CAIRN INDIA
Reco Price: Rs 301 ;
Target price: Rs 350
The government has given an in-principle nod to the Cairn-Vedanta deal after Cairn India agreed to share the royalty and cess on production from its Rajasthan fields. However, some routine approvals are due. Analysts expect these to come through by the end of the year, which should pave the way for an increase in production from the current 125,000 barrels of oil per day. Further, analysts believe the new promoter, the Vedanta Group, will support Cairn India’s ramp-up endeavours, as it has done with its previous acquisitions. The prevailing environment of stronger oil prices, a depreciating rupee and narrow heavylight spread should benefit Cairn. Despite worries concerning global growth, crude oil has remained around the current level of over $100/barrel. Maintain Overweight.HSBC Global Research
ADANI ENTERPRISES
Reco Price: Rs 399 ;
Target price: Rs 442
The recent 30 per cent plunge in the stock seems unwarranted, as analysts continue to believe the company’s business/revenue model remains unscathed. Despite the decline in global trade due to economic slowdown during FY09, the Mundra Port did not face any significant decline in cargo. A stress test on the possible scenarios across Adani’s three businesses — power, port and coal trading/mining — reveals the stock is trading close to the lower end at the prevailing market price of Rs 339 a share. Upgrade to buy.Edelweiss Securities
J P POWER
Reco Price: Rs 36 ;
Target price: NA
The company plans to scale up capacity to 3.3 times by FY15 and 4.8 times by FY20 to transform itself into 9.7-Gw independent power producer (IPP) with a sustainable business model. The beginning of power generation at the 1.2-Gw Karcham hydroelectric plant in the first half of the financial year and the 500-Mw Bina plant in first half of FY13, shifting of the Karchana BTG order to Phase-II of Bara & Bina hydro projects and a delay in the start of construction at the 1.5-Gw Lower Siang hydroelectric project to 2013 are the key catalysts for the stock. Analysts expect JP Power to be among the top five private IPPs which offers a compelling and diversified model. Buy.Bank of America Merrill Lynch
MPHASIS
Reco price: Rs 325 ;
Target price: Rs 325
While the operating performance missed expectations, with below par revenue growth (down four per cent quarter-on-quarter in US dollar terms), margins declined by 150 basis points q-o-q to 17.9 per cent, aided by a weak currency and improvement in utilization. At Rs 180 crore, profits, (down 5.5 per cent q-o-q) missed estimates and were driven by a lower operating performance and lower-than-expected foreign exchange gains (Rs 20 crore against estimates of Rs 46 crore). Aided by lower currency resets, Emkay has raised its October 2012 earnings estimates by nine per cent to Rs 35.4, despite a further cut in modest revenue growth expectations. Maintain reduce.Emkay Global Financial Services
The target price and projected movements given above are in terms of the next one trading session, unless otherwise stated.
