RESEARCH: Emkay says hold TCS, Infosys shares; accumulate Satyam
Monday, Sep 15 - Snapshot of equity research reports
.
Note: "Recent reports" category is alphabetically arranged by company
name.
> MP is market price as indicated in the report.
> MP and Target in rupees/share.
> Date refers to when the report was published by the brokerage.
> Market price refers to rate prevailing at the time of writing
this
report.
.
LATEST REPORTS
.
Date: Sep 12
.
Stock Brokerage Rating MP Target Analyst comment
HCL Emkay Accum- 238 297 * Indian information
technology
Technolo- Global ulate sector's demand
situation
gies Financial continues to worsen
Services
.
Infosys Emkay Hold 1749 1836 * For FY09, company could
report
Techno- Global lower than expected
dollar
revenue
logies Financial growth on rapid
appreciation
Services of dollar against euro
and pound
sterling
* FY09 and FY10 earning
estimates
could be upgraded by
about 4.9%
and 4.5% respectively
.
Mphasis Emkay Buy 249 315 * Uncertainty on the
demand side
Global continues
Financial
Services
.
Repro LKP Buy 133 200 * Company had order book
position
India Shares of 600 mln rupees at
end of
July to be executed by
Nov 2008
* Expected to record 30%
CAGR
growth in net profits
over
FY09-10 driven by 28%
growth in
revenues
.
Satyam Emkay Accum- 421 483 * IT sector could enter
2009
Computer Global ulate IT budgeting cycle with
extended
Services Financial level of uncertainty
and
Services precariously placed as
was the
case for 2008 budgeting
cycle
.
Tata Emkay Hold 836 1034 * Information technology
sector
Consult- Global could enter CY09's IT
budgeting
ancy Financial cycle with similar
level of
Services Services uncertainty and
precariously
placed as was the case
for CY08
budgeting cycle
.
Tech Emkay Buy 779 990 * With rapid appreciation
of
Mahindra Global U.S. dollar against the
Euro,
Financial company could be
adversely
Services impacted as it derives
about
65% of revenues from UK
alone
.
.
Date: Sep 9
.
Stock Brokerage Rating MP Target Analyst comment
Alembic ICICI Buy 45 - * Buoyed by patent
settlement
Securit- deals, launches at risk,
flurry
ies of new launches, Indian
pharma
companies expected to do
better
in next one year
.
Aventis ICICI Buy 815 - * Indian pharma sector in
better
Pharma Securit- shape in current
sluggish
ies environment
.
Cadila ICICI Buy 340 - * Indian pharma companies
are
Healthcare Securit- displaying signs of
better growth
ies and product visibility
.
Cipla ICICI Hold 235 - * Continued under-
ownership of the
Securit- sector by institutional
investors
ies and receding risk
appetite will
help sector performance
.
Dr. Reddy's ICICI Buy 592 - * Healthy sales of
branded domestic
Laborato- Securit- dosage form business and
stricter
ries ies cost discipline to be a
positive
.
Glaxosmit- ICICI Buy 1179 - * Company joined hands
with South
tkline Securit- African generics firm,
Aspen, to
Pharmace- ies boost its growth in
emerging
uticals markets
.
Glenmark ICICI Buy 673 - * To outshine Sensex;
deliver
Securit- potential upside of 35%
over
ies next 12-18 months
.
Ranbaxy ICICI Buy 462 - * Acquisition by Daiichi
Sankyo
Laborat- Securit- indicates rising
interest of
ories ies global pharma innovators
in
generics
.
Sun ICICI Buy 1540 - * To outshine Sensex;
deliver
Pharmace- Securit- potential upside of 25%
over
uticals ies next 12-18 months
India
.
Wockhardt ICICI Buy 208 - * Pharma sector
selectively offers
Securit- good defensive business
at lower
ies attendant risks
.
.
RECENT REPORTS
.
Stock: ABB Ltd
Current Market Price: 799.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
HDFC Under 893 835- * Strong order backlog provides
Sep 11
Securities performer 1001 revenue visibility
* Good revenue traction from
product business
.
.
Stock: Axis Bank Ltd
Current Market Price: 645.15 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Buy 710 901 * Ruling on forex derivatives not
Sep 9
expected to have any significant
impact on financials
.
.
Stock: Bajaj Hindusthan Ltd
Current Market Price: 134.50 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Credit Neutral 182 199 * Execution risks on account of
Sep 9
Suisse performance of new subsidiaries
* Upside potential is greater, as
it has a higher beta to the
sugar price-cane cost
differential
.
