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Thursday, April 7, 2011

{GS} Re: Broker's Call

Dolat Capital

Rallis India (Buy)

CMP: Rs 1,414

Target: Rs 1,698

Rallis redefined its DNA as a focused agrochemical player with complementary strengths in both manufacturing and distribution. Its business model rests on a strong USP of its 'farmer connect' and multiple relationships with global innovators. It has carefully turned around its manufacturing investments into a complementary global outsourcing model to provide predictable business growth.

We estimate earnings growth at 27 per cent CAGR (FY11-13E) led by sustainable growth in domestic business and increasing contribution from exports. Value unlocking opportunity from its investment in Advinus Therapeutics (out licensing deal – diabetes molecule) is a latent trigger. At CMP of Rs 1,411, the stock trades at 15.4x FY12E and 12.5x FY13E adjusted earnings.

PINC Research

NTPC Ltd (Hold)

CMP: Rs 186

Target: Rs 216

NTPC reported its FY11 provisional results. Although generation remained flat at 220BU, revenues grew by 17 per cent year-on-year to Rs 53,700 crore. However, PAT remained flat at Rs 8,800 crore. Both these were in line with our estimates. NTPC commissioned 2,490 MW during the year against its revised target of 3,150 MW – 660 MW Sipat slipped into FY12.

With NTPC missing its capacity addition target yet again in FY11, we remain skeptical on its capacity addition plan for FY12. However, we continue to build in its targeted addition for the year and will review it when the audited results will be declared in May. Despite this, we believe it offers better safety and steady returns vis-à-vis its private IPPs such as JSW Energy. NTPC has tied up 100 GW under long-term PPAs thus, providing steady returns. At the current price, NTPC trades at 2.2x FY12E book. We value the stock at 2.1x FY13E book to arrive at our target price of Rs 216, maintain 'hold'.

(This article was published in the Business Line print edition dated April 8, 2011)

On Wed, Apr 6, 2011 at 7:32 AM, ommarketaya namah <ommarketayanamah@gmail.com> wrote:

Emkay Research

IRB Infrastructure (Buy)

CMP: Rs 219.70

Target: Rs 280

We believe India's road PPP (Public Private Partnership) programme is on a sustainable uptrend following the positive convergence of the 3 Ps: Private participation-driven by strained public finances; Potention - Massive PPP opportunity of 35,000 km or $51billion and Policy initiatives - driven by strong political will. The positive convergence of the 3 Ps has propelled India's road development to a structural growth trajectory. This is clearly reflected in the awarding activity of 5,100 km in FY11E compared with 3,361 km awarded in FY10. We expect project awarding to gain momentum and estimate 12,700 km of new road BOT concessions to be awarded over FY12-13E compared with 8,400 km awarded over FY10-11.

ITNL (Accumulate)

CMP: Rs 249.10

Target: Rs 275

We initiate coverage on the road infrastructure sector with a positive stance on private road developers IL&FS Transportation Networks (ITNL). We expect the company to be a significant beneficiary of the sustained momentum in NHAI's new award activity. The balance sheet strength along with the execution track record of these industry leaders provides significant comfort in their ability to fund growth. We expect ITNL to bag project awards of Rs 10,000 crore over FY12-13. Current valuations implying no new order wins lend scope for positive surprises. Our SOTP-based target of 15 per cent is on upside from current levels for ITNL. We initiate coverage on ITNL with an 'Accumulate' rating and a target of Rs 275.

Edelweiss

Jaypee Infratech (Buy)

CMP: Rs 63

Target: Rs 80

Jaypee Infratech (JPIN) is constructing the Yamuna Expressway (YE) project, a six-lane 165 km road connecting Noida to Agra, which we expect to become operational by the first quarter of FY13. As compensation for constructing YE, JPIN has rights to collect toll for 36 years on YE and holds development rights on 6,175 acres (saleable area of 530 msf, of which, 311 msf is located in the NCR), across five contiguous land parcels along YE, acquired at a low cost of Rs 32-40/sf. We believe commissioning of YE and generation of real estate sales volumes from Greater Noida/Agra land parcels in FY12 will act as key triggers. At CMP of Rs 61 a share, the stock trades at 24 per cent discount to our NAV of Rs 80 a share.

Phoenix Mills (Buy)

CMP: Rs 191.70

Target: Rs 260

With the Pune and Kurla Market City malls set to become operational in the first half of FY12, PML's total operational retail area is poised to grow from 0.9 msf (High Street Phoenix) as of March 2011 to 3.4 msf, with PML's economic interest at 2 msf. Additional positives for PML are expected rental re-negotiations at HSP for 0.15 msf in FY12 and Shangri-La hotel becoming operational in FY12. We believe the stock offers an attractive entry point at current levels where it trades at 30 per cent discount to our FY12 NAV of Rs 260 a share.

(This article was published in the Business Line print edition dated April 6, 2011)


On Tue, Apr 5, 2011 at 7:52 AM, siddanth gupta <siddanthgupta@gmail.com> wrote:

Angel Broking

TCS (Accumulate)

CMP: Rs 1,211.50

Target: Rs 1,287

TCS has signed a multi-million dollar contract to provide application development and maintenance (ADM) services to Air Liquide USA LLC, a subsidiary of Air Liquide Group. Leveraging its global delivery model, TCS will provide end-to-end ADM services to support 5,800 Air Liquide US LLC users 24x7, improving operational effectiveness and efficiency. TCS will oversee day-to-day IT management through a managed services model and offer immediate problem diagnosis and repair services for an added level of IT support. TCS will also bring in application preventive maintenance as part of its service delivery model to increase productivity and reduce repair costs by streamlining IT costs and enhancing business performance. We maintain Accumulate on the stock with a target price of Rs 1,287.

