"At CMP, the bank's core banking business (after adjusting Rs 187/share towards value of the subsidiaries) is trading at 1.4x FY2015E ABV, which is below our fair value estimate for the bank. In the near term, given the weak macro environment and cautious outlook for the sector, stocks such as ICICI Bank may undershoot fair value estimates. But from a structural point-of-view compared to peers, keeping in mind its robust franchise and capital adequacy, it remains one of the preferred banks, in our view, from a medium term perspective. We maintain our Buy recommendation with a price target of Rs 1,220."
IRB Infrastructure"IRB has a robust order book of Rs 5,830cr (2.1x trailing E&C revenue, excluding O&M orders), which lends revenue visibility. The company is looking at both organic and inorganic options for growth with a threshold of 18 percent equity IRR and intends to allot 20 percent of its consolidated cash flow post debt repayment towards acquisitions. The stock trades at FY2014E and FY2015E P/BV of 0.7x and 0.6x respectively. We maintain our Buy view on the stock with a target price of Rs 106," says Angel Broking research report.
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