.
Stock: Balrampur Chini Mills Ltd
Current Market Price: 79.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Credit Out- 97 120 * Sourcing of cane may be below
Sep 9
Suisse perform estimate
* Regulatory risks, particularly
those aimed at controlling
prices
.
.
Stock: Bharti Airtel Ltd
Current Market Price: 751.50 rupees
.
Brokerage Rating MP Target Analyst comment
Date
CLSA Buy 820 1082 * India mobile cos still in
high
Sep 9
growth phase
* Superior outlook
.
.
Macquarie Outpe- 804 975 * Company is top pick among Indian
Sep 9
Research rform telecom companies
* Superior management, execution
capabilities are key
differentiators
.
.
Stock: Bilpower Ltd
Current Market Price: 153.00 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Unrated 166 - * Providing engineering,
Sep 10
procurement, construction
services improved its position
* Inability to generate consistent
cash flows, pressure on margins
.
.
Stock: Century Textiles Ltd
Current Market Price: 426.30 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Motilal Neutral 505 668 * In the absence of fundamental
Oswal revival in real estate market,
valuations alone cannot continue
to be the catalyst
.
.
Stock: Clariant Chemicals India Ltd
Current Market Price: 227.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
LKP Buy 230 - * Stock at current valuation
Sep 8
Shares is good investment bet
* Recommend long-term investors to
accumulate at decline
.
.
Stock: Dish TV India Ltd
Current Market Price: 31.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Outpe- 39 61 * Formal notification of reduction
Sep 9
Research rform in license fee by I&B ministry
is a catalyst
* Current valuations offer
attractive entry point
.
.
Stock: GAIL India Ltd
Current Market Price: 404.50 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Motilal Buy 426 563 * Remain positive on GAIL in
Sep 8
Oswal view of potential increase in
gas transmission volume
.
.
Stock: Glenmark Pharmaceuticals Ltd
Current Market Price: 565.10 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Buy 654 754 * Two new molecules bought present
Sep 11
new outlicensing opportunities,
yielding significant cash flows
in coming years
.
.
Stock: HCL Technologies Ltd
Current Market Price: 208.35 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Hold 249 266 * Concern over aggressive hedging
Sep 10
policy in its bid for Axon Group
* Acquisition is seen to be margin
dilutive in short-term, will
largely contract earnings
* Earnings from Axon seen offset
by interest on loans
.
.
Stock: Hindustan Construction Company Ltd
Current Market Price: 86.60 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Religare Buy 97 157 * Margins to remain under pressure
Sep 8
Securities * Improved working capital days,
but still above industry average
.
.
Stock: Housing Development & Infrastructure Ltd
Current Market Price: 234.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
BNP Reduce 316 250 * Unique business model, but
Sep 8
Paribas scalability remains a concern
* Funding constraints likely to
impact execution
* Negative sentiment outweighs
fundamentals
.
.
Stock: Idea Cellular Ltd
Current Market Price: 75.15 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Outpe- 81 100 * Expected to launch services in
Sep 9
Research rform Tamil Nadu and Orissa before
Dec
* First-quarter operating trends
positive, margin dip negative
.
.
Stock: Infotech Enterprises Ltd
Current Market Price: 221.00 rupees
.
Brokerage Rating MP Target Analyst comment
Date
ICICI Buy 227 300 * Time to Market Inc's acquisition
Sep 10
Securities to be marginally EPS-accretive
* Strong business synergies
.
.
Stock: Jain Irrigation Ltd
Current Market Price: 390.20 rupees
.
Brokerage Rating MP Target Analyst comment
Date
CLSA Buy 426 650 * Balance sheet strength to
improve Sep 9
* Negative operating cashflow
.
.
Stock: JSW Steel Ltd
Current Market Price: 628.40 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Outpe- 662 1631 * Steel price drop limited to
Sep 11
Research rform low-grade commoditised steel;
high grade steel prices still
rising
.
.
Stock: Kamat Hotels Ltd
Current Market Price: 113.30 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Not- 115 - * Orchid and VITS properties
Sep 9
rated likely to face fierce compe-
tition with incremental supply
of rooms from Sahara Star
* Inability to raise required
resources to fund its expansion
plan is a key potential risk
to earnings estimate
.
.
Stock: Mahindra Lifespace Developers Ltd
Current Market Price: 423.80 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Sharekhan Buy 454 828 * Standalone properties to expand
Sep 8
significantly
* Debt to equity ratio comfortable
.
