Bonanza views on Jagran Prakashan, NHPC

Bonanza on Jagran Prakashan - Target Rs 120-122

Bonanza research is bullish on Jagran Prakashan and has recommended buy rating on the stock with a target of Rs 120-122, in its research report.

“Jagran Prakashan, JPL is among the largest print media houses in India. Its flagship brand Dainik Jagran is the largest circulation newspaper in India. The scrip is at discount to the recently concluded IPO of peer DB Corp. It is likely to show an EPS of Rs 7 per share in FY10. At CMP, it trades at 17 PE on FY10 estimates. Investors may BUY in Rs 120-122 range for a target of Rs 140 i.e. 20 PE on FY10 estimates,” says Bonanza research report.

Bonanza on NHPC - Target Rs 38

Bonanza research has recommended buy rating on NHPC with a medium term target of Rs 38, in its research report.

“NHPC is India’s largest Hydro Power Company. It is adding capacities at regular intervals. If Govt allows it to sell power on merchant basis, its earnings can grow substantially. In the present scenario, we expect NHPC to report a consolidated EPS of Rs 1.2/Share. Its Consolidated Cash EPS is likely to be Rs 2/Share. At CMP, it trades at PE of 17.8 and Cash PE of 14. The scrip had fallen sharply from its issue price of Rs 36. Share may face stiff resistance at Rs.36. The scrip is expected to appreciate steadily over a period. Long term investors may buy around current levels, for a mid term target of Rs 38,” says Bonanza research report.

Stock views on Pidilite Industries, Hero Honda, Punj Lloyd

Bonanza on Pidilite Industries - Target Rs 195

Bonanza has recommended a buy rating on Pidilite Industries, with price target of Rs 195, in its report.

"Pidilite Industries is a dominant player in the adhesive and sealant market in India. The company cleared all the highcost inventory of raw materials, the low-cost inventory of raw materials together with price increases boosted OPM 510 bps to 23.3% in Q1 of FY 2010. Thus, strong brands enable the company to generate better sales and margin, baring short-term aberration. Going ahead with crude derivatve still priced lower, we expect the company to post better OPM for FY10. The company is about to start off its manufacturing operations at Bangladesh and African plants by later this. We have projected sales from these facilities with a lag effect of six months. We have projected that the company would post an EPS of 9.93, which is a conservative estimate in view of Q1FY10 EPS of 3.3. At this EPS the company is trading at an earning multiple of 14.1x. We recommend investors to buy the counter in 135-145 range with a target of Rs 195 in medium term," says Bonanza's report.

Motilal Oswal on Hero Honda - Target Rs 1762

Motilal Oswal has maintained its buy rating on Hero Honda Motors, with price target of Rs 1762, in its report.

"We like Hero Honda due to its dominant position in the two-wheeler market, multiple earnings drivers, 31% EPS CAGR (FY09-11) and strong balance sheet with net cash of Rs 257 per share in FY10 and Rs 342 per share in FY11. We maintain FY10 earnings estimates at Rs 100 (56% growth) and for FY11 at Rs 110.2 (10% growth). The stock trades at 15.1x FY10E EPS and 13.7x FY11E EPS. Maintain Buy with target price of Rs 1,762 (16x FY11E EPS)," says Motilal Oswal's report.


Bonanza on Punj Lloyd - Target Rs 300

Bonanza has recommended a buy rating on Punj Lloyd with a target price of Rs 300 in its research report.

"Punj Lloyd provides services to develop infrastructure for a host of industries. It lays down pipelines, tanks and terminals, refineries, power and civil infrastructure projects etc. The company had tough period in later half of FY2009. As global sentiments have turned positive, better performance is expected in FY10. It is likely to report a consolidated EPS of Rs.20/Share. At CMP Rs.255, it trades at 12.6 PE on forward earnings. Investors may BUY in range of Rs.245- 255 for a target of Rs.300 i.e. about 15PE on FY 10 estimates," says Bonanza's research report

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 South Indian Bank, Dabur India, Bank Of Baroda

ULJK Securities on Bank Of Baroda - Target of Rs 384


ULJK Securities has recommended a buy rating on Bank Of Baroda with a target price of Rs 384 in its research report.

"Bank of Baroda has posted a positive improvement in its return ratios driven by robust growth in the top line particularly non interest income. Asset quality of the bank also improved and the Gross NPA level now stands at 1.5%. Improvement in ROA will lead to an improvement in ROE, which we believe result in re rating for the stock. Looking at its sustainable growth prospect and attractive valuation, We recommend “BUY” on the stock with a target price of Rs 384 for a medium to long term horizon," says ULJK Securities' research report.


Bonanza on South Indian Bank - Target of Rs 55


Bonanza has recommended a buy rating on South Indian Bank with a price target of Rs 55 in its research report.

