Post earnings stocks pick: Emkay

Emkay Global Financial Services has come out with its report on various stocks, which can be value picks post their June quarter results.

Godrej Consumer Products: We retain our earnings estimate of Rs 19.3/share for FY12E and Rs 23.7/share for FY13E as we expect incrementally higher A&P spend to be offset by a likely improvement in gross margins owing to lower palm oil prices and full impact of price increases. The stock is trading at 18.6x FY13E earnings, a discount of 30% to the consumers sector. We believe valuations appear reasonable considering the strong earnings CAGR of 29% over FY11- 13E. Hence, we re-iterate our ACCUMULATE rating on the stock with a target price of Rs 474/share.
 
Ashok Leyland: We have an ACCUMULATE rating on the stock. Our TP of Rs 57 implies 12x/10x PER and 6.4x/5.3x EV-EBIDTA of our FY12/FY13 estimates . We expect 2QFY11 to be the worst quarter on YoY basis for the company and things should improve thereafter in terms of margins and profitability. We factor in DPS of Rs 2/2.4 in FY12/13 which implies div. yield of 3.8%/4.7%. The stock is currently trading at 11.3x/9.1x PER and 5.8x/4.9x EV/EBIDTA on our FY12/13 estimates. Dividend yield is one of the important reasons for our positive view on the stock despite lack of clarity on near term earnings.

Bank of India: We are downgrading our FY12E/FY13E EPS estimates by 11%/7% each and ABV by 5%/7% driven by higher slippages and provisions. Significant risks could arise to our earnings estimates if the capital puts cons traints on the loan growth (our assumption 17%) and if the slippages remain high even in H2FY12. The stock is currently quoting at 1.4x FY12E/1.2x FY13E ABV. We maintain HOLD rating with a lower TP of Rs420.

Thermax: We believe Thermax has low probability of negative earning surprises and has demonstrated sustained order inflow momentum

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