Hits and Misses of Q4: Emkay

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Hits and Misses of Q4: Emkay

Emkay Global Financial Services has come out with a report on 6 stocks picks.

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Emkay Global Financial Services has come out with a report on 6 stocks picks.

JSW Energy : We believe even after 35% underperformance relative to Nifty, there is a room for negative surprises from fuel (even Sungai Belati contract), power realizations (merchant prices, MSEDCL contract and long term contract prices). Reduce our FY12E/FY13E earnings by - 3%/-7% on higher coal price assumptions. At CMP of Rs75/share, the stock is trading at 1.7x/1.5 x FY12E/FY13E book and implies long term merchant rate of Rs3.7/unit. Maintain Reduce rating on the stock with a PT of Rs78/share."

Gujarat Gas Company : In the long term , 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 it would face margin pressure due to high cost. However, change in the business mix would provide cushion to the profitability and margins. At CMP of Rs.375 stock trades at 14.2x CY12E EPS and 3.1x P/BV, we maintain buy ratings on GGCL with target price of Rs.481.

Phoenix Mills : Topline for the quarter at Rs 468mn, marginally belowour estimates of Rs 474mn; Palladium operational at 100% added to the YoY growth. Post rental renewal negotiations, management expect average monthly rentals of Rs 175 /sf at HSP. We have estimated Rs 170 for the same in our estimations. Company further increased its stake in Market City (MC) Bangalore by 5.1% to 37.8%; Paid Rs 104mn for the same valuing the project at ~ Rs 1.84bn. We maintain our Buy rating with TP of Rs 231 derived on SOTP basis. At TP, the stock will trade at 1.9x FY12 P/BV.

Titan Industries : While we lower our EBITDA estimates by 6% for FY13E to factor in higher operating costs, our EPS remains unchanged for FY12/13E at Rs 118.2/149.8, respectively (not adjusting for bonus issue and stock split) as we reduce depreciation charges by 46% and increase other income by 228%. We remain positive on the company's future growth prospects aided by robust business model, healthy store expansion and strong balance sheet position. We, hence, continue to remain positive and maintain our Accumulate rating on the stock with an unchanged target price of Rs 4,490/share.

Greaves Cotton : We reiterate - GCL is in sweet-spot with strong growth drivers in Engines (automotive and non-automotive engines ) and Infrastructure segment (turned profitable). We introduce FY13E earnings estimates of Rs9.4 per share. We reiterate our BUY recommendation and roll-over our valuations to FY13E with target price of Rs124 (@13.2X FY13E).

United Phosphorus : We have revised our estimates for FY12E based on the improvement seen in North America and the expected turnaround in Europe. We have revised our revenue estimates for FY12 by 4% and also improved EBITDA margins by 10 bps. Revised EPS for FY12E is Rs 18.9 against our previous estimate of Rs 17.5. We have also introduced FY13 estimates and we expect company to report revenue growth of 10%. We expect EBITDA margins to improve by 20bps during FY13 and our EPS estimate is Rs 21.5, +14% yoy. We have rolled over our price target to FY13E basis with target price of Rs 215 (10x EPS).

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.

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