Stock Martket BSE » Brokerage Recommendations

Buy IndusInd Bank – ULJK Securities

aliquadir — Tue, 25 Jan 2011 14:02:05 +0000

“IndusInd Bank reported the loan book growth of 31% yoy to Rs 25,001cr driven by consumer loan and corporate loan segment growth of 36% yoy and 28% yoy respectively. However deposit grew slower than loan book posting growth of 25% yoy to 30,663cr while declining sequentially by 2%. We expect the bank to post 30% growth in advances and 23% growth in deposits for FY2012E.”

“Net interest income rose 53% yoy to Rs 363cr led by robust loan book growth and increase in NIMs. IndusInd Bank reported strong NIMs of 3.61% in 3QFY2011 from 2.94% in 3QFY2010. In order to maintain margins, the banks consciously reduced its term deposits and continue concentration towards growing CASA deposits. CASA ratio improved to 26.8% in Q3 FY11 from 25.1% in Q2 FY11 and 22.54% in Q3 FY10. The YoA rose from 12.1% in Q2FY2011 to 12.31% in Q3 FY2011 whereas sequentially CoF rose 18 bps to 6.17% in Q3 FY11.”

“Cost to income ratio which stood at 47.91% in Q3 FY11 due to increase in number of branches is expected to be around 45% over the next nine quarters. Added 48 branches in FY11 till date IndusInd Bank reported net profit growth of 75% yoy to Rs 154cr led by growth in net interest income and fee income. Gross NPA stood at 1.21% in 3QFY2011 from 1.34% in 3QFY2010 while Net NPA stood at 0.36% in 3QFY11 from 0.67% in 3QFY2010. The restructured book of the bank stood at 1.6% of total loan book with no exposure in telecom, ~2% exposure in real estate and ~1% of loan book in Microfinance sector. The Capital adequacy ratio of the bank stands at 15.6% with Tier 1 capital at 12.67%.”

Buy SBI 3QFY11 Results – Motilal Oswal

aliquadir — Tue, 25 Jan 2011 13:58:38 +0000

“SBI’s 3QFY11 PAT was up 14% YoY at Rs 28.3 billion (10% higher than our estimate). Performance on operating parameters was significantly better than we had anticipated. Some of the positive surprises are: margin improvement of 18bp QoQ (v/ s our estimate of 10bp decline), lower than expected opex (13% lower than estimated), and stable asset quality.”

“Margins have improved 18bp QoQ and 79bp YoY to 3.61%, led by a sequential drop in cost of deposits (13bp). Improvement in CASA ratio (~90bp QoQ) and CD ratio at elevated level of 77% also aided NIM expansion. The management guided that margins would be maintained at current levels (may see 10bp improvement in 4QFY11). For FY12, the management guided margin of 3.3% v/s ~3.5% expected in FY11. Operating expenses increased 11% YoY (down 3% QoQ), 13% lower than our estimate. With increase in benchmark yields, gratuity liability is revised to Rs 19 billion as against Rs 22 billion earlier. In absolute terms, GNPA remained flat QoQ at Rs 234 billion. PCR including technical write-offs increased to 64% (v/s 62.8% in 2QFY11). Reported slippages for the quarter were at Rs 39 billion (including Rs 7.7 billion of URIPY balance reduction).”

Stock Tips

admin — Thu, 22 Apr 2010 03:28:35 +0000

VST TILLAR :- stock has touched new high of 353, investors can think of booking profit at every higher levels . switch part of the same in to polyplex, where valuations are attractive

Jayaswal Neco :- .the Company as an Integrated Steel Plant is equipped with all the facilities for converting the
basic raw material Iron Ore into Iron and Steel Rolled Products for different applications. company has captive coal
mines . In view of encouraging outlook for the steel sector, company is expected to report encouraging results in future . Investors can keep watch to accumulate this stock on dips below 45 levels for long term target of 75.

Sun Flag Iron & Steel Co. Ltd. :- Performance of company has shown good improvement over last three qtrs & it is expected to do well, promoter holding has gone up by 8.8 5 % over last two years through market purchase. Based on working of 1st nine months full year eps is expected to be around 6 as 4rth qtr is expected to much better. Investors can keep watch on this stock for accumulation on dips for target price of 60 over next 6 months time .

Century Textile is expected to report good results, investors can continue to hold thsi stock for target price of 700.

Century Enka full year eps likely to be around 50/52 , stock trading at p/ e mutliple of 6 . it has good potential for upside.

KCP LTD , since there is good improvement is cement & capital good business, outlook of company is encouraging. investors can continue to hold this stock for target price of 500.

Supreme industry :- Results are encouraging, investors can stay invested for target of 600. Sharyans resources , though the stock has not given upmove, but investors having patience can accumulate for good long term growth.

Shilpa Medical, which was advised at lower levels of 165, investors can book profit & switch to stride arcolab,

Sarda energy, is another good steel sector stock having own mines of coal & iron ore. investors can keep watch on this stock for buying below 240 levels.

Buy Apollo Tyres target Rs 84 – India Infoline

admin — Thu, 18 Mar 2010 03:04:44 +0000

India Infoline has initiated buy rating on Bharat Forge, Apollo Tyres, Exide Industries and Motherson Sumi in its research report dated March 17, 2010.

