Stock views on Pidilite Industries, Hero Honda, Punj Lloyd

Bonanza on Pidilite Industries - Target Rs 195

Bonanza has recommended a buy rating on Pidilite Industries, with price target of Rs 195, in its report.

"Pidilite Industries is a dominant player in the adhesive and sealant market in India. The company cleared all the highcost inventory of raw materials, the low-cost inventory of raw materials together with price increases boosted OPM 510 bps to 23.3% in Q1 of FY 2010. Thus, strong brands enable the company to generate better sales and margin, baring short-term aberration. Going ahead with crude derivatve still priced lower, we expect the company to post better OPM for FY10. The company is about to start off its manufacturing operations at Bangladesh and African plants by later this. We have projected sales from these facilities with a lag effect of six months. We have projected that the company would post an EPS of 9.93, which is a conservative estimate in view of Q1FY10 EPS of 3.3. At this EPS the company is trading at an earning multiple of 14.1x. We recommend investors to buy the counter in 135-145 range with a target of Rs 195 in medium term," says Bonanza's report.

Motilal Oswal on Hero Honda - Target Rs 1762

Motilal Oswal has maintained its buy rating on Hero Honda Motors, with price target of Rs 1762, in its report.

"We like Hero Honda due to its dominant position in the two-wheeler market, multiple earnings drivers, 31% EPS CAGR (FY09-11) and strong balance sheet with net cash of Rs 257 per share in FY10 and Rs 342 per share in FY11. We maintain FY10 earnings estimates at Rs 100 (56% growth) and for FY11 at Rs 110.2 (10% growth). The stock trades at 15.1x FY10E EPS and 13.7x FY11E EPS. Maintain Buy with target price of Rs 1,762 (16x FY11E EPS)," says Motilal Oswal's report.


Bonanza on Punj Lloyd - Target Rs 300

Bonanza has recommended a buy rating on Punj Lloyd with a target price of Rs 300 in its research report.

"Punj Lloyd provides services to develop infrastructure for a host of industries. It lays down pipelines, tanks and terminals, refineries, power and civil infrastructure projects etc. The company had tough period in later half of FY2009. As global sentiments have turned positive, better performance is expected in FY10. It is likely to report a consolidated EPS of Rs.20/Share. At CMP Rs.255, it trades at 12.6 PE on forward earnings. Investors may BUY in range of Rs.245- 255 for a target of Rs.300 i.e. about 15PE on FY 10 estimates," says Bonanza's research report

Stock Views on Pidilite Industries, Welspun Gujarat, Jindal Saw

SKP Securities on Pidilite Industries - Target of Rs 195

SKP Securities has recommended a buy rating on Pidilite Industries with 18 months price target of Rs 195 in its September 27, 2008 research report. "At the current level of Rs 135, Pidilite is trading at the P/E of 15.48x, 12.02x and 10.14x of FY09E, FY10E and FY11E earnings of Rs 9, Rs 11 and Rs 13 respectively. Considering the strong brand value and steady growth we initiate coverage on Pidilite with 18 months price target of Rs 195 (44% upside) which discounts FY11E earnings by 15x, Buy," says SKP Securities' research report.

HDFC Securities on Welspun Gujarat - Target of Rs 592

HDFC Securities has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target of Rs 592 in its September 30, 2008 research report. "On a relative value basis, the stock is currently trading at 7.2x and 4.6x its expected FY09E and FY10x earnings. We expect it to re-rate positively and when coupled with the underlying earnings growth, should deliver significant out performance to investors in the long term."

"We therefore maintain our Strong BUY recommendation on the stock with a revised target price of Rs 592 (upside of 159%) from the earlier target of Rs 774 (Downward revision of 24%). This downward price target is partially due to our revised earnings estimates and also due to the derating in P/E multiple of the company and the market," says HDFC Securities' research report.

HDFC Securities on Jindal Saw - Target of Rs 987

HDFC Securities has given target of Rs 987 for Jindal Saw in its September 18, 2008 research report. "Going forward, the company has embarked upon an aggressive capex plan in the pipe space. It also plans to invest in new unrelated businesses (shipyard, Infrastructure etc), which remains a concern to us. The stock currently trades at a P/E multiple of 10.3x CY08E and 7.3x CY09E, with marginal downward revision of our estimates for CY08E and CY09E. We are revising our price target to Rs. 987 (Upside of 67%) from earlier price target of Rs.1050 (Downward revision of 6%). We expect the stock to re-rate positively once its expanded capacities come on stream and start contributing to profits," says HDFC Securities' reports.