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."

Stock views on Yes Bank, Sobha Developers, Crompton Greaves

Motilal Oswal on Yes Bank - Target Rs 327

Motilal Oswal is bullish on Yes Bank and has recommended buy rating on the stock with a target of Rs 327, in its reports.

“Despite 76% CAGR in assets over FY06-09, Yes Bank's market share is a mere 0.55% as of September 2009. Rapid branch network expansion, acquisition of new customers and deepening of existing customer relationships would help ensure that its asset growth remains higher than industry. With likely capital raising in next one year (we have factored in USD 235 million at Rs 250 per share), tier-I CAR would improve to ~12% and support asset growth over the next 2-3 years. We expect loan CAGR of 37% and PAT CAGR of ~32% over FY09-12.”

“We expect RoA of 1.5%+ and RoE of 17%+ over the next three years, despite equity dilution. Given the superior return ratios, superlative growth and a competent management, we believe Yes Bank deserves premium valuations. The stock trades at 2.3x FY11E BV and 15.7x FY11E EPS. We initiate coverage with a Buy recommendation and a target price of Rs 327 (3x FY11E BV).”

Edelweiss on Sobha Developers - Target Rs 316

Edelweiss has initiated coverage on Sobha Developers with a Buy rating and a fair value of Rs 316 per share - implying an upside of 29%.A report released on December 31 said: "We value Sobha based on DCF value of cash flow from ongoing projects (9.4 mn sq ft) and forthcoming projects – to be launched over FY10-14 (13.6 mn sq ft) and value of its balance land reserves (134 mn sq ft) land. We expect Sobha to generate INR 43.6 bn net cash from its ongoing and forthcoming projects, and value the same at INR 10.7 bn. We value the balance land reserves on land bank valuation at INR 27.5 bn, taking the total EV at INR 41.0 bn and a fair equity value of INR 30.9 bn. Consequently, we initiate coverage on the stock with a BUY and rate it Sector Performer on a relative return basis."

Angel Securities on Crompton Greaves - Target Rs 525

Angel Securities has upgraded the rating on Crompton Greaves from Accumulate to Buy with a target price of Rs 525 - an upside of over 20%.A report released on January 4 said: "We have been maintaining our positive stance on Crompton Greaves (CGL) right from our 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 topline and Bottomline CAGR of 12.1% and 19.8%, respectively, during FY2009-12E."At the CMP, the stock is quoting at 18.8x and 16.2x FY2011E and FY2012E EPS, respectively, which we believe is attractive compared to its peers ABB and Areva T&D (which are quoting at 24.9x and 21.5x CY2011E EPS, respectively).

We believe that such a high valuation gap is unwarranted and going ahead it would narrow down as CGL has been bridging the technological gaps through various acquisitions. The gap would also narrow down on the back of superior earnings growth and higher average RoEs for CGL as against its peers. We assign CGL a Target P/E multiple of 20x and upgrade the stock from Accumulate to Buy with a 15-month Target Price of Rs 525."

Stock views on HCL Technologies, Rural Electrification Corporation, Subros

Emkay Global Financial Services on HCL Tech - Target Rs 330

Emkay Global Financial Services has recommended an accumulate rating on HCL Technologies with a target price of Rs 330 in its research report.


HCL Tech reported revenues of USD 607.2 million (+7.9% QoQ). Revenues in constant currency up 4% sequentially. Revenues in Applications business (+4.5% QoQ) to USD 441.5 million while IMS revenues jump up by 25.5% sequentially (included USD 7 million of pass through revenues). We are upping rating on HCL Tech to 'ACCUMULATE' with a target price of Rs 330," says Emkay Global Financial Services' research report.

Motilal Oswal on REC - Target Rs 250

Motilal Oswal has recommended a buy rating on Rural Electrification Corporation (REC) with a target price of Rs 250 in its research report.

"REC is a long-term play on India's power-sector growth. We believe the stock offers earnings growth visibility (23% PAT CAGR through FY12E) and is reasonably valued (FY11E P/BV of 1.8x against a healthy RoE of 24%+). Our target price for REC is Rs 250 (2.2x FY11E BV). We initiate coverage with a Buy," says Motilal Oswal's research report.


Sharekhan on Subros - Target Rs 42

Sharekhan has maintained its buy rating on Subros with a target price of Rs 42 in its report.

