Akruti City
Reco Price: Rs 510,
Target Price: Rs 872
Ackruti City has sold over Rs 1,500 crore of stock (saleable area) since the upturn in the property market (past six months). The brokerage expects the company to continue its strong sales, with 2.9 million sqft in 2010-11. New projects add high value, and under-construction projects would contribute Rs 600 crore in 2010-11. The company recently did corporate sales, in two of its projects at Andheri (E), worth over Rs 150 crore. Pace of execution has increased and is likely to lead to construction-linked inflows. However, debt is expected to rise to Rs 1,570 crore, mainly for premium payments. Maintain buy.
—Anand Rathi
Genus Power Infrastructures
Reco Price: Rs 215,
Target Price: Rs 293
Genus Power Infrastructures (GPIL) has invested around Rs 26 crore in 2009-10 in one of its group company – Genus Paper Product (GPPL). GPPL plans to come out with an initial public offering (IPO) within the next six months. The company expects good returns on its investment in GPPL as it foresees the issue to command a decent premium in terms of valuations. GPIL’s management has indicated that the company could consider part stake sale in the IPO. The company has invested approximately Rs 3.5 crore in Genus SA, Brazil. As this joint venture has been unremunerative and continued to report operating losses for 2009-10 also, GPIL is looking to exit this venture. Maintain buy.
—Sharekhan
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Finolex Industries
Reco Price: Rs 114,
Target Price: Rs 142
The company has commissioned a 43-mw thermal plant, 50 per cent of which would be used for captive purposes. Finolex is expected to save around Rs 25 crore annually during 2010-11. For the remaining 50 per cent, the company has entered into a grid contract with MSEB at Rs 5 per unit. This will furthermore boost the company's income. Finolex plans to sell off its Chinchwad land (78 acres) worth around Rs 133 crore, which amounts to Rs 10.6 per share. The management estimates Finolex Plasson Industries (a micro irrigation firm where Finolex holds 46 per cent stake) turnover to grow by 67 per cent to Rs 250 crore with an operating margin of 30 per cent in 2010-11. Strong rural outlook, expanding capacities, cost reductions and option value from real estate provide a significant upside to the stock. Maintain buy.
—Networth Stock Broking
Elecon Engineering
Reco price: Rs 92,
Target Price: Rs 107
Elecon Engineering’s (EEC) material handling equipment division has bagged orders worth Rs 56 crore. The total order book at the end of August stood at Rs 1,567 crore. EEC is well placed to seize the upcoming opportunities in the power sector due its strong order book, which renders a high revenue visibility. The company's bottomline growth will be driven by stronger order inflow and a reduction in interest outflow due to better working capital management. At Rs 92, the stock is available at attractive valuations at 8.6 times earnings and 5.7 times EV/Ebitda based on 2011-12 estimated numbers. Maintain buy.
—Angel Broking