Crompton Greaves
Reco price: Rs 261
Target price: Rs 317 Crompton Greaves, market leader in the Indian transformer market and a significant participant in the European and American transmission and distribution (T&D) space through its subsidiaries Pauwels and Ganz, is among the best plays on global T&D spends. The Indian transformer market is expected to grow at around 15 per cent over the next three years. Growth is expected to be faster in the high-voltage systems segment. The company’s earnings are expected to grow 23.8 per cent annually over FY09-12 (financial years 2009-12). At Rs 261, the stock trades at 18 times FY11 estimated earnings, which is at a 25 per cent discount to Siemens and 40 per cent discount to ABB, and is a good long-term investment. Initiate buy.
— Ambit Research
Bosch
Reco price: Rs 4,897
Target price: Rs 5,520 Led by higher volumes' demand coming from commercial vehicles and tractors, Bosch’s Q1CY10 (first quarter of calendar year 2010) operating performance was good as revenue grew 59 per cent to Rs 1,600 crore. The company’s net profit grew even higher by 310 per cent to Rs 200 crore, which was largely on account of expansion of operating margins to 19 per cent compared to 10 per cent last year. The company is further expanding its production facility. It also has cash in books valued at Rs 800 per share. The brokerage has put a target price of Rs 5,520, which is 19 time its core earnings per share. Maintain neutral.
— Enam Securities
Canara Bank
Reco price: Rs 408.8
Target price: 330 Canara Bank reported a Q4FY10 net profit of Rs 500 crore, which was down 30 per cent and below expectation compared to last year.
The decline in profits was on account of the higher provisioning for bad loans. Also, the lower trading income due to the higher bond yields resulted in lower profits. Further, the brokerage expects the bank’s margins to remain under pressure as asset yields continue to have downward pressure sequentially and cost of funds is expected to rise. With provisioning likely to remain high and with margins and trading gains expected to be under pressure, the brokerage maintains under-perform rating on the stock. Maintain sell.
— Macquarie Research
SpiceJet
Reco price: Rs 62
Target price: Rs 84 SpiceJet, is one of the fastest growing airlines in the Indian aviation industry, having a market share of around 12 per cent. Considering its strong expansion plans, revival in the economy and strong passenger growth, the brokerage expects the company to do well. Driven by huge losses, most airlines reduced fleets and no new capacities were added since FY2009. But demand has bounced back sharply and low-cost carriers (LCCs) have been reporting 80 per cent-plus load factors. Demand is expected to outpace supply and, thus, will lead to a higher load factor and profitability. SpiceJet is expected to report 51 per cent annual growth in its profits over the next two years. Initiate buy.
— Angel Securities
