Stock Views on Essel Propack, Apar Industries, Yes Bank

IndiaInfoline on Yes Bank - Target Rs 290

IndiaInfoline is bullish on Yes Bank and has recommended buy rating on the stock with a target of Rs 290, in its January 06, 2010.

"Yes Bank has seen a spurt in volumes in yesterday’s trading session. It is currently trading around its 52-week high. Last week, the stock attempted a breakout from its critical resistance zone of Rs 274-275 and since then it is consolidating above its 10-DMA. A successful move above Rs274 will open the possibility of an upside up to Rs290 and higher. We recommend a buy with a short-term target of Rs 290 and stop loss at Rs 264."

SKP Securities on Apar Industries - Target Rs 277

SKP Securities is bullish on Apar Industries and has recommended buy rating on the stock with a target of Rs 277, in its research report.

"Apar Industries Ltd (Apar) is a leading conductors and speciality oil manufacturing company established in 1958. It is the second largest manufacturer of aluminium conductors and largest manufacturer of transformer oil in India with the market share of 23% and 50% respectively. Apar have its state-of-the-art establishments at Silvassa, Nalagarh and Rabale. The company derives 75% of its revenues from power sector."

"At the current market price of Rs 175, the stock is trading at a P/E of 8x, 5x and 4x of FY10E, FY11E and FY12E earnings of Rs 21.1, Rs 32.2 and Rs 39.6 respectively. We recommend BUY rating on the stock with a target price of Rs 277/- (58% upside) in 18 months implying a P/E multiple of 7x of FY12E earnings."


Emkay Global Financial Services on Essel Propack - Target Rs 76

Emkay Global Financial Services has recommended buy rating on Essel Propack with a target of Rs 76, in its research report.

“We recommend a BUY on Essel Propack (EPL) with price target of Rs76/Share entailing an upside of 73.5%. Our optimism emanates from our belief that EPL is all set to leave behind the tumultuous CY06-08 period and turn profitable in CY09E and thereafter scaling new highs in CY11E. We expect EPL to deliver earnings CAGR of 132.4% in CY09-11E period driven by strong surge in volumes, value and profitability. Alongside, strong earnings performance - we expect the valuations to retrace to CY06 levels - average 1-year forward PER of 13.3x during CY06. EPL's current valuations of PER of 10.1X CY10E earnings, thus presents a lucrative value proposition.”

“We are enthused by EPL's region specific strategy in tubes business - taking measures to address the issues and capitalize the opportunities specific to each regional segment.

Consequently, we expect tubes revenue to grow at 10.9% CAGR and total revenues to grow at 10.2% CAGR in CY09-11E period. Similarly, region specific cost rationalization exercise is likely to result in 570 bps jump in EBIDTA margins to 22.0% in CY11E, driving 27.9% CAGR in EBIDTA over CY09-11E period. The above twin factors is expected to help EPL return to black with net profit of Rs1,049 mn in CY11E (surpassing CY06 peak profitability) - against a net loss of Rs 883 mn in CY08.”

Stock views on Siemens, Aditya Birla Nuvo, SAIL

Anand Rathi on SAIL - Target Rs 291

Anand Rathi Securities has recommended a buy rating on SAIL, with price target of Rs 291, in its report.

"We initiate coverage on SAIL with a Buy rating and a target price of Rs 291. SAIL is one of our top picks owing to its Indiafocused operations, aggressive capacity expansion, modernization and strong balance sheet," says Anand Rathi Securities report.


IndiaInfoline on Aditya Birla Nuvo - Target Rs 975

IndiaInfoline is bullish on Aditya Birla Nuvo and has recommended buy rating on the stock with a target of Rs 975, in its research report.

"Aditya Birla Nuvo has seen a sharp rally from the support zone of around Rs 870 and has managed to cross the critical resistance levels of Rs 910-915 with impressive volumes. It has formed a medium term bottom around the above mentioned levels. Volumes accompanying the breakout are encouraging, thereby adding confirmation to the bullish outlook. MACD is in positive zone and has given a bullish crossover. The weekly RSI is exhibiting positive divergence. Based on the above-mentioned technical evidences, we recommend traders with high risk appetite to buy the stock in the range of Rs 910-930 for a target of Rs 975. A stop loss of Rs 895 should be maintained on all long positions."


