GMR INFRASTRUCTURE
Reco price/date: Rs 20/June 4
Current/target price: Rs 19/Rs 34
GMR Infrastructure (GMR) .After a dismal March quarter result, IDFC has downgraded its FY13 earnings estimates for GMR Infrastructure Ltd by 63 per cent to Rs 0.3/share. Analysts see a turnaround in GMR’s earnings in FY13, led by approval of a 340 per cent increase in Delhi airport tariffs effective May. Along with improving profitability of road assets, analysts expect better earnings to drive up stock performance. Restricted gas supply for the 608 Mw of existing and 768 Mw of upcoming capacities and poor visibility on coal supply for the 1,650 Mw of capacity coming up over the next 12 months remain key medium-term concerns. However, current valuations of 0.9 times price/book value factor in these risks. Maintain outperformer.
IDFC Institutional Securities
JUBILANT FOODWORKS
Reco price/date: Rs 1,233/June 4
Current/target price: Rs 1,150/Rs 995
As the exclusive franchise for Dominos Pizza and Dunkin Donuts in India, Jubilant FoodWorks Ltd is the only listed quick-service restaurant player in the country with a significant brand equity in the fast-growing quick-service restaurant segment. But this high quality growth story is matched with premium valuations (at 51 times FY13 estimated price/earnings). Any minor lapse near-term (store opening, comps, and/or margins) could significantly strain the valuation. JP Morgan would become more constructive on the stock close to Rs 900 levels. They expect 20 per cent downside from current levels. Initiate with underweight.
J P Morgan
CRISIL
Reco price/date: Rs 1,066/June 4
Current/target price: Rs 1,050/NA
CRISIL has entered into an agreement to acquire a 100 per cent stake in the UK-based research and analytic firm, Coalition Development Co. (Coalition), and its subsidiaries for Rs 250 crore. Coalition provides high-end analytics services mainly to leading global investment banks, and reported a revenue of Rs 77 crore in FY11. CRISIL’s revenue stood at Rs 827 crore at the end of CY11. CRISIL will be reporting Coalition’s revenue from the first year itself, directly fuelling nearly 10 per cent plus growth in its top line. Coalition’s cutting-edge capabilities and in-depth understanding of the workings of financial markets and strong relation with clients will further help CRISIL’s global research and analytics segment to widen its service offerings and add new clients. Maintain neutral.
Angel Broking
UNITY INFRAPROJECTS
Reco price/date: Rs 40/June 4
Current/target price: Rs 40/Rs 64
Unity Infraprojects Ltd’s March quarter performance was ahead of analysts’ estimates, mainly due to superior execution of its projects. The company reported a top line of Rs 717 crore in the quarter. The Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin at 12.5 per cent was lower due to a steep rise in key raw materials, which, according to the company, should be recoverable in the next couple of quarters. The order book currently stands at Rs 4,200 crore, 2.1 times the order book to bill ratio. Furthermore, the company is looking for an order inflow of Rs 5,000 crore in FY13 and a top line growth of 20 per cent. With plans to dilute its stake in two special purpose vehicles where it holds land and hotel projects, respectively, it could act as a catalyst for debt reduction. Maintain Buy.
ICICI Securities
