Stock views on Jain Irrigation, Ranbaxy, Jubilant Organosys

Karvy on Jubilant Organosys - Target Rs 165

Karvy Stock Broking has maintained its buy rating on Jubilant Organosys with a price target of Rs 165 in its research report.


"Jubilant Organosys Limited (Jubilant) has given clarification (announcement dt.26.02.09) on both FCCBs (Foreign Currency Convertible Bonds) buyback resource funding and discount rate on USD 11.1 million FCCB issue that was bought back earlier. Jubilant has repurchased its FCCB issue worth USD 59.4 million, of which USD 3 million from second issue worth USD 75 million and USD 56.4 million from third issue worth USD 200 million."

"The company has converted total USD 57.04 million, of which, USD 34.7 from first issue worth USD 35 million and USD 22.34 million from second issue worth USD 75 million. We are upgrading our price target by 3.13% to Rs 165 maintaining our PE multiple constant at 6.8x based on FY10E diluted EPS at Rs 24.4. We continue to rate the stock as a "BUY," says Karvy Stock Broking's research report.

Angel Broking on Ranbaxy Laboratories - Target Rs 277

Angel Broking has maintained its buy rating on Ranbaxy Laboratories with target price of Rs 277 in its research report.

"The USFDA has invoked Application Integrity Policy (AIP) on Ranbaxy's Paonta Sahib facility citing that the company has falsified data and results in approved and pending ANDA filed from the facility. Prior on September 16, 2008, the USFDA had issued two warning letters and instituted an Import Alert barring entry of all finished drug products and active pharmaceutical ingredients (API) from Ranbaxy's Dewas, Paonta Sahib facilities due to violation of US current Good Manufacturing Practices requirements."


"The Ranbaxy stock has slipped by 18% post announcement of the USFDA action. We maintain a Buy on the stock, with a Target Price of Rs 277 wherein the Core business is valued at Rs 178 giving it a fair P/E of 16x CY2009E Core Earnings of Rs 11.1, Rs 24 for the Non-Core Income and NPV Rs 75 is ascribed to the FTF opportunities available to the company," says Angel Broking's research report.


IIFL on Jain Irrigation - Target Rs 377

IIFL has recommended a buy rating on Jain Irrigation with target price of Rs 377 in its research report.

"Our recent meeting with JISL’s management indicated that:
(a) the company has scaled back its capex estimates to Rs 1.5 billion annually from Rs 2 billion earlier; and
b) the company’s leverage levels (debt/equity) should decline over the next couple of years, following the company’s scaling back of capex and improvement in working capital conditions.

Furthermore, despite 60% of JISL’s long-term debt being denominated in forex, the rupee’s depreciation does not pose the threat of an imminent cash loss, since most of this is repayable during FY11-13.

The company is in talks with IFC to raise longterm funds of USD 30 million, of which USD 15 million could be in the form of equity (implying dilution of 2.8% at CMP). This should cushion the company’s debt/equity, taking peak net debt/equity to 0.9x. We remain bullish on growth in the micro-irrigation segment and expect 25% earnings CAGR for the company during FY09-11ii. Buy, target price of Rs 377," says IIFL's research report.