best RoEs (>20%) and RoAs (1.2%) in the sector, the risk of continuation of current Chairman at the helm of affairs is the only pertinent non-fundamental risk that we can envisage at the current juncture. We upgrade the stock to an ‘Accumulate’ rating, with a revised price target of Rs 682," says Prabhudas Lilladher's report.

Karvy Stock Broking on Patel Engineering - Target of Rs 395

Karvy Stock Broking has maintained its buy rating on Patel Engineering with a price target of Rs 395, in its report.

"During the quarter ending March 09, we expect the company would report the net sales growth of 11.5% to Rs 8.1 billion in Q4FY09 from Rs 7.26 billion in Q4FY08. We expect EBIDTA would go up by 19.5% to Rs 1.25 billion and EBIDTA margin would improve by 100bps to 15.5% on account of higher contribution from high margin order book. We expect RPAT would go up by 36.3% to Rs 726 million."

"During the quarter, the company has bagged an order worth of Rs 7.99 billion from the Narmada Valley Development Authority for Bargi Diversion Project in joint venture with SEW Construction Ltd. The company's stake in the project would be around 60% which will translate the order inflow of Rs 5 billion. At the current market price of Rs 309, the company is trading at PER multiple of 10.2x and EV/EBIDTA multiple of 5.8x on FY10E earnings. Looking at the easing liquidity situation and expected robust order inflow post stable government; we maintain our 'BUY' rating with revised price target of Rs 395." says Karvy Stock Broking's report.

Angel Broking on Dr Reddys Laboratories - Target of Rs 765

Angel Broking has recommended a buy rating on Dr Reddys Laboratories with a target price of Rs 765 in its research report.

"For 4QFY2009, under Indian GAAP, Dr Reddy’s Laboratories (DRL) reported Net Sales of Rs 1,928.2 crore posting a growth of 52.2% yoy and ahead of our estimate of Rs 1,692.9 crore. For 4QFY2009, DRL’s Operating Margins (OPM) expanded by 974bp to 24.2% on the back of higher contribution from Sumatriptan and lower growth in SG&A expenses. For FY2009, the company reported OPM of 17.5%, up by 200bp."

"On the bourses, the stock has moved up 61.0% to Rs 636 in the last three months on the back of positive announcements pertaining to favourable judgment on Omeprazole OTC, ANDA filing of Fondaparinux and strong show on Sumatriptan in the US. For FY2011, we estimate Net Sales to post 10.5% yoy growth to Rs 7,848 crore with EBITDA Margins of 18.5% resulting in EPS of Rs 53.8 for the year. Discounting FY2011E Earnings, we have arrived at a Target Price of Rs 765 wherein Rs 741 is attributable to DRL’s base business (at 18x FY2011 EPS of Rs 41.2) and NPV of Rs 24 for its potential FTF. We recommend a Buy on the stock on the back of improving visibility in DRL’s product pipeline," says Angel Broking's research report.

KRChoksey on Tata Steel, Gujarat State Petronet, Patel Engineering

KRChoksey on Tata Steel - Target Rs 280


KRChoksey has maintained its buy rating on Tata Steel with a target price of Rs 280, in its research report. "Tata steel has recorded decline in sales by 3.9% in Q3FY09 to Rs 4,735.6 crore compared to Rs 4,928.2 Crore in Q3FY08. Top line has declined due to fall in the volumes by 13.8% YoY. PAT was mainly impacted due to increase in the raw material cost. Raw material cost has increased at Rs 1,611.2 crore from Rs 902.3 crore. Various measures have been taken by government to protect steel industry from cheap imports from china and other countries. These measures will help the steel producers in the medium term. However, the major concern will come from Corus operations. We maintain a BUY recommendation on stock with a target price of Rs 280," says KRChoksey's report.


KRChoksey on GSPL - Target Rs 36

KRChoksey has maintained its buy rating on Gujarat State Petronet (GSPL) with a target of Rs 36 in its research report. "GSPL reported net sales of Rs 110.6 crore, up 6.2% y-o-y & -1.0% q-o-q. PAT was down 9.7% y-o-y and 2.6% q-o-q due to lower operating p rofit and other income. We maintain a BUY on the stock with target price of Rs 36, giving an upside potential of 20%. At the target price the stock would be valued at 4.2x its FY10E CEPS of Rs 7.1, and 1.5x P/BV," says KRChoksey's research report.


