ICICI Bank
CMP: Rs 884
Target Price: Rs 1,225
Merrill Lynch has maintained a buy rating on ICICI Bank with a price target of Rs 1,225, though it feels that the stock may come under pressure in the near term. "We believe the stock, trading at 1.5 times FY08E adjusted book (after deducting value of subsidiaries; 1.1x FY09 adjusted book) could trade at 1.8-2.0 times adjusted book one-year forward (FY09 estimated), given the improved visibility of earnings we are likely to see in the coming quarters, estimated earnings growth of +35% in FY09E, and rising value of its subsidiaries," the investment bank said in a note to clients. "We believe the concerns expressed by RBI in its discussion paper is likely to delay the approval for ICICI Bank's proposed finco (financial company) despite ICICI Bank having obtained IRDA and FIPB approvals," it added.
United Spirits
CMP: Rs, 1399.40
Target Price: Rs 1,695
ICICI Securities has initiated coverage on United Spirits (USL) with a buy rating and price target of Rs 1,695 on expectations of steady earnings growth over the next couple of years. "We expect the company to register strong improvement in profitability on the back of increased realisations and sharp decline in raw material prices. Besides, the acquisition of Whyte & Mackay (W&M) complements USL's growth strategy," the domestic brokerage said. "Consolidated earnings to grow at 43% CAGR (compounded annual growth rate) through FY07-10E (earnings) on the back of sharp improvement in standalone profits and contribution from W&M," it added.
BHEL
CMP: Rs 1,889
Target Price: Rs 1,990
CLSA has maintained its buy rating on Bhel citing further additions in its already strong order book of roughly Rs 18,000 crore. "Bhel is participating in the bidding process for a number of super-critical projects. The company is also in negotiations with some states for supplying super-critical equipment, where it may take up equity in the project," the French investment bank said. "We expect Bhel to win its first super-critical project in the next one year. This could be followed by a number of such projects on negotiated/ competitive bidding basis," it added.
Ashok Leyland
CMP: Rs 38
Target Price: Rs 39
Citigroup has reiterated its sell rating on India's second-largest commercial vehicle manufacturer. It feels that the risk/reward ratio is currently unattractive for the company, even at current stock price. "Burgeoning capital outlay on various initiatives is a concern. Sharper-than-expected growth in heavy commercial vehicles volumes over FY08E and decline in material costs and rebound in margins remain the key upside risks," said the report.
CMP: Rs 884
Target Price: Rs 1,225
Merrill Lynch has maintained a buy rating on ICICI Bank with a price target of Rs 1,225, though it feels that the stock may come under pressure in the near term. "We believe the stock, trading at 1.5 times FY08E adjusted book (after deducting value of subsidiaries; 1.1x FY09 adjusted book) could trade at 1.8-2.0 times adjusted book one-year forward (FY09 estimated), given the improved visibility of earnings we are likely to see in the coming quarters, estimated earnings growth of +35% in FY09E, and rising value of its subsidiaries," the investment bank said in a note to clients. "We believe the concerns expressed by RBI in its discussion paper is likely to delay the approval for ICICI Bank's proposed finco (financial company) despite ICICI Bank having obtained IRDA and FIPB approvals," it added.
United Spirits
CMP: Rs, 1399.40
Target Price: Rs 1,695
ICICI Securities has initiated coverage on United Spirits (USL) with a buy rating and price target of Rs 1,695 on expectations of steady earnings growth over the next couple of years. "We expect the company to register strong improvement in profitability on the back of increased realisations and sharp decline in raw material prices. Besides, the acquisition of Whyte & Mackay (W&M) complements USL's growth strategy," the domestic brokerage said. "Consolidated earnings to grow at 43% CAGR (compounded annual growth rate) through FY07-10E (earnings) on the back of sharp improvement in standalone profits and contribution from W&M," it added.
BHEL
CMP: Rs 1,889
Target Price: Rs 1,990
CLSA has maintained its buy rating on Bhel citing further additions in its already strong order book of roughly Rs 18,000 crore. "Bhel is participating in the bidding process for a number of super-critical projects. The company is also in negotiations with some states for supplying super-critical equipment, where it may take up equity in the project," the French investment bank said. "We expect Bhel to win its first super-critical project in the next one year. This could be followed by a number of such projects on negotiated/ competitive bidding basis," it added.
Ashok Leyland
CMP: Rs 38
Target Price: Rs 39
Citigroup has reiterated its sell rating on India's second-largest commercial vehicle manufacturer. It feels that the risk/reward ratio is currently unattractive for the company, even at current stock price. "Burgeoning capital outlay on various initiatives is a concern. Sharper-than-expected growth in heavy commercial vehicles volumes over FY08E and decline in material costs and rebound in margins remain the key upside risks," said the report.
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