GSFC
Reco Price: Rs 349,
Target Price: Rs 530 GSFC’s chemicals business is expected to benefit from strong chemical prices. Key chemicals, Caprolactam and Nylon-6, are expected to benefit from rising prices. Caprolactam prices increased to $ 2,750/mt by Nov’10 and are higher 25 per cent than the H2FY10 average prices of $ 2,200/mt. However the key raw material – Benzene prices at $925/mt remain flat compared to H2FY10 average prices of US$ 910 / mt. Demand from the tyre industry remains buoyant. Strong margins in chemicals segment may trigger H2FY11E earnings upgrade of 15 per cent while captive ammonia production has helped improve fertiliser segment margins. Maintain buy.
—Emkay Global Financial Services Ltd
MAGFIL
Reco Price: Rs 135.7,
Target Price: Rs 182 Manappuram General Finance & Leasing (MAGFIL)has registered a CAGR of 42 per cent in its assets under management over a period of last three years, targeting to grow at 48 per cent CAGR over FY11-FY13. The underlying gold consumption market is set to grow by 35-40 per cent over the same period. Cost of borrowings for MAGFIL remain at comparatively low levels due to its long credit history as well as its borrowings mix. Analysts remain confident of the asset quality in the gold loans segment and expect NPAs to remain in the range of 1.2 per cent to 1.3 per cent. Initiate coverage with buy
—SPA Securities Limitied