Wednesday, April 6, 2011

Analysts' corner Bse Nse Stock

Hindalco Industries, Sintex Industries & Akzo Noble

Reco price: Rs 209
Target price: Rs 29
Hindalco has announced the successful financial closure for its upcoming 359-ktpa Mahan aluminium project and the associated 900-Mw power plant. The project costs Rs 10,500 crore and is likely to be completed by October 2011. However, we are assuming delays and expect it to be completed by March 2012. As on September 2010, Hindalco had spent Rs 2,300 crore. Additionally, Rs 4,000 crore, Rs 2,900 crore and Rs 500 crore are expected to be spent in FY11, FY12 and FY13, respectively (excluding financing cost). The company has committed 90 per cent of the total cost. The project would raise aluminium capacity by 60 per cent by the end of FY12. Aluminium prices stand at $2,600/t, higher than our FY12 estimate of $2,550/t, thereby posing upside risks to the same. Maintain Buy.

— Edelweiss Research

Reco Price: Rs 160
Target Price: Rs 220

Sintex is structurally a strong growth story. Key positives include 1) Diversified business model marked by low volatility in sales, profit and cash flows; 2) Market leadership in the prime Monolithic and Prefab segments which are expected to show CAGR of 25-27 per cent over FY11-13; 3) Acquired overseas and domestic subsidiaries have started delivering and are likely to show operational improvement; (4) Emerging cash flow positive in FY12-13 through better management — operational cashflow is likely to be Rs 590 crore and Rs 640 crore in FY12 and FY13, respectively, as against Rs 150 crore and Rs -260 crore in FY09 and FY10. At the target price, the stock looks attractive and discounts 12 times and 10.6 times the FY12 and FY13 estimated EPS of Rs 18.5 and Rs 20.7, respectively. Buy

— Pinc Research

Reco Price: Rs 826
Target price: Rs 1,094

The company is coming up with two plants with capacities of 60,000 tonnes and 84,000 tonnes, respectively, at a total cost of Rs 383 crore. The surge in demand for its products and anticipation of huge demand for its paints encouraged it to come up with these projects. The company is expected to increase its manpower, which might double from the current level of 1,500. At a CMP of Rs 826, Akzo Nobel is currently trading at P/E of 16.3 times and 13.6 times the forward earnings of FY11E & FY12E, respectively. Its peer group companies are trading at a trailing P/E, greater than 25 times the earnings. Buy         
 Ashika Stock Broking

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