Morgan Stanley Equity Research has re-iterated an outperform recommendation on HPCL at Rs 105. However, it has reduced the earnings estimates for FY02 and FY03 by 26 per cent and 23 per cent respectively based on expectations of lower gross refinery margins in future. The 12-month price target has also been reduced from Rs 220 to Rs 140.
SSKI Securites has given a underperformer recommendation to TISCO at Rs 70. Steel prices are expected to remain depressed over the next 12 months on account of poor demand and steep anti-dumping duty imposed by the US on Indian steel producers. TISCO's operating margins will be under pressure and earnings are estimated to fall by 47.1 per cent in FY2002.
Prabhudas Lilladher Securities has upgraded L&T to market performer from underperformer at Rs 148. After the dramatic decline in the market price, the stock is quoting at 11.3x and 9.2x FY02E and FY03E EPS. The bad news, including the likelihood of further delays in the cement deal, appears to be factored into the current market price, offering very little downside from these levels.
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Sushil Finance has initiated coverage on Tata Engineering recommending a strong buy at Rs 70 with a price target of Rs 100. The company is all set to put behind the dismal results of FY01, wherein it posted its highest-ever loss incurred by any company in Indian corporate history. Commercial vehicles, which contributes nearly 70 per cent of its sales, has shown early signs of revival.
Merrill Lynch has upgraded ITC Ltd. In the intermediate-term from reduce to accumulate at Rs 590. For the near term, bad news appears to be in the price, given the sharp fall and valuation at 12.6x for FY02 estimated earnings per share. Over the next 12 months, earnings appear relatively stable in the 17-18 per cent range.