Emkay bullish on Voltas, Blue Star, Bharti Airtel

25488 Investors following Voltas. Share this News with them.

0

Like this story, share it with millions of investors on M3

Emkay bullish on Voltas, Blue Star, Bharti Airtel

Emkay Global Financial Services has come out with reports on various stocks.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Indian Hotels; target of Rs 97: KRChoksey Sell Reliance Power Fut; target of Rs 101: IIFL Buy Sona Koyo Steering; target of Rs 24: PINC Research ALSO READ See previous views by Emkay Global Financial Services See what other Experts & Brokerages are saying about Voltas See messages about Voltas Voltas BSE | NSE 29/05/12 Are Mutual Funds betting on Voltas? Other Stocks in this news Blue Star | GlaxoSmithKline Consumer Healthcare | Berger Paints India | United Bank of India | Bharti Airtel |

Emkay Global Financial Services has come out with reports on various stocks.

Voltas : We have factored all possible events influencing earnings forecasts for Voltas, any further downplay in macro environment of India and global would remain key downside risk to earnings estimates . Whereas, (1) profitable execution of 2 large projects in Qatar. and (2) decline in raw material prices are key upside risks to our earnings estimates . Since, (1) cash flows of Voltas have been impacted with increase in payment days , which had shown resilience so far and (2) absence of strong near term catalyst; we downgrade our rating one notch to Accumulate with revised price target of Rs165/Share.

Blue Star : In the near to medium term, BLSR is likely to witness culmination of 2 key events (1) execution of low margin orders and provision for cost over-runs on current order backlog and (2) higher operating expenditure owing to faster growth in UCP business. Further, BLSR has seen sharp detoriation in cash flows with no signs for visible improvement. This has resulted in Rs4.1 bn debt accumulation in last FY08-11P period coupled with decline in ROCE from 70% in FY08 to 33.8% in FY11P, room to deteriorate further. We downgrade BLSR to HOLD with revised target price of Rs280/Share, rolling back the target multiple to 14X FY13E (in-line with FY04-08 average).

GSK Consumer : We believe GSK Consumer is well placed to benefit from the low-penetrated category of malted foods drinks with healthy growth in its core MFD portfolio and increasing focus on new product development (smaller packs for rural markets, premium product - Horlicks Gold priced at 30% higher, etc). We remain optimistic on GSK Consumer's future growth prospects with its strong brand positioning and hence, maintain our ACCUMULATE rating on the stock with a TP of Rs 2,547/share (revised from Rs 2590/share).

Berger Paints : While we expect discretionary product spends to moderate in future and thus, slow down the pace of growth even in the paints industry, we expect increasing size and scale, a favourable shift in its product portfolio towards premium products and backward integration, would lend Berger Paints a differentiating edge compared to the market leader, Asian Paints. Hence, we remain optimistic on the company's future growth prospects and believe that the valuation discount between Berger Paints and Asian Paints will narrow in future. Therefore, we maintain our ACCUMULATE rating on the stock with a target price of Rs 109/share.

United Bank of India : We have lowered our earnings estimates for FY12E/FY13E by 7.8%/3.4% to take into account a 3% lower NII driven by flat NIMs compared with 10bps expansion earlier. The lower NIMs are driven by management's strategy of growing liabilities in tandem with advances despite a lower than average LDR. At the CMP, the stock is quoting at 0.9x FY12E and 0.7x FY13E ABV. We maintain our ACCUMULATE rating with TP of Rs110.

Bharti Airtel : Considering, higher interest and tax outgo in Q1FY12, we tweak our FY12E and FY13E interest and tax rate in sync with reported number. This has led to cut in our EPS estimate by 11.1/2.9% for FY12E/13E. We maintain our positive view on the stock, however the key risks that prevails are: 1.) regulatory uncertainty in domestic market 2.) risk of margin erosion owing to aggressive 3G launch and 3.) slower than anticipated growth from African operations. We retain ACCUMULATE rating on the stock with target price Rs464. At CMP of Rs427, stock trades at 8.6x /6.9x EV/EBIDTA for FY12E/13E.

FIIs holding more than 30% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment