Stock views on Nava Bharat Ventures, Godawari Power and Ispat, Deccan Chronicle

Sushil Finance on Nava Bharat Ventures - Target Rs 517

Sushil Finance is bullish on Nava Bharat Ventures and has recommended buy rating on the stock with a target of Rs 517, in its research report.

“Nava Bharat Ventures, NBVL is an evolving Power utility, with 237 MW of operational capacity (including 9 MW bagasse based power plant). It has strategically aligned itself to downsize its Ferro alloys business which is highly cyclical in nature. The Company sells most of its power on merchant basis and has potential to generate and sustain strong ROE with the future projects like coal & manganese mining and foray into real estate. One of the major risks to our assumption would be downward pressure on the merchant rates which could hamper its margins."

"However, with the economy on the revival mode aided by rise in industrial production and persisting power deficit scenario, the merchant tariffs are expected to be stay in the range of Rs. 5 – 7 for next few years. NBVL has a strong balance sheet with very low leverage. With strong operational cash flows it is in a strong position to fund its future projects. At CMP of Rs.379, the stock is trading 1.5x FY11E BVPS & 1.2x FY12E BVPS and PE of 6.9x FY11E and 5.8x FY12E . We believe that it is at a significant discount to its intrinsic value & thus we initiate coverage with a BUY rating on the Company with a target price of Rs.517 (based on 1.7x its FY12E BVPS of Rs. 304.2),” says Sushil Finance research report.


Angel Broking on Deccan Chronicle - Target Rs 216

Angel Broking is bullish on Deccan Chronicle and has recommended buy rating on the chat with a target of Rs 216, in its research report.

“In our note dated September 22, 2009 (Deccan Chronicle: Charged up for second innings), we had outlined our positive stance on Deccan's IPL team stating, 'We remain optimistic on IPL's money-making prospects and any news flow on the stake sale front will trigger a re-rating in the DCHL stock'. Further, we had stated that, 'The next IPL team auction in 2011 is expected to set a benchmark post which DCHL might reconsider its position to dilute stake'. With IPL's recent announcement of auction (slated for January 19, 2010) of two new franchises for the 2011 edition at a base price of US$ 225 million, we believe that the floor is set for DCHL's stock to get re-rated. In our 2QFY2010 result note, we had valued DCHL on a consolidated basis at 12x FY2011E EPS of Rs 12.4 and arrived at a target price of Rs 149. Post this development and roll-over to FY2012E, we upgrade Deccan Chronicle Holdings, DCHL to a Buy, with a revised target price of Rs 216," says Angel Broking research report.

Emkay Global Financial Services on Godawari Power - Target of Rs 261

Emkay Global Financial Services has recommended a buy rating on Godawari Power and Ispat, with price target of Rs 261, in its report dated December 17, 2009. The stock closed at Rs 182.15
"Godawari Power and Ispat has embarked upon backward integration program with 0.6mtpa pelletization plant, 14mt captive iron ore mines and setting up additional 20MW captive power plant. The pellet plant is expected to be operational by Dec ’09 end helping GPIL to increase sponge iron capacity utilization and also to increase the topline and bottomline with the surplus pellet sales in the market. GPIL had already commenced Ari Dongri (Chhattisgarh) iron ore mine, having reserves of 7mt", says Emkay.

The report also says, "The company is also under the process of commencing Borai Tibbu (Chhattisgarh) iron ore mine, having reserves of 7mt, in next 3-4 months. This will lead to significant reduction in cost of production, generating savings of around Rs 2,000/t of sponge iron. Additonal 20MW captive power plant, which will be operational by Dec ’09, will be available for selling in merchant market, generating incremental margins. GPIL is expected to report earning CAGR of 60% for the period FY09-FY11E."

"Overall, the recent management meeting further supported our positive view on the stock, which is being supplimented by the current attractive valuations. At the CMP of Rs 170, the stock is trading at 13.8x FY10E EPS of Rs 12.3 and at 3x FY11E EPS of Rs 56.1. On EV/EBITDA basis, the stock is trading at 7.4x FY10E EV/EBITDA and at 2.9x FY11E EV/EBITDA; while on P/B basis, the stock is trading at 1x FY10E book value and at 0.8x FY11E book value. We maintain BUY on the stock with revised target price of Rs 261 (4x FY11E EV/EBITDA)," says Emkay Global Financial Services report.