"Given the improvement in demand environment and lower base of FY2009, we expect the company to report a stellar CAGR of 38.2% in its net profit for FY2009-2011. Apart from double-digit volume growth, the earnings growth would also be aided by lower interest outgo. Consequently, we have revised our estimates sharply upwards for FY2010 and FY2011 by 12.5% and 40% to Rs3 and Rs4.2 respectively. At the current market price the stock is trading at 8.3x its FY2011E earnings and EV/EBITDA of 3.2x. We maintain 'Buy' recommendation on the stock with revised price target of Rs 42," says Sharekhan's research report.

Stock views on Punj Lloyd, United Phosphorous, Maruti Suzuki India

Motilal Oswal on Maruti Suzuki India - Target Rs 1655

Motilal Oswal has maintained its buy rating on Maruti Suzuki India with a target price of Rs 1655 in its research report.

"We are upgrading our EPS estimates by 10% to Rs 73.2 for FY10 and by 7.3% to Rs 82.7 for FY11 to factor in stronger sales momentum and a stronger Rupee against the Yen. The stock trades at 19.3x FY10E and 17.1x FY11E EPS. Maintain 'Buy' with target price of Rs 1,655 (20x FY11E EPS)," says Motilal Oswal's research report.


Sharekhan on United Phosphorous - Target Rs 225

Sharekhan has recommended a buy rating on United Phosphorous with a target price of Rs 225 in its research report.

"United Phosphorous Ltd (UPL)’s diversified product portfolio, strong distribution network and presence across geographies make it a good investment play in the agrochemical space. We initiate coverage on UPL with a 'Buy' recommendation. We arrive at a price target of Rs 225 after valuing the company at 8.5x its FY2011E EV/EBITDA, which is at 10% discount to its historical average," says Sharekhan's research report.


ULJK Securities on Punj Lloyd - Target Rs 316.5

ULJK Securities has recommended a buy rating on Punj Lloyd with a target price of Rs 316.5 in its research report.

"The revenue of the company is likely to grow at a CAGR of 13% by FY11. The EBITDA and the Net Income margins are also likely to improve by more than 125 bps and will increase the profitability. The increase in revenue and margins will boost the bottom line which is likely to grow at a CAGR of more than 35% by FY11. The stock is currently trading at a P/E of 15xFY11 earnings ad P/B of 2.25xFY11 book value. The stock is looking attractive at current levels and we recommend a buy with a target price of Rs 316.5," says ULJK Securities' research report.

Stock views on Anant Raj Industries, Vivimed Labs, KEI Industries

FinQuest Securities on KEI Industries - Target Rs 49

FinQuest Securities has recommended a buy rating on KEI Industries with a target price of Rs 49 in its research report.

"With capacity expansion in place, growth in infrastructure investments, we expect KEI to return on a strong growth path. We expect the EPS of the company to be at INR 6.1 in FY11E from INR 0.2 in FY09. The company is currently trading at 4.9x and 4.6x its FY11E PE and EV/EBITDA respectively. We rate the stock as 'BUY' with a target price of INR 49.0," says FinQuest Securities' report.


Sunidhi Securities & Finance on Vivimed Labs - Target Rs 120

Sunidhi Securities & Finance has recommended a buy rating on Vivimed Labs with a target price of Rs 120 in its research report.

"Vivimed’s vide range of specialty chemicals, leading global clientele base in the FMCG space, sizable demand of its products, outsourcing potential and improving performance give strong visibility to revenue & profitability in the future. We recommend 'BUY' with a target price of Rs 120 in the medium term," says Sunidhi Securities & Finance's research report.


Motilal Oswal on Anant Raj Industries - Target Rs 194

Motilal Oswal has recommended a buy rating on Anant Raj Industries with a target price of Rs 194 in its research report.

"ARIL has a robust business model with multiple revenue streams and high monetization visibility. We expect revenues to increase at 50% CAGR over FY09- 12 and net profit to increase at 18.2% over FY09-12. The stock trades at 1.1x FY11E BV of Rs 127 and 27% discount to its FY11 NAV of Rs 194, which is attractive compared to industry peers that trade at 1.7x FY11E BV and 2% premium to NAV. We initiate coverage with Buy; our target price is of Rs 194," says Motilal Oswal's research report.

