Stock Views on Godawari Power & Ispat, Divis Lab, Lupin

Karvy on Godawari Power & Ispat _ Ttarget Rs 128

"The stock is trading at 0.6x its FY09 & 0.55x its FY10 BV. We revise FY10 earning estimates by 6% on account of change in MAT rate. However, we retain our valuation of 0.8x FY10 BV and target price of Rs 128/share. However, due to recent correction in stock price, we revise our rating from out performer to 'BUY'," says Karvy Stock Broking's report.

Emkay Global on Lupin - Target Rs 980

"Since this is a sub-judice matter, it is difficult to take a call which way the judgment goes? However, by the spirit of the matter taken up by the EU authorities and chronology of events leading to out of court settlement raises an iota of doubt about the intention of settlement between innovator (Servier) and Lupin. At the moment, we can not estimate the exact loss; therefore impact on financials can not be assessed. In worst case scenario, this event will lead to one time charges, which could be as high as Rs 3.7 billion (10% of FY09 revenue). Hence, we continue to maintain our Buy rating with a target of Rs 980," says Emkay Global Financial Services' research report.

Sushil Finance on Divis Lab - Target Rs 1490

"In spite of the economic slowdown, DLL has managed to maintain its above average industry margins in FY09. DLL does expect some pressure on its Custom Chemical Synthesis Business (CSS) business but is banking on API sales of Levirecetam, lopamidol & nabumetone which will offset the slowdown in other businesses. Seeing the growth prospects & above industry average margins the stock deserves to trade at higher multiple. At the CMP of Rs.1160, the stock trades at 13.3x its FY11E earnings. It has recommended buy rating on the stocks, target of Rs 1490," says Sushil Finance's research report.

Angel Brocking Views on Godawari Power, Sun Pharma, Glaxo Pharma, Alembic

Godawari Power - Target Rs 115
Angel Broking has maintained its buy rating on Godawari Power & Ispat with a target of Rs 115 in its October 24, 2008 research report. "Godawari Power & Ispat’s (GPIL) Top-line grew 86% yoy to Rs 331 crore (Rs 178.2 crore) in 2QFY2009. The company’s Bottom-Line surged 48.3% to Rs 31.8 crore (Rs 21.4 crore). We have revised our FY2009 and FY2010 estimates including our realisation assumption as we believe that prices across its products have peaked out. Growth in Bottom-line is expected to be slower owing to 494bp Margin contraction factored in by us. At the CMP, the stock is trading at 2.0x FY2009E and 1.8x FY2010E EPS and 0.4x FY2010E P/BV. We maintain a Buy on the stock, with a revised Target Price of Rs 115 (Rs 280)," says Angel Broking's research report.

Sun Pharma - Target Rs 1600

Angel Broking has upgraded its rating on Sun Pharmaceutical Industries from neutral to buy with a target of Rs 1600 in its October 24, 2008 research report. "The company posted Net Sales of Rs 1,177.8 crore registering yoy growth of 82.2%. Robust Sales growth along with expansion in Operating Margins aided Net Profits to end the period at Rs 512.8 crore yoy surging by 134.4%. In FY2008, Sun Pharmaceuticals clocked robust growth following launch of FTF products."

"Going into FY2009, the company would see potential upsides from Pantaprazole and Amifostine. Sun has maintained its guidance of 25% rise in its US business, while ex-USA regions are expected to deliver 18-20% growth. On the back of robust 1HFY2009, we have upgraded our Net Profit numbers for FY2009 and FY2010 by 34% and 23%, respectively. On the valuation front, at the CMP, the stock is trading at 13.9x FY2009E and 15.2x FY2010E Earnings. We upgrade the stock to Buy from Neutral, with a Target Price of Rs 1,600," says Angel Broking's research report.

