Top stocks picks: PINC Research

PINC Research has come out with its report on top stock picks.

Top-Shelf Selections:

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 Rs365, where BOT is valued at Rs220 and EPC division at Rs145 at 9x FY12E earning. We have a 'BUY' recommendation on the stock.

GODAWARI POWER: We expect GPIL to record 25% earnings CAGR over FY11-FY13E on volume growth and margin expansion. This would be driven by: higher output from Ari Dongri mines, 0.6mntpa pellet plant, and 20MW biomass power plant. Further, 0.6 mntpa pellet plant of 75% subsidiary Ardent Steel has also started stabilising with ~40% CU in Q1FY12 and is expected to provide additional earnings growth. Buy the stock with a target of Rs 206.

IRB INFRA: Our FY12E and FY13E earnings estimates are at Rs14.3 and Rs11.5, which are 3.2% and 30.3% lower for FY12 and FY13 consensus estimates respectively. We expect top-line growth of 27.7% at Rs 31.1bn for FY12E and 18.1% at Rs36.8bn for FY13E vs. consensus estimate of 34.7% at Rs32.8bn and 31.7% at Rs43.2bn. We believe the recent correction in stock price provides a good entry point for long-term investors. The stock offers upside potential of 36.9% at our SOTP-based target price of Rs227 vs. consensus target of Rs233.

JAGRAN PRAKASHAN (JPL): Our revenue estimate for FY13 is in line with consensus. However our EPS estimate of Rs8.2 for FY13 is 5% below consensus. We have a 'BUY' recommendation on the stock with a target price of Rs148 (18xFY13E EPS).

JYOTHY LABORATORIES: Our estimates for FY13 are among the highest on the street, led by expectation of profitability improvement in Henkel India. 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 Rs246.

MAHINDRA & MAHINDRA: We expect EPS of Rs41.6 and Rs47.9 in FY12 and FY13 respectively. Our FY12 earnings estimate is 7.8% lower than consensus estimate of Rs45.2. We value M&M using SOTP at Rs844, discounting the standalone business at 13x FY13E earnings.

NESTLE INDIA: 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. We assign P/E of 30x on next 12-months earnings to derive TP of Rs3,400.

PHOENIX MILLS: Our EPS estimates for FY12 and FY13 are Rs14.3 and Rs15.8 respectively. Our FY12 earnings estimate is 52% is higher than consensus estimate of Rs9.4. We have a 'BUY' recommendation on the stock with a target price of Rs240, which discounts FY12E Gross NAV by 20%.
POWER GRID: Our PAT estimate for FY12 and FY13 is lower than consensus by 3% and 1% respectively. We value PGCIL on FCFE basis to arrive at a target price of Rs122 (terminal growth rate 3% and 14% Ke)

SINTEX INDUSTRIES: Our earnings EPS estimates for FY12 and FY13 are Rs20.2 and Rs23.6 respectively. Our FY12 earnings estimate is 2% higher than consensus estimate of Rs19.9. 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 the street. We value Tata Steel at Rs629 using SOTP methodology.

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