KRChoksey on Patel Engineering - Target Rs 182

KRChoksey is bullish on Patel Engineering and has recommended buy rating on the stock with a target price of Rs 182, in its report. We anticipate company to report a healthy growth in Q4 it is generally the strongest quarter. However going forward in FY10 we expect company’s sales to remain muted due to slowdown in order inflow and delays in project execution owing to liquidity crunch. On the margin front we expect the company to sustain the current margins mainly due to fall in raw material prices. However, we expect the net profit margins to improve marginally from H2FY10, due to reduction in cost of debt."

"At the CMP of Rs145 the stock is trading at a 5.2x its TTM EPS of Rs 28 and 4.3x its FY10 EPS of Rs.33.9. Due to lack of clarity on the execution of real estate projects we have valued PEL’s land bank at cost of Rs 200 crore, which gives us a value of Rs 33.3per share. We recommend a BUY on the stock with a target price of Rs 182. At the target price of 182, the stock will be trading at 5.4x FY010E EPS," says KRChoksey research report.

Angel Broking views on Patel Engineering, IVRCL Infrastructure,

Angel Broking on Patel Engineering - Target Rs 231

Angel Broking has maintained its buy rating on Patel Engineering with a revised target price of Rs 231, in its research report. " Patel Engineering (PE) registered steady growth in 3QFY2009. Consolidated Sales of the company were in line with our expectations increasing 31% yoy to Rs 495 crore (Rs 379 crore) on the back of a strong order book of Rs 7,100 crore. For 9MFY2009, Top-line growth was a tad better at 32% to Rs 1,495 crore (Rs 1,133 crore). PE has a robust order book of Rs 7,100crore (3.0x FY2009E Revenues). We maintain a Buy on the stock, with a revised target price of Rs 231," says Angel Broking's research report.


Angel Broking on IVRCL Infrastructure - Target Rs 204

Angel Broking has maintained its buy rating on IVRCL Infrastructure with a target price of Rs 204, in its research report. " IVRCL Infrastructure Projects reported 20.7% yoy growth in top-line to Rs 1,190 crore (Rs 986 cr) for 3QFY2009, which was tad below our estimate of Rs 1,201 crore. Net Profit Margin declined to 3.9% (6.5%) resulting in 27% de-growth in Net Profit to Rs 46.5 crore (Rs 64.1cr). IVRCL has a very strong order book of Rs 14,300 crore, (excluding orders worth Rs 1,700 crore of L1 stage).We maintain a Buy on the stock, with a SOTP target price of Rs 204," says Angel Broking's research report.


Angel Broking on GAIL - Target Rs 239

Angel Broking has maintained its buy rating on GAIL with a target price of Rs 239, in its research report. "For 3QFY2009, GAIL reported 35.2% yoy increase in revenues to Rs 5,812crore (Rs 4,298 crore), which was below our expectation of Rs 6,364crore. Overall revenue growth was affected by the yoy decline in revenues from LPG & Liquid Hydrocarbon segment as the subsidy burden shared by the company in this quarter was a whopping Rs 646 crore. Petrochemical volumes surged 60.5% yoy to 1,30,000 tonnes (81,000 tonnes) during the quarter on account of de-stocking, while soft international petrochemical prices led to average realisations dipping by 28.2% yoy to Rs 47,154/tonne (Rs 65,679/tonne). We remain positive on GAIL. We maintain a Buy on the stock, with an SOTP target price of Rs 239," says Angel Broking's research report.

Stock views on Nava Bharat Ventures, City Union Bank, Patel Engineering

KRChoksey on Patel Engineering - Target Rs 182

KRChoksey is bullish on Patel Engineering and has recommended buy rating on the stock with a target price of Rs 182, in its report. We anticipate company to report a healthy growth in Q4 it is generally the strongest quarter. However going forward in FY10 we expect company’s sales to remain muted due to slowdown in order inflow and delays in project execution owing to liquidity crunch. On the margin front we expect the company to sustain the current margins mainly due to fall in raw material prices. However, we expect the net profit margins to improve marginally from H2FY10, due to reduction in cost of debt."

