ARVIND LTD
Reco Price: NA
Target Price: Rs 108
The company's topline and bottomline are expected to grow at a CAGR of 20.5 per cent and 66.8 per cent, respectively, over the FY11-13 period, coupled with margin expansion. Aggressive capacity expansion across the segments will result in volume expansion. The share of denim fabric is expected to come down from 33 per cent of overall revenue and contribution of other high margin segments, mainly brands and retailing, will rise. The company is planning to introduce new brands to occupy vacant segment opportunities. Surplus land of 520 acres around Gujarat is expected to generate Rs 1,000 crore over the next four years and will help improve return on the capital deployed from 10.7 to 15.8 per cent over FY11-FY13. Recommend buy.
—SPA Capital
GMR INFRA
Reco Price: Rs 30
Target Price: Rs 38
Delhi International Airport's (DIAL) operations are expected to drive its turnaround from a loss-making entity (Rs 240 crore in FY11), effecting a turnaround for its aero vertical. Implementation of the regulatory rate is expected to drive the revenues as well. The brokerage believes GMR is available at a discount to its SOTP fair value, with the current valuations ignoring the enormous long-term potential of key operating assets like DIAL. At Rs 30, GMR Infra trades at a price-to-book value of 1.2 times FY12 estimates. Recommend buy.
—Emkay Global