Stock Views on Nava Bharat Ventures, Jubilant Organosys, Infosys

FinQuest Sec on Nava Bharat Ventures - Target Rs 396

FinQuest Securities has recommended a buy rating on Nava Bharat Ventures, with price target of Rs 396, in its report.

"We expect realignment of business strategy to be value accretive and will lead to re-rating of the stock. We expect NBVL to be treated as Power generation utility as power will contribute 60% to topline in FY12E and the company will attain 1125 MW of power capacity by FY14E. We don't expect any expansion in Ferro alloys and sugar. Our SOTP valuation gives a target of INR 396. The company is currently trading at 4.4x and 3.0x its FY11E PE and EV/EBITDA respectively. We rate the stock as 'BUY'," says FinQuest Securities' report.

Karvy Stock Broking on Jubilant Organosys - Target Rs 210

Karvy Stock Broking has maintained its buy rating on Jubilant Organosys, with a price target of Rs 210, in its report.

"Jubilant Organosys has set a goal to grow its revenue and profit by 1.5x and 2x respectively in the next three years which will be on back of greater asset efficiency. The company has set a target of 30 % ROE for FY 2013E. We downgrade our EPS for FY 2010E by 16.3 % to Rs 18 and by 3 % to Rs 26 for FY 2011E on account of lower other income, higher interest cost, amortisation on account of foreign currency translation reserve and higher tax. We decrease our price target by 2.3 % to Rs 210 based on 8x FY 2011E. The overhang on stock does remain on account of the FCCB repayment of USD 270 mn by CY 2011. We maintain our 'BUY' rating on the stock, with price target of Rs 210," says Karvy Stock Broking's research report.

Reliance Money on Infosys - Target Rs 1985

Reliance Money has recommended a hold rating on Infosys Technologies, with price target of Rs 1985, in its report.

"In the last three odd months, most of the IT stocks had a sharp run up owing to smart rally in the domestic market, however there is not much improvement at the micro levels, nevertheless there is a marked improvement in the risk appetite and optimism towards a early 2010 recovery in the sector. We believe, Infosys with its robust business model coupled with strong margin management is well placed to take early advantage of the curve. In terms of stock price, we expect a near term correction after a sharp 28% run in the stock price in last three months. We recommend 'HOLD' on Infosys with a price target of Rs 1985, at our target price stock would be valued at 20x FY10E and 17x FY11E," says Reliance Money's report.

Stock views on Nava Bharat Ventures, City Union Bank, Patel Engineering

KRChoksey on Patel Engineering - Target Rs 182

KRChoksey is bullish on Patel Engineering and has recommended buy rating on the stock with a target price of Rs 182, in its report. We anticipate company to report a healthy growth in Q4 it is generally the strongest quarter. However going forward in FY10 we expect company’s sales to remain muted due to slowdown in order inflow and delays in project execution owing to liquidity crunch. On the margin front we expect the company to sustain the current margins mainly due to fall in raw material prices. However, we expect the net profit margins to improve marginally from H2FY10, due to reduction in cost of debt."

"At the CMP of Rs145 the stock is trading at a 5.2x its TTM EPS of Rs 28 and 4.3x its FY10 EPS of Rs.33.9. Due to lack of clarity on the execution of real estate projects we have valued PEL’s land bank at cost of Rs 200 crore, which gives us a value of Rs 33.3per share. We recommend a BUY on the stock with a target price of Rs 182. At the target price of 182, the stock will be trading at 5.4x FY010E EPS," says KRChoksey research report.


Karvy Stock Broking City Union Bank - Target Rs 23

Karvy Stock Broking has recommended a buy rating on City Union Bank with a target price of Rs 23 in its research report. "In Q3FY09, City Union Bank (CUB) reported 32% growth (Y/Y) in net interest income to Rs 650 million compared to our estimates of Rs 558 million; higher than our estimates mainly due to higher expansion in yield on funds (of 94 bps) compared to that of in cost of funds (of 70 bps) and much higher credit-deposit ratio at 71% (against 63% in Q3FY08). We cut our price target by 25.8% to Rs 23; we rate the stock as a BUY with a price target of Rs 23 at 1.09x adjusted book value FY10," says Karvy's research report.


