Emkay recommends 8 stocks to buy for month of June

Emkay Global Financial Services has come out with its report on various stocks.

Jagran Prakashan: Given the cost escalations, we cut EPS est. by 3.6/1.5% for FY12E/13E. Maintain BUY rating on the stock with revised target price of Rs149. At CMP of Rs120, stock trades at 15.3x /12.1x our EPS estimate for FY12E/13E.

Shree Cement: On account of higher than expected FY11 exit cement prices, we upgrade our FY12 EBITDA estimates by 3.8% to Rs11.4bn. However, adjusting for revised accelerated depreciation charges as guided by management, we cut our earnings estimates for FY12 by 85.4% to an EPS of Rs13.8 (Rs95 earlier). The accelerated depreciation in FY12 would reduce the burden in FY13 with much lesser depreciation charges. We introduce our FY13 estimates with a EPS of Rs175. The change in earnings for FY12 does not affect our target for Shree as earnings change in driven by higher deprecation (non cash charges). We continue to value Shree on 6X FY12E EV/EBITDA (currently 5.6X FY12). We maintain ACCUMULATE rating on the stock with price target of Rs1,960.

Sun Pharma: We expect Sun Pharma to report 23% growth in revenues in FY12E and 15% growth in FY13E. EBIDTA margins are expected to decrease from 34.4% in FY11 to 33.2% in FY12E and 33.9% in FY13E. Earnings will grow by 15% CAGR over FY11-13E. We revise our target price to Rs497 (22xFY13E core earnings of Rs22.6). At CMP, the stock trades at 23x FY12E and 20x FY13E EPS.

Colgate Palmolive: While we forecast a moderation in overall volume growth, we expect Colgate to maintain its leadership position in the market aided by healthy new product launches and regular brand activation programmes. We expect the company to post PAT CAGR of 13% over FY11-13E with unchanged FY13E earnings of Rs37.6/Share. Valuations at 24X FY13E EPS appear fair and hence, we maintain our HOLD rating on the stock with target price of Rs826/Share.

GSFC: On the valuations front, GSFC has current cash on its book of Rs 6.7 bn (84 / share) with negligible long term debt. Further it has liquid investments of Rs 5.4 bn (Rs 68/ share). With 42% of cmp in cash and equivalents and FY12 EV/EBITDA of 1.8x, P/E of 4.8x and 20% discount to book value, we believe that the stock offers attractive investment opportunity on compelling valuations. However due to volatile earnings driven by unpredictable chemical prices in FY12E, we maintain our price target of Rs 530 which discounts 7.2x FY12E EPS and we reiterate our BUY recommendation.

IVRCL Infra: IVRCL

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