Friday, January 14, 2011

Analyst's corner Bse Nse Stocks

United Phosphorus, Suzlon Energy, Coromandel International & Vipul

United Phosphorus
Reco price: Rs 160,
Target Price: Rs 198 

United Phosphorus (UPL) has announced conversion of outstanding FCCB's into equity. Of the total outstanding FCCB's worth $80 million, FCCB's worth $78 million have been converted into equity, while the balance worth $2 million have been redeemed. At Rs 160, the stock is trading at attractive valuations of 10.5 times 2011-12 EPS. Maintain Buy.

—Angel Broking

Suzlon Energy
Reco Price: Rs 53,
Target Price: Rs 68

Suzlon Energy (SUEL) will develop 1,000 Mw of new wind power capacity in Gujarat over the next three years. Over the past few years, SUEL has signed six MoUs with the government of Gujarat, committing over $3.1 billion for the development of wind farm projects and R&D centres in the state. Brokerages view the event to be highly positive for the company. The same is likely to provide much-needed support to its stagnant order book. In addition, it also lends comfort to the prospects of the company, making profit in 2011-12. REpower continues to report steady growth over the past few quarters. It has an order-book of $3.6 billion and framework contracts of 2,000 Mw, which are expected to materialise over the next two-three years, providing strong revenue visibility. While 2010-11 is likely to be a flat year for REpower, the company will register 20 per cent revenue growth in 2011-12. Maintain buy.

—Reliance Securities
Coromandel International
Reco Price: Rs 280,
Target Price: Rs 435

Q3FY11 results for Coromandel International remained inline with estimates. Revenues of Rs 2,050 crore (adjusted for subsidy of Rs 11 crore related to previous period) increased 17 per cent y-o-y and were ahead of estimates by 19 per cent. Higher sale volumes for fertilisers and contribution of Rs 110 crore via trading revenues drove topline growth. Ebitda margins stood at 10.9 per cent, contracting by 90 basis points y-o-y, led by higher trading activity. Current quarter results include subsidy income of Rs 11 crore related to previous period - which after adjustment for tax results in net profit of Rs 144 crore (down 2 per cent y-o-y). Maintain buy.

—Emkay Research

Fair Value: Rs 31,
Current Price: Rs 17.5

Crisil Equities has assigned fundamental grade of 2/5 to Vipul (Vipul), indicating moderate fundamentals. Gurgaon-focused Vipul is known for its brand and quality construction with a good execution track record of undertaking 5.5 mn sq ft of projects since 2001. The company's project pipeline of approximately 11.6 mn sq.ft with good pre-sales response and advanced construction level provide revenue visibility for the next five-six years. Besides, it has a land bank of 407 acres, which once monetised could unlock further value for the shareholders. The grade is constrained by the high debt levels, execution of future projects on recently acquired expensive land and concentration in the highly competitive Gurgaon market. Crisil Equities expects Vipul's revenues to grow at a three-year compound annual growth rate of 18 per cent to Rs 470 crore in 2012-13 while EPS is expected to improve to Rs 5.4 in 2012-13 from Rs 0.7 in 2009-10.

—Crisil Equities  

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