Stock Views on Bank Of India, PNB, Orchid Chemicals

KRChoksey on Bank Of India - Target Rs 380

KRChoksey has recommended a buy rating on Bank Of India with a target price of Rs 380 in its research report.

"Bank of India’s operational results were broadly in line with our expectations with headline profit numbers increasing 4% y-o-y to Rs 584.3 crores. Net Interest Income came under pressure as bank remained cautious on increasing advances (yoy advances growth up 23% yoy and 2.1% sequentially). We recommend a 'Buy' on Bank of India with a target of Rs 380," says KRChoksey's research report.


KRChoksey on PNB - Target Rs 780

KRChoksey has maintained its buy rating on Punjab National Bank with a target price of Rs 780 in its research report.

"PNB reported better than expected headline profit at Rs 832 crore (up 62.4% y-o-y) on back of higher trading gains. Net Interest Income held up better compared to peers as the bank was able to withstand margin pressures better. We maintain a 'Buy' on PNB with a target of Rs 780," says KRChoksey's research report.

Angel Broking on Orchid Chemicals - Target Rs 110

Angel Broking has maintained its buy rating on Orchid Chemicals and Pharmaceuticals with a target price of Rs 110 in its research report.

"For 1QFY2010, Orchid’s net sales increased 8% to Rs 305.8 crore (Rs 282.6 crore) driven by launch of the high-Margin Tazo-Pip in Europe. At current levels, the stock is trading at 6.1x FY2011E Adjusted Earnings and 1.3x FY2011E EV/Sales which we believe adequately factors in the concerns on the debt front and delays in getting approval for its high-Margin products. We maintain a 'Buy' on the stock, with a target price of Rs 110," says Angel's research report.

Stock Views on Orchid Chemicals, Crompton Greaves

Reliance Money on Orchid Chemicals - Target Rs 176

Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target price of Rs 176 in its research report.

"Orchid Chemicals & Pharmaceuticals (Orchid) is an integrated pharmaceutical company with core competencies in the cephalosporin injectable space and that too in regulated markets of US. Having an established strong base in US cephalosporin segment, the company is now spreading its wings to other regulated markets like Europe and Canada. Further the company is progressing well in the non-penicilin, noncephalosporin (NPNC) and drug discovery front."
"Orchid is currently trading at an attractive valuation of 5x it FY11 EPS its FY11 EV/ EBITDA. Further looking at the robust earning opportunities in the pipeline and debt reduction comitment, we recommend a 'BUY' rating on Orchid with a target price of Rs 176 (8x FY11E)," says Reliance Money's research report.

Sharekhan on Crompton Greaves - Target Rs 308

"We like Crompton Greaves for its consistent performance at the operating level. Moreover, its ability to improve its working capital management in a tough environment (most other companies have indicated a stretched working capital cycle) is quite impressive. We reiterate our bullish stance on the company and maintain our Buy recommendation on the stock. At the current market price the stock is discounting its FY2010 and FY2011 earnings estimates by 16.3x and 14.8x respectively, target of Rs 308," says

Stock views on Orchid Chemicals, Glodyne Technoserve, Unitech

Sharekhan on Orchid Chemicals, target of Rs 163

"The approval and launch of Tazo-Pip in the USA and the resumption of supplies to Europe would act as major triggers for the stock in the near term, whereas the reduction in the debt levels and interest costs would drive the stock in the medium to long term. At the current market price of Rs 94, Orchid is discounting its FY2011E earnings by 5.8x. We maintain our Buy recommendation on the stock with a price target of Rs 163," says Sharekhan's report.

Reliance Money on Glodyne Techno, target of Rs 575

Glodyne Technoserve continues to leap forward with impressive financial performance, we estimate an EPS CAGR of 33% over FY09-11E. At CMP of Rs 488, stock trades at 5X FY10E earning and 4x FY11E. We continue to remain positive on long term sustainability of Glodyne’s business model and recommend 'BUY' with a 12-month target price of Rs 575. At our target pricestock will be valued at 5x FY11E," says Reliance Money's report.