.
Stock: Pantaloon Retail India Ltd
Current Market Price: 301.30 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Merrill Under 350 330 * New area addition run rate
Sep 10
Lynch perform slower than expected
* High interest rate sensitivity
* Rich valuations, maintain
rating
.
.
Stock: Reliance Communications Ltd
Current Market Price: 361.30 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Neutral 393 475 * Performance to remain muted till
Sep 9
Research GSM launch
.
.
Stock: Reliance Industries Ltd
Current Market Price: 1847.35 rupees
.
Brokerage Rating MP Target Analyst comment
Date
CitiGroup Buy 2142 2450 * Asian refining demand-supply to
Sep 10
Global turn negative in 2009, but seen
Markets normalising by 2010
* Margins exposed to global petro-
chemical, refining cycles
.
.
Stock: Reliance Petroleum Ltd
Current Market Price: 144.30 rupees
.
Brokerage Rating MP Target Analyst comment
Date
CitiGroup Sell 159 155 * Reduced diesel premium, weaker
Sep 10
Global gasoline demand may hurt margins
Markets * Good location of refinery, and
parent company's good track
record gives it an advantage
* Declining gasoline cracks
are a negative
.
.
Stock: Shree Renuka Sugars Ltd
Current Market Price: 100.55 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Credit Out- 134 165 * Strong growth prospects both in
Sep 9
Suisse perform existing businesses and through
a number of new investments
* Risks account to delays in
ethanol blending programme
.
.
Stock: Steel Authority Of India Ltd
Current Market Price: 135.05 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Outpe- 140 196 * Business outlook to improve on
Sep 11
Research rform seasonal recovery, Chinese
export slowdown
.
.
Stock: Sterlite Industries Ltd
Current Market Price: 446.50 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Credit Out 622 850 * Aggressive valuation of Konkola
Sep 10
Suisse perform Copper Mines is a dampener, but
valuations remain cheap
* Unable to understand the reasons
behind 8% reduction in minority
stake in high-value Vedanta
Aluminium
.
IIFL Add 575 650 * Restructuring negative for
Sep 10
minority shareholders
* Aluminium - asset transfer to
Malco; limited benefit from
growth pipeline
.
Emkay Buy 576 953 * Possibility of ASARCO being
Sep 10
Global acquired by December
Financial * Restructuring seen value neutral
Services in zinc, copper, power,
aluminium businesses
.
CLSA Under- 576 570 * Downgrade to under-perform
Sep 9
perform * Copper transfer expensive
* Restructuring, and reduction of
cross holdings is a positive
.
Centrum Not 575 - * We have arrived at a sum of
Sep 9
Broking Rated parts valuation of 496 rupees
* Keeping aluminium business in 2
separate companies defies their
logic of demerger
.
.
Stock: Tata Steel Ltd
Current Market Price: 495.65 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Macquarie Outpe- 535 1416 * Spot steel prices in India 16%
Sep 11
Research rform below import pricing
* Valuations extremely attractive
.
Religare Buy 561 780 * Trading at compelling valuations
Sep 8
Securities * Steel prices to remain firm
.
.
Stock: Union Bank of India Ltd
Current Market Price: 136.70 rupees
.
Brokerage Rating MP Target Analyst comment
Date
Mafatlal Buy 147 205 * CASA ratio one of the best
Sep 11
Securit- among public sector banks
ies * Better than peers in terms
of productivity, operational
efficiency, return on assets,
asset quality
.
.
Stock: Zee Entertainment Enterprises Ltd
Current Market Price: 213.90 rupees
.
Brokerage Rating MP Target Analyst comment
Date
CLSA Buy 225 280 * DTH boost for entrenched players
Sep 9
* Zee's ranking stickiness helps
.
Macquarie Outpe- 221 260 * No slowdown in advertising
Sep 9
Research rform growth
* Company sees little threat from
new competition in Hindi GEC
investors
.
ABBREVIATIONS USED
q-o-q: Quarter-on-quarter
y-o-y: Year-on-year
BFSI: Banking, financial services and insurance
CAGR: Compounded annual growth rate
EBITDA: Earnings before interest, tax, depreciation and amortisation
FY: Financial year ended March
FCCB: Foreign currency convertible bonds
JV: Joint venture
MoU: Memorandum of Understanding
MTM: Mark-to-market
NIM: Net Interest Margin
NII: Net Interest Income
ROAE: Return on Average Equity
WHO: World Health Organisation
.
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