KS Oils

Bank of America initiates coverage on KS Oils with a `Buy’ rating and target price of Rs 90, which implies 41% upside. KS Oils is India’s largest mustard oil producer and has quadrupled its market share to 11% since FY06. BofA believes the company will grow through consolidation in the fragmented mustard oil market. Since FY06, KS Oils has focused on the mustard oil segment and ramped up capacity 6x by building efficient plants.

Its mustard oil brands, Kalash and Double Sher, have a strong presence in North and North East India with over 30% market share. BofA expects the company to nearly double market share to 19% by FY12 led by efficient procurement and capacity utilisation and estimates 28% EPS CAGR over FY09-12E as increased capacity contributes to revenue and margin improves 140 bps.

While capex to sales ratio is expected to halve to 6% versus ~13% in FY09 as high capex in oil business is behind, ~60% of its capex going ahead will be for palm plantations in Indonesia. The stock trades at 8x FY11E P/E and 5.2x FY11E EV/EBITDA.

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 Patni Computer Systems, KS Oils, Bharti Airtel, Dabur India,

Buy Patni Computer Systems, tgt Rs 142: Indiabulls Sec

Indiabulls Securities Research has upgraded its rating on Patni Computer Systems to buy with a target price of Rs 142 in its November 25, 2008 research report. "Patni Computer Systems (Patni) reported a modest sequential growth of 4.2% to Rs 8 billion for Q2’09, helped by the sharp depreciation of the rupee. respectively. The stock trades at a heavy discount to the industry average multiple of 7.9x and 7.2x for CY08 and CY09, respectively. Besides, based on our DCF valuation, we have arrived at a target price of Rs. 142, assuming an 8% Rf, a 5% terminal growth rate, and a 13.1% WACC. Our target price provides an upside of 20.3% over the current levels; thus, we upgrade our rating to Buy," says Indiabulls Securities' research report.

KS Oils - Target of Rs 52

Angel Broking has maintained its buy rating on KS Oils with a revised target price of Rs 52 in its November 26, 2008 research report. "KS Oils (KSO) has acquired a 500 metric tonnes per day (MTPD) port based refinery in Haldia Port in East India for Rs 125 crore. The plant which has a total refining capacity of 500MTPD with a vanaspati unit of 150MTPD is located within the Haldia Port with a direct pipeline access to ships. The acquisition will help the company in setting up a manufacturing base in Eastern India, which is one of its key markets. Moreover with this acquisition, KSO currently is using only the ports in western coast due to the presence of its existing plants in western and central India has access to eastern coast thereby reducing its geographic risks."

"The refinery is expected to give a boost to the company’s refined oils product strategy and will produce refined oil under the current brand name of KS Refined and KS Gold Refined for consumers in North East, West Bengal, Orissa, Bihar, Jharkhand and Uttar Pradesh. The acquisition is expected to facilitate logistics efficiencies and significantly reduce the time to market KSO’s products to its consumers in East India. We believe this acquisition will bring in incremental sales of Rs 180 crore and Rs 540 crore in FY2009 and FY2010 respectively. The net profit too is expected to increase by Rs 9 crore and Rs 27 crore during the same time periods. We believe this acquisition is EPS accretive and hence we maintain a Buy on the stock with a revised target price of Rs 52 (Rs 47)," says Angel's research report.

Dabur India, Target of Rs 80

Angel Broking has recommended an accumulate rating on Dabur India with a target price of Rs 80 in its November 24, 2008 research report. "Dabur India has acquired 72.15% of Fem Care Pharma Ltd (FCPL), a leading player in the women’s skin care products market, for Rs 204 crore in an all-cash deal. We believe the acquisition to be a positive move by Dabur, although at a slightly higher cost, as it brings to Dabur a portfolio of well-known household brands that enjoy a strong positioning in their respective categories, offering Dabur a strong platform to enter into newer product categories and markets since it was witnessing a slowdown in its core categories like Toothpaste, Hair Oils and Homecare."

"As with the previous acquisition and subsequent integration of Balsara’s Hygiene and Home products businesses, Fem too would offer substantial synergies for expanding the reach of Fem’s brands in all its geographies as well as better management of overall system costs. This provides Dabur an entry into the high-growth skin care market with an established brand name Fem with further potential to extend the brand into newer and related skin care categories. We recommend Accumulate rating on Dabur with a target price of Rs 80," says Angel's research report.

