Stock views on Upper Ganges Sugar, Bajaj Hindusthan, Repro India

Fairwealth Securities on Upper Ganges Sugar - Target Rs 150

Fairwealth Securities has recommended buy rating on Upper Ganges Sugar with a target of Rs 150 in twelve month perspective, in its research report.

“Sector:
a) Prices at 25 cents/pound are ruling at 28 year high up by more than 80% this year but lower than their all time high of 66 cents/pounds.
b) Sugar is only commodity which is a combination of 3 in 1 industry, namely FMCG, Power and Chemical.
c) Supply is diminishing due to draught and wrong government policies in India. Demand supply mismatch stands at record high 7-10 million tonne per year.
d) Regular increase in demand year after year thereby putting a pressure on supply, resulting in adjustment of sugar prices.
e) Little scope for increasing supplies in next one year. “

“Upper Ganges Sugar & Industries growing with vision under the leadership of KK Birla Group Company, the business possesses huge management expertise. Major expansions already done to take benefit of the current bull run. Strong vision for the future. Company’s gross revenue on TTM basis grew by 40 % to Rs 479 crore in Q2FY10 as against Rs 341 crore previous year (Q2FY09). Company reported PAT of Rs 12.55 crore on TTM basis (Q2FY10) as against the loss of Rs 3.48 crore previous year (Q2FY09). Long term investors can buy above closing of 95 with a target of Rs 150," says Fairwealth Securities research report.


Karvy Stock Broking on Bajaj Hindusthan - Target Rs 252

Karvy Stock Broking has recommended outperformer rating on Bajaj Hindusthan with a target of Rs 252, in its research report.

"For full year ended on September 2009, Bajaj Hindusthan, BHL (Consolidated) reported revenue decline of 2.1% to Rs 20.25 bn mainly due to ~19% decline in sugar sales to 0.81 mn mt during the year. The average realization improved by ~22% to Rs 21 per kg in FY09. The company reported loss of Rs 82.2 mn in FY09 as compared to loss of Rs 301 mn in FY08."
"For FY10 estimates, we have revised cane cost upward by 15.6% to Rs 2,142 per mt considering increase in sugar prices and shortage of sugar cane. We have maintained our sugar sales volume estimates to 1.24 mn mt. We have changed our average sugar realization estimates upward by 6.5% to Rs 31.4 per Kg. We have revised revenue estimates by 4.5% to Rs 42.74 bn and expect the company to report profit of Rs 3.47 bn (previous Rs 3.69 bn) in FY10. The book value has been revised from Rs 264 to Rs 288 per share considering issue of 35.4 mn shares at premium of Rs 203 in July 2009. We maintain our valuation based on average of 2xBV and 11xFY10 earnings. We have revised valuation from Rs 246 to Rs 252 per share and maintain Outperformer rating," says Karvy Stock Broking research report.

Sushil Finance on Repro India - Target Rs 146

Sushil Finance is bullish on Repro India and has recommended buy rating on the stock with a target of Rs 146, in its research report.

“Repro India is an integrated print service solution provider. It prints Educational Books, Children’s Books, Catalogues & Magazines and Annual Reports. The company’s print services ranges from creative & designing, sourcing & procurement, printing & production, warehousing, assembly & dispatch to customer promotions. Repro has already built up overseas presence & Exports about 55% of its revenues. They have relationship based businesses with large publishers in UK, USA and Africa.”

“Given its strong positioning in the value added print segment, effective marketing network, efficient operations, consistently improving performance & ensuing growth from the expansion over the next 2-3 years, we expect Repro to post an APAT growth of 19% in FY10 & 25% in FY11. At the CMP, the stock trades at an attractive valuation of 4x its FY11E earnings & P/BV of 0.7x FY11E,” says Sushil Finance research report.

Stock views on Bajaj Auto, Unity Infra, CMC

Sharekhan on Bajaj Auto - Target Rs 1695

Sharekhan is bullish on Bajaj Auto and has recommended buy rating on the stock with a target of Rs 1695, in its research report.

"Bajaj Auto recently launched the new Pulsar 135 cc bike to further strengthen its position in the 125+cc segment. The new Pulsar 135 LS, powered with a four-valve DTS-i engine, is competitively priced at Rs51,000 (ex-showroom Delhi) and has a mileage of 68 kilometre per litre (kmpl; as certified by the Automotive Research Association of India), which is good considering the engine capacity of 135cc. With the increase in our volume estimates for the motorcycle segment, our overall volume growth estimates for FY2010 and FY2011 stand revised to 27.2% and 14.2% respectively. In line with this, we have revised upwards our earnings per share (EPS) estimates for FY2010 and FY2011 from Rs108.9 and Rs114.3 earlier to Rs114.8 and Rs127.1 respectively. However, a probable increase in the excise duty in the forthcoming budget and a sharper than expected increase in raw material prices remain the key risk to our estimates."

"At the current market price, the stock is trading at 13.3x its FY2011E earnings of Rs127.1 and enterprise value (EV)/earnings before interest, tax, depreciation and amortisation (EBITDA) of 8.1x. On the back of the upgrade in our earnings estimates, our price target stands revised to Rs1,907 (15x FY2011E EPS) and considering the significant upside from the current market price of Rs 1,695, we upgrade our recommendation to Buy from Hold earlier."


Sharekhan on Unity Infra - Target Rs 569

Sharekhan is bullish on Unity Infraprojects and has recommended buy rating on the stock with a target of Rs 569.