"South Indian bank is mid-sized private sector bank. It serves niche market of NRIs and their families in India. SIB is growing at brisk pace. The bank has shown decent performance. Its profits have grown very well, from Rs 8.7 crore in FY 2005 to Rs 153.39 crore in FY 2008, a growth of 260% compounded. It has also shown very good improvement in Assets quality. Its Net NPA stand at 0.4% presently, down from 3.81% in FY 2005.It is likely to report an EPS of Rs 16.8 in FY 09. Investors can buy at CMP Rs 46 for a target of Rs 55 i.e. PE of 3.3," says Bonanza's research report.


IIFL on Dabur India - Target of Rs 111


IIFL has maintained its buy rating on Dabur India with target price of Rs 111 in its research report.

"Dabur has put its beauty and wellness retail venture ‘new-u’ on the block. The company has mandated Grant Thornton to find a buyer for the retail chain. We had anticipated this move by the management, given the poor response to the chain, weak positioning and the overall operating environment, which has turned extremely tough for retailers. This is a move in the right direction, though finding a buyer may not be easy in the current environment. Retail losses will no longer be a drag on overall profitability. Accumulated losses on the venture add up to Rs 220 million over an investment of Rs 416 million over the past two years. We reiterate 'BUY' with target price of Rs 111," says IIFL's research report.

Stock Views on Bank of Maharashtra, Kirloskar Oil Engines, Glenmark Pharma

Bonanza on Bank of Maharashtra - Target of Rs 25
Bonanza has recommended a buy rating on Bank of Maharashtra with a target of Rs 25 in its research report.


"Bank of Maharashtra is a mid-sized PSU bank, with branches concentrated in Western India. Bank has controlled its NPA very well. Its NPA levels are at 0.82%. The bank enjoys high CASA of about 38%. Investors can Buy with a target of Rs 25 i.e. about 3PE based on FY09 EPS of Rs 8.23," says Bonanza's research report.


Reliance Money on Kirloskar Oil Engines - Target of Rs 69


Reliance Money has recommended a buy rating on Kirloskar Oil Engines with a target price of Rs 69 in its research report.

"Kirloskar Oil Engines Ltd (KOEL) has announced the demerger of Engine and Auto Component business of the Company into Kirloskar Engines India Ltd (KEIL). In our earlier report dated 28th January 2009 we mentioned that demerger of investments on the books would be beneficial for the investors as it would reflect fair value of core business. In continuation of the same view and considering the potential upside of its strategic investments made in various group and associate companies, we believe after the de-merger KOEL stock to trade at 1x of book value Rs 25."

"We believe the industry would revive only after the increase in capex by these respective user industries. Considering the outlook on the industry and company we estimate the value of KEIL to be around Rs 44. We estimate ROCE of KEIL to be 28% for FY09E which is considerably higher compared to ROCE of 16% for FY09E. We upgrade our recommendation on the back of announcement of demerger of its core business (engines and auto components) into separate company to BUY with a target price of Rs 69 which offers an upside of 23% from current level," says Reliance Money's research report.


Sharekhan on Glenmark Pharma - Target of Rs 270

Sharekhan has recommended a buy rating on Glenmark Pharma with a price target of Rs 270 in its research report.

"Glenmark has borne the brunt of the ongoing economic and financial crises that have resulted in a slowdown in its business across international geographies. The company has been hit by several negative developments right from the failure of GRC 6211, concerns over its ability to meet guidance, uncertainty over outlicensing income and the policy to refrain from providing guidance. Despite the recent disappointments, we continue to like Glenmark’s business model, which is focused on differentiated niche products."

"We remain confident about Glenmark’s future prospects, both in relation to the scaled-up potential of its core generic and branded formulation businesses and its ability to monetise and extract value out of its R&D assets. We upgrade our recommendation on the stock to a Buy with a price target of Rs 270 (12x FY2010 core earnings for base business plus Rs 60 per share for the R&D pipeline)," says Sharekhan's research report.

Stock views on Suzlon Energy, KEC International, Mphasis

Anagram Research on Suzlon Energy - Target of Rs 60
Anagram Research has recommended a buy rating on Suzlon Energy with a target price of Rs 60 in its research report.

"In the last 2 years, Suzlon has traded in the range of 16 to 65 times its earnings. Whereas Vestas and Gamesa have traded in the range of 25 to 73 and 24 to 42 respectively. Historically the companies in the wind energy market have traded at high P/E levels primarily due to expected high growth of the industry. Furthermore the recent decline in the stock price of Suzlon presents an excellent opportunity for investment in the company."