Indiainfoline on Siemens - Target Rs 655

Indiainfoline is bullish on Siemens and has recommended buy rating on the stock with a target of Rs 655, in its research report.

"On the daily chart, Siemens has given a bullish breakout. It suggests that its short-term trend has turned up. Over the last eight weeks, the stock was consolidating in the range of Rs605-540. On Thursday, the stock crossed above the upper end of this trading band. The upmove was well supported by healthy volumes. Further, supportive technical oscillators are also positive. We recommend traders to buy the stock at current levels and on declines to the levels of Rs 610 for an initial target of Rs 655. It is advisable to maintain a stop loss of Rs 597," says Indiainfoline research report.

Stock views on Nagarjuna Construction, Prism Cement, Crompton Greaves

IndiaInfoline on Nagarjuna Construction - Target Rs 185

IndiaInfoline research is bullish on Nagarjuna Construction with a target of Rs 185, in its research report.

"Nagarjuna Constructions continues to be in an uptrend after breaking out from consolidation between range of Rs145-180 from first week of November 2009. The momentum indicator RSI is exhibiting positive movement suggesting further upside in the near term. Moreover, volumes have also picked up substantially as the stock breached the upper end of the consolidation range mentioned above. Keeping in mind the above mentioned technical parameters, we recommend traders to buy the stock in the range of Rs173-177 with a stop loss of Rs169 for a target of Rs 185, says IndiaInfoline research report.

Hem Securities on Prism Cement - Target Rs 70

Hem Securities is bullish on Prism Cement and has recommended buy rating on the stock with a target of Rs 70, in its research report.

“The company enjoys cost competitiveness due to modern plant, lower overheads, operational efficiencies and logistics management. It is ideally positioned with a strong brand name in the high potential markets of UP, MP and Bihar. The company would sustain its industry leading profitability due to focus on high net cement realisation zone, flexible product and distribution mix (trade and non trade) and lower total delivered cost. Major expansion plan initiated by the company would enhance growth in coming years. In wake of such growth, Prism Cement Ltd seems to be extremely attractive investment opportunity.”

“Presently, the stock is trading at Rs 50.40 which is at 7.47 times to its TTM (Trailing twelve months) earnings and 1.92 times to its book value of Rs 26.25. Since the stock offers good opportunity, we initiate a ‘BUY’ signal on the stock with a target price of Rs 70 in long term investment horizon expecting an appreciation of about 39% from the current level of Rs 50.40.”

Angel Broking on Crompton Greaves - Target Rs 525

Angel Broking has come out with a research report on Crompton Greaves. The research firm has upgraded the stock from accumulate to buy, with a 15-month target price of Rs 525.

"We have been maintaining positive stance on Crompton Greaves (CGL) right from initiating coverage report dated June 12, 2009, citing its unjustifiably huge valuation gap with peers ABB and Areva T&D. Now we introduce our FY2012 estimates, and expect the company to register a top-line and bottom-line CAGR of 12.1% and 19.8%, respectively, during FY2009-12E. We upgrade the stock from accumulate to buy, with a 15-month Target Price of Rs 525", says Angel Broking.

Stock views on Prakash Industries, Bajaj Hindusthan, DLF

Motilal Oswal on Prakash Industries - Target Rs 285

Motilal Oswal has recommended buy rating on Prakash Industries with a price target of Rs 285 in its report.

"The company will spend Rs 33 billion over five years to nearly double its crude steel production, expand its sponge iron capacity to capitalize on iron ore integration and put up a 625MW power plant. The company's steel making capacity will increase from 550,000tpa to 1mtpa by March 2012 and its sponge iron capacity will increase from 400,000tpa to 1mtpa. Prakash Industries is extracting nearly 1mtpa of coal from the Chotia mine to feed its 100MW CPP and sponge iron kilns. Over FY09-12, we expect EBITDA to grow at 39% CAGR to Rs 7.9 bn due to raw material integration. We expect PAT growth of 40% CAGR to Rs 5.6 billion. Our target price is Rs 285 (30% upside) based on 5.5x FY12E EV/EBITDA. We initiate coverage with a Buy recommendation, says Motilal Oswal research report.

Prabhudas Lilladher on Bajaj Hindusthan - Target Rs 226

Prabhudas Lilladher has come out with a research report on Bajaj Hindusthan. The research firm has maintained accumulate rating on the stock with a target price of Rs 226.

