Sunday, October 2, 2011

Bull's Eye: Shree Renuka Sugars, VA Tech, United Spirits, Power Grid Corp, NHPC

SHREE RENUKA SUGARS - HOLD
Rs 55: CMP
Rs 57: Target Price
Morgan Stanley downgrades Shree Renuka Sugar to Equal-Weight from Overweight. The stock has outperformed the Sensex by 5% over the past three months. Lower international sugar prices and uncertainty on the domestic sugar season may hit stock's price performance.


VA TECH WAGAB - BUY
Rs 366: CMP
Rs 481: Target Price

BNP Paribas estimates VA Tech Wabag's global addressable water market size of $424 billion to grow at 4-5% annually, while the addressable India market of $ 5 billion to grow at 10-15%, implying The company holds a large potential opportunity.


UNITED SPIRITS - BUY
Rs 797: CMP
Rs 1168: Target Price
Citigroup maintains Buy rating on United Spirits. The target price is based on a two-part EV/EBITDA methodology of: Valuing the domestic business at 12.5x Mar-13E EV/EBITDA at a 25% premium to international peers; and valuing W&M at 7.5x Mar-13E EV/EBITDA at a 20% discount to global majors.


POWER GRID CORP - BUY
Rs 98: CMP
Rs 116: Target Price

J P Morgan reiterates their Overweight rating on Power Grid as they think it offers relatively safe/stable growth, despite higher uncertainty around land, fuel, environmental clearances and merchant prices. PGCIL has outperformed the Sensex by 10% over the last year.


NHPC - BUY
Rs 23: CMP
Rs 29: Target Price

Deutsche Bank has initiated coverage on NHPC with a Buy rating. The investment recommendation is on the basis of 13% earnings CAGR over FY11-14E driven by capacity addition, higher reservoir levels, attractive earnings yield and reasonable valuations.


 

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