Brics PCG: 'Buy' PVR, Asian Electronics

Brics PCG recommends a 'Buy' on PVR at the current market price of Rs 227 with a target of Rs 400.

The company has posted good Q1 FY07 results with revenue growth of 57.8% at Rs 40.42 crore and 92.5% surge in net profits to Rs 3.33 crore.

Revenues increased due to higher inflows from existing cinemas and from new multiplexes which commenced operations during the year.

During the quarter the company commenced operations at four new multiplex projects two in Mumbai, one in Indore and another in Lucknow.

The total number of screens by the end of the quarter was 68. In July, the company started operations of one more multiplex in Gurgaon taking the total number of screens to 70.

About 46 more screens are expected to commence operations over the next 12 months. The average occupancy in PVR's multiplexes was 51% during the quarter, with a mean ticket price of Rs 115.

The stock trades at 27.6 times and 12.9 times its FY07 and FY08 earnings.

Brics PCG recommends a 'Buy' on Asian Electronics at the current market price of Rs 351 with a target of Rs 645.

Asian Electronics being a leading energy service company(ESCO) in India, will benefit from rapid growth in the sector following a series of initiatives taken by the Indian government.

These efforts have now gained momentum which is evident from the rise in spending by power utilities on energy efficient projects. The company's order book stands at Rs 440 crore to be execurted over a period of two years.

Brics expects the revenues to grow at 86% and 33% in FY07 and FY08 respectively, fuelled by the lighting ESCO business.

Profits are expected to grow at 97% and 50% during the same period. The stock is trading at 8.7 times and 5.8 times on FY07 and FY08 earnings of Rs 40.1 and Rs 60.2 respectively.