Mahindra & Mahindra
CMP: RS 823.55
Target price: RS 939
Religare has initiated coverage on Mahindra & Mahindra (M&M ) with an 'accumulate' rating as it feels that new launches over the next two years will completely revamp the company's utility vehicle (UV) portfolio and help sustain its market position.
The brokerage also expects competition to remain moderate apart from a rebound in growth rates of tractors. "Tractor sales will recover in FY09 driven by good monsoons, increase in prices of agricultural products, increase in allocation of funds towards rural credit and softening of interest rates" , says the report. "Till FY10, M&M is unlikely to face any serious competition in its key segments ie UVs, LCVs, tractors and three wheelers. Threat from new entrants also appears to be low till FY10, after which competition in UVs could intensify" , adds the report.
The brokerage also feels that M&M's joint ventures with international players can create substantial value in the coming years and the near term trigger will be the listing of Mahindra Holidays. The brokerage has valued M&M at Rs 939 based on a sum-of-the parts (SOTP) valuation method.
Jaiprakash Hydro-Power
CMP: RS 125.60
Target price:
NA ICICI Direct has advised investors to book profits in Jaiprakash Hydro-Power (JHPL) as its feels that the stock is fairly valued at the current price factoring its business model and steady cash flows. "At the current price of Rs 128, the stock is trading at 34.43 times FY09 earnings, 25.50 times FY09 EV/EBITDA and 7.4 times FY09 P/BV. We advise investor to book profits" , says the report.
The brokerage further adds that the company plans to form a joint venture company, Jaypee Powergrid Ltd, with Power Grid Corporation of India (PGCIL) to set up the transmission system for the 1,000-MW Karcham Wangtoo Hydoelectric Project in Himachal Pradesh. While JHPL will hold 74% of the equity, the remaining 26% will be held by PGCIL. ICICI Direct has valued the the venture at Rs 16 per share for Jaiprakash Hydro-Power .
GMR Infrastructure
CMP: RS 239.55
Target price: RS 358
Emkay has maintained a 'buy' rating on GMR Infrastructure after the company announced the placement of 16.52 crore shares at a price of Rs 240 to qualified institutional buyers (QIBs).
However, the brokerage has revised the target price downwards to factor in the increased equity capital. "We continue to maintain a buy recommendation with a revised price target to Rs 358 per share (down 2% from Rs 367). We have revised our price target downwards to account the increase in the equity capital of the company" , says the report. "Our price target is arrived at from the embedded value of each of the projects undertaken by GMR Infrastructure and as the company develops more projects our target price would be revised to include the value of the new projects" , adds the report.
On a different note, the brokerage feels that the government's stand that GMR's Delhi Airport can raise funds by way of deposits and charge lower lease rentals for the commercial property to be developed adjacent to the Delhi International Airport will prove positive for the company. "This would enable GMR to collect about Rs 30 billion (Rs 3,000 crore) as interest refundable deposits for the first parcel of 50 acres of land" , says the report.
Tata Chemicals
CMP: RS 386.20
Target price: RS 444
Asit C Mehta Investments has initiated coverage on Tata Chemicals with a `buy' rating on account of growth from its fertilizers and inorganic segment. According to the brokerage, the company's net sales is expected to grow at a CAGR of 11% and PAT at a CAGR of 17% in the next two years.
"The company's competitive advantage stems from its inorganic segment, mainly soda ash business. The domestic demand is expected to grow at a CAGR of 6% to 3.037 mn. tonnes in 2010 from 2.546 mn. tonnes in 2007 led by increase in consumption from glass industry and soap & detergent industry," said the brokerage in a note to its clients.
TCL is also in the process of de bottlenecking its Urea plant at Babrala, where the Urea manufacturing capacity would increase from 0.86 mtpa to 1.2 mtpa. TCL's foray into new businesses like Khet Se and Bio-fuel , would help the company to exploit new opportunities arising from the growing retail segment and need for alternative energy segment respectively.
