TATA STEEL
Reco price: Rs 340,
Target price: Rs 340
FY13 should be an eventful year for the company, with domestic expansion now just a quarter away, iron ore/coal output from its Canadian/Mozambique mines about to begin, and EU business ready to release working capital. These factors can materially change its cash-generating potential. While a $6-billion market cap on a $15 billion enterprise value makes an EV/Ebitda-driven fair value extremely volatile, analysts believe that short of a global crisis, it is hard to justify a fair value below Rs 340. A sharper slowdown in Europe/China and further book value erosion due to the UK pension fund are the key risks. Upgrade to neutral
Credit Suisse
MARICO
Reco price: Rs 145,
Target price: Rs 165
The growing domestic business, backed by the value-added hair oil portfolio, would help the company expand its market share. Efforts in expanding rural reach are also expected to contribute towards the growth of its domestic business. Subdued performance of Kaya and inflated copra prices suggest a cautious outlook for the stock. The stock is trading at an earnings multiple of 27.8 times FY12 estimated earnings. Accumulate
Bonanza Portfolio
ZYDUS WELLNESS
Reco price: Rs 385,
Target price: Rs 690
High competitive pressure on the Everyuth brand, the cyclical downturn in SugarFree’s revenues and higher raw material costs for Nutralite have impacted Zydus Wellness’s performance over the past two quarters. As the company is required to pay excise duty to Sikkim and collect the refund from the government next year, the duty is likely to drop from the second year of operations. Analysts expect the lower duty to begin from second half of FY13. They feel the strong long-term growth potential is intact and view the correction in the stock price as an attractive entry point. Maintain buy
Anand Rathi Research
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DEN NETWORKS
Reco price: Rs 48,
Target price: Rs 64
Den Networks, the only profitable multi-system operator in India, has the largest reach with 11 million subscribers, including 1.4 million paid ones, acquired mainly through secondary point acquisitions. Strategic buys helped the company garner better carriage revenues through an improved subscriber base. Initiate coverage with buy
Pinc Research