"Unity Infraprojects (Unity) has raised Rs 73 crore by private placement of 14.5 lakh shares with qualified institutional buyers at the price of Rs506 per share. The proceeds from the qualified institutional placement (QIP) is expected to be utilised by the company to partly fund its capital expenditure (capex) and to meet its working capital requirement."

"Given the strong order intake in M9FY2010 and expected lower interest cost, we are upgrading our order book estimates and hence PAT estimates for FY2010 and FY2011 by 5% and 18% respectively. Further the lower than expected earnings dilution will result in our revised EPS getting upgraded by 7% for FY2011. Hence, we are increasing our price target to Rs 569 and maintain our Buy recommendation, as we feel the stock is attractively valued. At current market price of Rs 506, the stock trades at 8.9x and 7.1x its FY2010 and FY2011 diluted earnings respectively."


Fairwealth Securities on CMC - Target Rs 1530

Fairwealth Securities has recommended buy rating on CMC with a target of Rs 1530, in its research report.

“CMC synergistic relationship with TCS, CMC is gearing itself in IT industry. In embedded systems, the Company is seeing growth in US, UK and Europe. In Government segment, the Company is seeing traction in treasury management, HRMS systems for various states, energy sector (APDRP, billing), GST related migration. In private sector, the Company is expecting growth from Insurance and Financial sector (depository product), banks. The Company has a good base in Insurance space with 80% of market. The Company would be focusing on the transportation vertical, in e-Governance space with TCS and in Defense space. In the private space it is looking at cross-selling solutions & services. The Company is seeing new services like video surveillance, identity management and large corporate are going for offshore. The company would be re-looking at its franchisee business in E&T SBU. The Company is seeing growth in corporate training business. The Company is focusing on value added services and cost effective niche solutions as CMC already has a rich portfolio of industry specific assets.”

“Phase I of the SEZ has been completed. Phase II would be completed by June 2011 with a capex of Rs 155 crore over 2 years. The Company won defense contract in Q2FY2010 which will improve margins in future as these contracts are all long term contracts. The average deal size is Rs 5 – 10 crore with engagement of 2-3 years. SI with 41.43% PBIT margin in Q1FY10, we see scope of tremendous growth in this SBU which going forward will improve margins for company. Its Egovernance business has a huge potential for growth. Company expects operating profit margin to grow to 20% in next 6-12 months. Presently its stands at 18%, highest ever for the company,” says Fairwealth Securities research report.

Stock Views on Ipca Labs, Moser Baer, Tech Mahindra

Karvy on Ipca Labs - Target of Rs 740

Karvy Stock Broking has recommended a buy rating on Ipca Laboratories with a price target of Rs 740 in its report.


"We have marginally upgraded our FY10 estimates despite downgrade in API exports on back of negligible intermediate revenues. The company should manage a 20 % revenue growth on a higher base of revenues compared to our estimates. We have reduced our revenue R & D estimates by factoring in additional cost of Rs 100 mn in FY 2010 compared to Rs 150 mn additional cost earlier. Due to company's hedging of 43 % of FY 10 revenues at Rs 47.5 and conversion of majority of loans to rupee loans the company would not have forex loss at current rates."

"The company has basically set off forex loans against receivables, hence the company would not be having any balance sheet losses. The stock is currently quoting at 14x FY 2009E and 7.6x FY 2010E. We revise our earnings for FY 2010 upwards by 5.2% to Rs 74.4. As a result of the re-rating and upgrade in earnings we revise our multiple from 7.4x to 10x and assign a price of Rs 740. We continue to rate the stock as a 'BUY'," says Karvy Stock Broking's report.


Fairwealth Securities on Moser Baer - Target Rs 160

Fairwealth Securities has recommended a buy rating on Moser Baer with a price target of Rs 160, in its report.

"We initiate a buy call on Moser Baer, on basis of huge potential in its PV business, stabilizing sales in Optical discs and increasing share in high margins Blu-Ray and DVD format production. Also positive Operational cash flows and stable balance sheet is a trigger for the company. Moser Baer is a potential multi bagger which can give huge returns if the technology company is betting on (Thin film PV cells) establishes itself as best cost PV cells. Company as well as experts expect PV to achieve Grid parity within next couple of years. Besides Moser Baer there are many other players in the country which are betting huge on this business like Videocon and Reliance, but Moser Baer, one of the earliest entrants into the business is likely to get maximum benefit due to its manufacturing capabilities and expertise in high end technology work. We initiate a buy call on Moser Baer, with a target price of 160. We recommend Risk averse (avoiding) investors to ignore this stock," says Fairwealth Securities' report.


IIFL on Tech Mahindra - Target of Rs 635


IIFL has upgraded its rating on Tech Mahindra to buy with a 12-month price target of Rs 635 in its report.

"Stability at Satyam's client base after a spate of client losses, Anand Mahindra and other senior management meeting with clients to assure them of business continuity and aggressive and quick cost cutting make us believe that odds are turning in favour of Tech Mahindra’s management to effect a turnaround at Satyam. Undoubtedly there are a number of risks and roadblocks on the way for steady growth to begin and potential legal liabilities are unknown. However, we believe the current valuations (including Satyam’s contribution) of <1x EV/sales and 7.5x FY11 p/e already reflect these concerns and risk /reward is in favour of Tech Mahindra. We upgrade Tech Mahindra to a 'BUY', based on 7.5x FY12ii EPS, with 12-month price target of Rs 635," says IIFL's report.