Cipla
Recommendation: buy at Rs 941
Enam Securities
Enam Securities is bullish on Cipla at Rs 941, trading at 41 per cent discount to its fair value of Rs 1,607 derived by DCF method. Cipla is well positioned to capture the best emerging opportunities such as marketing of active ingredients to US generic majors and launch CFC-free inhalers in Europe.
It's management has consistently delivered performance and exhibited commendable foresight in developing competencies for future growth. It is currently trading at 16x its estimated FY04 earnings of Rs 60.3 per share.
State Bank of India
Recommendation: buy at Rs 242
Kotak Securities
Kotak Securities expects a 20-25 per cent gain in State Bank of India(SBI) from the current level of Rs 242. The short-term prospects for the bank have improved. The cyclical recovery and change in strategy to lend to AAA and AA corporates could lead to better credit off-take.
Spreads have been falling, but should now stabilise as cost of funds is down significantly, and the bank has been successful in gaining market share in housing finance. The management expects to deliver 25% growth in profit in FY2003, which is possible if it aggressively books treasury gains.
Public Sector stocks
Recommendation : buy
UBS Warburg Research
In a comprehensive coverage on public sector (PSU) stocks, UBS Warburg believes some of the PSU stocks are still reasonably valued, despite the recent share price appreciation of around 50-200 per cent.
Valued under certain criteria like potential for privatisation, low valuation risks, benefits from structural reforms and deregulation, and potential acquirers benefiting from improvement in asset efficiency, the brokerage house concludes that Hindustan Petroleum Corporation(HPCL), Bharat Petroleum Corporation (BPCL) and Mahanagar Telephone Nigam (MTNL) meet the first three criteria and has recommended a buy on these stocks. Apart from this, National Aluminium Company(Nalco) and Oil & Natural Gas Corporation (ONGC) may benefit from sector deregulation.
Novartis India
Recommendation: hold at Rs 260
UBS Warburg Research
UBS Warburg advises to wait for the new price regime before investing in Novartis India at Rs260. The likely changes in the pricing regime are the main factor affecting the share price for now, as the company's three key brands that account for 16 per cent of sales may be impacted. It is estimated that a 20 per cent reduction in prices of these brands could reduce net profits for FY03E by 16 per cent. Thus, it will be better to take an investment decision on Novartis after a clear picture on new DPCO emerges.
