M&M
Reco price: Rs 693
Target price: Rs 865
M&M’s UV sales should see strong growth in FY13 given new product tailwinds, which should drive market share gains. Visibility on tractor growth is weaker but analysts see a better case for a moderation of growth than a sharp slowdown. Stand-alone margins are unlikely to improve given rising share of lower-margin new products and higher share of MVML in sales. Analysts have cut FY12-13 EPS estimates by 5-7 per cent factoring in lower tractor growth, higher UV growth and lower margins. Valuations at 10 times FY13 auto business P/E are attractive. Maintain buy.
-CLSA
JSW STEEL
Reco price: Rs 469
Target price: Rs 739
JSW Steel management believes that if Karnataka ore is not available they can’t run the plant in the long run. Imported iron ore would not make sense as costs would be too high, while getting iron ore from Orissa is not likely due to high freight and logistics issues. JSW Steel has maintained its guidance of 7.5mtpa production in FY12 and has enough iron ore visibility to run the plant at 80 per cent utilization for next six months. They expect some mines to start production in next 2-3 months time. Maintain buy.
-Nomura Equity Research
JET AIRWAYS
Reco price: Rs 175
Target price: Rs 400
Jet Airways (JAL) has a dominant market share among corporate travelers, a low price elastic segment. With Kingfisher Airlines (the only other alternative apart from the national carrier) announcing a series of flight cancellations, Jet has emerged as the key beneficiary as reflected by the November market share gains. Further, a 20 per cent rise in fares in November augurs well for the profitability in Q3. Maintain Buy.
-Edelweiss Securities