Indian Auto Component manufacturers have registered an improved financial performance in the past couple of quarters on the back of higher volumes arising from the domestic market. Cost cutting initiatives, improved productivity and better financial management during the meltdown (Q3 FY09-Q1 FY10) provided additional traction to their financial performance. We believe the momentum is expected to continue based on the following factors:

Strong domestic demand for automobiles
Replacement demand gaining traction
India emerging as automobile manufacturing hub
Rising automobile component sourcing from India

Buy Elecon Engineering with a price target of Rs 107 – SKP Securities

admin — Wed, 03 Mar 2010 03:09:15 +0000

“Elecon Engineering Company (Elecon) is a leading manufacturer of industrial gears with the market share of 26%, operating in multiple core industries. It is also one of the largest players in material handling equipments (MHE) in India. Majority of its MHE revenues are derived from buoyant power sector. Elecon is also present in wind turbine segment. It has its state of the art facilities at Vallabh Vidyanagar, Gujarat. At the current market price of Rs 75, the stock is trading at a P/E of 13x, 11x and 8x of FY10E FY11E and FY12E earnings of Rs 5.7, Rs 7.1 and Rs 9.7 respectively. We recommend BUY rating on the stock with a target price of Rs 107/- (43% upside) in 18 months at the P/E of 11x on FY12 earnings of Rs 9.7, “says SKP Securities research report.

Motilal Oswal has downgraded Mphasis to neutral rating with a price target of Rs 710

admin — Sun, 28 Feb 2010 11:27:36 +0000

“Mphasis 1QFY10 results were in line with expectations, excluding impact of higher than anticipated forex gains on revenue and other income. EBITDA margins were in line with expectations at 26.3% (v/s est. of 26.4%) and profits were flattish, excluding impact of forex gains. The stock quotes at P/E of 13.9x FY10 (YE Oct) and 13.3x FY11 earnings. We downgrade the stock to Neutral, with a target price of Rs 710, based on 14x FY11 earnings. We expect pricing cut from its parent HP and uncertainty on applications pricing going forward to weigh on the stock in the interim. Lower than anticipated pricing declines can provide upsides to our estimates, “says Motilal Oswal research report.

Buy Allied Digital target Rs 260- Firstcall Research

admin — Thu, 25 Feb 2010 03:12:58 +0000

Firstcall Research has recommended to buy Allied Digital Services with a target price of Rs 260 in its report dated February 20, 2010.

“Allied Digital Services reported a substantial rise in standalone net profit for the quarter ended December 2009. During the quarter, the profit of the company rose 43.66% to Rs 267.50 million from Rs 186.20 million in the same quarter previous year. Net sales for the quarter for the quarter rose 27.30% to Rs 1,224.20 million, while total income for the quarter rose 28.38% to Rs 1,239.90 million, when compared with the prior year period. At the market price of Rs 220.30, the stock trades at 10.08x and 8.83x for FY10E and FY11E respectively. The topline and bottomline of the company are expected to grow at a CAGR of 22% and 39% respectively over FY08 to FY11E. We recommend a “BUY” in this stock with a target price of Rs 260 for medium to long term,” says Firstcall research report.

Accumulate KPIT Cummins, target Rs 150 – Prabhudas Lilladher

admin — Tue, 23 Feb 2010 03:12:33 +0000

Prabhudas Lilladher has recommended an accumulate rating on KPIT Cummins, with price target of Rs 150, in its report dated February 22, 2010. The stock closed at Rs 108.85 on February 22, 2010.

“We expect KPIT Cummins to report organic growth of 1-2% QoQ and inorganic growth of 7-8% QoQ in USD terms for Q4FY10. We expect the stability in Cummins business as a precursor to the growth from it. We anticipate Sparta acquisition along with improvement in automotive & semiconductor sector and stability in Cummins business to help KPIT deliver stronger growth than its peers. We reiterate our “Accumulate” rating, with a target price of Rs 150, a target multiple of 12x FY11 earning,” says Prabhudas Lilladher report.

GlaxoSmithKline Pharma- Religare, Hitchens and Harrisons Stock Tips

admin — Mon, 22 Feb 2010 03:45:16 +0000

Reco price: Rs 1,580
Current market price: Rs 1,649.65
Target price: Rs 1815
Upside: 10%
Brokerage: Religare, Hitchens & Harrisons

GSK Pharma launched five products (including one vaccine – Cervarix) in CY09. The vaccine portfolio has seen a positive surprise in terms of demand. Going ahead, the company is expected to launch 6–8 products per year. Some of these will be positioned in the niche segment. In addition to the in-house product range, the company will have access to the dermatology portfolio of Stiefel.

The management has guided for revenue growth of 12–13 per cent for CY10 and CY11, up from the 9–10 per cent run-rate posted in the past two years. New product launches are expected to underpin the growth shift. GSK Pharma’s EBITDA margin increased 10 basis points to 36 per cent in CY09. The company intends to increase its field force and raise promotional expenses to support its new product basket. However, these incremental costs will be offset by an improving product mix and stronger operating leverage. In addition, niche product opportunities will offer a margin upside. The brokerage has revised its earnings estimates for Glaxo by 2–3 per cent for CY10 and CY11 to reflect the upbeat growth prospects, and maintains buy on the stock, which is currently trading at a P/E of 23 times its estimated CY10 earnings.

Sell Bank of Baroda| target Rs 450- Karvy

admin — Wed, 20 Jan 2010 12:56:38 +0000

“We expect Bank Of Baroda to report 9% (YoY) decline in net profits to Rs 6,435 million primarily on account of lower treasury profits. The bank had booked Rs 4.2 billion in 3QFY2009 as treasury gains and we expect the bank to report only Rs 1.3 billion in this segment in 3QFY2010. We are retaining our sell recommendation with target price of Rs 450 as we would seek further clarity on BOB’s Dubai exposure and the likely provisions that the bank may have to undertake in that region,” says Karvy Stock Broking report.