Kotak Securities has cherry-picked 9 top-quality stocks that are preferred for investment on fundamental grounds.
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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 »Gujarat Pipavav Port Research Reports By IndiaNivesh, IDFC & Kotak
We continue to like GPPL for its strong parentage, geographical advantage and scalability potential. We estimate 26% earnings CAGR over CY13-15E led by continued cargo growth and operating leverage. Stock trades at 12.3x CY15E earnings and 1.8x P/B. Maintain Outperformer with a price target of Rs80
READ MORE »Kotak Securities Buy-Sell Stock Recommendations
Kotak Securities has released a concise and succinct research report setting out their advice on what stocks you should buy and sell
READ MORE »MUNDRA PORT & SEZ (MPSEZ) Research Report: Kotak Securities
At the current market price of Rs.164, the stock of MUNDRA PORT & SEZ (MPSEZ) trades at 6.6x book value, 27.3x earnings and 22.1x cash earnings based on FY12E. We feel the stock of MUNDRA PORT & SEZ (MPSEZ) looks attractive if we consider it on SOTP. This is due to its integrated business model coupled with superior infrastructure consisting of multi cargo port, SEZ, Airport, Rail and Road connectivity. Also the industries in the surrounding SEZ would provide steady flow of cargo to the port. This would ensure steady growth in volume of cargo handled at the port by MUNDRA PORT & SEZ (MPSEZ).
READ MORE »Redington Research Report: Kotak Securities
At the current market price of Rs.82, Redington‘s stock is attractively valued at 2.3x P/BV, 11.8x earnings and 10.4x cash earnings based on consolidated FY12E earnings
estimates. We continue to remain positive on the medium to long term growth prospects of Redington as we feel that Redington is poised to handle a greater share of the business in supply chain solution space with its unique business model, proven execution capabilities and its presence in potential markets. Due to 16% upside potential from current levels we upgrade Redington from REDUCE to BUY with increased price target of Rs.95.
Geometric: Kotak Securities Research Report
In FY11E, we expect an EPS of Rs.9.7 for Geometric, which is expected to move up to Rs.10.5 in FY12. For FY12, we expect tax rate to increase to 20% v/s about 4% in FY11. Our DCF – based price target for Geometric works out to Rs.86, based on FY12E earnings (v/s Rs.71 earlier). We upgrade the stock to ACCUMULATE. Our exit multiple works out to 8x FY12E EPS.
READ MORE »Tractors India Limited (TIL) Research Report: Kotak Securities
Tractors India Limited (TIL)’s current valuations appear favorable vis-à-vis the potential growth in revenues: At current price of Rs.730, Tractors India Limited (TIL)’s stock is trading at 10.8x and
9.3x P/E and 5.6x and 4.8x EV/EBITDA multiples for FY11E and FY12E respectively. We value Tractors India Limited (TIL) using DCF valuation methodology that derives a price target of Rs.900 per share, implying an upside of 24% over a 12- month horizon. Our DCF model employs a WACC of 12.05%, beta of 0.9 and terminal growth of 3%. At our target price of Rs900, the stock of Tractors India Limited (TIL) would trade at 13.3x
FY11 EPS and 11.4x FY12E EPS of Rs67 and Rs.79 respectively.
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 »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.
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