MTNL
CMP: 150.45
Target price: Rs 155
CLSA has maintained its underperform rating on MTNL, post April-June (Q1) earnings on its assessment that expectations of a turnaround in the state-owned telecom player's business has been largely factored in the stock's current valuation. "MTNL's fixed-line business remains under pressure with private fixed-line operators targeting MTNL's high-end corporate base and shifting traffic towards mobile," the French brokerage said.
CLSA estimates the company's earnings per share for 2007-08 at Rs 10.3, as against Rs 9.9 reported in 2006-07. For 2008-09, MTNL's EPS has been estimated at Rs11.6.
IL&FS Investsmart
cmp: Rs 203
target price: Rs 161
Citigroup has maintained its sell rating on IL&FS Investsmart, after its Q1 results, citing lack of clarity in businesses in the near term. "There has been modest traction in revenues on the retail broking and distribution fronts, though we see meaningful market share improvement at least a couple of quarters away," the investment bank said in a note to clients.
Citi expects E*trade, which increased its stake in the brokerage to 44%, to add value in the long run. "E*Trade has committed management resources to Investsmart, and we expect more strategic clarity and direction post completion of the open offer (priced at Rs 210)," it said.
Subex Azure
CMP: Rs 583.40
target price: Rs 840
UBS Securities has reiterated its buy rating on Subex, post Q1 earnings, citing strong outlook as the key trigger."We believe Subex has 75% of its operating costs denominated in dollar. Also, its FCCB (foreign currency conertible bonds) of $180 millon acts as a natural hedge against currency appreciation," the foreign brokerage said. "Finally, we expect product revenue growth of 30% CQGR (compounded quarterly growth rate) from hereon in FY08.
Also, we expect EBITDA (operating profit) margins to expand to 20% in 2Q, 25% in 3Q and 30% in 4Q of FY08," it added.
Reliance Capital
CMP: Rs 1,201
Target price: NA
Merrill Lynch has downgraded Reliance Capital to neutral due to a rise in valuation, driven by the sharp run-up the share has seen in the last four months. "While all its key businesses, barring life insurance, are growing in line/ahead of our expectations, we believe the current valuations are already pricing in much of the strong forecast growth in each of these businesses," the investment bank said.
Merrill said it has not downgraded Reliance Capital to sell because, "We still see some potential upside in our SOTP () value and believe the longer term P/B (price-to-book) multiple assigned to its consumer foray (1.7x FY09E book) could re-rate as we get more visibility on its consumer foray and the company ramps up the loan book."
Balaji Telefilms
CMP: Rs 252.30
Target price: Rs 305
ICICI Securities has renewed coverage on Balaji Telefilms (BTL) with a buy, as concerns about the company's gloomy outlook is waning. "BTL is gradually shirking both concerns on growth and financial performance of its key client, STAR Plus, via growth through aggressive venture in regional space, expansion of Hindi prime-time slots and diversification into broadcasting, international television content and movies," the brokerage said in a note.
"We value BTL at Rs305/share, estimating the content business at Rs 232/share (FY09E P/E (price-to-earnings) of 13 times), and estimate the film business together with the BTL-STAR TV JV at Rs 3.6 billion (Rs 360 crore) (2 times the investment value)," it added.
CMP: 150.45
Target price: Rs 155
CLSA has maintained its underperform rating on MTNL, post April-June (Q1) earnings on its assessment that expectations of a turnaround in the state-owned telecom player's business has been largely factored in the stock's current valuation. "MTNL's fixed-line business remains under pressure with private fixed-line operators targeting MTNL's high-end corporate base and shifting traffic towards mobile," the French brokerage said.
CLSA estimates the company's earnings per share for 2007-08 at Rs 10.3, as against Rs 9.9 reported in 2006-07. For 2008-09, MTNL's EPS has been estimated at Rs11.6.
IL&FS Investsmart
cmp: Rs 203
target price: Rs 161
Citigroup has maintained its sell rating on IL&FS Investsmart, after its Q1 results, citing lack of clarity in businesses in the near term. "There has been modest traction in revenues on the retail broking and distribution fronts, though we see meaningful market share improvement at least a couple of quarters away," the investment bank said in a note to clients.
Citi expects E*trade, which increased its stake in the brokerage to 44%, to add value in the long run. "E*Trade has committed management resources to Investsmart, and we expect more strategic clarity and direction post completion of the open offer (priced at Rs 210)," it said.
Subex Azure
CMP: Rs 583.40
target price: Rs 840
UBS Securities has reiterated its buy rating on Subex, post Q1 earnings, citing strong outlook as the key trigger."We believe Subex has 75% of its operating costs denominated in dollar. Also, its FCCB (foreign currency conertible bonds) of $180 millon acts as a natural hedge against currency appreciation," the foreign brokerage said. "Finally, we expect product revenue growth of 30% CQGR (compounded quarterly growth rate) from hereon in FY08.
Also, we expect EBITDA (operating profit) margins to expand to 20% in 2Q, 25% in 3Q and 30% in 4Q of FY08," it added.
Reliance Capital
CMP: Rs 1,201
Target price: NA
Merrill Lynch has downgraded Reliance Capital to neutral due to a rise in valuation, driven by the sharp run-up the share has seen in the last four months. "While all its key businesses, barring life insurance, are growing in line/ahead of our expectations, we believe the current valuations are already pricing in much of the strong forecast growth in each of these businesses," the investment bank said.
Merrill said it has not downgraded Reliance Capital to sell because, "We still see some potential upside in our SOTP () value and believe the longer term P/B (price-to-book) multiple assigned to its consumer foray (1.7x FY09E book) could re-rate as we get more visibility on its consumer foray and the company ramps up the loan book."
Balaji Telefilms
CMP: Rs 252.30
Target price: Rs 305
ICICI Securities has renewed coverage on Balaji Telefilms (BTL) with a buy, as concerns about the company's gloomy outlook is waning. "BTL is gradually shirking both concerns on growth and financial performance of its key client, STAR Plus, via growth through aggressive venture in regional space, expansion of Hindi prime-time slots and diversification into broadcasting, international television content and movies," the brokerage said in a note.
"We value BTL at Rs305/share, estimating the content business at Rs 232/share (FY09E P/E (price-to-earnings) of 13 times), and estimate the film business together with the BTL-STAR TV JV at Rs 3.6 billion (Rs 360 crore) (2 times the investment value)," it added.
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