Stock Views on Ipca Labs, Infosys Technologies, Glenmark Pharma,

Emkay Global Financial Services on Ipca Labs - Target Rs 1107

Emkay Global Financial Services has recommended a buy rating on Ipca Laboratories, with price target of Rs 1107, in its report dated December 17, 2009. The stock closed at Rs 1019.80
"We are of the view that Ipca Laboratories provides good visibility in terms of consistent CAGR growth of 20% over next few years on the back of its focus on branded formulations segment, geographical expansions in semi-regulated markets, new product launches in fast growing chronic segment and focus on European and US markets. On the back of upward revision in our FY11E earning estimates, we have raises our target price form Rs 971 to Rs 1107 (12x FY11E)," says Emkay Global Financial Services report

Angel Broking on Infosys - Target Rs 3020

Angel Broking has recommended a buy rating on Infosys Technologies, with price target of Rs 3020, in its report. The stock closed at Rs 2526.50

"Infosys has always focused on organic growth, maintaining its profitability and creating shareholders value, which the company achieved even during the global economic turmoil in FY2009. We believe the company is well poised to take advantage of the upcoming opportunities and face the challenges through its novel business plans and quality manpower.

While the Infosys management at the analyst meet did indicate that near-term pressure on IT Budgets is expected to continue, we remain confident of the fact that in-line with the global economic recovery, demand for Indian IT services will be back to the forefront and companies like Infosys stand to benefit in particular on account of the availability of talent and delivery from a low-cost base. Thus, considering the above and the increasing focus of the company on non-linear initiatives along with its strategy to focus on newer geographies and services, we remain positive on the company. In this note, we also introduce our FY2012 estimates for Infosys and roll over our target price on FY2012 basis. At the CMP, Infosys trades at 21.7x its FY2011E EPS and 18.5x its FY2012E EPS, which leaves room for further upside. Thus, we recommend a BUY on the stock with a 15-month Target Price of Rs 3,020 (Rs 2,475), valuing the stock at 22x its FY2012E EPS," says Angel Broking report.

Sharekhan on Glenmark Pharma - Target Rs 319

Sharekhan has recommended a buy rating on Glenmark Pharmaceuticals, with price target of Rs 319, in its report. The stock closed at Rs 261.35

"Glenmark has dropped 12% in the year till date (the stock has seen an upside of 21% since we had upgraded our recommendation to Buy from Hold in our report dated October 29, 2009) as compared to the BSE HC Index, which is up 66.5%, and the Sensex, which is up 71.1%. However, with the revival signs gaining visibility in the emerging markets and the domestic markets, where we have seen a staggering growth of 44.6% and 18.4% respectively in H1FY2010.

We expect the cash flow to improve, as the capital expenditure eases and the management attempts to rein in the working capital. This would allow the management to address its high leverage and return to free cash flow territory in FY2010. We believe that the risk-reward ratio is favourable for the stock at the current levels, given an improving macro outlook, which may see the growth rebound in the emerging markets, improving the working capital cycle. Given the healthy business performance expectations and favourable risk-reward ratio, we maintain our Buy recommendation on the stock with a revised price target of Rs 319 (16x FY2011E core earnings for the base business plus Rs 43 per share for the R&D pipeline). At the current market price of Rs 261, the stock trades at 15.1x FY2011E earnings," says Sharekhan 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.

Stock views on Sun Pharma, Ipca Labs, ITC

Motilal Oswal on ITC - Target of Rs 200

Motilal Oswal has recommended a buy rating on ITC, with price target of Rs 200, in its report.

"ITC’s stock price has reacted negatively to sharp increase in duties in the past. The stock declined by 6.1% in 2005 (10% excise increase after a gap of three years) and 17% in 2007 (imposition of 12.5% VAT and 5% increase in excise). We currently factor in 7.5% increase in excise and 4% volume growth: We are currently factoring in 4% increase in cigarette volume and 7.5% increase in excise duty. Double-digit excise duty increase will be viewed negatively by the markets, in our opinion. Expanding margins by increasing prices will not be an easy option in FY10 as cigarette prices have increased by over 25% in the last two years. Maintain Buy with target price of Rs 200," Motilal Oswal's report.

Angel Broking on Ipca Labs - Target of Rs 684

Angel Broking has maintained its buy rating on Ipca Laboratories with a target price of Rs 684 in its May 29, 2009 research report.

“Ipca, a vertically integrated company with a geographically diversified business model, has grown at a steady pace in the past posting a CAGR of 17.3% in net sales during FY2005-08 primarily driven by its Domestic Formulation Segment. Going forward, we expect the next leg of growth for the company to come from its Export Segment as it leverages its API capabilities to create a sturdy business in the Regulated and Emerging Formulations market.”
“For FY2010, management expects top-line to grow 18-20% with OPM remaining steady at 20-21% levels. On the back of the same, we have upgraded our FY2010 net sales estimates resulting in an 8% upward revision of our net profit FY2010 numbers. We have also introduced our FY2011 numbers, wherein we expect the company to post 14.1% and 23.9% rise in net sales and Profit, respectively. Overall, we expect Ipca’s net sales and Adjusted net profit to post a CAGR of 16.9% and 29.4% respectively, over FY2009-11. At Rs 547, the stock is trading at 8.0x FY2010E and 6.4x FY2011E Earnings. We believe that the stock is trading at attractive valuations compared to its historical trading band. Hence, we maintain a buy on the stock with a target price of Rs 684," says Angel's research report.

KRChoksey on Sun Pharma - Target of Rs 1352

KRChoksey has recommended a hold rating on Sun Pharmaceutical Industries with a target price of Rs 1352 in its KRChoksey's research report.

"Sun Pharma Q4FY09 performance was hit by lower sales from Caraco and the economic downturn, which resulted in a slowdown in the domestic business. Currently, the status of the Detroit facility is unchanged; however the management has indicated that if the need arises, the company could evaluate product transfer options to India from Caraco on a case-to-case basis. For FY2010, Caraco has not provided any guidance, given the uncertainty surrounding its Detroit facility and the lower exclusivity revenues."

"Going forward, we expect the slower growth in the business to continue for the next two to three quarters, due to the economic downturn and lack of new product launches from the Caraco facility that is under USFDA scrutiny. However, the company’s track record of delivering consistent and robust growth makes it the best Indian player in the generic space. With a strong balance sheet with over Rs 3,500 crore in cash, Sun Pharma is well positioned to exploit newer growth avenues. Thus we remain positive on the stock.'Hold', price target of Rs 1352," says KRChoksey's research report.