"At the CMP of Rs145 the stock is trading at a 5.2x its TTM EPS of Rs 28 and 4.3x its FY10 EPS of Rs.33.9. Due to lack of clarity on the execution of real estate projects we have valued PEL’s land bank at cost of Rs 200 crore, which gives us a value of Rs 33.3per share. We recommend a BUY on the stock with a target price of Rs 182. At the target price of 182, the stock will be trading at 5.4x FY010E EPS," says KRChoksey research report.


Karvy Stock Broking City Union Bank - Target Rs 23

Karvy Stock Broking has recommended a buy rating on City Union Bank with a target price of Rs 23 in its research report. "In Q3FY09, City Union Bank (CUB) reported 32% growth (Y/Y) in net interest income to Rs 650 million compared to our estimates of Rs 558 million; higher than our estimates mainly due to higher expansion in yield on funds (of 94 bps) compared to that of in cost of funds (of 70 bps) and much higher credit-deposit ratio at 71% (against 63% in Q3FY08). We cut our price target by 25.8% to Rs 23; we rate the stock as a BUY with a price target of Rs 23 at 1.09x adjusted book value FY10," says Karvy's research report.


KRChoksey on Nava Bharat Ventures - Target Rs 207

KRChoksey has maintained buy rating on Nava Bharat Ventures with a target of Rs 207 in its report. "Nava Bharat Ventures Q3FY09 net sales are gone up by 13.2% (YoY) to Rs 285.3 crore. Its PAT increased by 34.3% (YoY) to Rs 101.1 crore. We are cutting our FY09E and FY10E earning estimates by 2.3% & 7.6% (YoY) to Rs 54.9 & Rs 59.8 on account of slowdown in economy and correction in Ferro Alloy business. In Q3FY09, company’s ferro alloy business segment has disappointed on results. But we believe company’s power business would compensate the situation in coming time."

"At CMP, stock is trading 1.78x on TTM earning of Rs 61.1 and 1.82x on FY10E earning of Rs 59.8. On back of company’s diversified business model, power business initiatives, substantial land value holding at Hyderabad & Secundrabad, we maintain our BUY rating on the stock. Though we are cautious of ferro alloys business slow down, but w e believe the concerns are heavily discounted in the stock price,"says KRChoksey's research report.

SBICAP Securities Views on IDFC, Patel Engineering, Piramal Healthcare

Piramal Healthcare - Target 360
SBICAP Securities has maintained its buy rating on Piramal Healthcare with a target of Rs 360 in its September 16, 2008 research report. "We value PIHC using a range of approaches including DCF and relative approaches. We use relatives to set our target valuation of Rs 360 based on a sum-of-parts PE approach on weighted average EPS of Rs 22.10 (FY09-10); implying an exit PE multiple of 17.4x and 14.9x over the FY09 and FY10 EPS of Rs 20.64 and Rs 24.13 respectively, Buy," says SBICAP Securities' research report.

Patel Engineering - Target 490

SBICAP Securities has recommended a buy rating on Patel Engineering Company with a target of Rs 490 in its September 17, 2008 research report. "At the current price of Rs 370, assuming full tax rate of 33%, the stock trades at a P/E multiple of 17.4x its FY09E consolidated EPS of Rs 21.2 and at 14.3x its FY10E consolidated EPS of Rs 25.9. On an EV/EBIDTA basis, it trades at 8.8x FY09E and 7.7x FY10E. We value the real estate subsidiary at Rs 185 per share, BOT subsidiaries at Rs 13 per share and assign a conservative 12x P/E multiple to its core construction business's standalone FY10EEPS of Rs 24.4. Thus,arriving at an SOTP value of Rs 490 per share (an upside of 32% from the current level),we recommend a BUY on the stock," says SBICAP Securities' research report.

IDFC - Target 360

SBICAP Securities has maintained its buy rating on Infrastructure Development Finance Company (IDFC) with a target of Rs 104 in its September 16, 2008 research report. "IDFC has evolved as a diversified financial institution in the infrastructure finance segment with two major acquisitions of SSKI Securities (79.8%) and the Standard Chartered Mutual Fund (100%). IDFC's private equity business continues to scale up rapidly with assets under management expected to triple to USD 2.3 bn. by the end of this fiscal."

" Despite the diversification, much of IDFC's revenues continue to flow from the project finance business. We believe that except for the mutual fund business, the other businesses are more or less likely to grow at similar rates. We value IDFC using the SOTP methodology and arrive at a target price of 104. We initiate coverage with a BUY rating.," says SBICAP Securities' research report.