Biocon
Reco Price: Rs 397.1,
Target Price: Rs 480
Biocon expects to grow at 15-20 per cent over the next three-four years, driven by launch of biosimilars in the emerging markets, growth in the India branded formulations business and the research services business. Post 2013-14, growth is likely to accelerate due to insulin and insulin analogue launches in the regulated markets, as part of the deal with Pfizer. Margins are likely to remain healthy despite some increase in R&D spend and should support earnings growth. The company has tie-ups with several partners for products in Immunosuppresants and Statins and approvals would drive growth. Axicorp will continue as a trading business but real benefits will begin once insulin is launched in Germany. Maintain medium risk.
—Citigroup
Eros International Media
Reco Price: Rs168,
Target Price: Rs 247
Eros International Media will release its much awaited movie No Problem on December 10. Analysts expect No Problem to do well at the box-office. EIML is also releasing its live action animation film, Toonpur Ka Superrhero, directed by Kireet Khurana, on December 24. EIML’s last release, Golmaal 3 is doing well at the box-office with gross collection of more than Rs 117 crore worldwide. On the other hand, Endhiran the Rajnikanth starrer, is amongst the top five grossing Indian films in the overseas markets. With three big successful releases in the quarter, we expect the Q3FY2011 financial performance of EIML to be fairly good. Maintain buy.
—Sharekhan
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Jyoti Structures
Reco Price: Rs127,
Target Price: Rs 180
Jyoti Structures indicated that it will spend Rs 54 crore to set up a new unit for high–end towers, which would be funded from internal cash flows. The company will manufacture high–voltage towers to meet demand in the US. Currently, international revenue accounts for 10 per cent of JYS’s total revenue. The company expects it to double over the next two years. Analysts expect earnig per share growth of 30 per cent annually through 2011-12. The stock is trading at low price to earning ratio of eight times 2011-12 earnings. Maintain buy.
—Kim Eng India Research
Phillips Carbon Black
Fair value: Rs 286,
Current market price: Rs 175
Crisil Equities has assigned a fundamental grade of 4/5 to Phillips Carbon Black Ltd (PCBL) indicating ‘superior’ fundamentals. Robust demand growth in the end-user industry coupled with the company’s capacity expansions in both its segments are expected to drive its business growth and profitability. Company’s high dependency on the auto sector which is cyclical in nature and the susceptibility of its operating margins to changes in key raw material - carbon black feedstock (CBFS) prices, are the key risks. CRISIL Equities expects PCBL’s revenues to grow at a two-year CAGR of 29 per cent in FY12, while EPS to increase to Rs 51.
—Crisil Equities