PET recycling has got tremendous growth potential: With changing lifestyle and higher disposable income, Indian PET demand is expected to grow at 7.5% pa from current level of 3.40 lac TPA. Current PET recycling capacity in India is 1.57lac TPA, thus by Y 2012, India will have 2.00Lac TPA excess PET waste (130% more than installed recycling capacity). Ganesh Polytex Ltd, with largest PET recycling capacity will be natural beneficiary of this untapped emerging growth opportunity. Capacity expansion will lead to growth in turnover: By FY12E Ganesh Polytex will be expanding recycling capacity by another 14400 TPA .This will take RPSF capacity to 72000 TPA by FY12E. It will also set up a recycled POY yarn manufacturing facility with a capacity of 15000TPA . Because of enhanced capacity, Turnover in FY12E will grow to Rs 351 cr from Rs 199 cr in FY 10.
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Jagran Prakashan: K. R. Choksey Research Report
Jagran Prakashan Ltd being a leading Hindi publisher in the country having dominant position in largest Hindi advertising market (UP), its entry into English segment by acquiring profitable venture (Mid-day) is commendable. We believe synergies at cost and advertising rates would offset competition in markets like UP from HMVL and Bihar & Jharkhand from DBCORP, in turn will drive its long term profitability. Holding company with net cash of Rs 275 crore and Rs 175 crore in Jagran Prakashan Ltd itself would invite them to explore newer markets through inorganic or organic growth and further penetrate their current markets. So, we maintain our “Buy” rating on the stock of Jagran Prakashan Ltd with 18-months target price to Rs 153, representing upside potential of 25%. At the CMP of Rs 138, stock of Jagran Prakashan Ltd is trading at FY11E and FY12E EV/EBITDA of 13.9x and 12.3x for EBITDA of Rs303.3 crore and Rs343.4 crore respectively. Taking into account the current EV/EBITDA of 15.0x, we assign a multiple of 15.5x to Jagran Prakashan Ltd which provides a target price of Rs 177 with 27% upside potential
READ MORE »Oberoi Realty: SBICap Research Report
We have valued Oberoi Realty on NAV approach. While the ongoing projects are valued as per Oberoi Realty’s guidance on completion dates, we have built in conservatism while valuing longer duration and still to commence projects. As per our post money valuation, the IPO is available at 11% – 13% discount at its price band of INR 253 – 260. Though the valuation is relatively rich compared to the other listed players in the real estate industry, high visibility on Oberoi Realty’s limited number of projects along with zero debt on the balance sheet should justify the premium. On conservative valuation, the stock looks fully valued and the upside is possible from the timely completion of the projects, increase in realizations and land acquisition through leveraging balance sheet. We recommend Subscribe with long term view
READ MORE »Diamond Power: Kotak Research Report
DIAMOND POWER INFRASTRUCTURE is a virtually fully integrated player in the power distribution projects business. DIAMOND POWER INFRASTRUCTURE has captive facilities to manufacture conductors, cables (LT and HT), transmission towers and transformers. Shortly, DIAMOND POWER INFRASTRUCTURE will also commission its EHV cables plant. DIAMOND POWER INFRASTRUCTURE is mainly a play on the power T&D sector, which is expected to grow significantly in the foreseeable future. The stock of DIAMOND POWER INFRASTRUCTURE is trading at attractive valuations of 9.6x and 7.9x FY11 and FY12 earnings respectively. We recommend a BUY with a target price of Rs.318 based on DCF.
READ MORE »Tech Mahindra: Anand Rathi Research Report
We await further clarification from management of Satyam & Tech Mahindra, as regards current quarterly revenue run-rate (exit run rate), margins post wage hikes, utilisation levels and employee hiring pattern. Also, there is no clarity on Upaid and class action lawsuits. Hence, we maintain our target price & rating for Tech Mahindra
READ MORE »IVRCL INFRASTRUCTURES – Kotak Securities Research Report
We continue to maintain our estimates and expect revenues of IVRCL INFRASTRUCTURES to grow at a CAGR of 19% between FY10-FY12. n We continue to expect margins of in the range of 9% going forward for IVRCL INFRASTRUCTURES Inline with increase in the working capital requirements as well as higher borrowings seen in Q1FY11, our estimates factor in higher borrowings as well as higher interest outgo going forward. We thus expect net profits of IVRCL INFRASTRUCTURES to grow at a CAGR of 15% between FY10-FY12.
READ MORE »Crompton Greaves – Kotak Securities Research Report
Currently Cromton Greaves is trading at 22.4x FY11E consolidated earnings. On an EV/EBITDA basis, the stock of Cromton Greaves is trading at 13.8x FY11E numbers. We value the stock based on 21x FY11 earnings for the core business and Rs 10 per share for Avantha power and thus arrive at a price target of Rs 308 per share (280 earlier). We change our recommendation to ‘REDUCE’ for the Cromton Greaves stock.
READ MORE »BHEL – Motilal Oswal Research Report
BHEL‘S Order backlog at the end of 1QFY11 was Rs1,480b, a book-to-bill ratio of 4.4x TTM, providing the best revenue visibility in our engineering universe. We expect earnings and revenue CAGR of 22% and 24% respectively with margin expansion of 160bp at 22.1% over FY10-12. After capacity expansion to 20GW by 2012, BHEL‘s capacity will be at par with its Chinese and Korean counterparts, giving BHEL muscle to compete, execute and deliver on time. Our EPS estimates for BHEL are Rs119 for FY11 and Rs147 for FY12. Our price target is Rs2,934, an upside of 19% from current levels. Maintain Buy.
READ MORE »Bajaj Auto Finance – HDFC Securities Research Report
Though the stock of Bajaj Auto Finance Limited has run up quite a bit so far, we think that the broadening the asset portfolio, strengthening of systems and benign lending scenario could see Bajaj Auto Finance Limited continuing to see a fast growth in assets, incomes and profits. Though the capital adequacy of Bajaj Auto Finance Limited is quite comfortable at the moment, going by the rate at which it is growing its disbursements, it could visit the capital markets to boost its networth over the next few quarters. This could further boost its book value and trigger a further rise in its share price.
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