Binani Industries

Target Price = Rs.182 ; Time Frame = 6months ;

Market Cap = 347 crores ; Shares O/S. = 2,95,96,425

Debt/Equity Ratio = 0.52 : 1 ; 52 week High/Low = 143/47

Face Value = Rs.10 ; B.V. = Rs. 68 ; P/E = 1.9 ; P/B: 1.7

The Braj Binani Group is a well-diversified industrial house with a 136-year history behind it. Today, the group is actively working in the core sectors of Cement, Zinc, Glass Fibre and Downstream Composite Products.

Binani Industries Ltd. is essentially a holding & investment company and currently holds strategic stake in listed entity Binani Cements and various unlisted entities like Binani  Zinc, Goa Glass Fibre and BT Composites. While calculating NAV of BIL we have valued

Binani Cements at Market Value and all unlisted companies like Binani zinc, Goa Glass Fibre and BT Composites at historical price as they are still unlisted. Still at CMP of Rs.117, the stock is available at 68% discount to its NAV which seems to  be quite attractive. Also at this price its dividend yield is 2.54%. At the current price of Rs.117, the stock is trading at 1.7x FY11E earnings. Return for investors in these companies can be two fold driven by appreciation of its investments and decrease in discount. Holding company generally trades at  discount but here what we believe is that BIL is trading at a discount much higher than its historical average of 50%. We expect the discount to decrease and move towards its historical average of 50% as investors would flock towards buying these undervalued companies, keeping in mind sharp recovery in the stock market and improved sentiments. We recommend BUY with a price target of Rs.182 (50% of Current NAV per share) given the company’s holdings in subsidiaries and future growth potential.

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This IT software company has announced 50% interim dividend along with liberal bonus in the ratio of 5 shares for every 1 share held. For 09-10 (on stand alone basis) the company reported total turnover of Rs.51.70 crore with a net profit of Rs.20.15 crore against turnover of Rs.45.41 crore with a net profit of Rs.19.04 crore for corresponding previous year. The company has done major acquisition in hospitality subsidiary and is thus going for hospitality business as well. Scrip is worth adding in one’s portfolio at every decline. It is hovering around Rs. 266.75 against 52 week high/low of Rs. 350/200, FV Rs. 5.

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“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.

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ITC witnessed strong volume growth of 5 per cent and 7 per cent in the June and September quarters, respectively, and expects this trend to continue. Channel checks suggest a volume growth of around 7 per cent in December quarter. Moreover, cigarette companies have put forward a representation to the government to introduce smaller filter cigarettes, which could help counter the increasing contraband menace.

In the FMCG business, ITC has maintained clear focus on cost curtailment since the past few quarters and expects losses to reduce by around 20 per cent each in 2009-10 and 2010-11. The hotel business, which was a drag on the numbers, is now looking up with a 10-15 per cent sequential rise in average room rates (ARR) and occupancy of over 70 per cent. Compared to a year-on-year decline in EBIT (earnings before interest and tax), the hotel business is expected to show flat year-on-year EBIT growth in March 2010 quarter and a much stronger 2010-11. The agri and paper businesses are expected to repeat their strong performance as witnesses in September quarter.

Given the improved outlook across businesses, the brokerage has upgraded its 2009-10 and 2010-11 EPS estimates by 2 per cent and 6 per cent, respectively. At Rs 256, the stock is trading at a PE of 24.5 times and 20.5 times estimated earnings for 2009-10 and 2010-11, respectively. Maintain buy.

Also Read :  incometaxefiling

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