Top mid cap picks: Mid cap rally can last a while in a conducive/improving economic environment Our analysis of 11 years of price data supports the thesis that mid cap stocks are a high beta play on economic growth/recovery and tend to have a prolonged period of sharp and sustained outperformance
READ MORE »Posts in category Stock Research Report
Best PSU Bank Stocks To Buy Research Report
We have favored private banks over public sector (PSU) banks for the past three years on concerns about stressed assets and low capital adequacy ratios (CAR) for PSUs. However, macro recovery and potential for post-election reforms should see a gradual reduction in stressed loans on lower slippages and higher recoveries. We believe Indian banks, especially high-beta PSU banks, could be at the cusp of re rating given improving macro and likely political clarity post the upcoming elections. A sharp correction in current account, falling inflation, reforms in power and road space, as well as deleveraging efforts by corporate India could lead to reduction in stressed assets, revival of investment activity, and improvement in the earnings trajectory for banks, in our view
READ MORE »Kotak Securities Model Portfolio March 2014
The reward-risk balance for the Indian stock market is less favorable after the sharp run-up in prices of several domestic cyclical and PSU stocks in the past two weeks. Current stock prices already discount FY2015E EPS for most large-cap. stocks under our coverage. Earnings upgrades will largely depend on favorable government action in a few sectors, which itself is predicated on a favorable outcome of elections and continuation of economic reforms. We make a few changes to our Model Portfolio to factor in the recent diverse movements in sectors and stocks
READ MORE »Alembic Pharma Research Report By HDFC Sec
Although Alembic Pharma has witnessed P/E expansion from ~8-10x levels to 10-13x levels, we see enough room for further re-rating on the stock as its US pipeline unfolds. The stock still trades at an attractive valuation of 14.9x FY15E EPS and 11.1x FY16E EPS. We value Alembic Pharma at 15x FY16E EPS of Rs 26.1 and recommend BUY with a TP of Rs 392
READ MORE »V-Guard Industries Research Report By Motilal Oswal
Valuation and view: We expect V-Guard Industries to post 20.3% CAGR in revenue and 28.1% CAGR in PAT over FY14E-16E. We believe that growth has bottomed out after two quarters of lower single digit performance and is expected to accelerate, given the strong outlook of summer going forward and lower base effect. At CMP of INR442, the V-Guard Industries stock trades at 13.9x FY15E and 11.2x FY16E earnings respectively. We value V-Guard Industries at 14x FY16E EPS of INR39.3 and arrive at a target price of INR550. Maintain Buy
READ MORE »Cummins India Research Report By Motilal Oswal
Over the last 18 months, Cummins India has seeded several growth levers, including: i) LHP Products, for Exports (potential revenues of INR10b+, vs INR3.9b in FY13) and Domestic (targeting ~15-20% market share, possible revenues of INR5b+) ii) Reconditioning (Recon), as CPCB-2 implementation will improve economic viability. We model revenue CAGR of 14.6% during FY14-16 largely led by potential ramp-up in LHP products and Recon business; excluding these segments, the growth CAGR stands at just 8.7%. Maintain Buy, with price target of INR560/sh (18x FY16E)
READ MORE »Alembic Pharma Research Report By Motilal Oswal
Improving business profile; re- rating candidate: The business mix at Alembic Pharma is likely to improve further, with higher contribution from US generics and specialty therapies in India, while low-margin APIs and acute therapies may continue to face slowdown. We expected transition to result in 280bp EBITDA margin expansion and 35% earnings CAGR over FY14E-16E. […]
READ MORE »Va-Tech Wabag Research Report By Hem Securities
With asset light model, robust order pipeline, strong balance sheet, leadership position in Indian market and increasing geographical presence with strong brand image; Va Tech Wabag Ltd. revenue visibility looks strong. We believe the company is trading at an attractive valuation at 16.86x and 14.24x of FY14EPS of Rs.41.01 and FY15EPS of Rs.48.53. We initiate a ‘BUY’ on the stock with a target price of Rs.870 (appreciation of about 26%) with the medium to long term investment horizon
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