Thursday, February 17, 2011

Analysts' corner Bse Nse Stock

 M&M, Taj GVK Hotels & Resorts, Deccan Chronicle Holdings & Parsvnath Developers

Reco Price: Rs 668,
Target Price: Rs 819

M&M would effect a fresh round of price increases across its tractor portfolio effective from February 12-15, 2011 in the range of 2-3 per cent. This would mean for nine months of 2010-11 price increase of 7-8 per cent for the tractor portfolio. While dealers said demand was steady, higher demand is seen for 40-45 Hp segment. Though lending rates have increased by 100-150 bps over the last 3 months for M&M Finance, at 12-13 per cent, and for nationalised banks at 10-11 per cent, this has not affected demand so far. Analysts believe the price increases would help M&M partially mitigate the input cost pressure. This, coupled with steady demand for tractors, augurs well for M&M. Maintain buy.

—Centrum Broking

Taj GVK Hotels & Resorts
Reco Price: Rs 100,
Target Price: Rs 165

Taj GVK Hotels & Resorts (Taj GVK) reported Rs 70 crore sales, up 9 per cent Y-o-Y. It posted ORs of 65-75 per cent for its hotels in Hyderabad against 65 per cent in Chennai and 77 per cent in Chandigarh. ARRs grew flat to marginally, both Q-o-Q and Yo-Y. The company sounded cautious on any big jump in ARRs, as there is enough supply coming in the next 2-3 years across its major markets. Taj GVK reported 40 per cent EBIDTA margins, flat on a Y-O-Y basis. Edelweiss has reduced its FY11 and FY12 EBIDTA estimates by 20 per cent and 22 per cent respectively, due to lower-than-estimated rise in ARRs. With the opening of Begumphet property, in Q2FY12, Edelweiss expects EBIDTA margins to decline to 36.2 per cent in FY12 from 37.5 per cent in FY11. Maintain buy.

—Edelweiss Securities

Deccan Chronicle Holdings
Reco Price: Rs 81,
Target Price: Rs 128

Post Deccan Chronicle Holdings’ (DCHL) Q3FY2011 results, Angel Broking has revised its estimates downwards primarily to factor in lower revival in advertisement volume. The company posted dismal results for the quarter, with top-line de-growth of 15 per cent yoy to Rs 200 crore and earnings decline of 55 per cent yoy to Rs 35 crore, , impacted by increase in interest expense, depreciation charge and margin contraction, though cushioned by higher other income. Its Ebitda margin contracted by 1648 bps yoy, led by squeeze in gross margin and lower operating leverage. Angel Broking has lowered its target P/E multiple from 12x to 10x owing to concerns relating to the merger of its 100 per cent subsidiaries, Deccan Chargers Sporting Ventures, Odyssey Indian and Netlink Technologies with itself and high volatility in garnering advertisement volumes owing to the political instability in Andhra Pradesh. The stock trades at attractive valuations. Maintain buy .

—Angel Broking

Parsvnath Developers
Current market price: Rs 29,
Fair value: Rs 63

CRISIL Equities has assigned fundamental grade of 2/5 to Parsvnath Developers Ltd (Parsvnath), indicating Rs moderate’ fundamentals. Parsvnath's strong development pipeline and fast construction activity provide a strong revenue visibility over the next decade. The grade is constrained by the high amount of debt which was borrowed to fund its aggressive project execution plans. Though the recent fund raising through QIP and project level private equity investment has eased the overall liquidity, CRISIL believes that Parsvnath’s huge development plans will necessitate more funding and may lead to further debt raising.

CRISIL Equities expects Parsvnath’s revenues to grow at a three-year CAGR of 17 per cent to Rs 1520 crore in FY13, while EPS is expected to increase from Rs 3.0 in FY10 to Rs 9.3 in FY13.   

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