CMP: RS 823.55
Target price: RS 939
Religare has initiated coverage on Mahindra & Mahindra (M&M ) with an 'accumulate' rating as it feels that new launches over the next two years will completely revamp the company's utility vehicle (UV) portfolio and help sustain its market position.
The brokerage also expects competition to remain moderate apart from a rebound in growth rates of tractors. "Tractor sales will recover in FY09 driven by good monsoons, increase in prices of agricultural products, increase in allocation of funds towards rural credit and softening of interest rates" , says the report. "Till FY10, M&M is unlikely to face any serious competition in its key segments ie UVs, LCVs, tractors and three wheelers. Threat from new entrants also appears to be low till FY10, after which competition in UVs could intensify" , adds the report.
The brokerage also feels that M&M's joint ventures with international players can create substantial value in the coming years and the near term trigger will be the listing of Mahindra Holidays. The brokerage has valued M&M at Rs 939 based on a sum-of-the parts (SOTP) valuation method.
Jaiprakash Hydro-Power
CMP: RS 125.60
Target price:
NA ICICI Direct has advised investors to book profits in Jaiprakash Hydro-Power (JHPL) as its feels that the stock is fairly valued at the current price factoring its business model and steady cash flows. "At the current price of Rs 128, the stock is trading at 34.43 times FY09 earnings, 25.50 times FY09 EV/EBITDA and 7.4 times FY09 P/BV. We advise investor to book profits" , says the report.
The brokerage further adds that the company plans to form a joint venture company, Jaypee Powergrid Ltd, with Power Grid Corporation of India (PGCIL) to set up the transmission system for the 1,000-MW Karcham Wangtoo Hydoelectric Project in Himachal Pradesh. While JHPL will hold 74% of the equity, the remaining 26% will be held by PGCIL. ICICI Direct has valued the the venture at Rs 16 per share for Jaiprakash Hydro-Power .
GMR Infrastructure
CMP: RS 239.55
Target price: RS 358
Emkay has maintained a 'buy' rating on GMR Infrastructure after the company announced the placement of 16.52 crore shares at a price of Rs 240 to qualified institutional buyers (QIBs).
However, the brokerage has revised the target price downwards to factor in the increased equity capital. "We continue to maintain a buy recommendation with a revised price target to Rs 358 per share (down 2% from Rs 367). We have revised our price target downwards to account the increase in the equity capital of the company" , says the report. "Our price target is arrived at from the embedded value of each of the projects undertaken by GMR Infrastructure and as the company develops more projects our target price would be revised to include the value of the new projects" , adds the report.
On a different note, the brokerage feels that the government's stand that GMR's Delhi Airport can raise funds by way of deposits and charge lower lease rentals for the commercial property to be developed adjacent to the Delhi International Airport will prove positive for the company. "This would enable GMR to collect about Rs 30 billion (Rs 3,000 crore) as interest refundable deposits for the first parcel of 50 acres of land" , says the report.
Tata Chemicals
CMP: RS 386.20
Target price: RS 444
Asit C Mehta Investments has initiated coverage on Tata Chemicals with a `buy' rating on account of growth from its fertilizers and inorganic segment. According to the brokerage, the company's net sales is expected to grow at a CAGR of 11% and PAT at a CAGR of 17% in the next two years.
"The company's competitive advantage stems from its inorganic segment, mainly soda ash business. The domestic demand is expected to grow at a CAGR of 6% to 3.037 mn. tonnes in 2010 from 2.546 mn. tonnes in 2007 led by increase in consumption from glass industry and soap & detergent industry," said the brokerage in a note to its clients.
TCL is also in the process of de bottlenecking its Urea plant at Babrala, where the Urea manufacturing capacity would increase from 0.86 mtpa to 1.2 mtpa. TCL's foray into new businesses like Khet Se and Bio-fuel , would help the company to exploit new opportunities arising from the growing retail segment and need for alternative energy segment respectively.
No comments:
Post a Comment