Seven Stocks Worth Buying Now By Amar Ambani Of IIFL

Express Idea: Indoco Remedies – BUY
CMP Rs311, Target Rs350, Upside 12.7%

• Domestic growth to sustain above industry run rate

• International revenues driven by partnerships with global peer

• Robust EPS cagr leaves room for further rerating; BUY

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Reliance Industries (Q3 FY15) – BUY
CMP Rs869, 2 Year Target Rs1,300, Upside 49.6%

• Revenues at Rs802bn, lower by 22.5% yoy driven by sharp fall in crude oil prices causing weak refining and petchem segment sales

• OPM improves by 163bps yoy and 45bps qoq; yoy improvement was led by 191bps increase in petchem segment EBIT margins, sequential improvement was led by 67bps rise in petchem EBIT margins

• GRMs were at US$7.3/bbl, was lower than our expectations, GRMs saw 3.9% yoy and 12% qoq fall mainly on account of inventory losses

• Shale gas revenues and EBIDTA declined qoq owing to fall in gas prices

• PAT at Rs50.8bn was lower than our estimates owing to lower than expected refining segment performance

• Cut estimates to factor in lower crude oil prices, we maintain BUY rating with reduced 2-year TP of Rs1,300

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Wipro Ltd (Q3 FY15) – BUY
CMP Rs555, Target Rs652, Upside 17.5%

• IT services dollar revenue growth beat expectations

• Guidance for Q4 FY15 moderated by anticipated weakness in energy vertical

• Material OPM expansion was a positive surprise; company to comfortably sustain margin near current levels

• Favorable risk-reward; Retain Buy with a 12-month TP of Rs652

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PTC India Financial (Q3 FY15) – BUY
CMP Rs68, Target Rs80, Upside 17.6%

• Modest disbursements and significant repayments restrict loan book expansion

• Retain long-term loan growth outlook on robust sanctions build-up

• NIM impacted by increase in cost of funds; to gradually come-off from the current high levels

• Asset quality remains intact; higher provisioning due to RBI’s recent stipulation

• Re-iterate BUY with 24-month price target of Rs80

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Axis Bank (Q3 FY15) – BUY
CMP Rs515, Target Rs600, Upside 16.5%

• Loan growth was ahead of expectation at 23% yoy; corporate portfolio drive sequential expansion again

• C/D ratio rose further as asset growth was funded though borrowings; deposit mix improves

• NIM declines marginally in fall in blended yield on advances; but outlook remains strong

• Fee growth accelerated with robust momentum in retail fees; C/I ratio also declined

• Impaired assets addition was much lower than estimated; however, bank retained its asset quality guidance for the year on a conservative note

• Valuation to re-rate further, Retain BUY

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TCS Ltd (Q3 FY15) – Accumulate
CMP Rs2,532, Target Rs2,700, Upside 6.6%

• Volume growth was below expectations; pricing improvement drove an in-line revenue growth

• Growth mix was broad; client metrics deepened

• Margin performance was in-line; to be in a narrow band going ahead

• Premium valuation caps material upside; maintain Accumulate rating

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Bajaj Auto (Q3 FY15) – Accumulate
CMP Rs2,420, Target Rs2,666, Upside 10.2%

• Revenues at Rs56.5bn higher by 10.2% yoy; was in line with our estimates

• Blended realizations improved 11.3% yoy driven by 8.6% higher export and 13.3% higher domestic realizations

• Total volumes were lower by 0.9% yoy as 16.1% jump in export volumes was more than offset by 13.5% slump in domestic volumes. In terms of products, 2-W volumes declined by 4.8% yoy while 3-W volumes surged 31.5% yoy

• OPM at 21.7% was lower by 44bps yoy but increased 407bps qoq, Adjusted for MTM impact of forex hedges OPM was flat yoy but improved 30bps qoq

• APAT at Rs8.6bn was higher than our estimates

• Maintain Accumulate rating with a 9-month price target of Rs2,666

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