Market Updates 08 Jun11
Powered By Bazaaredge.com
Market Outlook »
Nifty shows a small bodied bullish candle, which indicates a mild buying support on dips
Market has been demonstrating consistent weakness for the last few days on lower volumes. Nifty took a support from very critical level of 5,480. If this is broken, next support comes at 5,420. On the higher side, 5,540 and 5,580 are strong resistance levels to penetrate.
Buy RIL 937.00 target 950
Buy Standard Charted PLC 94.55 target 100
Buy U-Flex 212.00 target 225
More
Buy KRBL 27.85 target 30
Buy Adani Power 112.70 target 120
Buy
More
Investment »
KJMC has recommended `Buy` on Sanghvi Movers with a price target of Rs 158
Outlook & Valuation:
Going ahead SML foresees a strong growth prospects in the power and windmill sector and hence is incurring a regular capex
foreseeing demand for the same in future. However it also faces competition from global players as well as some domestic
players.
In view of the increased competition being faced by SML from its competitors and SML not able to generate revenues in line
with the capex incurred by it we are of the view of that yields and utilization need to be improved and maintained on a
consistent basis in future.
At the current market price (CMP) of Rs 112, the stock is trading at a P/E of 5.6x and 5.0x its FY11E & FY12E earnings of Rs
19.9 & Rs 22.6 respectively. We upgrade our recommendation on the stock to `Buy` from `Accumulate` with a target price of Rs
158 which is 7x its FY12E earnings of Rs 22.6.
Investment »
ULJK Financial Services has recommended `Buy` on Pratibha Industries with a price target of Rs 72
Highlights during the Quarter 4Q FY2011:
Pratibha Industries (PIL) has posted strong results for 4QFY 2011 with both the top line and bottom line has grown strongly.
Net Sales has grown by 29% from Rs 3,025 million to Rs 3,896 million, which is in line with our estimates of Rs 3,963
million and PAT has grown 31% to Rs 274 million from Rs 209 million, during the corresponding quarter ending previous year,
which was ahead of our estimate of Rs 216 million. This is mainly on account of lower than expected interest cost and lower
effective tax rate during the last quarter. The top line growth of PIL was highly driven by strong execution of the projects
from it`s construction and infrastructure division arm which reported a revenue growth of 15% on YoY basis. Further, its
manufacturing division also reported a better revenue growth of 10.3% on YoY basis, as this particular division largely
caters to internal orders.
Operating margins remain subdued but PAT margins maintain during the quarter:
PIL put up a better show on both the top line and bottom line during the quarter ended Q4FY2011 and also the full year, but
have not been able to maintains its operating margins, which declined by nearly 265 bps YoY and 232 bps on a QoQ basis as
compared to Q3FY2011. This was due to sharp increase in raw material prices during the period. But interestingly, PIL has
been able to maintain its PAT Margins at 7.1% due to following reasons: (1) backward integration of its manufacturing of
pipes which were used for the company internal order for its water based projects and (2) on account of lower than expected
interest cost regime and effective tax rate.
Order book update:
PIL`s order book as on March 2011 stood at Rs 36 billion (Rs 36 billion) diversified across segments like water treatment
(60%) & urban infrastructure (40%) with an average execution period of 3-3.5yrs. As PIL also held an L1 bidder position
(lowest bidder) of Rs 7 billion which the Company has converted into orders as on May 2011. Therefore currently, PIL’s
order book as on May 2011 stood at Rs 43 billion (Rs 43.35 billion). PIL`s current order book to sales is 2.8x FY 2011
revenue. Furthermore, the Company expects strong order inflows from the Water Business & Urban Infrastructure projects where
water segment remains at the top on its total order book.
Outlook & Valuation:
We expect Net Revenue to grow at a CAGR of 24% over FY11-13E, due to strong growth in its core water supply management
segment, as well as increased focus from the GOI to develop the
diversify its presence in new verticals to leverage on the huge infrastructure spending expected over the next few years.
At the current market price (CMP) of Rs 54, the stock is trading at 5.9x and 4.5x P/E & 5.0x and 4.5x EV/EBITDA multiples
for FY12E and FY13 respectively. We value the company at 8x FY12E estimated earnings and arrive at the valuation of
R72/share. We thus arrive at a price target of s72 with a potential upside of 29% from current levels & recommend `Buy` on
the stock.
Visit the Blog http://www.bazaaredge.com/blog
Graphics, Design & Internet Marketing Techniques http://www.simplyweb.in/blog
Disclaimer : This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. And not soliciting any action based upon it. The report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon such. We or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report
----------------------------------------------
The message was checked by Zillya! Antivirus 1.1.2942.0, bases 2.0.0.660 - No viruses detected
No comments:
Post a Comment