Bharti Airtel - Target of Rs 710

India Infoline has recommended a buy rating on Bharti Airtel with a stoploss of Rs 610 and target of Rs 710 in its November 25, 2008 research report. "In the short-term, we expect the current reversal in trend to continue. The daily RSI is also showing a sign of reversal, currently trading above 45. Short-term traders can buy the stock in the range of Rs 635-650 for a target of Rs 710. It is advisable to maintain a stop loss of Rs 610 on the long positions," says India Infoline's research report.

Stock Views on Patni Computer Systems, Bharti Airtel, Dabur India, KS Oils

Indiabulls Sec on Patni Computer Systems - Target Rs 142

Indiabulls Securities Research has upgraded its rating on Patni Computer Systems to buy with a target price of Rs 142 in its November 25, 2008 research report. "Patni Computer Systems (Patni) reported a modest sequential growth of 4.2% to Rs 8 billion for Q2’09, helped by the sharp depreciation of the rupee. respectively. The stock trades at a heavy discount to the industry average multiple of 7.9x and 7.2x for CY08 and CY09, respectively. Besides, based on our DCF valuation, we have arrived at a target price of Rs. 142, assuming an 8% Rf, a 5% terminal growth rate, and a 13.1% WACC. Our target price provides an upside of 20.3% over the current levels; thus, we upgrade our rating to Buy," says Indiabulls Securities' research report.

Angel on KS Oils - Target of Rs 52

Angel Broking has maintained its buy rating on KS Oils with a revised target price of Rs 52 in its November 26, 2008 research report. "KS Oils (KSO) has acquired a 500 metric tonnes per day (MTPD) port based refinery in Haldia Port in East India for Rs 125 crore. The plant which has a total refining capacity of 500MTPD with a vanaspati unit of 150MTPD is located within the Haldia Port with a direct pipeline access to ships. The acquisition will help the company in setting up a manufacturing base in Eastern India, which is one of its key markets. Moreover with this acquisition, KSO currently is using only the ports in western coast due to the presence of its existing plants in western and central India has access to eastern coast thereby reducing its geographic risks."

"The refinery is expected to give a boost to the company’s refined oils product strategy and will produce refined oil under the current brand name of KS Refined and KS Gold Refined for consumers in North East, West Bengal, Orissa, Bihar, Jharkhand and Uttar Pradesh. The acquisition is expected to facilitate logistics efficiencies and significantly reduce the time to market KSO’s products to its consumers in East India. We believe this acquisition will bring in incremental sales of Rs 180 crore and Rs 540 crore in FY2009 and FY2010 respectively. The net profit too is expected to increase by Rs 9 crore and Rs 27 crore during the same time periods. We believe this acquisition is EPS accretive and hence we maintain a Buy on the stock with a revised target price of Rs 52 (Rs 47)," says Angel's research report.

Angel on Dabur India - Target of Rs 80

Angel Broking has recommended an accumulate rating on Dabur India with a target price of Rs 80 in its November 24, 2008 research report. "Dabur India has acquired 72.15% of Fem Care Pharma Ltd (FCPL), a leading player in the women’s skin care products market, for Rs 204 crore in an all-cash deal. We believe the acquisition to be a positive move by Dabur, although at a slightly higher cost, as it brings to Dabur a portfolio of well-known household brands that enjoy a strong positioning in their respective categories, offering Dabur a strong platform to enter into newer product categories and markets since it was witnessing a slowdown in its core categories like Toothpaste, Hair Oils and Homecare."

"As with the previous acquisition and subsequent integration of Balsara’s Hygiene and Home products businesses, Fem too would offer substantial synergies for expanding the reach of Fem’s brands in all its geographies as well as better management of overall system costs. This provides Dabur an entry into the high-growth skin care market with an established brand name Fem with further potential to extend the brand into newer and related skin care categories. We recommend Accumulate rating on Dabur with a target price of Rs 80," says Angel's research report.

India Infoline on Bharti Airtel - Target of Rs 710

India Infoline has recommended a buy rating on Bharti Airtel with a stoploss of Rs 610 and target of Rs 710 in its November 25, 2008 research report. "In the short-term, we expect the current reversal in trend to continue. The daily RSI is also showing a sign of reversal, currently trading above 45. Short-term traders can buy the stock in the range of Rs 635-650 for a target of Rs 710. It is advisable to maintain a stop loss of Rs 610 on the long positions," says India Infoline's research report.