Sector View on FMCG

Motilal Oswal Securities on ITC
THE 18% growth inQ3 PBIT has been encouraging. Growing demand and high entry barriers for other players will ensure steady double-digit profit growth. Poor performance from hotels business is already priced in. Market share of 2.5% in the toilet soaps & rising consumer acceptability in skin care is positive for the company.

Motilal Oswal Securities on Nestle

NESTLE India is best placed to ride on the expected growth in processed food market due to the strong technology of the parent company. Dominant market share and strong brands will prevent margin erosion of the company. Going ahead, high penetration and innovative prod-uct launches would further fuel its growth.

Antique Stock Broking on Britannia Industries

AFTER witnessing consistent drop for four years, Bri-tannia’s market share has stabilised over the last two years, both in value and volume terms. Going ahead, Britannia’s sales would be driven by Good Day, growing at 25-30% in the premium category and Tiger brand, growing at 18-20% in the value-for-money category.

Motilal Oswal Securities on Marico

CONSOLIDATED net sales of Marico recorded a 23% YoY growth, largely led by 15% price increases and 7% volume growth. Brands in pure coconut oil category — Parachute & Nihar — have reported a volume growth of 9% and 15%, respectively. GLobal business grew 44% YoY. Decline in copra and safflower oil prices benefited the co.

Invest Shoppe on Ruchi Soya

RUCHI Soya enjoys the leadership position in the domestic edible oil market. Its processing capacity (the largest in India), experienced mgmt, increasing share of sales from branded products and consistent profit growth despite volatile commodity prices are some of the positives. It is expected to benefit once oil prices start rising.

Invest Shoppe on McLeod Russel

THE tea price boom helped McLeod Russel to post 61.48% growth in net profit in the last quarter. It attributes the improved performance to strong domestic demand. It plans to acquire Vietnam-based Phu Ben Tea for $2 million. McLeod, the world’s largest bulk tea player, will continue to gain from increased preference to tea world over.

Stock Views on IDBI Bank, Marico, JP Associates

Sunidhi Securities on IDBI Bank - Target Rs 115

Sunidhi Securities & Finance has recommended a buy rating on IDBI Bank, with price target of Rs 115, in its report.

"IDBI Bank has adopted a strategy of developing a larger client base in the mid-corporate, SME and retail sectors while nurturing the deep relationships that already exist in the large corporate sector. IDBI Bank has high quality assets, comfortable capital adequacy, robust other income and strong growth in advances in the current challenging scenario. At the CMP of Rs 87, the share is trading at a P/BV of 0.74 (FY10), P/E of 8.2x on FY09E and 6.1x on FY10E. We recommend 'BUY' with a target of Rs 115 in the medium term," says Sunidhi Securities & Finance's research report.

Sharekhan on Marico - Target Rs 85

Sharekhan has recommended a hold rating on Marico with a target price of Rs 85 in its report.

"We remain bullish about Marico’s prospects. We maintain our earnings estimates but increase our price target for the stock to Rs 85, as we roll the target over based on our 19x FY2011E estimates. However considering marginal upside from current market price we put a 'Hold' recommendation on the stock," says Sharekhan's research report.

Motilal Oswal on JP Associates - Target Rs 227

Motilal Oswal has maintained its buy rating on Jaiprakash Associates with a price target of Rs 227 in its report.

"We expect Jaiprakash Associates to report net profit of Rs 11.8 billion in FY10E (up 38% YoY) and Rs 11.5 billion in FY11E (down 2% YoY). Based on SOTP methodology, we arrive at price target of Rs 227 per share. Stock trades at PER of 24.6x FY10E and 25.1x FY11E. Maintain Buy," says Motilal Oswal report.

Motilal Oswal Views on Tata Consultancy Services, IVRCL Infrastructure, Reliance Infra

Motilal Oswal on Reliance Infra - Target of Rs 1785

Motilal Oswal has maintained its buy rating on Reliance Infrastructure with a target price of Rs 1785 in its research report.

"We expect Reliance Infrastructure to report net profit of Rs 10.5 billion (up 58.9% YoY) in FY09, Rs 9.9 billion in FY10 (down 5.4% YoY) and Rs 10 billion in FY11 (up 1.9% YoY). The stock quotes at PER of 10.5x FY09E, 11.1x FY10E and 10.9x FY11E. We arrive at a target price of Rs 785/share, comprising of: Power business Rs 90/share, Delhi business Rs 34/share, EPC business Rs 49/share, Cash and cash equivalent Rs 251/share and holding in Reliance Power Rs 361/share (20% holding company discount). Maintain Buy," says Motilal Oswal's research report.


