Stock Views on Bajaj Auto, Power Grid, Welspun Gujarat

Bonanza on Welspun Gujarat - Target Rs 240


Bonanza has recommneded a buy rating on Welspun Gujarat with target price of Rs 240 in its research report.

"The quarter started with the order book of approximately Rs 7500 crore and added Rs 1200 crore. The company gets orders from both domestic and overseas buyer. The company’s five year CAGR of consolidated revenue is 53.3% and profit is 58.3%. The company’s operating margin will extensively go up in FY 10 due to fall in price of raw materials as well as selling price. The company is trading at the one year Forward PE of 7.4X. The new investors can 'BUY' at CMP of Rs 201 with the target of Rs 240, " says Bonanza's report.

Hem Securities on Power Grid - Target Rs 144

Hem Securities has initiated a buy rating on Power Grid Corporation of India with a target price of Rs 144 in its research report.

"The company posted financial figures for the quarter ended March 2009 more than expectations. The net sales for the company gone up by 44.30% to Rs 22498.90 million for the Q4FY09 as against the net sales of Rs 15591.80 million for the Q4FY08. The stock at the current market price of Rs 110.10 will trade 27.38 times to its earnings of Rs 4.02 and 3.16 times to its book value of Rs 34.74 and is expected to provide huge upside potential in medium to long – term. We initiate a ‘BUY’ signal on the stock at the current levels with a target of Rs 144 in the medium term investment horizon (5- 6 months) with an appreciation of about 30%," says Hem's research report.


Hem Securities on Bajaj Auto - Target Rs 1430

Hem Securities has initiated a buy rating on Bajaj Auto with a price target of Rs 1430 in its report.

"Bajaj Auto limited is one of the largest two wheeler manufacturing company in India. The company posted excellent financial figures for the quarter ended June 2009. The net sales for the company remain flat at Rs 23384.70 million for the Q1FY10 as against the net sales of Rs 23107.60 million for the Q1FY09. The company posted the operating profits of Rs 4314.00 million for the Q1FY10 as against the operating profits of Rs 2667.80 million for the Q1FY09 with the growth rate of 61.71%. The company plans six new launches in 2009 and on back of these launches the company is planning to almost double its sales in India by the second half of 2009-10. We initiate a ‘BUY’ signal on the stock at the current levels with a target of Rs 1430 in the medium term investment horizon (4- 5 months) with an appreciation of about 24%,“ says Hem Securities' report.

Stock views on Welspun Gujarat, Sanwaria Agro Oils, Indraprastha Gas, Indian Oil Corporation

KRChoksey on Indraprastha Gas - Target of Rs 130


KRChoksey Research has recommended a buy rating on Indraprastha Gas with a target price of Rs 130 in its November 13, 2008 research report. "IGL reported net sales of Rs 215.2 crore, up 23.6% Y-o-Y, on the back of increase in volume of CNG by 22.7% and PNG by 26.7% to 117.2 million Kg and 13.3 mmscm respectively. We recommended a BUY on the stock with target price of Rs 130, giving an upside potential of 23%. At the target price the stock would be valued at 9.0x and 7.6x its FY09E & FY10E EPS of Rs 14.5 and Rs 17.0 respectively," says KRChoksey's research report.



KRChoksey on Sanwaria Agro Oils - Target of Rs 45


KRChoksey has recommended a buy rating on Sanwaria Agro Oils with a target of Rs 45 in its report. The geographical benefits which the company enjoys on account of all its plants being located in the state of MP (largest producer of soybean seeds) is a key advantage over its peers. Further, SAOL will benefit from setting up of wind turbine generators which will bring down the operating cost and thus enhance margins by 230bps. We expect the profit margins to improve going forward as interest rates cool down."


