PINC Research has come out with its report on top 15 picks.
ASHOKA BUILDCON: We value BOT (DCF basis) at equity multiple of 1.6x and 1.1x FY12E and FY13E. Our SOTP based target price is Rs 364, where BOT is valued at Rs208 and EPC division at Rs 156 at 9x FY12E earning. We have a 'BUY' recommendation on the stock.
BAJAJ AUTO: Our FY11 and FY12 earnings estimates are Rs88.8 and Rs103.1 respectively. We have a 'BUY' recommendation on the stock with a target price of Rs 1,649, discounting FY12E earnings at 16x. Our FY12 earnings estimate is 1.9% lower than consensus estimate of Rs105.1.
GODAWARI POWER: Our earnings estimates are below consensus estimates mainly because we have not included amalgamation of Ardent Steel and group companies in our estimates. Buy the stock with a target of Rs 272.
HCL TECH: Our revenue estimates for FY12 and FY13 are in line with consensus, underpinned by stronger volumes and modest uptick in pricing. Our EBITDA margin forecast for FY12 and FY13 is higher than consensus by 60bps and 20bps respectively. Our FY12 EPS estimate is 1% higher than consensus whereas FY13 EPS estimate is in line with consensus. Buy the stock with a target of Rs 272.
INDRAPRASTHA GAS: The correct measure to evaluate operating performance for the CGD business is at EBITDA level. Our FY12 EBITDA estimate is in line with consensus; however, our net profit estimate is 4.3% lower than consensus owing to higher depreciation and interest charges. Buy the stock with a target of Rs 370.
IRB INFRA: Our FY11E and FY12E earnings estimates are at Rs14.9 and Rs16.9, which are 3.1% and 4.8% higher than FY11 & FY12 consensus estimates. We expect top-line growth of 47.6% at Rs 25.2bn for FY11E and 40% at Rs35.2bn for FY12E vs. consensus estimate of 49.6% at Rs25.5bn and 50.3% at Rs38.3bn. We believe the recent correction in stock price provides a good entry point for long-term investors. The stock offers an upside potential of 52.5% at our SOTP-based target price of Rs253 vs. consensus target of Rs264.
JAGRAN PRAKASHAN (JPL): Our revenue estimate varies from consensus by ~6% for FY12. We expect net margin of 19% in FY12. Our EPS estimate of Rs8.2 for FY12 varies 4% from consensus. Buy the stock with a target of Rs 165.
JYOTHY LABS: Our estimates for FY13 are among the highest on the street, led by expectation of profitability improvement in Henkel India and 50% debt repayment during FY13. We assign 16x to FY13 earnings and add Rs12/ share NPV on tax saving of Rs1.2bn @12% discount rate to derive the TP of Rs280.
LUPIN: Our FY2013 earnings estimate is 7% lower than consensus. We expect net sales and EPS to log CAGR of 14.4% and 15.1% to Rs 74,424mn and Rs25.3 over FY2011-13E respectively. We value the company at 22x (in line with the big players in the sector) June'12E earnings yielding a TP of Rs497.
MAHINDRA & MAHINDRA: We expect EPS of Rs44.1 and Rs48.0 in FY11 and FY12 respectively. Our FY12 earnings estimate is 2.3% lower than consensus estimate of Rs49.2. We value M&M using SOTP at Rs920, discounting the standalone business at 15x FY12E earnings.
NESTLE: Our estimates and target price are among the lowest on the street, led by pressure on EBITDA margin and argument of narrowing down the Nestle's P/E premium to 25%. We assign P/E of 30x on next 12-months earnings to derive TP of Rs3,208.
NIIT TECH: Our top-line estimates vary from consensus by ~0.5% for FY12 and ~1.4% for FY13, underpinned by stronger volumes and modest uptick in pricing. Our EBITDA margin estimate for FY12 is 20.5% and FY13 is 20.3% which is in line with consensus. Our EPS estimate for FY12 and FY13 is 6.4% and 6.5% respectively higher than consensus. Buy the stock with a target of Rs 285.
PHOENIX MILLS: Our EPS estimates for FY12 and FY13 are Rs14.3 and Rs15.8 respectively. Our FY12 earnings estimate is 35% higher than consensus estimate of Rs11. We have a 'BUY' recommendation on the stock with a target price of Rs240, which discounts FY12E Gross NAV by 20%.
SINTEX INDUSTRIES: Our earnings estimates (EPS) for FY12 and FY13 are Rs20.2 and Rs23.6 respectively. Our FY12 earnings estimate is 3.2% higher than consensus estimate of Rs19.5. We have a 'BUY' recommendation on the stock with a target price of Rs240, which discounts FY12E earnings by 12x.
TATA STEEL: Our consolidated estimates are lower than street estimates. We value Tata Steel using SOTP methodology at Rs 817.
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