Jagran Prakashan: Given the cost escalations, Jagran Prakashan‘s EPS is cut by 3.6/1.5% for FY12E/13E. Maintain BUY rating on the Jagran Prakashan stock with revised target price of Rs149. At CMP of Rs120, Jagran Prakashan stock trades at 15.3x /12.1x our Jagran Prakashan’s EPS estimate for FY12E/13E.
Sun Pharma: We expect Sun Pharma to report 23% growth in revenues in FY12E and 15% growth in FY13E. Sun Pharma‘s EBIDTA margins are expected to decrease from 34.4% in FY11 to 33.2% in FY12E and 33.9% in FY13E. Sun Pharma‘s earnings will grow by 15% CAGR over FY11-13E. We revise our target price of Sun Pharma to Rs497 (22xFY13E core earnings of Rs22.6). At CMP, the Sun Pharma stock trades at 23x FY12E and 20x FY13E EPS.
Shree Cement: On account of higher than expected FY11 exit cement prices, we upgrade Shree Cement‘s FY12 EBITDA estimates by 3.8% to Rs11.4bn. However, adjusting for revised accelerated depreciation charges as guided by Shree Cement‘s management, we cut Shree Cement‘s earnings estimates for FY12 by 85.4% to an EPS of Rs13.8 (Rs95 earlier). Shree Cement‘s accelerated depreciation in FY12 would reduce the burden in FY13 with much lesser depreciation charges. We introduce Shree Cement‘s FY13 estimates with a EPS of Rs175. The change in Shree Cement‘s earnings for FY12 does not affect our target for Shree Cement as earnings change in driven by higher deprecation (non cash charges). We continue to value Shree Cement on 6X FY12E EV/EBITDA (currently 5.6X FY12). We maintain ACCUMULATE rating on the Shree Cement stock with price target of Rs 1,960.
Colgate Palmolive: While we forecast a moderation in overall volume growth of Colgate Palmolive, we expect Colgate Palmolive to maintain its leadership position in the market aided by healthy new product launches and regular brand activation programmes. We expect Colgate Palmolive to post PAT CAGR of 13% over FY11-13E with unchanged FY13E earnings of Rs37.6/Share. Colgate Palmolive’s valuations at 24X FY13E EPS appear fair and hence, we maintain our HOLD rating on the Colgate Palmolive stock with target price of Rs826/Share.
GSFC: On the valuations front, GSFC has current cash on its book of Rs 6.7 bn (84 / share) with negligible long term debt. Further GSFC has liquid investments of Rs 5.4 bn (Rs 68/ share). With 42% of CMP in cash and equivalents and FY12 EV/EBITDA of 1.8x, P/E of 4.8x and 20% discount to book value, we believe that the GSFC stock offers attractive investment opportunity on compelling valuations. However due to volatile earnings driven by unpredictable chemical prices in FY12E, we maintain GSFC‘s price target of Rs 530 which discounts 7.2x FY12E EPS and we reiterate our BUY recommendation.
IVRCL Infra: IVRCL Infra’s order backlog at 4.2x FY11 revenues, provides good revenue visibility, ~40% of IVRCL Infra‘s order backlog is witnessing tardy progress and faces execution headwinds, hurting that visibility. We remain skeptical on the pace of ramp up of IVRCL Infra‘s projects. We also built in lower order inflow assumptions in the transportation vertical due to aggressive competition in the road BOT space, which we believe will restrict IVRCL Infra to aggressively bid for road projects. Consequently we cut IVRCL Infra‘s EPS estimates by -8.7% for FY12E and target by 8% to Rs93 (valuing core construction business at 9X FY12 PER. We introduce IVRCL Infra‘s FY13E EPS at Rs8.4.
GNFC: We expect GNFC’s chemicals segment performance to remain strong and maintain GNFC‘s FY12 estimates (EPS of Rs 22.4) and introduce FY13E estimates of Rs 26.5. We believe commissioning of GNFC‘s Nitric Acid plant (DNA and WNA) by July’2011 is likely to drive revenues growth in FY12E while commissioning of Ethyl Acetic and TDI plant to add revenues in FY13E. Due to volatile chemical prices, we maintain GNFC‘s price target based on 7x FY12 estimates of Rs 157 and maintain our BUY recommendation on the GNFC stock.
Mahindra & Mahindra: We have valued Mahindra & Mahindra on SOTP basis. We have lowered Mahindra & Mahindra TP by ~2% to Rs 810. We have valued the standalone business of Mahindra & Mahindra at Rs 658 (lowered by 5%) which implies 7.5x FY13E EV/EBIDTA. We have valued the listed subsidiaries of Mahindra & Mahindra and Tech Mahindra at Rs 138 per share. We introduce value for MVML subsidiary at Rs 15 (7.5x FY12E EV/EBITDA, EBITDA of Rs 2.3bn and net debt of Rs 8bn in FY12E).