"Bajaj Hindusthan (BJH) has started the civil work for 400MW power plant. BJH expects it to commission the plant by end of August’11. The company is expected to sale 80% of power to state government and rest on merchant trade basis. The company has applied with Government of India for coal linkage. The company is also doing due diligence for coal mine (potential reserves of 750m Tonnes) in South Africa", according to Prabhudas Lilladher.

The report also says, "With buffer stock of the government getting reduced, 3.5m tonnes out of approximately 7m tonnes for the whole year are yet to be imported. Hence, the tight demand-supply condition is expected to continue in FY10. At CMP, the stock trades at 8.7x FY10E and 20.7x FY11E. We maintain accumulate rating on the stock."


IndiaInfoline on DLF - Target Rs 415

IndiaInfoline research is bullish on DLF and has recommended buy rating on the stock with a target of Rs 415, in its research report.

"DLF has been consolidating from last week of October 2009 between the range of Rs 395-340. On Friday, the stock attempted to break past the top-end of the consolidation phase. The move was supported by strong volumes and against a weak trend in the broader indices. On observation of the daily chart we can visualize that the stock is yet to break out of the consolidation phase. DLF is now believed to be very close to an upside breakout, a development that should lead to a rapid advance towards the levels of Rs 415-430. We recommend traders to buy the stock between the levels of Rs 387-393 with a stop loss of Rs 378 for a target of Rs 415."

IndiaInfoline views on Reliance Capital, Educomp Solutions

IndiaInfoline on Educomp Solutions - Target Rs 790

IndiaInfoline has recommended buy rating on Educomp Solutions with a target of Rs 790, in its research report.

"On Monday, Educomp Solutions broke out from the stiff resistance zone of 742-745. The stock moved in the range between Rs 745-697. The daily RSI is already in strong buy mode, indicating that the prices are set to rally from the current levels. On the weekly chart, the stock has broken past the downward sloping trendline from Last week of October 2009. Based on above technical analysis, we recommend traders to buy the stock at current levels or up to the levels of Rs 750 for an initial target of Rs 790. It is advisable to maintain a stop loss of Rs 738 on all the long positions."

IndiaInfoline on Reliance Capital - Target Rs 930

IndiaInfoline has recommended buy rating on Reliance Capital with a target of Rs 930, in its research report.

"Reliance Capital has seen a severe correction from the levels of Rs 1,668 in June 2009 to a low of Rs 681 in November 2009. This was a panic bottom and since then it has rallied higher without a retest of this low. On the daily charts, the price movements appear to have formed a higher bottom formation. The stock broke out to break out from last one-week trading range. The bullish formation is confirmed after the stock gave a close above its short-term moving averages. Traders can buy the stock at current levels and on declines to the levels of Rs 883 with a stop loss of Rs 872 for a short-term target of Rs 930 in the coming trading sessions."

Stock views on Nalco, Dena Bank, Royal Orchid Hotels

IndiaInfoline on Nalco - Target Rs 445

IndiaInfoline is bullish on National Aluminium Company (Nalco) and has recommended buy rating on the stock with a target of Rs 445, in its research report.

"On the daily chart, National Aluminum has given a trendline breakout after closing at its 52-week high. The stock has rallied sharply over the past few weeks holding on to its short-term support trendline. This week, we saw Nalco gaining fresh upside momentum after crossing over its stiff technical resistance levels of Rs 404-407 accompanied by high volumes."

"On Thursday, the stock rallied by 7% in a rangebound market, confirming the bullish set up. The other supportive technical oscillators RSI and Stochastic are exhibiting positive divergence which signifies the up move may extend to the levels of Rs 445. Based on above observations, we recommend high risk traders to buy the stock in the range of Rs 414-422 for target of Rs 440 and Rs 445. It is advisable to maintain a stop loss of Rs 406 on all long positions," says IndiaInfoline research report.

