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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.

Add Bombay Rayon Fashion, target of Rs 159: IIFL

admin — Fri, 27 Mar 2009 03:04:23 +0000

IIFL has recommended an add rating on Bombay Rayon Fashions with target price of Rs 159 in its March 26, 2009 research report.

“BRFL announced preferential allotment of 18m shares at Rs 185/share-32% higher than the current market price-to an investor company, AAA United BV (promoted by European fashion retailer Bestseller). This Rs 3.3 billion equity infusion, which results in 26% equity dilution, addresses two investor concerns: a) it lowers the company’s debt/equity from 1.7x to less than 1.2x; and b) it lends greater visibility on volume growth, given the strategic interest that a large buyer such as Bestseller would have.”

“We revise our FY10 and FY11 PAT estimates upwards by 8% and 13% to account for lower interest costs, but lower our EPS estimates by 14% and 10% to account for the dilution. Accordingly, we also raise our target price to Rs 159 from Rs 135 earlier, as we raise the earnings multiple to account for greater visibility on volume growth,” says IIFL’s research report.

Buy Marico above Rs 59.25: ICICIdirect

admin — Mon, 09 Mar 2009 09:05:39 +0000

ICICIdirect has recommended to buy Marico above Rs 59.25 with a stoploss of Rs 58.75 and targets of Rs 60/63/higher in its March 9, 2009 research report Related posts:Sell HUL below Rs 223: ICICIdirect Hold NTPC, target of Rs 200: ICICIdirect Buy SAIL (April) at Rs 101: Emkay Global Related posts:

Buy ICSA India, target of Rs 348: Hem Securities

admin — Mon, 09 Mar 2009 09:01:34 +0000

Hem Securities has maintained its buy rating on ICSA India with a target of Rs 348 in its March 7, 2009 research report.

“ICSA India Limited is keen on acquiring a power firm in the US with an investment of USD 20-30 million. ICSA India Limited has been permitted by the Board of Non-Conventional Energy Development Corporation of Andhra Pradesh Limited (NEDCAP) to set up a 20 MW Capacity Wind power project in Andhra Pradesh. The company has a strong order book position of more than INR 700 Crores which provides a strong visibility to the revenues. The company is trading at a very low PE of around 1.5X. We expect the company to outperform in the future and we reiterate “BUY” on the stock with a Target of INR 348.00,” says Hem Securities’ research report.

Buy Kalpataru Power, target of Rs 284: Karvy

admin — Mon, 09 Mar 2009 09:00:03 +0000

Karvy Stock Broking has upgraded its rating on Kalpataru Power Transmission from market performer to buy with a price target of Rs 284 in its March 9, 2009 research report.

“Kalpataru Power Transmission (KPTL) announced on 4th March 2009, that the company has bagged orders worth Rs 3.73 billion from Power Grid Corporation of India (PGCIL) for supplying power transmission equipment in India. This is followed by a large order worth USD 250 million (Rs 12 billion) from Ministry of Energy and Water, Kuwait during January 2009. Including the new order from PGCIL, total order book of KPTL (standalone) is Rs 48 billion (including L1) with an average execution period of 22 months. The latest project secured from PGCIL is expected to commence from March 2009 and scheduled to be completed within 27 months. Hence, we expect partial revenue to be booked in FY10 and remaining in FY11.”

“We maintain our revenue and earnings estimates and retain our price target of Rs 284, based on 4.5x FY10 earnings. However, owing to recent price correction, we upgrade our rating from Market performer to BUY,” says Karvy Stock Broking’s research report.

Sterlite Industries, target of Rs 263: IIFL

admin — Mon, 09 Mar 2009 08:58:21 +0000

IIFL has recommended an add rating on Sterlite Industries (India) with a target price of Rs 263 in its March 9, 2009 research report.

“Sterlite has announced a renegotiated deal to acquire substantially all assets of ASARCO. It will make an upfront payment of USD 1.1 billion for ASARCO’s assets and pay USD 600 million over the coming nine years (including a bullet payment of USD 460 million in the last year). ASARCO falls in the highest quartile in terms of production cost; its costs will continue to be among the highest even after the company-projected reduction to USD 2,700 per tonne.”

“In our assessment, the acquisition is expensive even on the assumption of current copper price and company-projected cost savings. Hence, we cut our target price by Rs 25 for Sterlite to Rs 263. Any sharp drop in copper prices would make ASARCO lossmaking. Additionally, the acquisition will drain cash out of Sterlite’s well-endowed balance sheet, which has been major source of comfort for investors. Add,” says IIFL’s research report.