Motilal Oswal on TCS - Target of Rs 750


Motilal Oswal has maintained its buy rating on Tata Consultancy Services with a target price of Rs 750 in its research report.

"We have revised our estimates to factor in project cancellations, adverse cross currency impact and revised INR/USD assumptions. Our INR/USD assumptions for FY10 have changed from Rs 45.6 to Rs 49.6. We model 3% volume growth and 6% pricing decline for TCS in FY10. USD revenues including CGSL are expected to rise 0.7% in FY10 (down 2.4% ex-CGSL). We cut our FY10 EPS by 6.3% to Rs 52.9 (from Rs 56.5 earlier). Stock trades at 9x FY10E earnings. Maintain 'Buy' with a target price of Rs 550 (upside of 16%)," says Motilal Oswal's research report.


Motilal Oswal on IVRCL Infrastructure - Target of Rs 184


Motilal Oswal has maintained its buy rating on IVRCL Infrastructure and Projects with a price target of Rs 184 in its research report.

"We expect IVRCL to report net profit of Rs 2.2 billion in FY09 (up 6% YoY) and Rs 2.5 billion in FY10 (up 16% YoY). The stock is trading at 7x FY09 and 6x FY10E. Maintain Buy with a price target of Rs 154/share (36.3% upside). We have valued the core business at Rs 123/share (7xFY10 earnings, 15% discount to industry average, to factor in lower tax rates due to 80IA benefits being considered), BOT projects at Rs 20/share (book value) and other subsidiaries at Rs 11/share (based on the CMP)," says Motilal Oswal's research report.

Stock views on Shriram Transport Finance, Garware Offshore Services, Great Offshore, Simplex Infra

SKP Sec on Shriram Transport - Target of Rs 247

SKP Securities has recommended an accumulate rating on Shriram Transport Finance Corporation with a price target of Rs 247 in its research report.

"STFC registered more than 60% growth in AUM from Rs 12038 crore in FY07 to Rs 19520 crore in FY08. The growth was mainly achieved due to availability of ready funds to the company. The inflow of funds leveraged company’s brand, customer base, wide reach and strong business model. Going ahead we expect the same factors to drive the growth of AUM to Rs 37619 crore by FY11. STFC being a leader in the financing of the STOs and FTUs, the unique business model will act as a support to survive in the prevailing slowdown and restrict its losses below 2%. We value the stock at 1.50x FY 11E book value implying a price target of Rs 247 (33% upside) in 12 months and recommend accumulate rating on the stock," says SKP Securities' report.

PINC Research on Garware Offshore - Target of Rs 80

PINC Research has maintained its buy rating on Garware Offshore Services (GOS) with a price target of Rs 80 in its research report.

"GOS has timed the market well in the past with its expansion. Going forward, the outlook remains positive for the company as the newer assets should provide the necessary momentum for earnings growth. Also, the newer assets would have a better margin profile. In addition, with a diversified revenue stream to include in chartering and commission sale revenues, the revenue cycle seems relatively insulated. We maintain our 'BUY' recommendation on the stock, with a revised price target of Rs 80 over a 15 month perspective, on the back of higher earnings from new assets and prospects of vessel addition which should provide further fillip to earnings," says PINC's research report.

PINC Research on Great Offshore - Target of Rs 300

PINC Research has maintained its buy rating on Great Offshore with a price target of Rs 300 in its research report.

"GOFF is well poised to weather the slowdown in the offshore service space by having a well diversified business model, minimal capex and leverage as well as high visibility of revenues. 75% of GOFF’s fleet are contracted on long term charters thereby locking in assets for assured cash flows and enhancing revenue visibility. Also, most of its assets are contracted with ONGC, which should carry out upstream exploration irrespective of where oil prices are headed. This minimises risk of contract cancellations and guarantees revenue streams. We maintain our 'BUY' recommendation on the stock, with a price target of Rs 300 over a 15 month perspective, in light of high revenue visibility, low leverage and assured cash flows from government contracts," says PINC's research report.

