Top 5 midcap picks: ULJK Securities

ULJK Securities has come out with its report on midcap stocks pick.

Pratibha Industries: We expect net revenue to grow at a CAGR of 24% over FY11- 13E. The growth prospects for PIL is expected to remain robust inline with strong order backlog led by growth in its core water supply management segment. PIL has entered into new verticals such as hydro carbon, power projects and real estate which should support revenue growth going forward. PIL is also collaborating with international players to grow its order book. At current price of Rs56, stock is trading at FY12E PE of 6.2x and EV/EBITDA of 4.9x We recommend a BUY on the stock with target price of Rs72 per share.

KEC International: We expect net revenue to grow at a CAGR of 19% over FY11- 13E driven by higher T&D orders in India and the international markets. We expect EBITDA margin to stabilize around 10.5-10.6% with the contribution from the high margin SAE towers business partially offset by the relatively low margin railway and water segment. At CMP Rs83, the stock is trading at a P/E of 11.4x and 9.4x for FY11-FY12E respectively. We recommend a BUY on the stock with target price of Rs108 per share. We assign a multiple of 11x our FY12E EPS to arrive at our target price on back of its strong order book and geographical presence.

Godawari Power and Ispat: We estimate a 16% and 27% CAGR in GPIL

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