Wipro (Accumulate)

CMP: Rs 480.55

Target: Rs 507

Wipro will acquire US-based Science Applications International Corporation's (SAIC) global oil and gas IT practice for an all-cash consideration of nearly $150 million (Rs 675 crore). The purchase is valued at approximately 0.8 times the revenue and six times the EBITDA on a trailing 12-month basis. The deal is expected to be completed by June-end. The purchase covers only the IT business of the firm's oil and gas vertical, which provides consulting, system integration and outsourcing services to global oil majors. SAIC's IT business will contribute merely 2.3 per cent to the company's top line. We keep our estimates unchanged, owing to the transformation phase in the company. We maintain our Accumulate view on the stock with a target price of Rs 507.

Dolat Capital

KPIT Cummins Info (Buy)

CMP: Rs 174.20

Target: Rs 240

KPIT trades at an attractive valuation of 9x of its FY13E earnings ex-Revolo. We expect core business revenues to grow 23 per cent and EPS to grow 27 per cent CAGR over FY2011-13E – valued at Rs 214 for the core business based on 12xFY13E earnings at Rs 17.8. We assign a lower multiple to Revolo, given the current status on pending OEM approvals, and acceptance of the product in market. Based on our volume estimates for Revolo, we estimate the contribution of this segment at Rs . 26 a share for KPIT (6xFY13E for Revolo earnings, 50 per cent discount to core business).

Sharekhan

BHEL (Buy)

CMP: Rs 2,173.80

Target: Rs 2,707

We feel that the order inflow would be the most important monitorable in the results as the company needs to bag orders worth Rs 23,000 crore in Q4FY2010 to achieve its target of Rs 60,000 crore. The stock is trading at the five-year low multiple of 15.6x FY2012 earnings per share (EPS). The valuation is even lower than that recorded in the 2008 recessionary period. We feel that in spite of the recent run-up in the stock, its valuation is still very attractive. The stock remains our preferred pick in the capital goods space.

(This article was published in the Business Line print edition dated April 5, 2011)
 
Sg



On Wed, Mar 30, 2011 at 7:34 AM, me cretin <mecretin@gmail.com> wrote:

Sushil Finance

TCS (Accumulate)

CMP: Rs 1,139.25

Target: Rs 1,290

TCS has been able to achieve QoQ revenue growth for last seven quarters from Q1FY10 onwards as global economy began to recover post the downturn and recessionary phase passed. During the period, its EBITDA margins and net profits also delivered QoQ growth barring Q1FY11 (aggressive hiring & high wage inflation impacted margins of IT companies during Q1FY11). We believe TCS is very well placed to grow faster than the industry given its capabilities, deal pipeline and focus on non-linear growth models. Hence, with increased transformational and consultancy deals ensuring stronger growth, we are optimistic about its performance. We re-instate our coverage on the stock with an 'Accumulate' rating and a price target of Rs .1,290 (25x FY12E EPS).

Religare Capital

Axis Bank (Buy)

CMP: Rs 1,422.60

Target: Rs 1,675

Improvement in asset quality to boost near-term earnings: An improving trend of slippages, as seen in Q3FY11, is likely to continue in Q4FY11 as well, as slippages from the restructured assets pool have already peaked with 17 per cent of these loans already turning into NPLs. The bank's credit costs are likely to have peaked and lower incremental credit costs could boost earnings in the coming quarters. However, higher exposure to infrastructure and power sectors remains a concern in the longer term given the deterioration in profitability of a few large SEBs (in the near term, we do not expect any restructuring or default from this segment). AXSB currently does not have any exposure to SEBs; however, absence of any structural reforms could hit the entire chain, in our view.

Motilal Oswal

Infosys (Buy)

CMP: Rs 3,172.05

Target: Rs 3,664

Infosys continues to be positive on the long term demand environment though it maintained a muted 4QFY11 guidance of 1-2 per cent sequential growth due to seasonality. We are modeling revenue growth of 4 per cent in 4QFY11, better than the company's guidance, though we expect Infosys' growth to continue to lag TCS' (we are modeling sequential revenue growth of 5 per cent for TCS). We expect Infosys to guide for 18-20 per cent US dollar revenue growth in FY12, better than NASSCOM's 16-18 per cent estimate for the industry. Our estimates are largely unchanged after our interaction with the Infosys management. We retain a Buy rating on Infosys with a price target of Rs 3,664, based on 20x FY13E earnings.

L&T (Buy)

CMP: Rs 1,648.85

Target: Rs 1,831

L&T remains one of the best plays on India's capex theme; maintain Buy. We have cut our standalone earnings estimates by 5.4 per cent for FY12 and by 6.2 per cent for FY13 on account of lower order intake in FY11 and FY12. We have cut our intake assumptions by 8 per cent for FY11 and by 9 per cent for FY12, lowering our revenue estimates by 3 per cent for FY12 and by 2 per cent for FY13. We have also lowered our consolidated earnings estimates by 9 per cent for FY12 and by 18 per cent for FY13 due to reduced standalone earnings and assumption of lower growth in international subsidiaries.

(This article was published in the Business Line print edition dated March 30, 2011)


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