Emkay bullish on Voltas, Blue Star, Bharti Airtel

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

Voltas: We have factored all possible events influencing earnings forecasts for Voltas, any further downplay in macro environment of India and global would remain key downside risk to earnings estimates . Whereas, (1) profitable execution of 2 large projects in Qatar. and (2) decline in raw material prices are key upside risks to our earnings estimates . Since, (1) cash flows of Voltas have been impacted with increase in payment days , which had shown resilience so far and (2) absence of strong near term catalyst; we downgrade our rating one notch to Accumulate with revised price target of Rs165/Share.

Blue Star: In the near to medium term, BLSR is likely to witness culmination of 2 key events (1) execution of low margin orders and provision for cost over-runs on current order backlog and (2) higher operating expenditure owing to faster growth in UCP business. Further, BLSR has seen sharp detoriation in cash flows with no signs for visible improvement. This has resulted in Rs4.1 bn debt accumulation in last FY08-11P period coupled with decline in ROCE from 70% in FY08 to 33.8% in FY11P, room to deteriorate further. We downgrade BLSR to HOLD with revised target price of Rs280/Share, rolling back the target multiple to 14X FY13E (in-line with FY04-08 average).

GSK Consumer: We believe GSK Consumer is well placed to benefit from the low-penetrated category of malted foods drinks with healthy growth in its core MFD portfolio and increasing focus on new product development (smaller packs for rural markets, premium product

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