Angel Broking on Dena Bank - Target Rs 104

Angel Broking has recommended a buy rating on Dena Bank, with price target of Rs 104, in its report

"Dena Bank, with a strong CASA ratio of 36.9%, is better placed than peers to protect its NIMs. Post the proposed capital infusion, the Bank's Tier-I ratio will improve to 9.9% by end FY2011E from 6.8% in FY2009 and enable it to maintain its CAR well above 12% levels till FY2012E. We estimate Advances to grow at 16% CAGR over FY2009-12E driving Earnings' CAGR of 15% over the period. At the CMP, the stock is trading at attractive valuations of 0.7x FY2012E ABV. We have valued the stock at its 5-year median P/ABV of 0.9x FY2012E ABV and arrived at a 15-month target price of Rs 104, an upside of 23% from current levels. We Initiate Coverage on the stock with a Buy recommendation," says Angel Broking report.


SKP Securities on Royal Orchid Hotels - Target Rs 108

SKP Securities has recommended a buy rating on Royal Orchid Hotels, with price target of Rs 108, in its report.

"At current market price, Royal Orchid Hotels is trading at EV/EBITDA of 12.0x and 8.0x of FY11E and FY12E EBITDA, respectively. We have valued the stock at 9.5x its FY12E EV/EBITDA (which is inline with its historical average and discount to its peer group). We expect ROHL’s EBITDA to grow at a CAGR of 17.35% over FY09-FY12E. We hereby initiate coverage on ROHL Ltd. and recommend buy rating with a target price of Rs 108 (32% upside) in 15 months," says SKP Securities report.

Stock views on Tata Chemical, Sesa Goa, Parekh Aluminex

IndiaInfoline on Tata Chemical - Target Rs 335

IndiaInfoline is bullish on Tata Chemical and has recommended buy rating on the stock with a target of Rs 335

"Tata Chemical has done pretty much nothing in last three weeks, besides moving in a trading band between Rs 295-270. This week, after a long time, the stock made a move above the upper end of the trading range. The rangebound trading appears to be broken and the stock is all ready to surge higher. Our view is further validated after the stock gave a close above the cluster of moving averages placed around Rs 299-300 levels. If the stock holds up above the levels of Rs 325-326 today, it can post huge upside in the coming trading sessions. We recommend high risk traders to buy the stock in the range of Rs 311-318 for target of Rs 335. Maintain a strict stop loss of Rs 303,” says IndiaInfoline research report.

IndiaInfoline on Sesa Goa - Target Rs 400

IndiaInfoline is bullish on Sesa Goa and has recommended buy rating on the stock with a target of Rs 400

“Sesa Goa has been consolidating in a range between the levels of Rs380-360 from last two weeks. On Thursday, the stock attempted to break-out from the upper-end of this trading range. Moreover, on the daily chart, the stock has formed a Bullish Candlestick suggesting upside from the current levels. The daily RSI is already in strong buy mode. The stock has closed above all its key daily moving averages. A move past the levels of Rs385 could take the stock towards the levels of Rs400 in the short-term. Keeping in mind the above-mentioned evidences, we recommend high risk traders to buy the stock between the range of Rs376-385 with a stop loss of Rs 370 for a target of Rs 400,” says IndiaInfoline research report.

Sunidhi Sec on Parekh Aluminex - Target Rs 145

Sunidhi Securities & Finance has recommended a buy rating on Parekh Aluminex, with a price target of Rs 145, in its report

"Parekh Aluminex is likely to post an EPS of Rs 34 in FY10, which would further go up to Rs 44 in FY11. At CMP, the share is trading at a P/E of 3.2x on FY10E and 2.5x on FY11E. The stock is forming a sideways consolidation triangle price pattern. The consolidation pattern is forming after a long run-up. The upside breakout from the price pattern is at Rs 120. The target for the stock after the breakout is Rs 160. However, we recommend BUY with a target price of Rs 145 in the medium term," says Sunidhi Securities & Finance report.

Stock views on Aventis Pharma, Indraprastha Gas, Alstom Projects

Karvy Stock Broking on Aventis Pharma - Target Rs 1770

Karvy Stock Broking has recommended outperformer rating on Aventis Pharma with a target of Rs 1770, in its research report.

“Aventis Pharma’s domestic formulations business (ex- Rabipur) has been growing by 14 % plus for the nine month period while exports has had a blip in the last quarter. We maintain our earnings but upgrade our multiple on account of current re- rating in the sector from 16.5x to 17x and value our core price target at Rs 1427 and add cash per share of Rs 342 per share and arrive at a price target of Rs 1770. On account of the upgrade in price target by 2.5 % we upgrade our rating in the stock to Outperformer, says Karvy Stock Broking research report.