"We believe Suzlon will continue to command high P/E on account of better growth prospects, well placed among peers & due to planned backward integration leading to higher margins in the future. We believe most of the bad news has already been factored in the stock price. While the long term story for the Wind Energy sector is intact and Suzlon has done well to survive amongst adversity. We recommend BUY rating on the stock with a target price of Rs 60 in 12 month period," says Anagram's research report.


Bonanza on KEC International - Target of Rs 147

Bonanza has recommended investors to buy KEC International on dips near 105-110 levels, for a target of Rs 147 in its research report.

"A RPG group company KEC is leading tower & transmission line EPC contractor. The Power sector is its main customer. It has order book of Rs 5000 crore, out of which over 70% is from overseas. It is executing orders in 15 countries presently. Given the visibility in earnings the scrip looks a good mid-term investment pick. At CMP, it trades at about 5.5 PE based on FY 09 Estimated EPS of Rs.21.7. Investors can buy on dips near 105-110 levels i.e. 5X PE, for a target of Rs 147 i.e. at PE multiple of 7," says Bonanza's research report.


Emkay Global on Mphasis - Target of Rs 240

Emkay Global Financial Services has maintained its buy rating on Mphasis with a price target of Rs 240 in its research report.

"Mphasis’s strong parentage of HP-EDS has helped it sustain high growth rates in the recent past and we believe that would continue to provide strong support in a tough demand environment. We highlight that Mphasis’s ITO business’s growth is driven by restructuring of EDS’s existing ITO contracts as the new contracts incorporate significant offshore ramp up in Infrastructure outsourcing."

"We highlight that the erstwhile EDS management (prior to the HP takeover) had categorically attributed its improved success rate in new deal wins/renewals to Mphasis’s offshore strength and had indicated that those deals had a substantial offshore component. We believe Mphasis remains the ‘Best Demand’ story in a tough macro environment helped by it’s strong HP-EDS parentage. Maintain BUY with a price target of Rs 240," says Emkay Global Financial Services' research report.

Stock views on Jaiprakash Associates, Jubilant Organosys, Bharat Electronics

Bonanza on Jaiprakash Associates - Target Rs 96

Bonanza has recommended a buy rating on Jaiprakash Associates with a target of Rs 96 in its research report. "The company's net sales were at Rs 1380.6 crore versus Rs 942.88 crore. Its other income was at Rs 66.5 crore versus Rs 58.7 crore. Its operating profit was at Rs 306.2 crore versus Rs 265.91 crore. Its OPM % was at 22.18% versus 28.2%. We recommend investors to buy on the counter with a target of Rs 96 in the medium term," says Bonanza's research report.


Emkay Global on Jubilant Organosys - Target Rs 187

Emkay Global Financial Services has maintained its buy rating on Jubilant Organosys with a target price of Rs 187 in its research report. "Jubilant Organosys Q3FY09 revenue was up by 42% to Rs 9.1 billion, in line with our expectations. Robust growth in revenues is driven 54% growth in Pharma and Life science (P&LS) on the back of 81.6% and 49.6% growth in DDDS and CRAMS segment. We maintain BUY with a target price of Rs 187," says Emkay Global Financial Services' research report.


Indiabulls Securities on Bharat Electronics - Target Rs 994

Indiabulls Securities Research has downgraded its rating on Bharat Electronics (BEL) from buy to hold with a target price of Rs 994 in its research report. "Bharat Electronics Limited (BEL)’s Q3’09 revenue moved up a meager 1.8% yoy to Rs. 6.84 billion, compared with a 10.1% yoy growth in the last quarter. Given the slow execution rate in 9M’09, we have reduced our revenue target for FY09 from 8.4% to 6.8%. However, we have upwardly revised our revenue target post FY10 as we believe the current concerns relating to the domestic security should significantly increase the demand for defence and security equipments. Consequently, we have increased our target price from Rs. 816 in our last report to Rs. 994, based on the DCF valuation and assuming a 16.2% WACC and a 5% terminal growth rate. Therefore, we have downgraded our rating from Buy to Hold," says Indiabulls Securities' research report.

Bonanza Portfolio Views on Large cap Banking Sector

STATE BANK OF INDIA

The bank is the largest commercial financial organisation in India. M&A among SBI group banks have started, with State Bank of Saurashtra merging into SBI. In view of growth potential of Indian economy and under banked status of the masses, with rising incomes & purchasing power, SBI has good potential going forward. The government has given strong signals of the economy heading for softer interest regime.

HDFC

The company has shown constant growth in past three decades. It is able to maintain margins in spite of slow down shown by industry. There is visibility in its earnings and growth. India is heading for softer interest regime as government is infusing more liquidity to over come the glut in economy. Further, the scrip has hidden value of about Rs 800 per share in form of its investments and subsidiaries.