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Sell Action Construction Equipment, target of Rs 25: PINC

admin — Sun, 31 May 2009 13:52:04 +0000

PINC Research has maintained its sell rating on Action Construction Equipment with a target price of Rs 25 in its May 29, 2009 research report.

“Action Construction’s (ACE) results were in line with estimates on revenues front as net sales declined by 37% to Rs 775 million while exceeding our estimate on the profitability front as net profits plunged by 90% to Rs 10 million. We maintain our ‘SELL’ recommendation with an upgraded price target of Rs 25 based on 10x FY10 earnings,” says PINC’s research report.

Hold IVRCL Infra, target of Rs 340: PINC

admin — Sun, 31 May 2009 13:49:14 +0000

PINC Research has maintained its hold rating on IVRCL Infrastructure and Projects with a target price of Rs 340 in its May 29, 2009.

“IVRCL Infrastructures & Projects Ltd’s (IVRCL) Q4FY09 results were ahead of our expectations. Its revenues grew 23.1% YoY to Rs 16.3 billion backed by robust execution across water supply & environmental segment. OPM for the period dipped by 178bps YoY to 8.7% owing to higher masonry and labour expenses at 24.5% of net sales. Fuelled by other income of Rs 87 million, net profits rose marginally by 9% YoY to Rs 799 million. We are of the opinion that presently the stock is fairly valued in line with our SOTP valuation of Rs 340 per share. Hence, we maintain our ‘HOLD’ recommendation on the stock,” says PINC’s research report.

Hold Voltas, target of Rs 101: PINC

admin — Sun, 31 May 2009 13:47:32 +0000

PINC Research has downgraded its rating on Voltas to hold with a target price of Rs 101 in its May 29, 2009 research report.

“Voltas Ltd’s Q4FY09 net sales grew by 48% YoY to Rs 12.5 billion against our estimate of Rs 8.2 billion. OPM declined by 60bps to 6.3% mainly due to increase in cost of raw material to sales by 235bps. Net profit rose by 13% to Rs 629 million (Adj. Rs 589 million) against our estimate of Rs 310 million. We downgrade our recommendation to ‘HOLD’ as the stock is fairly valued at current price, target of Rs 101, says PINC’s research report.

Buy Deepak Fertilizers, target of Rs 98: PINC Research

admin — Fri, 22 May 2009 02:01:06 +0000

PINC Research has recommended a buy rating on Deepak Fertilizers (DFPCL), with a price target of Rs 98, in its report dated May 20, 2009.

“At the CMP of Rs 86, DFPCL is trading at a P/E of 6.2x and EV/EBITDA of 3.5x FY10E. Favourable fertiliser policy & expected increase in availability of gas post RIL KG basin development, augurs well for DFPCL. We maintain our ‘BUY’ recommendation with a target price of Rs 98, which implies a P/E of 7x FY10 earnings that is less than 5years historical median P/E of 7.4x,” says PINC’s research report.

Hold Wipro, target of Rs 225: PINC Research

admin — Thu, 23 Apr 2009 12:28:33 +0000

PINC Research has reiterated its hold rating on Wipro with a price target of Rs 225 in its April 23, 2009 research report.

“Wipro reported Q4FY09 results in-line with the expectation and guidance. The pricing grew by 3% YoY, better than its peers, resulting in IT services revenue of USD 1,046 million (USD 1,058 million @cc, against guidance of USD 1,045 million). Wipro reported flat Q4FY09 with consolidated revenue of Rs 65.5 billion (touch above the consensus estimate of Rs 65.3 billion). Operating margin improved by 24bps QoQ to 16.6%.”

“The onsite realization rate declined by 0.1% QoQ whereas offshore realization improved by 0.8% QoQ. The clients are demanding a pricing cut of 0-5% and 0-10% IT budget cut. The management commented that shift towards fixed price is not going to improve pricing. The management was cautiously optimistic on demand environment. We reiterate our ‘HOLD’ rating with a price target of Rs 225,” says PINC’s research report.

Hold HCL Tech, target of Rs 100: PINC Research

admin — Thu, 23 Apr 2009 12:21:29 +0000

PINC Research has maintained its hold rating on HCL Technologies with price target of Rs 100 in its April 23, 2009 research report.

“HCL Technologies managed to win USD 1.5 billion deals in FY09 when compared to USD 1 billion for FY08. The deals of FY08 will contribute about USD 188 million in revenue in FY09 and FY09 deal flow would contribute USD 45 mn this year.”Despite the decent quarter the bottom-line was eroded by Forex loss. HCL Tech has realized a Forex loss of Rs 76 crore and cash flow hedge loss of Rs 1.3 billion. It has total hedges of USD 1.3 billion and cash flow loss of USD 225 million to be amortized in the next 6 quarters. We believe HCL Tech would not get any near-term respite from Forex loss and debt schedule. We reiterate our ‘Hold’ rating with a price target of Rs 100,” says PINC’s research report.