IndiaInfoline on Indraprastha Gas - Target Rs 203

IndiaInfoline is bullish on Indraprastha Gas and has recommended buy rating on the stock with a target of Rs 203, in its research report.

"Indraprastha Gas has seen impressive volume in yesterday’s trading session and appears to have taken support between Rs 175-177 range. It could bounce till somewhere between Rs198-200 levels in the near term. The bullish formation is confirmed after the stock gave a close above its short-term moving averages with positive divergences in momentum oscillators. Any move above Rs190 could take the stock towards Rs 200 and higher in the short-term. Traders are advised to maintain a stop loss of Rs181 and go long. Book partial profit around Rs198 and exit around the levels of Rs 203, says IndiaInfoline research report.

IndiaInfoline on Alstom Projects - Target Rs 610

IndiaInfoline is bullish on Alstom Projects and has recommended buy rating on the stock with a target of Rs 610, in its research report.

"Alstom Projects (APIL) has displayed strength in last few trading sessions prior to Friday, trading in a narrow range amid volatility in the market. The stock had been consolidating in a range between the levels of Rs 521-560 from last four weeks. On Friday, the stock broke-out from the upper-end of this trading range. Moreover, on the daily chart, the stock has formed a Bullish Candlestick suggesting upside from the current levels. The daily RSI is already in strong buy mode. The stock has closed above all its key daily moving averages. A move past the levels of Rs 580-585 could take the stock towards the levels of Rs 605-610 in the short-term. Keeping in mind the above-mentioned evidences, we recommend high risk traders to buy the stock between the range of Rs 571-581 with a stop loss of Rs 561 for a target of Rs 610," says IndiaInfoline research report.

Stock views on NHPC, Jagran Prakashan, Reliance Infrastructure

IndiaInfoline on Reliance Infra - Target Rs 1160

IndiaInfoline has recommended buy rating on Reliance Infrastructure with a target of Rs 1160, in its research report.

Reliance Infra is trading 28% lower than its 52-week high of Rs1,404 in October 2009, but higher than its low of Rs45 in March 2009. A detailed study of Reliance Infra shows a distinctive pattern emerging which signals a temporary bottom. The stock has broken out (as seen in the daily chart) from the overall base-like pattern carved during the past five-weeks. In fact, the last couple of trading weeks represents a high level bullish congestion area between Rs 1,092-1,056. We believe that the current bullish consolidation is likely to lead to a potential upside, once the 50-DMA is broken. We recommend traders to buy the stock in the range of Rs 1,095-1,110 for a target of Rs 1,160. We advise traders to maintain a stop loss of Rs 1,080," says IndiaInfoline research report.


Bonanza on Jagran Prakashan - Target Rs 140

Bonanza research is bullish Jagran Prakashan and has recommended buy rating on the stock with a target of Rs 140, in its research report.

"Jagran Prakashan 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/Share in FY10. At CMP Rs.126/Share, 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."


Bonanza research on NHPC - Target Rs 38.

“NHPC is India’s largest Hydro Power Company. It is adding capacities at regular intervals. If Government 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 per share. Its consolidated Cash EPS is likely to be Rs 2 per 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.”

Stock views on Cambridge Solutions, IndusInd Bank, Bank of Baroda

IndiaInfoline on Cambridge Solutions - Target Rs 104

IndiaInfoline is bullish on Cambridge Solutions and has recommended buy rating on the stock with a target of Rs 104, in its research report.

"Cambridge Solutions has shown impressive strength on Tuesday’s. The bullish formation is confirmed after the stock gave a positive close (up 9%) despite a sell off in broader indices. In addition, momentum indicators like RSI are exhibiting strong divergence. We recommend traders with high risk appetite to buy the stock in the range of Rs 94-97 for a short term target of Rs 104. A stop loss of Rs 92 should be maintained on all long positions," says IndiaInfoline research report.

IndiaInfoline on IndusInd Bank - Target Rs 160

IndiaInfoline is bullish on IndusInd Bank and has recommended buy rating on ths stock with a target of Rs 160, in its research report.