KRChoksey on Nava Bharat Ventures - Target Rs 207

KRChoksey has maintained buy rating on Nava Bharat Ventures with a target of Rs 207 in its report. "Nava Bharat Ventures Q3FY09 net sales are gone up by 13.2% (YoY) to Rs 285.3 crore. Its PAT increased by 34.3% (YoY) to Rs 101.1 crore. We are cutting our FY09E and FY10E earning estimates by 2.3% & 7.6% (YoY) to Rs 54.9 & Rs 59.8 on account of slowdown in economy and correction in Ferro Alloy business. In Q3FY09, company’s ferro alloy business segment has disappointed on results. But we believe company’s power business would compensate the situation in coming time."

"At CMP, stock is trading 1.78x on TTM earning of Rs 61.1 and 1.82x on FY10E earning of Rs 59.8. On back of company’s diversified business model, power business initiatives, substantial land value holding at Hyderabad & Secundrabad, we maintain our BUY rating on the stock. Though we are cautious of ferro alloys business slow down, but w e believe the concerns are heavily discounted in the stock price,"says KRChoksey's research report.

KRChoksey views on Hindustan Zinc, Nava Bharat Ventures, Sanwaria Agro Oils

Sanwaria Agro Oils - Target of Rs 45

KRChoksey has recommended a buy rating on Sanwaria Agro Oils with a target of Rs 45 in its report. The geographical benefits which the company enjoys on account of all its plants being located in the state of MP (largest producer of soybean seeds) is a key advantage over its peers. Further, SAOL will benefit from setting up of wind turbine generators which will bring down the operating cost and thus enhance margins by 230bps. We expect the profit margins to improve going forward as interest rates cool down."

"At CMP of Rs 32, the stock is trading at 6.4x FY08 earnings of Rs 4.98. We recommend a “BUY” rating on the stock with a price target of Rs 45 based on our P/E valuation, with an upside potential of 41% from current levels. At the target price, the stock would be valued at 6.6x FY09 EPS of 6.8," says KRChoksey's research report.

Nava Bharat Ventures - Target of Rs 247

KRChoksey Research has maintained its buy rating on Nava Bharat Ventures with a target price of Rs 247 in its November 7, 2008 research report. "Net sales surged by 157.0%(YoY) to Rs 398.3 crore in Q2FY09 against Rs 151.3 crore in Q2FY08. On back of company’s diversified business model, power business initiatives, substantial land value holding at Hyderabad & Secundrabad and improving sugar prices, we maintain our BUY rating on the stock with the target price of Rs 247. Though we are cautious of ferro alloys business slow down, but we believe the concerns are already been discounted heavily in the stock prices," says KRChoksey's research report.

Hindustan Zinc - Target of Rs 504

KRChoksey Research has recommended a buy rating on Hindustan Zinc with a target price of Rs 504 in its November 7, 2008 research report. "Net sales of the company declined from Rs 1,984.0 crore to Rs 1,790.5 crore; negative growth of 9.8% (y-o-y). We recommend a BUY on the stock with a target price of Rs 504," says KRChoksey's research report.

Stock views on HEG, Nava Bharat Ventures, Dishman Pharma, Gateway Distriparks

PINC Research on HEG - Target of Rs 205

PINC Research has maintained its buy rating on HEG with a target of Rs 205 in its November 5, 2008 research report. "HEG reported a decent 15% YoY growth in its revenues for Q2FY09 which stood at Rs 3 billion. A Rs 300 million provision for losses on account of mark-to-market on forex loans, dampened the profits, which fell by 25% on YoY basis. We believe that HEG would continue to maintain its margin and incremental volumes would drive its profit growth going forward."

"At the CMP of Rs 149, it is trading at P/E of 3.4x and EV/EBDIT of 2.3x discounting its FY10 estimates. We believe this is at substantial discount to its fair value, which also includes 36% stake in BEL. Hence we maintain ‘BUY’ recommendation on the stock with a revised price target of Rs 205 on a 12 month investment horizon," says PINC' research report.

