Infosys Technologies
Recommendation: Buy at Rs 3,139 by ABN Amro India
ABN Amro India has upgraded Infosys Technologies to a buy from hold at Rs 3,139, with a price target of Rs 3,800. Continued weakness in the stock despite an improving geo-political environment provides an excellent opportunity for long-term investors. Moreover, expectations of strong volume growth and further improvement in employee utilisation levels this quarter could provide a upside trigger to the stock in the near future.
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Colgate Palmolive
Recommendation: Sell at Rs 142 by Merrill Lynch Securities
Given the stiff competition, Merrill Lynch has downgraded Colgate Palmolive at Rs 142 from buy to sell in the intermediate term and neutral in the long term. Poor topline growth of 3-5 per cent, coupled with expectations of flat margins implies unexciting earnings growth prospects in this fiscal. While management has been more proactive in terms of a better product portfolio and more competitive pricing, the cost of defending market share is likely to remain high -- in the range of around 21 per cent of sales. A dull business outlook and stiff competitive pressures do not justify the steep valuation of 24.5x FY03E and 22xFY04E earnings.
Padmalaya Telefilms
Recommendation: Buy at Rs 175 by Tata TD Waterhouse
Tata TD Waterhouse is bullish on Padmalaya Telefilms at Rs 175. Padmalaya has a broad-based and well-diversified business portfolio. Moreover, Zee' s strategic stake will be beneficial in terms of securing volume commitments, besides adding an edge to marketing. With seven films slated for release this fiscal, revenue and earnings are estimated to growth 96 per cent and 140 per cent respectively. The stock currently trades at 18.5x FY2002 and 7.7x estimated FY2003 earnings of Rs 22.5 per share.
Hindustan Lever
Recommendation: Buy at Rs 190 by CSFB Securities
CSFB Securities has recommended a buy on Hindustan Lever (HLL) at Rs 190, with a 12-month price target of Rs 275. By scaling down the exports and non-consumer business -- which utilises 84 per cent of the firm's capital and generates just five per cent of earnings before interest and tax (EBIT) -- and shifting focus to the more profitable businesses of home and personal care, HLL could improve its margins by as much as 400 basis points. Moreover, even in bad times, the company has enhanced its profitability in many business lines.
Infotech Enterprises
Recommendation: Buy at Rs 528 by Prabhudas Lilladhar Securities
Prabhudas Lilladhar Securities recommends investors to accumulate Infotech Enterprises at Rs 528, with a 12-month price target of Rs 750. The impressive growth of over 60 per cent is estimated to result in strong growth in revenues and earnings in FY03. Its other divisions -- GIS and Software Services -- are expected to maintain a moderate growth profile. Margins, too, are expected to improve on the back of better contribution from the engineering division and a shift towards higher-end services in the GIS business. The company is estimated to post earnings of Rs 46.8 and Rs 55.5 in FY2003E and FY2004E, respectively.