Goldman Sachs has reiterated its “Conviction Sell” on BHEL with a target of Rs 205. In the NTPC bulk tender yesterday, Goldman says, the lowest bidder quoted an over 11% discount to similar bulk boiler tenders in September 2011. "This shows that increasing competition in the power equipment segment is resulting in lower pricing and margin compression. The EBITDA margin for the industry is likely to remain under pressure."
Morgan Stanley has maintained its “Equalweight” on Larsen & Toubro (L&T) with a target of Rs 1,324. L&T has lost out NTPC's bulk tender and also the West Asia airport order, which means, it could potentially miss its order inflow guidance of 5% for FY12.
Nomura has recommended buying Development Credit Bank (DCB) with a target of Rs 60. DCB has largely completed the turnaround process it initiated about 3 years ago and the bank is now ready to deliver strong earnings growth and improving profitability.
Morgan Stanley has upgraded Infotech Enterprises to “Overweight” and raised its target to Rs 184. Higher forex losses and a one-time steep increase in effective tax rates hurt earnings for Infotech in FY12. However, Morgan Stanely expects strong revenue and earnings growth of over 20% in the next 2 years.
Credit Suisse is “Neutral” on ONGC with a target of Rs 315. Even if ONGC were to have flat realisations from here on, volume growth could still drive earnings. However, in the absence of clarity on subsidy payments and net realisations, Credit Suisse has a neutral call on the stock.
RBS has recommended buying Maruti with a target of Rs 1,434. With yen denominated costs at nearly 21% of net sales, Maruti is a major beneficiary of yen depreciation seen since early January. With hedges lasting for few months only, RBS expects the recent yen weakness against the rupee to extend 8% upside to FY13 EPS.
UBS has upgraded TCS to neutral and raised its target to Rs 1,375. They expect non-linear revenue to contribute an additional 5% to revenue and 45 bps to the operating margins. But a further delay in project starts could lead to downside risk in estimates and limit share price upside potential.
UBS has upgraded Indraprastha Gas to neutral with a target of Rs 385. Their meeting with the management indicates strong, growing gas demand. The company is maintaining EBITDA margins through price hikes to offset LNG sourcing , and its Delhi monopoly is likely to be retained.