"On the weekly chart, IndusInd Bank has crossed over its previous high of Rs 135 recorded during December 2007. Since past few weeks, the stock was moving in a range of Rs 120-135. During the current week, the stock made an attempt to break out from the top of the above trading range. Moreover, cluster of moving averages are proving good support to the stock at current levels. We expect the stock to stage a smart rally in the near term. Traders can buy the stock with a strict stop loss of Rs 134 for a target of Rs 152. Medium term traders can hold onto the stock for a target of Rs 160+,"says IndiaInfoline research report.

Networth Capital on Bank of Baroda - Target Rs 606

Networth Capital has recommended buy rating on Bank of Baroda with a target of Rs 606.

"Bank of Baroda (BOB) has been steadily repositioning and consolidating its business position within PSU banking space, re-gaining its lost market share. Bank has doubled its business with improved asset quality and profitability during past 3 years, taking the advantage of last economic cycle and is now bracing for next leg of growth. As a strategy, bank is focusing on branch expansion (particularly in south), improving CASA ratio, NIM’s, better operating efficiency and chase qualitative business growth, which should put the India’s international bank (BOB) in an advantageous position."

"BOB offers a conservative but consistent PSU bank with improved fundamentals and a strong international character. After recent re-rating, stock is currently trading at 1.5xFY10E and 1.3xFY11E Adj BV. We value BOB’s core banking business assigning a P/adj BV of 1.5x on FY11E adj.BV and stake in UTI MF at about Rs20 per share to arrive at a target price of Rs 606. Our target price provides an upside of 19% from current levels and hence recommend a Buy on the stock," says Networth Capital.

Stock Views on Rolta India, KS Oils, Hindustan Construction Company

Prabhudas Lilladher on Rolta - Target of Rs 240

Prabhudas Lilladher has recommended accumulate rating on Rolta India with a target of Rs 240, in its research report.

“Rolta has strengthened its IP portfolio with Geospatial Fusion, OneView, iPerspective and SOA Today, that has de-linked its model away from the linear growth model. Also, JVs with Thales Group and The Shaw Group have helped them bid for government projects and provide world-class service to its clients. We believe that solution driven growth when compared to service driven growth led by nonlinear approach to revenue momentum, would help the company sustain its margin with revenue momentum.”



Prabhudas Lilladher on KS Oils - Target Rs 88


Prabhudas Lilladher is bullish on KS Oils and has recommended buy rating on the stock with a target of Rs 88, in its research report.

“KS Oils (KSO) is a market leader in the Rs130bn mustard oil market, with 11% market share (FY09). It also has ~30% market share in branded mustard oil segment (current market size of ~Rs39bn) which is expected to grow at ~25% CAGR, going forward. By FY11, the company is expanding its mustard oil crushing capacity by ~3x (of its FY09 capacity). We believe that the multi-product brand portfolio will push KSO to capture the growing branded mustard oil market. Further, KSO is expanding ~4x of its FY09 refined oil capacity by FY11. We believe that a strong market presence in mustard oil, strong brands and rich experience in edible oil industry will help KSO capture the ~Rs600bn refined oil market in India.”

“Based on one year forward P/E, KSO is trading at a discount to its global as well as domestic peers despite having higher earnings CAGR and higher return ratios (RoE). We are positive on the stock on account of its strong edible oil market presence, its growth potential and discounted valuation. At present, stock is trading at near to lower end of its historical forward P/E band of 8x-14x. Hence, we recommend ‘BUY’ the stock,” says Prabhudas Lilladher research report.

IndiaInfoline on HCC - Target Rs 160

IndiaInfoline is bullish on Hindustan Construction Company, HCC and has recommended buy rating on the stock with a target of Rs 160, in its research report.

"On the daily chart, HCC has given a bullish breakout. A detailed analysis of the volumes of HCC reveals that maximum interest has been displayed by the traders in this stock since last week of October 2009. On Thursday, it made a convincing move above the top of the trading range. The daily momentum oscillators i.e. RSI and MACD are suggesting strength in the upmove. Keeping in mind the above-mentioned evidences, we suggest high risk traders to buy the stock between the levels of Rs 149-152 with a strict stop loss of Rs 146 for a short-term target of Rs 160."

Stock views on Jet Airways, Unity Infra, Hindustan Construction Company

IndiaInfoline on Jet Airways - Target Rs 575-580

IndiaInfoline is bullish on Jet Airways and has recommended buy rating on the stock with a target of Rs 575-580, in its research report.

