ADANI PORT & SEZ
Reco price: Rs 130;
Target price: Rs 160
Adani Port has refinanced the $2-billion bridge loan that it had taken for Abbot Point coal terminal in Australia in May 2011. The nine mt HPCL-Mittal Energy refinery in Bhatinda, which has been awaited for a while, has been fully operationalised in the last week of March 2012. The company’s stock price has been under pressure on account of negative news flow regarding its probable involvement in a money laundering issue, which has been categorically denied by the management. The company’s stock price has underperformed by 11 per cent in the last one month. Maintain buy.
Prabhudas Lilladher
EICHER MOTORS
Reco price: Rs 2,100;
Target price: Rs 2,220
Since March 1, 2012, Eicher Motors’ share price has risen 22 per cent and outperformed the Sensex by 25 per cent. Analysts believe Eicher is poised to emerge as a commercial vehicle powerhouse over the long term on the back of market share gains in heavy tonnage trucks, significant involvement of, and potential outsourcing opportunities from Volvo. Rising market share for Eicher in heavy tonnage trucks and margin improvement are key positive catalysts. Competition from new entrants in the heavy trucks segment, a shift in tonnage dynamics within the truck industry and imposition of royalty by Volvo on VECV at a future date are key risks. Maintain buy.
Ambit Capital Research
PTC INDIA
Reco price: Rs 67;
Target price: Rs 83
The Tamil Nadu electricity regulatory commission has approved 37 per cent tariff hike by taking into account prior period expenses, factoring in carrying cost of FY11 and FY12 revenue gap and also recalibrating the state power entity’s expense forecasts for FY13. Analysts expect this move to reduce PTC India’s (PTC) working capital funding to the extent of at least Rs 600 crore (dues from TN) will also aid earnings. Maintain buy.
Edelweiss Securities
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EMMBI POLYARNS
Current market price: Rs 13;
Fair value: Rs 23
CRISIL Research has assigned fundamental grade of 2/5 to Emmbi Polyarns Ltd (Emmbi). The company mainly operates in the highly competitive flexible intermediate bulk container segment. It has expanded its capacity threefold to 18,200 MTPA in 2011 to increase its global presence and high-margin specialty products portfolio. However, marketing incremental output remains a challenge. Emmbi has decade-old relationships with leading MNCs, which ensure repeat business. Revenue is expected to grow at a three-year CAGR of 28 per cent to Rs 156.2 crore and adjusted net profit is expected to increase at a three-year CAGR of 37 per cent to Rs 6.5 crore in FY14. Adjusted EPS is expected to increase to Rs 3.7 in FY14 from Rs 1.6 in FY11. The valuation grade is 5/5, indicating that the market price has a strong upside potential from the current levels.
CRISIL Research