KRChoksey on Unitech, target of Rs 110

"The successful QIP’s has brought positive triggers in the stock. We expect Unitech would be able to launch 35 million sq ft in next 2 years. The company plans to launch 40 projects at aggressive price points on which they have received a good response. We expect Unitech to reduce its debt by 35% to Rs 5,070 crore by the end of FY10 from the existing debt of Rs 7,800 crore., which will bring down its D/E from 1.6X to 0.5x. Based on our funding analysis, we believe that the funds raised from QIPs and other initiatives (asset sale, Telenor deal, warrants to be issued to promoters, etc) would be sufficient to fund its planned projects. We thus belive that the funding woes for the company are more or less over in short to mid term. At CMP of Rs.84 we maintain our ‘BUY’ recommendation on the stock with a target price of Rs 110, which gives it an upside potential of 29.4%. At the CMP of Rs 84, the stock is trading at 20.3x FY10E earnings of Rs 4.2," says KRChoksey's report.

Angel Broking views on Axis Bank, HDFC Bank, Orchid Chemical

Angel Broking on Axis bank - Target of Rs 859

Angel Broking has maintained its buy rating on Axis Bank with a target price of Rs 859 in its research report.

"Axis Bank had been gradually re-rated from sub 1x P/ABV multiples up to April 2003, with a median P/ABV of 2.8x since April 2007, as the market continued to recognise and reward its transformation into a strong Private Sector Bank with an attractive potential for wealth creation. At current valuations, the stock is once again trading at sub 1x P/ABV multiples on exaggerated concerns regarding asset quality and top management continuity, which we believe offer substantial margin of safety even based on our worst case sensitivity analysis. We maintain a Buy on Axis Bank, with a target price of Rs 759, implying an upside of 91%," says Angel Broking's research report.

Angel Broking on HDFC Bank - Target of Rs 1666

Angel Broking has maintained its buy rating on HDFC Bank with a target price of Rs 1,666 in its research report.

"At current valuations, HDFC Bank is trading below its six-year median P/ABV multiple. We believe the Bank is among the most competitive banks in the Sector and is poised to maintain its profitable growth over the long term. We believe the Bank's competitive advantages, driving gains in CASA marketshare and traction in multiple Fee Revenue streams, can support up to 5% higher core sustainable RoEs vis-à-vis sectoral averages over the long term, creating a material margin of safety in our target valuation multiples. We maintain a Buy on HDFC Bank, with a target price of Rs 1,666, implying an upside of 41%," says Angel Broking's research report.

Angel Broking on Orchid Chemical - Target of Rs 198

Angel Broking has maintained its buy rating on Orchid Chemicals and Pharmaceuticals with target price of Rs 198 in its research report.

"Orchid Chemicals and Pharmaceuticals announced that it has bought back bonds worth USD 25.7 million out of the total outstanding FCCB of USD 194.7million as on date, and was in the process of extinguishing the same. The funding has been done through ECB. Post this transaction, the company would have FCCBs worth around USD 169 million of which USD 19.7 million is payable in FY2011 and USD 149.3 million in FY2012. The company intends to purchase additional bonds from the market and extinguish them from time to time. We believe the transaction per se will not materially alter the company’s current Debt/Equity ratio of 3x.
We maintain a Buy on the stock, with a target price of Rs 128 as the stockcontinues to trade at 11.8x FY2009E and 3.9x FY2010E adjusted Earnings. We believe launch of Piperacilin-Tazobactum in Europe would be a key positive trigger for the stock in the near term," says Angel Broking's research report.

Stock views on Corporation Bank, Orchid Chemicals, Aventis Pharma

Sunidhi Securities on Corporation Bank - Target Rs 195

Sunidhi Securities & Finance has recommended a buy rating on Corporation Bank with a target price of Rs 195 in its research report. "During Q3FY09, total income has gone up by 50 per cent to Rs 1906 crore whereas net profit has gone up 34 per cent to Rs 256 crore. Net margin however, declined form 15% to 12.7%. During the nine months ended December 2008, net profit surged 19% to Rs 632 crore. NP margin stood at 12.7% against 14% in the previous nine months ended December 2007. At CMP, the share is trading at a P/BV of 0.5 (FY09), P/E of 2.8x on FY09E and 2.5x on FY10E. We recommend BUY on the stock with a price target of Rs 195 in the medium term," says Sunidhi Securities & Finance's research report.