"At CMP of Rs 32, the stock is trading at 6.4x FY08 earnings of Rs 4.98. We recommend a “BUY” rating on the stock with a price target of Rs 45 based on our P/E valuation, with an upside potential of 41% from current levels. At the target price, the stock would be valued at 6.6x FY09 EPS of 6.8," says KRChoksey's research report



Asit C. Mehta on Welspun Gujarat - Target of Rs 190


Asit C. Mehta has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target price of Rs 190 in its November 13, 2008 research report. "WGSRL has an order book of USD 2 billion, which provides revenue visibility until FY10. Current orders sufice current capacity. As new capacity becomes operational, the company should attract orders. However, with the current global credit crisis we expect new orders to come in at a slower pace."


"We believe that the company will benefit in the near term on account of the capex it has incurred in the pipes segment. We therefore maintain a positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 190, which is equivalent to a P/E multiple of 5 times its FY10E EPS," says Asit C. Mehta's research report.


Indiabulls Securities on IOC - Target of Rs 479


Indiabulls Securities Research has upgraded its rating on Indian Oil Corporation (IOC) to buy with a target price of Rs 479 in its November 26, 2008 research report. "With global oil prices at their peak in Q2’09, Indian Oil Corporation Limited (IOC) reported a net loss of Rs 70.5 billion as it was unable to pass the full effect of the price increase because of government controls. We have revised our estimates to incorporate the effect of the recent fall in the crude prices and the depreciating rupee. Based on our relative valuation, we have arrived at a target price of Rs 479, which provides an upside potential of 17%. Thus, we have upgraded our rating on the stock to Buy," says Indiabulls Securities' research report.

Stock Views on Rallis India, Orchid Chemicals, Welspun Gujarat

Emkay Global on Rallis India - Target of Rs 518

Emkay Global Financial Services has recommended a buy rating on Rallis India with a target of Rs 518 in its November 12, 2008 research report. "The company has shown a consistent growth in the past with improvement in the EBITDA margins, increased number of new launches, improving operational efficiency and increased thrust on exports. We believe that EBITDA margins of 15.5% will be sustainable in future with less pressure from raw material cost due to overall fall in the commodity prices."

"We expect EPS of Rs 52 and Rs 64.8 for FY09E and FY10E. The company also has ‘hidden assets’ like excess land bank and a minority stake in Advinus, one of the finest pharma research organizations in India. Based on this, we are revising our price target to Rs 518 (from Rs 550 earlier) which is 8XFY10E earnings with a BUY rating," says Emkay Global Financial Services' research report.

Reliance Money on Orchid Chemicals - Target of Rs 176

Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target of Rs 176 in its November 14, 2008 research report. "Orchid Chemicals & Pharmaceuticals Ltd (Orchid) reported 19% growth in consolidated revenues on a higher base to Rs 3484.5 million during Q2FY09. As per revised estimates, we expect the Revenue and profit (excluding forex loss) would grow at a CAGR of 15% and 16%, respectively during FY08-10E. Thus, the revised EPS (excluding forex loss) stands at Rs 14 and Rs 22.9 for FY09E and FY10E, respectively."

"But the positive part of Orchid is that FCCBs have sufficient time horizon for conversion and the company does not hedge its revenues, which could benefit the company from the weakening Rupee scenario in the near term. In line with our changed estimate based on consolidated numbers and in order to align our valuation with market valuation, we are revising our target price. In fact, to capture the market wide correction in valuations, we have reduced the earning multiple by 35% and revise target price to Rs 176 (i.e. 8x FY10E EPS),Buy," says Reliance Money's research report.

Asit C. Mehta on Welspun Gujarat - Target of Rs 190

Asit C. Mehta has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target price of Rs 190 in its November 13, 2008 research report. "WGSRL has an order book of USD 2 billion, which provides revenue visibility until FY10. Current orders sufice current capacity. As new capacity becomes operational, the company should attract orders. However, with the current global credit crisis we expect new orders to come in at a slower pace."

"We believe that the company will benefit in the near term on account of the capex it has incurred in the pipes segment. We therefore maintain a positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 190, which is equivalent to a P/E multiple of 5 times its FY10E EPS," says Asit C. Mehta'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.