Monday, December 12, 2011

Bulls eye : Economic time



India Cement - Hold
CMP: Rs 74
TARGET: Rs 80

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Nomura initiates coverage of India Cements with a Neutral rating. Given its complete exposure to the southern region, volume growth looks constrained over the next two years and, profitability would depend on continued production discipline.

HCL Tech - Buy
CMP: Rs 408
TARGET: Rs 520




Bank of America retains Buy rating on attractive growth and valuation. The current forward P/E of 10.8x , which is at a 35% discount to Infosys, provides valuation comfort as well. BoA raises FY12-14 EPS by 0-8% driven mainly by rebasing dollar-rupee dollar-rupee assumption.

RComm - Hold
CMP: Rs 76
TARGET: Rs 80


Deutsche Bank maintains Hold rating on Reliance Communications. RCOM's key challenge is to build momentum in its wireless business and generate sufficient cash flows to reduce its debt burden. Over the last six quarters, revenue/min has been stable, but mobile EBITDA has stagnated.

Godrej Consumer - Buy
CMP: Rs 388
TARGET: Rs 488



HSBC initiates Overweight rating on Godrej Consumers as it expects double-digit earnings growth for next few years. The valuation, growth and profitability trade-off analysis shows that GCPL's structurally attractive and it has a lowcapital intensive business model.

Federal Bank - Buy
CMP: Rs 389
TARGET: Rs 550




UBS believes Federal Bank is on the brink of an operational turnaround brought about by a change in leadership and a structural improvement in asset quality. The bank will now focus on improving the contribution of fee-based income to offset cyclical decline in NIMs.

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