Karvy Stock Views on Defensive Healthcare / Pharma - Part I - Dishman Pharma, Divis Labs, Wockhardt

Dishman Pharma - Target of Rs 310

Karvy Stock Broking has upgraded its rating on Dishman Pharmaceuticals & Chemicals to buy with a target of Rs 310 in its October 16, 2008 research report. "We expect revenues and earnings to grow at a CAGR of 31.4% and 27% from FY08 to FY10E driven primarily from the high margin CRAMS segment. We maintain our long term positive outlook on the company. Currently the stock is quoting at 12.5x FY 09E and 9.7x FY 10E. On account of contraction in valuations we revise our price target downwards by 18 % to Rs 310 based on P/E of 13.1.x FY10E. On account of price correction we upgrade our rating to BUY with a price target of Rs 310," says Karvy Stock Broking's research report.

Divis Labs - Target of Rs 1415

Karvy Stock Broking has upgraded its rating on Divis Laboratories to buy with a price target of Rs 1415 in its October 16, 2008 research report. "The net revenues of the company set to exhibit 25.7% CAGR growth from FY08 to FY10E on account of continued revenue traction. The earnings are expected to grow at a CAGR of 28.1% from FY08 to FY10E which is estimated at Rs 68.3 in FY09E and Rs 88.4 in FY10E. On account of recent price correction due to fall in markets the company is available at attractive valuations. We upgrade our rating to BUY with a price target of Rs 1415 based on a PE of 16x FY10E basis," says Karvy Stock Broking's research report.

Wockhardt - Target of Rs 200

Karvy Stock Broking has recommended a buy rating on Wockhardt with a target of Rs 200 in its October 15, 2008 research report. "Net revenues are expected to grow by 27% to Rs 9.4 billion. Profits for the quarter are expected to be down by 20 % at Rs 870 million. At fully diluted equity at current price the stock is quoting at 7.7x CY08E and 5.4x CY09E. On a multiple of 7x CY09 the stock would be valued at Rs 200. We rate the stock as a BUY," says Karvy Stock Broking's research report.

KRChoksey vliews on Tata Motors, IVRCL Infrastructure, Wockhardt, Dishman Pharmaceuticals

Buy Dishman Pharmaceuticals, target of Rs 356

KRChoksey Research has maintained its buy rating on Dishman Pharmaceuticals & Chemicals with a target price of Rs 355.8 in its August 1, 2008 research report. "In Q1FY09, the company’s sales have increased by 40.4% on a y-o-y basis to Rs 235.9 crore. The net profit of the company rose by 28.7% y-o-y to Rs 27.7 crore against Rs 21.5 crore."

"At the CMP of Rs 298.7, the stock is trading at 19.9x TTM EPS of Rs 15.0 and 13.0x FY09E EPS of Rs 22.9. We maintain our BUY recommendation with a target price of Rs 355.8, implying an upside potential of 21%. At the target price, the stock would be valued at 15.5x FY09E EPS of Rs 22.9," says KRChoksey's research report.

Buy Wockhardt, target of Rs 250

KRChoksey Research has maintained its buy rating on Wockhardt with a target price of Rs 250 in its July 31, 2008 research report. "In Q2CY08, the company’s sales have increased by 48.3% on a y-o-y basis to Rs 935 crore. The net profit of the company rose merely by 4% y-o-y to Rs 106.3 crore against Rs 102.4 crore."

"At the CMP of Rs 187, the stock is trading at 5.3x FY07 EPS of Rs 35.25 and 4.8x FY08E EPS of Rs 39.1. We maintain our BUY recommendation with a target price of Rs 250, implying an upside potential of 33%. At the target price, the stock would be valued at 6.4x FY08E EPS of Rs 39.1," says KRChoksey's research report.

Buy IVRCL Infrastructure, target of Rs 381

KRChoksey Research has maintained its buy rating on IVRCL Infrastructure and Projects with a target price of Rs 381 in its July 31, 2008 research report. "We expect IVRCL to register strong growth in top-line as a result of robust order book position providing revenue visibility over the next 2-3 years. Moreover, central and state government’s urge to develop irrigation projects augurs well for IVRCL having order backlog of Rs 9,800 crore (66.2% of total order book). However we anticipate pressure on operating and net profit margins in the immediate future due to increase in raw material and interest expenses."

"We therefore downgrade our target price from Rs 526 to Rs 381, however, maintaining a BUY rating. At the target price the stock would be valued at 21.5x FY09E EPS of Rs 17.72, implying an upside potential of 26.2%," says KRChoksey's research report.

Buy Tata Motors, target of Rs 634

KRChoksey Research has recommended a buy rating on Tata Motors with a target price of Rs 634 in its August 1, 2008 research report. "Net sales grew by 14.4% y-o-y to Rs 6928.4 crore against Rs 6056.8 crore in Q1FY08. The sales growth was on the back of 3.65% y-o-y growth in volumes and strong growth in the realizations of 10% y-o-y."

"We recommend a BUY on the stock with a target of Rs 634 arrived through the SOTP process. At the target price the company would be trading at 11x its FY09E EPS of Rs 57.47 representing an upside potential of 60% from current levels. These calculations, however, do not take into account the recent JLR acquisition which we believe would be strongly EPS accretive, as we are awaiting the numbers for JLR to be disclosed by Tata Motors to evaluate it," says KRChoksey's research report.