Glaxo Pharma - Ttarget Rs 1250

Angel Broking has maintained its buy rating on Glaxo Pharma with a target of Rs 1250 in its October 24, 2008 research report. "Advent of the Product Patents Regime in India is more beneficial for MNC Pharmaceutical companies in the long run. Glaxo, which has a strong parentage, is our preferred pick in the MNC Pharmaceutical space on the back of management’s commitment to launch its products through its listed arm. This is evident from the 9 product launches that the company plans to carry out through its listed entity. On the valuation front, at Rs980, stock is trading at 19.0x CY2008E and 16.9x CY2009E Earnings. Including the significant cash on the books (constitutes around 18% of market capitalisation), the stock is trading at 15.4x CY2008E and 13.7x CY2009E Earnings, which we believe is attractive. We maintain a Buy on the stock, with a Target Price of Rs 1,250," says Angel Broking's report.

Alembic - Target Rs 44

Angel Broking has maintained its buy rating on Alembic with a target of Rs 44 in its October 24, 2008 research report. "For 2QFY2009, Alembic posted Net Sales of Rs 344.7 crore registering a growth of 13.1%. During 2QFY2009, the company posted Net Profits of Rs 15.0 crore, substantial part of which came on the back of Rs 22.5 crore forex losses booked by the company. Alembic has re-aligned its business model to leverage the opportunities available in the Pharmaceutical sector."

"Over the years, the company has also invested in R&D and built infrastructure to cater to the Regulated markets. The company is now through with its investment phase. The company’s 1HFY2009 performance has been impacted by forex losses on account of which we have pruned our FY2009 and FY2010 estimates by 54% and 23%, respectively. At Rs 27, stock is trading at 8.0x FY2009E and 4.2x FY2010E Earnings. We maintain a Buy on the stock, with a Target Price of Rs 44," says Angel Broking's research report.

Godawari Power, Country Club, Idea Cellular

Karvy Stock Broking on Godawari Power - Target of Rs 260

Karvy Stock Broking has maintained its buy rating on Godawari Power & Ispat with a target of Rs 260 in its September 26, 2008 research report. "Godawari Power & Ispat (GPIL) has recently announced its plan for setting up 1000 MW thermal power plant in Chhattisgarh. Godawari Power Ltd, a subsidiary of GPIL signed a Memorandum of Understanding (MoU) with the Government of Chhattisgarh. We continue to be positive on the stock backed by likely to net profit growth of 31% (CAGR) on net sales CAGR of 37% during FY08-10E."

"At the current price, the stock is trading at 3.3x FY09E and 2.5x FY10E earnings. GPIL is available at an EV/EBIDTA of 3.4x FY09E and 2.7xFY10E. It is trading at 0.8x FY09E BV and 0.6x FY10E BV. As it is available below its current year (FY09) BV, we reiterate our BUY rating on GPIL with a price target of Rs 260 per share," says Karvy Stock Broking's research report.

Prabhudas Lilladher on Country Club - Target of Rs 797

Prabhudas Lilladher has maintained its buy rating on Country Club (India) (CCIL) with a target of Rs 797 in its September 20, 2008 research report. "CCIL’s aggressive expansion plans in terms of acquiring properties and offering comprehensive range of products to its clients has helped the company to grow at CAGR of 210.8% over last three years to Rs 3.18 billion in FY08. At the CMP of Rs 270, the stock trades at 4.5x FY09E and 2.7x FY10E earnings."

"We believe that CCIL should trade at a premium to the current valuations, given its strong revenue and profit growth. We maintain BUY rating on the stock with a target price of Rs 797 (8x FY10E)," says Prabhudas Lilladher's research report.

Prabhudas Lilladher on Idea Cellular - Target of Rs 94

Prabhudas Lilladher has initiated an accumulate rating on Idea Cellular with a target of Rs 94 in its September 19, 2008 research report. " We initiate coverage on Idea cellular with an accumulate rating and a DCF based target price of Rs 94 (WACC=13%, Terminal growth rate=3%). Idea cellular is in the early stage of wireless coverage and at least 3-4 years away from attaining maturity. Further, new rollouts are currently gestation businesses (with around 10-12 quarters away from breaking even). Hence, we have used DCF as our prime tool to capture the true potential of the business," says Prabhudas Lilladher research report.