MPHASIS
Reco price/date: Rs 404/December 3
Current/target price: Rs 400.90/Under review
The analyst observes that he has been regularly emphasising on the fact that good performance in the direct channel was almost mandatory for the company to gain momentum in its financial performance. This acquisition is a sizable step towards that direction. However, it is important to consider that the company has been under-performing compared to its peers in terms of revenues growth since the past eight quarters. Going ahead, he does not expect a hockey stick kind of recovery in growth rates as HP would still contribute 50 per cent to the total revenues and remain a major overhang. The company is expected to report its October quarter and year-end numbers on Wednesday. Hence, it would be wise to read this acquisition further in conjunction with the revenue performance in the October ending quarter. Until then, he keeps recommendation for Mphasis UNDER REVIEW.
Asit C Mehta Investment interrmediates Limited
STATE BANK OF INDIA
Reco Price/date: Rs 2,170/ December 2
Current/target price: Rs 2,203/Rs 2,540
While the bank reported a weak 2Q, the research house sees asset quality pressures abating at the margin. Also, State bank’s restructuring has been lower than other private sector banks and largely restricted to Corporate Debt Restructuring. Net interest margins could see only limited compression and may pick up with loan growth revival. This, coupled with re-pricing of residual bulk deposits, would aid NIMs. They note that SBI’s Current Account Savings Accounts remains solid even in a tough resource mobilisation environment – a reflection of its strong franchise (as against a sharp deterioration for other public sector banks. We also believe SBI would be the biggest beneficiary in a falling interest rate scenario due to its high mid-corporate/small and medium enterprises exposure. While a likely capital infusion could be a near-term overhang, it would be a long-term positive given the rising capital requirements under Basel III. Upgrade to Buy.
Religare Institutional Research
DLF
Reco price/date: Rs 209/November 30
Current/target price: Rs 210.65/Rs 263
According to media reports, the Competition Commission of India (CCI) has rejected a complaint of alleged abuse of market dominance against DLF, related to a housing project in Chennai. The grounds of rejection are that relevant geographic market cannot be confined to a particular section of the city and should comprise the entire city. The Analyst believes this is directionally positive for the stock as it could lay the ground for a judgment favouring DLF even in the Gurgaon projects. This judgment is a directional positive, as it points towards potentially favourable judgment in the anti-trust case for Park Place and Belaire, DLF’s luxury residential Projects in Gurgaon. We remain positive on the stock given its attractive valuations and Improving balance sheet and cash flows. Maintain ‘BUY’.
Edelweiss Securities Ltd
TITAN INDUSTRIES
Reco Price/date: Rs 312/ November 30
Current/target price: Rs 306.2/Rs 325
We find increased activity in the jewelry market as festive sales were robust with industry sales growing 35 per cent year on year, the wedding season is spread over a longer period with 25 per cent more wedding dates than last year and the organized market is growing with erstwhile regional players going national. In our view, these parameters augur well for the industry, and particularly for Titan, as being the market leader it will benefit most. Over the past four quarters Titan’s volumes declined due to muted consumer sentiment This has created a favorable base for it in the near term. We have increased EPS estimates by seven per cent for FY13 and FY14 each as we build benefits of festive season demand and mix improvement. Retain ADD.
Kotak Institutional equities