"On the daily chart, Jet Airways has formed a bullish price channel. It is a continuation pattern that slopes up and is bound by an upper and lower trend line. On Tuesday, the momentum indicator RSI depicted a positive divergence. In addition the stock is trading above its key short-term moving averages. We recommend a buy at current levels and on declines up to Rs 555 with a stop loss of Rs 551 for a target of Rs 575, 580," says IndiaInfoline research report.

Karvy Stock Broking on HCC - Target Rs 171

Karvy Stock Broking is bullish on Hindustan Construction Company, HCC and has recommended buy rating on the stock with a target of Rs 171, in its research report.

“Hindustan Construction Company (HCC) one of the largest and oldest companies engaged in construction business is in a sweet spot with core construction business on a growth trajectory driven by improving visibility for new order inflow and 135% higher infrastructure investments in 11th five year plan. We expect order book would grow at CAGR of 19% over the next two years to Rs 233 billion, primarily from sectors like hydro power and irrigation."

"Consequently, HCC's revenue would grow at CAGR of 26% over FY10-11 and able to sustain margin at higher level. In addition to that, value unlocking from its foray into real estate primarily Lavasa Corporation would add significant value to HCC's shareholders. We initiate coverage with a BUY rating and price target of Rs 171 based on our SOTP (Sum of the Parts) valuation,” says Karvy Stock Broking research report.


Nirmal Bang on Unity Infra - Target Rs 669


Nirmal Bang is bullish on Unity Infraprojects and has recommended buy rating on the stock with a target of Rs 669, in its research report.

"Unity Infraprojects has raised Rs 73.3 crore through a QIP issue. The QIP was issued at Rs 506 per share resulting in a post issue dilution of 10.7%. The promoter shareholding in the company now stands at 62.7% down from 69.5%. The company has issued 14,49,476 shares at a premium of Rs 496 per share. The equity share capital for the company now stands at Rs 14.8 crore. We have revised the target price of UIL to Rs 669 per share down from Rs 726 primarily to factor in the equity dilution. At the current market price of Rs 508 per share the stock looks quiet attractive. We maintain a ‘BUY’ recommendation with a long term view," says Nirmal Bang research report.

Stock views on Larsen & Toubro, Ranbaxy, Allied Digital Services, Piramal Healthcare, Infosys, Mahindra & Mahindra

MOTILAL OSWAL on M&M
MOTILAL OSWAL maintains its 'Buy' rating on Mahindra & Mahindra. M&M had earlier mentioned in its post-2QFY09 results that it would be reviewing the Rs7,000-crore capex plan over FY09-12 for a possible reduction. After a review of the capex plans, management has now decided to go ahead with the original capex plan of Rs 7,000 crore without any cuts. Out of the Rs 7,000 crore over FY09-12, Rs 5,000 crore will be invested in the automotive business and Rs 2,000 crore in the non-auto business. In auto business, investment will be made in the Chakan plant (~Rs2,500 crore), product development (Rs 2,000 crore for Xylo, Scorpio's successor, light transport vehicles and lobal product) and further equity contribution in Mahindra Navistar JV (Rs 350 crore). In the non-auto business, it is investing Rs 500 crore in tractors business, Rs 700 crore in logistics business and defence business and Rs 750 crore for setting up world-class research facility at Chennai. Motilal Oswal has downgraded the consolidated earnings estimates by 11.7% for FY09 to Rs 58.7 and by 12.9% for FY10 to Rs 70.6, to factor in lower volumes and downgrade in subsidiary / associate earnings. Notwithstanding short-term challenges, valuations at 4.6x FY09E and 3.9x FY10E consolidated EPS are attractive.


CITIGROUP on INFOSYS

CITIGROUP EXPECTS Infosys' revenues at $1,167m, down ~4% qoq. This assumes marginal decline in volumes, stable pricing and ~4% impact of cross currency. EBIT margins are expected to fall ~150bps qoq. Citigroup forecast basic EPS of Rs 26.63 in line with guidance. Volumes continue to be under pressure with clients cutting back on discretionary projects and Q3 being also impacted due to "holiday project closures". Citigroup has lowered its FY10-11E estimates by ~6% on the back of lower volume/pricing assumptions and cross currency impact in Q3. While the stock price witnessed ~37% erosion in CY08, expected numbers are ~6% below consensus, and consensus is to be revised down further. This could put further pressure on the stock in the near term. The EPS numbers benefit from ~5% INR depreciation assumed in FY09 - in other words, Citigroup is modelling an EPS decline in constant currency terms. With a likely result disappointment and further EPS cuts, the stock could underperform in the near term.