Angel Broking on Orchid Chemicals - Target Rs 128

Angel Broking has maintained its buy rating on Orchid Chemicals and Pharmaceuticals with a target price of Rs 128 in its research report. "Orchid Chemicals & Pharmaceuticals (Orchid) will raise overseas debt to retire the USD 175 million (Rs 858 crore) foreign currency convertible bonds (FCCBs). A resolution passed by the company’s Board recently allowed it to raise up to Rs 1,500 crore, for which shareholder approval is expected to be sought soon."


"The company’s FCCBs are currently being traded at a significant discount and are set to mature in February 2012 at a strike price of Rs348 for conversion to Equity. The current yield-to-maturity is 7.25%. This move takes advantage of the recent liberalised norms that permit companies to use proceeds from overseas debt to retire FCCBs. The company did not confirm about the price at which the bonds would be bought back. We maintain a Buy on the stock, with a target price of Rs 128," says Angel's research report.


Angel Broking on Aventis Pharma - Target Rs 1,027

Angel Broking has maintained its buy rating on Aventis Pharma with a revised target price of Rs 1,027 in its research report. "For 4QCY2008, the company posted net sales of Rs 269.9 crore registering a yoy growth of 32.3% on the back of strong traction in both the domestic and export segments. Robust growth in sales, rise in OPM and higher other income led to 67.8% increase in Net Profit to Rs 45.3 crore during the quarter. For CY2008, the company posted 15.1% yoy growth in Net Profit to Rs 166.2 crore on the back of Sales growth. We maintain a Buy on the stock, with a revised target price of Rs 1,027," says Angel Broking's research report.

Stock Views on on Infosys Technologies, NTPC, Sadbhav Engineering, Orchid Chemicals

Motilal Oswal on Infosys Technologies - Target of Rs 1640


Motilal Oswal has maintained its buy rating on Infosys Technologies with a target of Rs 1640 in its November 14, 2008 research report. "Infosys reported in-line revenue growth of 5.3% QoQ and 18.9% YoY to USD 1,216 million for 2QFY09. Infosys guided for revenue of USD 4.72 billion-4.81 billion for FY09 v/s its earlier guidance of USD 4.97 billion-5.05 billion, implying 13-15% growth now v/s 19-21% growth earlier. The rupee revenue guidance for FY09 has been changed only marginally to Rs 213 billion-217 billion from Rs 213 billion-216 billion, implying growth of 28-30%. The company has maintained EPS guidance for the year at Rs 101.06 (the higher end), implying growth of 24%."

"We believe operating margins will be stable with a negative bias for 2HFY09. The company hired 17,299 employees in 1HFY09, which is 69% of the total guided gross hires for the year. We reduced our FY09 EPS estimate by 2% to Rs 100.4 and FY10 EPS estimate by 5% to Rs 109.1 and are revising our target price to Rs 1,640 (15x FY10E earnings) due to earnings growth deceleration to 17% over FY08-10 and prevailing uncertainties. Maintain Buy," says Motilal Oswal's research report.


Hem Securities on NTPC - Target of Rs 183


Hem Securities has initiated a buy rating on NTPC with a target price of Rs 183 in its November 15, 2008 research report. "The company has posted decent results for the quarter ended September 2008. The Net sales have surged to Rs 100911 million with a year over year growth of 25.87 per cent. Presently, the stock is trading at Rs 149 which is at 17.65 times to its earnings and 2.18 times to its book value of Rs 68.49. Since the stock seems to offer extremely good investment opportunities, we initiate a ‘BUY’ signal on the stock with a target price of Rs 183 in medium term investment horizon expecting an appreciation of about 22% from the current level of Rs 149," says Hem's research report.


Angel Broking on Sadbhav Engineering - Target of Rs 718


Angel Broking has maintained its buy rating on Sadbhav Engineering with a target price of Rs 718 in its November 12, 2008 research report. "For 2QFY2009, Sadbhav Engineering (SEL) reported Net Sales numbers, which were below our expectations. The company registered 22% yoy growth in Net Sales to Rs 124.2 crore (Rs 101.8 crore) as against our expectation of 41% growth at Rs 143 crore. We value, SEL at 6x FY2010E standalone Earnings assigning Rs 430 per share. We value SEL’s portfolio of BOT assets at Rs 399 crore (Rs 420 crore earlier), contributing Rs 288 per share excluding NSEL Annuity project, which we believe has no value while factoring in current increased cost of financing and arrive at a conservative SOTP Target Price of Rs 718 (Rs 1,036). We maintain a Buy on the stock," says Angel's research report.


