WIPRO
Reco price/date: Rs 449/April 9;
Current/target price: Rs 394/Rs 460
Edelweiss has trimmed Wipro's target price to Rs 460 a share from Rs 515 a share earlier in light of demerger of Wipro Consumer Care & Lighting and Wipro Infrastructure Engineering & Medical Diagnostic Product & Services from Wipro into Wipro Enterprises Ltd (WEL). Analysts expect Wipro to trade at 10 per cent lower than current market price post this event. April 11 has been fixed as the record date for the demerger, which is effective March 31, 2013. While Wipro will remain a publicly listed company, WEL will be an unlisted entity. The demerger will enable the company to focus on its growth strategy in the IT services and products space and increase its competitiveness in the market. Maintain Buy.
EMAMI
Reco price/date: Rs 602/April 9;
Current/target price: Rs 594/Rs 733
Given the sharp decline in menthol prices of late, analysts believe Emami should be able to deliver significant improvement in margins in FY14, which is not being built into the current stock price. Analysts now factor in a 110 basis points margin improvement for FY14. This is despite higher A&P spend of closer to 18.5 per cent in FY14. Valuations at 19.7 times FY15 estimated EPS versus sector average of 23.9 times leaves plenty of room for upside potential from current levels. Nomura raised Emami to their preferred pick in the mid-cap consumer space. Maintain Buy.
TVS MOTOR
Reco price/date: Rs 40/April 9;
Current/target price: Rs 35/NA
TVS Motor (TVSL) has entered into a long term co-operation agreement with BMW's motorcycle division, BMW Motorrad to develop and produce new series of motorcycles that will cater to the sub 500 cc segment. Analysts see this as a positive development for TVSL in the long-run given that BMW will provide technological access to the company and help TVSL expand its presence in the premium motorcycle space. The stock has run-up by more than 25 per cent over the last five trading session. Neutral.
EDUCOMP SOLUTIONS
Reco price/date: Rs 62/April 8;
Current/target price: Rs 58/Rs 45
Revenue growth and profitability of SmartClass (SC) continues to erode for Educomp. Analysts expect revenue to decline by 25 per cent in FY14 and for the company to report a net loss. During FY10, the transition from BOOT to upfront sales led to one-time revenue recognition. Analysts expect transition back to a BOOT model as of FY14 could lead to a decline in SC revenue. Maintain Underweight.
Reco price/date: Rs 449/April 9;
Current/target price: Rs 394/Rs 460
Edelweiss has trimmed Wipro's target price to Rs 460 a share from Rs 515 a share earlier in light of demerger of Wipro Consumer Care & Lighting and Wipro Infrastructure Engineering & Medical Diagnostic Product & Services from Wipro into Wipro Enterprises Ltd (WEL). Analysts expect Wipro to trade at 10 per cent lower than current market price post this event. April 11 has been fixed as the record date for the demerger, which is effective March 31, 2013. While Wipro will remain a publicly listed company, WEL will be an unlisted entity. The demerger will enable the company to focus on its growth strategy in the IT services and products space and increase its competitiveness in the market. Maintain Buy.
-Edelweiss Securities
EMAMI
Reco price/date: Rs 602/April 9;
Current/target price: Rs 594/Rs 733
Given the sharp decline in menthol prices of late, analysts believe Emami should be able to deliver significant improvement in margins in FY14, which is not being built into the current stock price. Analysts now factor in a 110 basis points margin improvement for FY14. This is despite higher A&P spend of closer to 18.5 per cent in FY14. Valuations at 19.7 times FY15 estimated EPS versus sector average of 23.9 times leaves plenty of room for upside potential from current levels. Nomura raised Emami to their preferred pick in the mid-cap consumer space. Maintain Buy.
-Nomura Equity Research
TVS MOTOR
Reco price/date: Rs 40/April 9;
Current/target price: Rs 35/NA
TVS Motor (TVSL) has entered into a long term co-operation agreement with BMW's motorcycle division, BMW Motorrad to develop and produce new series of motorcycles that will cater to the sub 500 cc segment. Analysts see this as a positive development for TVSL in the long-run given that BMW will provide technological access to the company and help TVSL expand its presence in the premium motorcycle space. The stock has run-up by more than 25 per cent over the last five trading session. Neutral.
-angel broking
EDUCOMP SOLUTIONS
Reco price/date: Rs 62/April 8;
Current/target price: Rs 58/Rs 45
Revenue growth and profitability of SmartClass (SC) continues to erode for Educomp. Analysts expect revenue to decline by 25 per cent in FY14 and for the company to report a net loss. During FY10, the transition from BOOT to upfront sales led to one-time revenue recognition. Analysts expect transition back to a BOOT model as of FY14 could lead to a decline in SC revenue. Maintain Underweight.
-Morgan Stanley Research