MERRILL LYNCH on PIRAMAL HEALTHCARE


Merrill Lynch reiterates 'Neutral' rating on Piramal Healthcare (PHL). However it revises estimates to factor higher interest cost and lower target price to Rs 280 based on 12x FY10E EPS. PHL's proposed acquisition of Minrad comprises equity consideration (US$6mn), convertible debt redemption (US$30mn) and existing debt (~US2mn). Apart from this, PHL would infuse US$12mn in Minrad for working capital requirement. Post-completion of this acquisition (5th in 2008), PHL's D/E would be ~0.9x which is higher than the industry average. Minrad's acquisition bolsters the US$20mn inhalation anaesthetics business of PHL and broadens its portfolio from two products currently to five (halothane, isoflurane, enflurane, desflurane and sevoflurane). PHL-Minrad combine would be the 3rd largest player in US inhalation anaesthetics market addressing a US$1bn+ opportunity worldwide. Merrill Lynch is relatively conservative and expects the deal to be EPS neutral in FY10. The deal is expected to be closed by FY09-end. PHL's CMO business has mid-teens EBITDA margin which is the lowest among that of its peers.


INDIAINFOLINE on ALLIED DIGITAL SERVICES

Allied Digital Services (ADSL)'s pan-India presence, direct support model, established remote infrastructure and significant price competitiveness provide an edge against competition in the domestic IMS market. Its marquee clientele includes large customers won from leading Indian offshore vendors. The recent En Pointe Global Services LLC (EPGS) acquisition would significantly increase international IMS revenues apart from driving domestic revenues through offshoring. Further, the SOC services are expected to register exceptional growth driven by increasing compliance requirements globally. The company expects a hefty ~US$100-million revenue contribution from EPGS in FY10. ADSL's operating margin is likely to improve by 150-200bps in FY10 driven by lower solutions revenue share and improving profitability within IMS through offshore shift. IndiaInfoline expect revenues and net profit of ADSL to record a robust CAGR of 61% and 82% respectively over FY08-10E. Higher growth in earnings would be driven by OPM expansion. Given the strong fundamentals, current valuations of 4.7x FY10 P/E and 1.4x FY10 P/BV appear inexpensive.


JP MORGAN on RANBAXY LABORATORIES

GIVEN THE twin uncertainties of the continued US FDA import ban and potential currency exchange losses, JP Morgan remains 'Neutral' on Ranbaxy even though valuations remain attractive for longer-term investors. Ranbaxy, which has a 180-day exclusivity on generic Imitrex (Sumatriptan), has not yet been able to launch the drug in the US as the FDA approval has not yet come through. Sumatriptan First to File is approximately Rs 5/share of the target price. Brand sales of Imitrex were US$1.29 billion in 2007. Given that the generic filing is not from the manufacturing sites where the US FDA had issued warning letters, the launch approval from the US FDA for Sumatriptan is key to see if it is business as usual for Ranbaxy in the US beyond the products in the import ban. Given the large FTF (first to file) pipeline for Ranbaxy, any delay in approvals for Sumatriptan would be negative for the remaining FTF pipeline.


HSBC on LARSEN & TOUBRO

HSBC has downgraded the rating of Larsen & Toubro to 'Negative' over the Satyam stake purchase. HSBC believes this investment is a portfolio investment rather than a strategic one and views this as a negative for L&T. It thinks that the stake is not positive for L&T's subsidiary, L&T Infotech, given that it has a smaller operation versus Satyam's 53,000 employee base. The integration will be a significant issue given L&T Infotech's smaller size. Also, after allegations of misappropriation regarding Satyam's former chairman, integration could expose L&T to litigation. Moreover, there is a lot of uncertainty in terms of any liability for Satyam. HSBC reduces its FY10E PAT estimate by 8%, driven by a lower 4% change in sales and expects a 25.7% revenue CAGR over FY09-11E, driven by the existing order backlog and new orders from infrastructure, power and new verticals. HSBC is reducing its valuation of L&T subsidiaries to Rs 131 per share.