Stock Views on Allahabad Bank, Unitech, Torrent Power

Karvy on Torrent Power - Target Rs 270

Karvy Stock Broking has recommended a buy rating on Torrent Power with a target price of Rs 270 in its research report.

"Revenues for the quarter were up by 23.2 % to Rs 4810 million. Domestic formulations continue to outperform the industry with growth rate of 15.4 % for the quarter to Rs 1987 million. We increase our operating margins estimates from 17.6 % and 17.9 % on account of better gross margins and lower overheads in majority of the markets to 19.1 % and 19.2 % respectively for FY 10E and FY 11E respectively. We increase our EPS estimates for FY 2010 by 12.4 % to Rs 28.8 and by 13.6 % to Rs 33.3 for FY 2011E. On account of upgrade in EPS we upgrade our price target by 15 % to Rs 270 based on 8.1x FY 2011E. We continue to rate the stock as 'BUY'," says Karvy's research report.

IIFL on Unitech - Target Rs 102

IIFL has maintained its add rating on Unitech with a price target of Rs 102 in its report.

"Unitech reported revenue growth of 33.5% QoQ in 1QFY10, ahead of our estimate. PAT came in at Rs1.6 billion, after operating losses in 4QFY09. Unitech has sold 6.9m sq ft since March for a total consideration of Rs27 billion. Even more creditable is the mix of its sales—Rs18 billion from residential (5,000 apartments) and Rs9bn from commercial verticals. It has cut debt by Rs 20 billion from the proceeds of the two QIPs, asset sales and promoter warrants. It has tripled the execution staff in its pre-sold projects to accelerate deliveries. It is also rolling back prices for existing buyers in Grande in Noida and Nirvana Floors in Gurgaon; this, we believe, will boost customer goodwill. We have upgraded revenue and PAT estimates for FY10 by 13% and 12% respectively, to account for better-than-anticipated ramp-up in execution. We maintain ADD with a target price of Rs102/share, at 5% discount to 1-year forward NAV," says IIFL's report.


Bonanza on Allahabad Bank - Target of Rs 116

Bonanza has recommended a buy rating on Allahabad Bank with a price target of Rs 116 in its report.

"Allahabad Bank has shown good results in Q1 FY10. Bank’s total interest income has increased by 18%, whereas Interest Costs have gone up by 11.6%. Bank’s Gross NPA has marginally increased from Rs 1078 crore in Q4 FY09 to Rs 1093 crore in Q1 FY10. Net NPA are down from Rs 419 crore in Q4 FY09 to Rs 220 crore, as bank has recovered NPAs. Its GNPA are at 1.79% in Q1 FY10 down from 2% in Q1 FY09 and Net NPA are at 0.37% down from 0.8% in Q1FY09. The need for provisioning may go down in future. Allahabad Bank has given good results in Q1 FY10. We revise our earlier EPS estimates from Rs 23/Share to Rs 29/Share. At CMP Rs 86, it trades at 2.9 PE. Investors may 'BUY' at CMP, for a target of Rs 116 i.e. about conservative 4 PE on FY10 estimates, “ says Bonanza's research report.

Stock Views on Allahabad Bank, Wipro, ICICI Bank

Maximus Securities on Allahabad Bank - Target Rs 105

"At the current price of Rs 75.50 the scrip discounts its estimated EPS of FY10 by 3.08x. The scrip is currently trading at a PE ratio of 4.39x and P/BV ratio of 0.68x which is at a discount of 45% and 10% to the industry average respectively. With the pick up in credit demand particularly in infrastructure and home loan segment, the business of the Bank is expected to grow at 20-21% in FY10. However NIM is likely to be affected with reduced lending rates which may affect the profitability of the Bank in the coming year. But the Banks target of 40% CASA ratio will help to maintain NIM at 2.75% at the end of FY10. With restructured accounts in the balance sheet, rise in NPAs remains a concern. However the fact that the Bank is adequately capitalized, provides cushion in case NPAs rise. We recommend a “BUY” on Allahabad Bank with a target price of Rs 105 and an investment horizon of one year," says Maximus Securities' report.

Sharekhan on ICICI Bank - Target Rs 781

"ICICI Bank’s loan book growth has decelerated sharply in the last three years with FY2009 marking the first instance of contraction in the loan book. The root cause of this decelerating trend in the loan book growth is the slowdown in the retail segment. The slowdown in the retail segment is partly due to the weakening demand and partly due to the management’s objective of re-balancing its loan portfolio following an uptick in delinquencies. At the current market price of Rs 733, the stock trades at 17x its FY2011E earnings per share (EPS) and 1.5x its FY2011E book value (BV). While we are maintaining our earnings estimates, we are revising our price target to Rs 781 based on our FY2011 estimates. We maintain our Hold recommendation on the stock,"

Bonanza on Wipro - Target Rs 500

"Wipro is the second largest IT service vendor in the Indian Market behind IBM. We expect the company to leverage its strong presence in India and continue to bag multiple contracts in the coming months, which would aid Wipro in reporting incremental revenues in the coming years. The company has bagged Six and a Half year contract worth Rs 1182 crore from Employee State Insurance Corporation. Order worth Rs 200 crore from LIC. Company bagged order from Unitech wireless executable over a period of Nine years for an undisclosed sum. Company has reported a growth of more than 28% in its topline for FY09."

"Going ahead, with orders form Indian Sector improving and Clients in US and Europe also seeking a reduction in cost and opting for out sourcing Company’s topline is expected to improve in the coming years and expansion of profit margins can also not be ruled out. At current market price the stock is trading at an earning multiple of 13.89 x for TTM EPS of 26.64. We recommend investor to gradually accumulate the scrip on dips near Rs 395 with a target of Rs 500 in the medium term," says Bonanza's report.