Stock views on KEC International, AIA Engineering, City Union Bank

Sushil Finance on City Union Bk, target of Rs 32
Key strengths of the Bank are high margins of +3.0%, one of the lowest opex ratio of 38%,well-capitalized with CAR of 12.5% (supported by very high percentage of Tier-I capital of +10%), High CD Ratio of 69%, strong business growth of +30% over FY07-09, Low AFS portfolio of around 20% and high sustainable ROE of 19% supported by high ROA of 1.4%. Key weakness is very low CASA of 19% and lower NPA coverage ratio of 40%. The stock is currently trading at 1.1x FY10E ABV and 5.3x FY10E Earnings with a sustainable ROE of 19%, Buy, " says Sushil Finance's research report.
Sushil Finance on AIA Engineering; target of Rs 315

AIA has a manufacturing capacity of 165,000 TPA and it had plans to expand another 100,000 TPA capacity, preferably a SEZ, to manufacture high chrome mill internals. AIA would be benefited by both replacement and capex led demand in cement, mining and power utilities across the domestic and international markets. AIA generates 75% of its revenues from replacement demand. At CMP of Rs 240, the stock is available at 11.3x its FY11E EPS of Rs. 21.2 & 2.1x its FY11E ABV. 'Buy' with a target price of Rs 315," says Sushil Finance's research report

Angel Broking on KEC International, target of Rs 477

KEC International (KEC) is a global player in the Power Transmission and Distribution (T&D) network. KEC, which recently enjoyed a good inflow of domestic orders primarily from Power Grid Corporation (PGCIL), is well poised to bag more orders from the domestic markets. Further, KEC derives close to 63% of its revenue from its overseas operations and is expected to clock good growth in this space as well. Thus, KEC is set on a high growth path on the back of healthy order book position, stable Margins (registered in spite of a volatile commodity and currency markets) and diversification into the Railways and Telecom Segments, where the government is set make substantial investments. At Rs 373, the stock is trading at 10.2x FY2010E and 7.8x FY2011E Earnings. We initiate coverage on the stock with a buy recommendation and target price of Rs 477,” says Angel Broking's research report.

Stock views on Power Grid, AIA Engineering, Emco, KSB Pumps

Hem Securities on Power Grid - Target of Rs 105
Hem Securities has recommended a buy rating on Power Grid Corporation of India with a target of Rs 105 in its research report.

"Power Grid Corporation of India has granted investment approval for implementation of `North East - Northern / Western Inter connector-I' Project at an estimated cost of Rs 111.30 billion with commissioning schedule of 54 months for Part A (related to HVDC) and 48 months for part B and C (related to AC) of the transmission system, from the date of investment approval."

"The net sales for the company gone up by 36.07% to Rs 14774.40 million for the Q3FY09 as against the net sales of Rs 10857.70 million for the Q3FY08. The company posted the EBITDA of Rs 12269.50 million for the Q3FY09 as against the EBITDA of Rs 8881.30 million for the Q3FY08 with the growth rate of 38.15%. We initiate a ‘BUY’ signal on the stock at the current levels with a target of Rs 105 in the medium term investment horizon (3- 4 months) with an appreciation of 16%," says Hem Securities' research report.


Hem Securities on AIA Engineering - Target of Rs 178

Hem Securities has reiterated its buy rating on AIA Engineering with a target of Rs 178 in its research report.

"AIA Engineering Limited has a scalable business model, good growth visibility, high operating margin and limited competition. The company has registered a continuous robust growth rate over past few years. As discussed with the management, the Company has a strong order book position of around INR 415 crores which provides a strong visibility to their revenues. We expect the company to outperform in the future and we reiterate “BUY” on the stock with a target of Rs 178," says Hem Securities' report.


KRChoksey on Emco - Target of Rs 36

KRChoksey has maintained its buy rating on Emco with a target price of Rs 36 in its research report.

