Here's Emkay Global's buy, sell or hold list

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Here's Emkay Global's buy, sell or hold list

Emkay Global Financial Services has come out with its report on various stocks. The research firm is bullish on Gujarat Gas and Bharti Airtel while bearish on GSK Pharma and has recommended reduce rating on the stock. It has a hold rating on Ashok Leyland, Manappuram General Finance in its November 4, 2011 research report.

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RELATED NEWS Hold Gujarat Gas; target Rs 480: PINC Research Angel Broking neutral on UCO Bank Buy Jain Irrigation Systems; target Rs 185: PINC Research ALSO READ See previous views by Emkay Global Financial Services See what other Experts & Brokerages are saying about Guj Gas See messages about Guj Gas Guj Gas BSE | NSE 29/05/12 Are Mutual Funds betting on Guj Gas? Other Stocks in this news Ashok Leyland | GlaxoSmithKline Pharmaceuticals | Manappuram Finance | Bharti Airtel |

Emkay Global Financial Services has come out with its report on various stocks. The research firm is bullish on  Gujarat Gas  and Bharti Airtel while bearish on GSK Pharma and has recommended reduce rating on the stock. It has a hold rating on  Ashok Leyland , Manappuram General Finance in its November 4, 2011 research report.

Emkay Global Financial Services research report

Gujarat Gas Company

During the quarter company has faced margin pressure backed by high cost of RLNG, which constitute of almost 35% of the total raw material consumption. RLNG is expected to be a continuing feature in the company's gas sourcing mix which will ease the supply concern of the company but company would face moderate margin pressure due to high cost of RLNG. However, recent hike in industrial and CNG segment provides cushion to the profitability and margins in coming quarters. At CMP of Rs 444 stock trades at 16.6x CY12E EPS and 3.9x P/BV, we maintain buy ratings on GGCL with target price of Rs 481.

Ashok Leyland

Based on our revised estimates, the stock trades at 11.7x/9.4x PER and 6x/5x EV/EBIDTA on our FY12/13 estimates. We raise our target price to Rs 30 per share, valuing the company at 12.7x/10x PER and 6.4x/5.4x EV-EBIDTA of our FY12/FY13 estimates. Uncertainty with respect to demand for AL (due to regional disparity) continues to be a concern on the volume front. However, price hikes and lower RM cost can provide cushion against the drop in earnings due to lower volumes. Also, there exist upside risk to our FY13 estimates to the extent of 3% to 7% based on the ramp up in the LCV business. We have not yet factored in the same due to lack of clarity on accounting of the same.

GlaxoSmithKline Pharma

We expect GSK to report 7% revenue growth in CY11 and 12% growth in CY12. We expect EBIDTA margins to contract from 35.31% in CY10 to 31.6% in CY11 and 32.9% in CY12. Earnings will grow at a CAGR of 7% to Rs 6.7bn. We revised our target on the stock to Rs 1,714 and downgrade the stock one notch to Reduce. At CMP, the stock is trading at 31x/27x CY11E/CY12E earnings respectively.

Manappuram General Finance

Though MAGFIL continue to grow at a healthy pace, however with rising competition and possibility of NPA recognition on 90dpd as mentioned in the draft discussion paper could hurt growth and margins. At CMP the stock trades at 2.1x/ 1.7x FY12E/FY13E ABV. Downgrade to HOLD with target price of Rs 65

Bharti Airtel

Post the results our revenue and EBITDA estimate largely remain unchanged however, adjusting for non-operating item (forex loss) and higher tax rate going forward our profitability numbers go down. After incorporating above mentioned adjustments our EPS cuts by 13.4% for FY12E and 6.1% for FY13E (purely on account of higher tax rate). We maintain our positive view on the stock, however the key risks that prevail are: 1) lower than expected off-take of 3G services and 2) slower than anticipated growth from African operations. We retain ACCUMULATE rating on the stock with target price Rs 464. At CMP of Rs 398, stock trades at 8.0x /6.6x EV/EBITDA for FY12E/13E.

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To read the full report click on the attachment