Market Outlook
The daily candle chart of the Nifty shows a small bodied bearish candle with a large upper shadow, indicating resistance on advances. The downward sloping trendline still remains a maginot line for the bulls to overcome - failing which any upthrust remains a relief rally. The Nifty (spot) must stay above the 5550 levels sustainably with volumes and open interest expansion to rally intraday. On the flip side, sustaining below the 5530 levels may trigger a fresh bout of declines.
Technical Calls
Buy GMDC 150.00 target 160
Buy IFCI 48.00 target 55
Buy Tata Global 98.00 target 105
Buy Polaris 188.00 target 195
Buy IRB Infra 164.00 target 170
Buy Essar Ports 104.00 target 110
Buy Jubilant Foodworks 818.00 target 825
Buy HOEC 188.15 target 195
Buy Biocon 370.00 target 380
Buy Sonata Software 47.00 target 50
Momentum Calls
Buy OBC 347.00 target 355
Buy Shakti Pump 28.00 target 32
Buy Bajaj Auto 1331.00 target 1345
Buy South Indian Bank 24.00 target 26
Buy Balrampur Chini 62.00 target 70
Buy Guj. Ambuja Export 29.05 target 32
Buy Polaris 188.00 target 195
Buy Whirlpool 242.00 target 250
Buy IDBI 131.00 target 140
Buy BATA 514.15 target 520
Buy Genesys International 242.00 target 250
Investment
KR Choksey Recommends Royal Orchid Hotels
Capacity Expansion on track: The company is expanding its current capacity of 1622 Keys by additional 1115 Keys in the next 3 years to reach at a 2737 Keys count.
- Occupancy & ARR improvement to drive topline growth: The company’s average occupancy rates have improved from the lows of close to 50% in FY10 to over 60% in FY11, the management expects to maintain the occupancy at similar levels.
The ARR’s on blended basis are around Rs 4500/Room, the management anticipates a 10% y-o-y increase in ARR’s from the current levels.
Valuation: At CMP of Rs 63.5 per share, ROHL is trading at a PE of 9.3x FY12E Earnings. The company is available at compelling valuations with EV/ Room of Rs 0.8 Crs FY11 and Rs. 0.6 Crs FY12E and P/BV of 0.83x FY11.
Investors are recommended to buy the stock for a price target of Rs78, implying an upside of 24% from the CMP of Rs63.50
Investment
Networth Recommends Jyoti Structures
Strong revenue growth: Revenue for the year was in line with our estimate at Rs2,379cr, growing at 18% y-o-y. EBIDTA margins remained stable at 11.5% while PAT grew by 21%.
Other income helped the PAT while margins remained stable at 4.7% for the year. Like all EPC companies, Q4 was strong with revenues growing by 32% to Rs721cr while PAT grew by 38% to Rs35cr.
EBIDTA margins though came down significantly as increased erection and subcontracting expenses impacted the margins.
- Order inflows strong at Rs2,700 cr: Q4FY11 showed maximum order inflow at Rs1,100 cr taking the total order inflow for the year at Rs2,700 cr. The order book remains strong at Rs4,400 cr to be executed over next 18 - 22 months.
For FY12E, we have estimated order intake at Rs2,800 cr. Given the spill over’s from the current year and 2012 being the last year of the XIth five year plan, we estimate order tendering to be strong.
Valuation - Maintain buy: The stock is currently trading at Rs86. Networth maintains a buy rating on the stock with a target price of Rs110. This target price is arrived at on the basis of a conservative assumption of 8 times target P/E on FY12E EPS of Rs13.8.
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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
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