Emkay suggests 3 stocks for your portfolio

Emkay Global Financial Services has come out with its report on stocks like Godawari Power, GAIL and Tata Chemicals.

Godawari Power: We believe, GPIL to maintain its volume however, realizations may soften a bit in the short- medium term. While, higher costs are expected to restrict margins to go up sharply during FY12, rise in interest rates could take some shine out off the bottomline. At the CMP of RS 179, the stock is trading at 4x its FY13E EPS and 4.6x FY13E EV/ EBITDA. We believe, the stock has good potential to perform better going forward and available at an attractive valuation. We value the stock at 5xFY13 EV/ EBITDA to arrive at a target price of Rs 232/ share, providing an upside of 30%. We retain BUY rating on the stock.

GAIL: Based on the new subsidy sharing we have cut our earnings for FY12E and F13E by 3.2% and 5.4% respectively and reduce our target price to Rs.510 (Rs.565 earlier) based on our SOTP valuation. Currently, stock trades at 13.5x FY13E EPS and 2.3x P/BV, we maintain ACCUMULATE ratings on the stocks.

Tata Chemicals: Management expects that due to volatile fertiliser prices globally, fertiliser margins are likely to face margin pressure in current year while chemical segment may witness some margin expansion driven by increase in realizations. We have reduced our FY12E earnings estimates by 3% to Rs 32.2 and introduce our FY13E estimates (Rs 36.3). We rollover our price target to FY13E to Rs 400 and maintain our Accumulate recommendation based on 11X FY13E.

FIIs holding more than 30% in Indian cos

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