"Emco Ltd has received five orders worth Rs 550 crore from the state-run Power Grid Corporation of India Ltd for a 765 kilo volt overhead transmission line. The orders also involve supply of galvanised steel towers. In Q3FY09, company’s witnessed drop of 14.6% & 45.7%(YoY) in net sales & PAT to Rs 207.9 crore & Rs 8.2 crore. The topline declined mainly due to intentional delay in deliveries to industrial clients and issues in sourcing of key components. We maintain our BUY rating on the stock with target price of Rs 36, with an upside potential of 38.5% from current levels," says KRChoksey's research report.


KRChoksey on KSB Pumps - Target of Rs 242

KRChoksey has recommended a buy rating on KSB Pumps with a target price of Rs 242 in its research report.

"In Q4CY08, the company’s sales have increased by 33% on a y -o-y basis to Rs 174.7 crore from Rs 131.8 crore. The growth in sales was on account of rise in the revenues from pumps segment by 47% y-o-y.The growth of the pump industry would be driven by the heavy investments being made in the user industries, such as power and petrochemicals."


"The growth of the pump industry would be driven by the heavy investments being made in the user industries, such as power and petrochemicals. However delay in the expansion plans of user industries and volatility in raw material prices going forward can affect the company’s earnings. We recommend a BUY with a target price of Rs 242, implying an upside potential of 17%. At the target price, the stock would be valued at 5.5x CY09E EPS of Rs 43.4," says KRChoksey's research report.

Stock views on Power Grid, Seamec, Piramal Healthcare

Indiabulls Sec on Power Grid - Target Rs 120

Indiabulls Securities Research has maintained its buy rating on Power Grid Corporation of India with a target price of Rs 120 in its research report.

"PowerGrid’s net sales were up 34.4% yoy to Rs 14.8 billion in Q3’09, mainly due to a higher transmission income. Transmission revenues increased on account of the commissioning of assets worth Rs 87.5 billion since Q3’08 and the recognition of Rs 1.9 billion of Foreign Exchange Rate Variation (FERV) loss as recoverable transmission income. Our enthusiasm in Power Grid Corporation of India Ltd. (PGCIL)’s stock has been lighted up by the encouraging tariff determination norms issued by the CERC for FY10–14. As a result, we have increased our target price for PGCIL’s stock from Rs 110 to Rs 120 and maintain our Buy rating," says Indiabulls Securities' research report.

Emkay Global on Seamec - Target Rs 73


Emkay Global Financial Services has maintained its buy rating on Seamec with a price target of Rs 73 in its research report.

"Seamec has reported net profit Rs 547 million in Q4CY2008 which is sharply above our expectation on account of higher than expected utilisation of fleet during the quarter. Revenues for the quarter stood at Rs 1044 million registering a growth of 369% yoy as Seamec had all of its four vessels full operational during the quarter as compared to just two vessels operating partially in Q4CY2007. Driven by full utilisation of fleet, higher day rate for Seamec Princess and currency appreciation, EBITDA for the quarter stood at Rs 612 million as compared to loss in Q4CY2007. As per management guidance all of its vessels will be fully available for operation in CY2009."

"Consequently on expected full utilisation of fleet and currency appreciation we are upgrading our earnings estimates for CY2009 by 20% to Rs 24.3 per share. At current levels the stock is trading at undemanding valuations of 2X its CY2009 earnings and P/B of 0.4X. The company has a market cap of USD 34 million and it is already sitting on committed contracts worth 40 million dollars. We maintain our BUY recommendation with a revised price target of Rs 73," says Emkay Global Financial Services' report.


Motilal Oswal on Piramal Healthcare - Target Rs 290

Motilal Oswal has maintained its buy rating on Piramal Healthcare with a target price of Rs 290 in its research report.

"Piramal Healthcare’s 3QFY09 performance was below estimates, with topline growth of 13.1% to Rs 8.3 billion v/s estimate of Rs 8.65 billion, EBITDA margin at 18.8% v/s estimate of 20% and PAT decline of 23% to Rs 599 million v/s estimate of Rs 976 million. We estimate that adjusted for NCE hive-off, PAT has de-grown by 39% for 3QFY09. We reiterate Buy with a target price of Rs 290 (12x FY10E EPS), an upside of 58%," says Motilal Oswal's research report.