Stock views on Jindal Steel, Zicom, Maharashtra Seamless

IIFL on Jindal Steel, target of Rs 2884

"Jindal Steel and Power (JSPL) is expanding its power generation capacity from 1,333MW to 5,000MW by FY13ii. We believe that given the sustained peak power deficit in India and resultant high power prices (which are up 125% since FY04), its strategy to sell power through short-term PPAs will pay off handsomely, like the 1,000MW plant of its subsidiary Jindal Power (PAT of 15bn, RoE of 93% in FY09, the first year of operations). We forecast consolidated earnings will register a CAGR of 11% through FY12ii, despite weak steel prices, aided by 21% CAGR growth in power business profit. A unique revenue model (vertical integration + opportunistic sale of power) and visibility on expansion makes JSPL a good play on peak power deficit, Add," says IIFL's reports.

Sushil Finance on Zicom, target of Rs 145

"Zicom has got strong software capabilities relating to the security business. It has also integrated all the multiple security applications into one coordinated hardware and software package. The company has secured various Government projects including Mumbai City Surveillance, Bangalore City Surveillance, Kolkata Metro, Mumbai Western Railway. During 9MFY09, the Company has delivered a decent performance. Its consolidated revenues, EBITDA and net profit after minority interest stood at Rs. 2,719.1 million, Rs. 353 million & Rs. 134.1 million respectively. It has posted an EPS of Rs. 10.6 for the period under review. The stock currently trades at 7.2x its FY10E earnings and 1.0x FY10E BV. 'Buy' the stock with target of Rs 145," says Sushil Finance's report.
Sushil Finance on Maharashtra Seamless, target of Rs 335

"Maharashtra Seamless Ltd. (MSL) is one of the largest manufacturers of seamless tubes with a production capacity of 350 000 tons MSL also manufactures ERW pipes. The total unexecuted Order Book of the Company as at Mar. ‘09 stands at Rs 5,700 million, to be executable over the next one year. The company has net cash of around Rs. 5,000 million in its books. The company plans to productively use the cash partly to fund its capacity expansion plans & to meet its working capital requirements over the next 2 years. At the current market price the company is trading at 7 4x its FY09EPS of Rs 36 and 1 4x. Buy the stock with target of Rs 335," says Sushil Finance's report.

Indiabulls Securities views on NTPC, Bharat Forge, Jindal Steel, Tata Power

NTPC, target of Rs 194


Indiabulls Securities Research has upgraded its rating on NTPC to buy with a target of Rs 194 in its November 11, 2008 research report. "NTPC clocked revenues to the tune of Rs 96.6 billion for Q2’09. Net profit for the quarter increased 9.6% yoy to Rs 21.1 billion. After the recent correction, we believe NTPC’s stock should prove to be a good buy. Based on our DCF valuation, we have arrived at a target price of Rs 194, assuming a terminal growth rate of 5% and a WACC of 10.5%. Since our target price implies an upside of 28% from the CMP, we upgrade our rating to Buy," says Indiabulls Securities' research report.


Bharat Forge - Target of Rs 130


Indiabulls Securities Research has maintained its buy rating on Bharat Forge with a target of Rs 130 in its November 21, 2008 research report. "Bharat Forge (BFL)’s stock has plunged 63%. At the current market price (CMP) of Rs 92.40, the stock is trading at a forward P/E of 8.3x and 8.1x for its FY09E and FY10E earnings, respectively. We have valued BFL by using the DCF valuation methodology, assuming a WACC of 13.1% and a terminal growth rate of 5%."

"Our valuation suggests a target price of Rs 130, which provides a potential upside of more than 40% from the CMP. At the current levels, we believe that BFL is a compelling long-term investment. Hence, we maintain our Buy rating on the stock," says Indiabulls Securities' research report.


Jindal Steel - Target of Rs 1000


Indiabulls Securities Research has upgraded its rating on Jindal Steel & Power from hold to buy with price target of Rs 1000, in its report dated December 3, 2008. "We have valued the Company by using the Sum-of-the-Parts (SOTP) valuation technique. We have used the DCF methodology to value the standalone company, assuming a WACC of 13% and a terminal growth rate of 5%. Additionally, we have valued JPL at two times its estimated book value at the end of Q2’09. Our SOTP-based valuation of Rs. 921 suggests a potential upside of 18.6% from the current market price (CMP) of Rs 776.9. Given the growth potential of its power business and based on our valuation, we upgrade our rating on the stock from Hold to Buy," says Indiabulls Securities' research report.


Tata Power - Target of Rs 872


Indiabulls Securities Research has upgraded its rating on Tata Power Company with a target price of Rs 872 in its December 4, 2008 research report. "Tata Power Company Ltd. (TPC), a leading private power sector player, is expected to significantly ramp up its capacity in the coming years on the back of the 4,000 MW Mundra UMPP and the 1,050 MW Maithon power project. Based on our SOTP valuation, we have arrived at a target price of Rs 872. Thus, we have upgraded our rating from Hold to Buy," says Indiabulls Securities' research report.