Motilal Oswal on Simplex Infra - Target of Rs 296

Motilal Oswal has maintained its buy rating on Simplex Infrastructures with a price target of Rs 296 in its research report.

"In 4QFY09 ytd, Simplex has witnessed order intake of Rs 15 billion in 4QFY09, and current order book is estimated at Rs 100 billion (similar to December 08 levels), book to bill ratio of 2.2xFY09 revenues. Order intake in 4QFY09 comprises of segments like industrials, power, urban infrastructure (Delhi, Bangalore Metro etc).

We estimate earnings CAGR of 25.6% during FY09-FY11, driven by 14% revenue CAGR and lower interests cost during the same period. Maintain Buy with price target of Rs 296/sh (106% upside), based on PER of 8xFY10," says Motilal Oswal's research report.

Stock views on IVRCL Infra, Colgate Palmolive, Sun Pharma

Angel Broking on Sun Pharma - Target of Rs 1526

Angel Broking has maintained its buy rating on Sun Pharmaceutical Industries with price target of Rs 1526, in its report.

"During FY2009, the company’s performance was driven by sales of the generic version of Protonix and robust growth in the Domestic Formulation Segment. However, in FY2010, owing to subdued sales from the said product, we expect moderation in the company’s overall Top-line growth and also its impact on overall Profitability."

"Without considering one-off opportunities, management has guided towards 13-15% growth in Top-line. However, we expect the company to clock Sales growth of 8.8% during the period and would monitor the company’s performance before revising our FY2010 numbers. We have also introduced our FY2011 numbers and expect the company to post 11.6% and 11.4% growth in Sales and Net Profit, respectively. On the valuation front, at Rs 1,219 the stock is trading at 16.0x FY2010E and 14.4x FY2011E Earnings, respectively. We maintain a Buy on the stock, with a Target Price of Rs 1,526," says Angel Broking's report.

IIFL on Colgate Palmolive - Target of Rs 627

IIFL has upgraded its rating on Colgate Palmolive (India) to buy from add with a target price of Rs 627 in research report.

"Colgate’s 4QFY09 results were significantly ahead of our estimate and consensus: net profit grew 38% YoY, while sales growth momentum accelerated to 16%. The revenue growth was entirely due to volumes (up 15% YoY). EBITDA margin expansion of 342bps was driven by a reduction in raw-material costs and advertising expenses. While the raw-material cost reduction (down 116bps) was expected, given declining raw-material prices, the fall in advertising expense (down 334bps) reflected lower media costs and a fall in the overall category advertising."

"We expect Colgate to sustain c15% sales growth going forward and estimate earnings will grow at a faster annualised rate of 18% (over FY09-11), led by a 90bps expansion in EBITDA margins. Besides being a strong rural play (45% of sales from rural areas), Colgate offers high volumes and earnings visibility and has one of the best capital efficiencies in the sector. We expect the stock to re-rate from hereon and raise our target multiple from 17x to 21x. Our new one-year target price is Rs 627. The stock also offers a 4.2% dividend yield. We upgrade the stock to 'BUY' from 'ADD', with a target price of Rs 627," says IIFL's research report.

Motilal Oswal on IVRCL Infra - Target of Rs 348

"Post FY09 results (earnings above estimate by 5%), we are upgrading our earnings estimates for FY10 to Rs 22.6/sh (+20.2%) and FY10 to Rs 25.2/sh (+12.7%) to factor in higher revenue growth and EBITDA margins assumptions. Maintain Buy with a price target of Rs 348/sh. We have valued core business at Rs 296/sh (13x FY10 earnings), BOT projects at Rs 30/sh (book value) and other subsidiaries at Rs 22/sh (based on the current m-cap discounts)," says Motilal Oswal's research report.

Stock Views on HDIL, DLF

Motilal Oswal Securities on DLF

WE view DLF as the best managed realty company in India with a robust business model. DLF Assets is close to finalising fund raising of around $450m. This would lower DLF’s receivables and improve liquidity. DAL is also likely to have around 10 mn sq ft of rental portfolio by March 2009, which could yield about Rs 3,000-cr cash flow.


Emkay Research on HDIL


HDIL has ample floor space index and transfer development rights (TDR) avail-able, which ensures better churn of liquidity. The airport slum rehabilitation project is on track and the company has sold 2.3 MSF of TDR generated from the project. HDIL intends to generate another 2 MSF of TDR by March 2009.