Reliance Money on Orchid Chemicals - Target of Rs 176


Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target of Rs 176 in its November 14, 2008 research report. "Orchid Chemicals & Pharmaceuticals Ltd (Orchid) reported 19% growth in consolidated revenues on a higher base to Rs 3484.5 million during Q2FY09. As per revised estimates, we expect the Revenue and profit (excluding forex loss) would grow at a CAGR of 15% and 16%, respectively during FY08-10E. Thus, the revised EPS (excluding forex loss) stands at Rs 14 and Rs 22.9 for FY09E and FY10E, respectively."


"But the positive part of Orchid is that FCCBs have sufficient time horizon for conversion and the company does not hedge its revenues, which could benefit the company from the weakening Rupee scenario in the near term. In line with our changed estimate based on consolidated numbers and in order to align our valuation with market valuation, we are revising our target price. In fact, to capture the market wide correction in valuations, we have reduced the earning multiple by 35% and revise target price to Rs 176 (i.e. 8x FY10E EPS),Buy," says Reliance Money's research report.

Stock Views on Rallis India, Orchid Chemicals, Welspun Gujarat

Emkay Global on Rallis India - Target of Rs 518

Emkay Global Financial Services has recommended a buy rating on Rallis India with a target of Rs 518 in its November 12, 2008 research report. "The company has shown a consistent growth in the past with improvement in the EBITDA margins, increased number of new launches, improving operational efficiency and increased thrust on exports. We believe that EBITDA margins of 15.5% will be sustainable in future with less pressure from raw material cost due to overall fall in the commodity prices."

"We expect EPS of Rs 52 and Rs 64.8 for FY09E and FY10E. The company also has ‘hidden assets’ like excess land bank and a minority stake in Advinus, one of the finest pharma research organizations in India. Based on this, we are revising our price target to Rs 518 (from Rs 550 earlier) which is 8XFY10E earnings with a BUY rating," says Emkay Global Financial Services' research report.

Reliance Money on Orchid Chemicals - Target of Rs 176

Reliance Money has recommended a buy rating on Orchid Chemicals and Pharmaceuticals with a target of Rs 176 in its November 14, 2008 research report. "Orchid Chemicals & Pharmaceuticals Ltd (Orchid) reported 19% growth in consolidated revenues on a higher base to Rs 3484.5 million during Q2FY09. As per revised estimates, we expect the Revenue and profit (excluding forex loss) would grow at a CAGR of 15% and 16%, respectively during FY08-10E. Thus, the revised EPS (excluding forex loss) stands at Rs 14 and Rs 22.9 for FY09E and FY10E, respectively."

"But the positive part of Orchid is that FCCBs have sufficient time horizon for conversion and the company does not hedge its revenues, which could benefit the company from the weakening Rupee scenario in the near term. In line with our changed estimate based on consolidated numbers and in order to align our valuation with market valuation, we are revising our target price. In fact, to capture the market wide correction in valuations, we have reduced the earning multiple by 35% and revise target price to Rs 176 (i.e. 8x FY10E EPS),Buy," says Reliance Money's research report.

Asit C. Mehta on Welspun Gujarat - Target of Rs 190

Asit C. Mehta has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target price of Rs 190 in its November 13, 2008 research report. "WGSRL has an order book of USD 2 billion, which provides revenue visibility until FY10. Current orders sufice current capacity. As new capacity becomes operational, the company should attract orders. However, with the current global credit crisis we expect new orders to come in at a slower pace."

"We believe that the company will benefit in the near term on account of the capex it has incurred in the pipes segment. We therefore maintain a positive outlook on the stock and reiterate a “BUY” recommendation with a revised target price of Rs 190, which is equivalent to a P/E multiple of 5 times its FY10E EPS," says Asit C. Mehta's research report.