| Cadila Healthcare is one of the leading pharmaceuticals, diagnostics, herbal products, skin care products and OTC products company. The company had recently received US FDA approval for its cardiovascular lipid lowering drug Simvastatin, and has launched it in the US market right on the day it received the approvals. |
| The company has been registering a steady double digit growth in its domestic businesses, and the international operations too are about to break even over the next two years. |
| Cadila's topline is expected to record 19% CAGR over FY06-09, led by a 46% CAGR in the international formulations business. The company has joint venture partnerships with companies like Altana for supplying Pantoprazole intermediates, Mayne for supplying 8 oncology products and Bharat Serums for marketing and distribution of an oncology NDDS. |
| At Rs 350, the stock trades at a P/E ratio of 24.02 times and 19 times estimated FY07 earnings and 15.8 times estimated FY08 earnings. The corresponding EV/EBITDA ratios are at 11.4 and 9.6 times estimated FY07 and FY08 earnings. |
| Indraprastha Gas |
| Indiainfoline recommends a "buy" on Indraprastha Gas at a price of Rs 114 with a target of Rs 162 providing an upside of over 42 per cent. The stock is currently valued at 12 times one year forward earnings or 6 times EV/EBITDA. |
| Indraprastha Gas Limited is a piped natural gas and compressed natural gas distribution company based out of Delhi, operating virtually as a monopoly as it does not have any competition in its territory of operation. Approximately 92 per cent of the company's revenues come from public transport vehicles of Delhi for whom the usage of CNG is mandatory. |
| With the launch of CNG variants of cars in the pipeline, the company's client base would extend to private cars too. |
| As the operating margins of IGL seem to be sustainable at over 40 per cent levels, and the company expands in new territories in the NCR regions, the stock looks promising fundamentally. |
| At the current price of Rs 115.90, the stock trades at a P/E ratio of 13.38 times and 11.7 times estimated FY07 earnings and 9.9 times estimated FY08 earnings. The corresponding EV/EBITDA ratios are at 5.7 and 4.9 times estimated FY07 and FY08 earnings. |
| Hindustan Construction Company |
| Finquest recommends a "buy" at a price of Rs 141 on Hindustan Construction Company with a 12 month target price of Rs 171. HCC is an established player in the construction industry which has to its credit major orders like Bandra-Worli sea link project, Mumbai-Pune expressway, Kolkata Metro Project, Rajasthan Atomic Power projects-Units 1 and 2,etc. |
| The company which currently has orders worth Rs 98.2 billion spread over the next 4 to 5 years could see this reach the Rs 108 billion mark next year. A key positive for HCC remains its balanced order book which would help it avoid concentration risk. |
| Moreover, Power projects have now surpassed the road segment of the company's order book composition. Finquest believes that this would lead to an increase in HCC's operating margins. The company has undertaken development of several of its real estate holdings. The phase I of the Lavasa Township in Pune is in process of being completed. |
| The company's land in Mumbai is also being developed and plans are afoot to construct an IT park. At the price of Rs 141, on core business valuations, the stock trades at a P/E ratio of 25 times and 19 times the company's estimated FY2007 and FY2008 earnings. |
| Rolta India |
| Prabhudas Lilladhar recommends a "buy" on Rolta India at Rs 249 with a price target of Rs 350. Rolta is a leading provider of Geospatial Information systems, engineering solutions and services. It could benefit from the unravelling of the tremendous potential of the GIS market expected to cross $ 1 billion in another five years. |
| Rolta's leading presence in the Engineering Design Services and Automation solutions space is a key positive. Rolta's recent joint venture with the French defence firm, Thales is seen to have a potential of $ 500 million in the next five years. Rolta's JV with Stone and Webster Inc, USA could also pay rich dividends. |
| This is especially based on expectations of SWRL playing a significant role in the Indian civil nuclear energy space. Prabhudas Lilladhar also expects a 37 per cent growth in revenues in the next three years, driven by new service offerings, geographic expansion and deeper cross-selling opportunities. |
| At the price of Rs 249, the stock trades at a PER of 8.5 times and 6.4 times its estimated FY2008 and FY2009 consolidated earnings. |
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