Dec 13, 2012, 04.51 PM | Source: Moneycontrol.com
Emkay Global Financial Services has come out with its report on investment in 8 largecap stocks.
, Emkay Global Financial Services |
HCL Technologies : We raise our FY13/14E EPS by ~8/4% each to Rs 47.3/49 respectively driven largely by higher margin assumptions to 20.1/18.9% (V/s 18.8/18.5% earlier). While sector wide slowdown continues to drive revenue growth trajectory down for HCLT as well, we see HCLT on a stronger footing driven by strong order book and scope to improve margins through improved client mining with recent quarters lending enough confidence to the thesis. ACCUMULATE, TP Rs 650.
Hindustan Zinc : We value the stock at 5xFY14 EV/ EBITDA. This translates to a target price of Rs 146/ share. At CMP of Rs 138, the stock trades at 8.7xFYEPS and 4.5xFY14 EV. EBITDA. Moreover fast ramp-up of the SK mines, strong silver volumes, the ongoing exploration projects and residual stake sale by the Govt. should be very positive for the stock going forward.
ICICI Bank : ICICI Bank has already seen seasoning of the NPA book with amount of NPAs in SS and D1 category reducing by 2% of its loans. Credit cost to remain at 60bps due to controlled slippages and incremental NPAs only in SS and D1 category requiring low provisions. We expect the bank to witness 19% CAGR in NII / customer assets each over FY12-14E. Improvement in margins with easing credit cost pressures would aid RoA performance. Any material spike in restructured loan portfolio remains key risk in near term. Maintain positive bias.
Tata Motors : New launch pipeline for JLR remains healthy with new Range Rover in Q3FY13 followed by new Range Rover sports in H1FY14. New RR volumes are expected to exceed its previous peak of ~32k per annum. Jaguar is also expected to see slew of new launches like F-Type (capacity of 10,000 -15,000 units), AWD versions of XF/XJ (~50% of the market) and Sportsbrake. Expect earnings performance at 10% CAGR in FY12-FY14E period aided by strong volumes in JLR and FCF generation. Emkay’s earnings forecast are Rs 39/share and Rs 45/share for FY13E and FY14E respectively. Strong quarterly earnings (due to improvement in product mix) to be the key stock trigger.
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