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Last Updated : Jul 15, 2011 05:39 PM IST | Source: Moneycontrol.com

PINC power picks for the month of July 2011

PINC Research has come out with its report on 13 stock picks for the month of July.

 
 
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PINC Research has come out with its report on 13 stock picks for the month of July.


Top-Shelf Selections- July 2011:


ASHOKA BUILDCON: We value ABL's BOT project (DCF basis) at equity multiple of 1.6x and 1.1x FY12E and FY13E. Our SOTP-based target price is Rs 363, with BOT valued at Rs 208 and EPC at Rs 155 at 9x FY12E earnings. We have a 'BUY' recommendation on the stock.


BAJAJ AUTO: Our FY12 and FY13 earnings estimates are Rs 107.5 and Rs123.3 respectively. We have a 'BUY' recommendation on the stock with a target price of Rs 1665, discounting FY13E earnings at 13.5x. Our FY12 earnings estimate is 6.1% higher than consensus estimate of Rs101.3.


GODAWARI POWER: Our FY12 EBITDA stands 22% above consensus as we expect improved performance from Ardent Steel. For Ardent Steel, we assume CU of 60% in FY12E and 70% in FY13E. Buy the stock with a target of Rs 278.


HCL TECH: Our revenue estimates vary from consensus by ~(1)% for FY12 and for FY13 it is 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 70bps and 20bps respectively. Our FY12 EPS estimate is in line with consensus whereas for FY13 it is 1% higher than consensus. Buy the stock with a target of Rs 630.


IRB INFRA: Our FY12E and FY13E earnings estimates are at Rs14.0 and Rs10.5, which are 5.3% and 36.1% lower than consensus estimates respectively. We expect top-line growth of 27.7% at Rs 31.1bn for FY12E and 18.1% at Rs36.7bn for FY13E vs. consensus estimate of 36.1% at Rs33.2bn and 30.7% at Rs43.4bn respectively. We believe the recent correction in stock price provides a good entry point for long-term investors. The stock offers an upside potential of 20.9% at our SOTP-based target price of Rs 227 vs. consensus target of Rs 234.


JAGRAN PRAKASHAN (JPL): Our revenue estimate for FY13 is 3% above consensus. However our EPS estimate of Rs8.3 for FY13 is 7.5% below consensus. Buy the stock with a target of Rs 150.


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 Rs265.


MAHINDRA & MAHINDRA (M&M): We expect EPS of Rs41.6 and Rs 47.9 in FY12 and FY13 respectively. Our FY12 earnings estimate is 8.8% lower than consensus estimate of Rs45.6. We value M&M using SOTP at Rs 836, discounting the standalone business at 13x FY13E 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 Rs 3208.


NIIT TECH: Our top-line estimates for FY12 and FY13 is in line with consensus, underpinned by stronger volumes and modest uptick in pricing. Our EBITDA margin estimate for FY12 is 20.4% and for FY13 is 20.3%, in line with consensus. Our EPS estimate for FY12 is 1.2% and for FY13 is 5.8% higher than consensus.


PHOENIX MILLS: Our EPS estimates for FY12 and FY13 are Rs14.3 and Rs15.8 respectively. Our FY12 earnings estimate is 45% higher than consensus estimate of Rs9.1. We have a 'BUY' recommendation on the stock with a target price of Rs 240, 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 19% 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 consol.estimates are lower than the street. We value Tata Steel at Rs 713 using SOTP methodology.


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.

To read the full report click on the attachment

First Published on Jul 15, 2011 01:26 pm
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