PINC Research on Nava Bharat Ventures - Target of Rs 190

PINC Research has maintained its buy rating on Nava Bharat Ventures with 12-month price target to Rs 190 in its November 7, 2008 research report. "Nava Bharat Ventures Ltd. (NBVL) once again reported an excellent set of results in Q2FY09 as it posted a 157% increase in revenues, at Rs 4 billion, with 70% contribution from the ferro alloy division alone. Net profits grew by 127% to Rs 1.2 billion."

"At the CMP of Rs110, the stock is trading at a P/E of 2.3x and EV/EBIDT of 1.2x its FY10E earnings We believe these are very attractive valuations for a company with a very robust business model where the company can switch between power and ferro alloys production depending on the market conditions. Hence, we maintain our ‘BUY’ recommendation on the stock but revise our 12-month price target to Rs 190," says PINC's research report.

Reliance Money on Dishman Pharma - Target Rs 185

Reliance Money has recommended a buy rating on Dishman Pharmaceuticals and Chemicals, with a 12-month price target of Rs 185, in its report dated October 31, 2008. "Dishman Pharmaceuticals & Chemicals reported 35% growth in its consolidated revenues to Rs 2520 million during Q2FY09, which was in line with our expectations. To capture the market wide correction in the valuations, we are revising down our target price to Rs 185 (i.e 8x FY10EPS) from our earlier DCF based target price of Rs 320. Thus, we maintain our rating on Dishman Buy with revised target price of Rs 185," says Reliance Money's report.

India Capital Markets on Gateway Distriparks

India Capital Markets has maintained its buy rating on Gateway Distriparks, in its report dated October 31, 2008. "Gateway Distriparks Ltd (GDL) has reported impressive Q2FY09 numbers in revenues on back of increase in volume growth by 13% on qoq basis. On standalone basis GDL’s revenues grew by 32% on yoy to Rs 554 million in Q2FY09 on the back of rationalization of cost structure at Mumbai CFS. GDL overall handled 110,175 TEUs (up by 22% on yoy & 13% on qoq). GDL has deployed 12 rakes which are running on domestic and EXIM routes which will enhance to total of 40 rakes in next 18 months. Snowman’s performance has improved on operational level. We remain positive on the stock, but recent global worsening financial conditions may slow down the export – import (EXIM) trade. We continue to remain BUY on the stock," says India Capital Markets' research report.

Stock views on Nava Bharat Ventures, Redington, NIIT

Hem Securities on Nava Bharat Ventures - Target of Rs 280

Hem Securities has maintained its buy rating on Nava Bharat Ventures with a target of Rs 280 in its September 22, 2008 research report. "The company posted excellent financial figures for the quarter ended June 2008. The net sales for the company gone up by 64.77% to Rs 2904.77 million for the Q1FY09 as against the net sales of Rs 1762.91 million for the Q1FY08.Since the stock seems to offer extremely good investment opportunities, we initiate a ‘BUY’ signal on the stock with a target price of Rs 280 in medium term investment horizon expecting an appreciation of about 28% from the current level,” says Hem Securities’ research report.

India Capital Markets on Redington - Target Rs 325

India Capital Markets has recommended a buy rating on Redington (India) (RDIL) with a target of Rs 325 in its September 23, 2008 research report. "RDIL is currently trading at a P/E of 13 on FY09E earnings with a PEG of 0.9. An important aspect to note is that the projected growth is only for the established business of RDIL & doesn’t include contribution from NBFC & proposed ADC. We initiate coverage on the company with a BUY recommendation, with a Target Price of Rs 325," says India Capital markets' research report.

Emkay Global on NIIT - Target of Rs 132

Emkay Global Financial Services has maintained its buy rating on NIIT with a target of Rs 132 in its September 22, 2008 research report. "We highlight that the company remains sound on achieving the earlier envisaged financial targets for FY09 (our growth and margin assumptions for the business segments are lower than company’s internal targets). We would look to review our ratings and target price post Q2FY09 results; however believe that there is little risk to our FY09 earnings estimates of Rs 5.4. Maintain BUY with a price target of Rs 132," says Emkay Global Financial Services' research report.