Sell Infosys, target of Rs 1050: PINC Research

admin — Thu, 16 Apr 2009 11:23:02 +0000

PINC Research has maintained its sell rating on Infosys Technologies with a price target of Rs 1050 in its April 15, 2009 research report.

“Infosys Technologies missed Q4FY10 USD guidance and guided for 4.1% decline in USD revenue for FY10. The company guided for operating margin erosion of 300bps and net income margin erosion of 100bps for FY10. The customers remain wary about their IT spends. Infosys revenue de-grew by 4.3% to USD 1121 million (guidance of USD 1149 million) in USD terms. Revenue for NA and Europe de-grew by 2.5% and 7.2% QoQ in rupee term respectively. In terms of segments, the largest vertical BFSI de-grew by 7.9% QoQ, whereas telecom de-grew by 2.6% QoQ. This is in line with our expectation and hypothesis.”

“We believe guidance of backend loaded year should be treated with caution. In our view, consensus estimates seems to be aggressive and likely to be revised downward. We reiterate our Sell recommendation with a price target of Rs 1050,” says PINC’s research report.

Buy Colgate Palmolive, target of Rs 498: PINC Research

admin — Tue, 14 Apr 2009 04:31:26 +0000

PINC Research has initiated a buy rating on Colgate Palmolive (India) with a price target of Rs 498 in its April 13, 2009 research report.

“We expect CPIL to post a revenue growth of 19% to Rs 17.5 billion in FY09 driven by healthy volume growth along with steadily rising market shares. OPM should expand by 200 bps as advertisement and sales promotion spends are lower due to a slower pace of new launches. Accordingly, operating profits should rise by 33% to Rs 3.3 billion. Net profits are expected to show a 16.3% growth to Rs 2.7 billion as tax benefits from the Baddi plant begin to supplement earnings growth.

In FY10, net sales are likely to witness a growth of 13.9% to Rs 20 billion led by prudent price hikes coupled with increased penetration of oral care products. Margins are expected to expand by 60 bps to 19.5% backed by a moderation in raw material and packaging costs. While operating profits should rise by 17.4% to Rs 3.9 billion, net profits are expected to grow by 18.6% to Rs 3.3 billion.

CPIL has exhibited earnings visibility in the face of an economic slowdown thus demonstrating strong brand equity. Furthermore, a moderation in sorbitol prices would enhance margins together with benefits accruing from the Baddi plant reducing tax costs. Hence, we initiate coverage on the stock with a BUY rating and a 12-month price target of Rs 498″, says PINC Research’s report.

Hold Tata Chemicals, target of Rs 165: PINC Research

admin — Wed, 08 Apr 2009 10:19:51 +0000

PINC Research has maintained its hold rating on Tata Chemicals with a price target of Rs 165 in its April 06, 2009 research report.

“While TCL’s management is confident that current soda ash prices may hold for next 3 months, it sounded cautious on H2CY09 prices outlook. Both GCIP and BMG recorded a decent jump of USD 25 and GBP 20 resp. in their term contracts in Janaury ’09. However, currently African and Asian markets are witnessing volumes shrinkage. Also, volumes in USA and Europe are seeing contraction mainly in flat glass demand. TCL is getting KG basin gas at USD 6.2/mmbtu. It has increased urea capacity through debottlenecking by 30% to 11.4 mn mt. We expect volumes and prices to contract by 10-15% in FY10. We maintain our ‘HOLD’ recommendation with a price target of Rs 165 (6x FY10E EPS),” says PINC’s research report.

Buy Petronet LNG, target of Rs 66: PINC Research

admin — Tue, 07 Apr 2009 04:00:32 +0000

PINC Research has recommended a buy rating on Petronet LNG Ltd with a price target of Rs 66 in its April 06, 2009 research report.

“Petronet LNG Ltd. (PLL) accounts for 23% of natural gas supply of India and boasts of a sovereign parentage of GAIL, IOCL, ONGC and BPCL. Considered as an Indian pioneer in import distribution, it regasifies 6.5 million mtpa of imported LNG from its facility in Dahej, Gujarat and is a major supplier to GAIL’s HVJ gas pipeline. The capacity expansions at Dahej should enable PLL volume growth by 13% in FY10 to 7.4 million mt and 24% in FY11 to 9.2 million mt garnering scale in earnings. Hence we initiate coverage on the stock with a ‘BUY’ recommendation and a price target of Rs 66 on a 24 month investment perspective,” says PINC’s research report.