Britannia Industries
Recommendation: Buy at Rs 538 by SSKI Securities
In an update, SSKI has re-iterated its outperformer rating on Britannia Industries (BIL) at Rs 538. The company's earnings are estimated to increase by 12.9 per cent to Rs 23.8 per share in this fiscal. BIL has booked pre-tax gains of Rs 125 crore from transfer of its diary business. The proceeds from the transfer will be used to buy back shares at a price not exceeding Rs 650. The scrip is trading at 17.5 times estimated FY2003 earnings.
Ranbaxy Laboratories
Recommendation: Buy at Rs 797 by Kotak Securities
Kotak Securities expects a 42 per cent appreciation in Ranbaxy Laboratories share price from the current levels of Rs 797. Over the next eighteen months, Ranbaxy is poised to reap the benefits of three more billion-dollar spaces opening up to generic alternatives - Isotretinoin, Augmentin and Claritin.
Ranbaxy is likely to generate combined revenues of US$114 mn and profits of US$54 mn from the possible launches of these generic versions. Based on PEG valuation, Ranbaxy trades at about 35% discount to global specialty pharma players (0.9x CY02E and 0.7x CY03E).
Tata Power
Recommendation: Hold at Rs 114 by Enam Securities
Enam Securities has re-iterated its hold recommendation on Tata Power at Rs114. As the power reforms progress, they will provide good investment and growth opportunities to Indian power utilities. Moreover, with increasing contribution from captive power projects(CPP) and independent power projects(IPP), the earnings are estimated to jump by over 20 per cent to around Rs 25 per share in FY2003.
The scrip is trading at 4.56x FY2003 earnings. However, the area of concern for Tata Power is its proposed investments of Rs 2,200 crore in the group's telecom projects.
Nestle India
Recommendation: Buy at Rs 505 by Kotak Securities
Kotak Securities has re-iterated its buy recommendation on Nestle India at Rs 505. Over the past few years, the company has focused on making its portfolio of value-added food products more affordable by holding the price line and even lowering it in a number of major brands.
Increasing affordability has helped drive penetration, thus increasing the company's consumer base. A soft commodity price environment enabled the company to take price cuts without hurting margins. With the estimated earnings growth of 19 per cent in CY2003 to Rs 23.8 per share, the scrip is trading at a forward price-earnings ratio of 21.2x CY2003 earnings.
Andhra Bank
Recommendation: Buy at Rs 11.25 by Tata TDWaterhouse
Tata TDWaterhouse is bullish on Andhra Bank at Rs 11.25, despite the fact that scrip has already appreciated from Rs 8.5 in March 2002. The bank is returning capital to the tune of Rs 150 crore, including Rs 50 crore as interest, to the government. Thereby, reducing current capital from Rs 450 crore to Rs 350 crore.
Moreover, the bank has comfortable capital adequacy of over 13.7 per cent and low net NPAs of 2.95 per cent making it an attractive stock. It is trading at around 2 times its FY2002 earnings.
