Friday, June 17, 2011

Analysts’ corner Bse Nse Stock

Axis Bank, Zee Entertainment Enterprises, IL&FS Transportation Network * Goodyear India

Reco price: Rs 1,246,
Target price: Rs 1,500

After delivering an industry-best loan growth of 36 per cent in FY11, Axis Bank expects to outgrow the system by 30-40 per cent in FY12. Based on an internal estimate of 18 per cent growth for the system, the bank expects its credit growth at 24-25 per cent. The estimate is tailored around its target of 25 per cent plus Casa growth. Significant improvement in branch productivity should drive strong CASA accretion, increasing its share in total deposits. C/D ratio would remain elevated with deposit growth expected to be slightly lower than advances. Analysts build-in 25 per cent loan CAGR for Axis Bank over FY11-13. In Q1 FY12, the loan book may shrink sequentially with some short-term loans running-off. NIM to moderate further in Q1 FY12; FY12 guidance at 3.25-3.5 per cent. Recommend buy.


Reco price: Rs 139,
Target price: NA

Zee Entertainment Enterprises( ZEEL) is likely to launch a 24-hour golf HD channel in August This will be its fourth sports channel solely dedicated to golf once it acquires the required license. This proposed new launch is part of ZEEL's strategy of launching new sports channels to get sustainable growth in subscription revenues. In Q4FY11, losses from the sports business were limited to Rs 15 crore against (a loss of) Rs 103 crore in Q3FY11. Analysts expect this channel to be low cost (Rs 100-200 per month) as telecast rights for golf properties are cheap. According to ZEEL Chairman Subhash Chandra, there could be a potential viewership of 2.5 million for golf in India. Maintain buy.

—Edelweiss Securities

Reco price: Rs 207,
Target price: Rs 243

IL&FS Transportation Network (ITNL) has signed a new concession agreement for 17.5 years with Govt of Jharkhand for a 68.7 km improvement of the Chaibasa-Kandra-Chowka(CKC) Road in Jharkhand with estimated project cost at Rs 430 crore. Analysts expect ITNL to recognise 3 per cent of the fee income upfront in FY12 and remaining over the 2.5 years of construction period, leading to marginal reduction in FY12 profitability. Emkay has fine tuned its operation and maintenance expense for the Chenani Nashri project which has lead to fair value of the project improving to Rs 8.2, as compared to Rs 1.1/share. Maintain Accumulate.        —Emkay Global research


Reco price: Rs 298,
Target price: Rs 400

Goodyear India (Goodyear) has managed its margins relatively well, as compared to its competitors in case of rising raw material prices, natural rubber. The company has one of the strongest balance sheets in the sector. Analysts expect the margins to improve, considering that raw material prices have shown a declining trend since the beginning of this calendar year. Goodyear has one of the strongest balance sheets in the tyre sector.

—Nirmal Bang Securities

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