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.
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L&T: Kotak Securities Research Report
We recently met the management of L&T. L&T does not foresee execution slippages like in the previous year and indicated that the environment has vastly improved. Power sector to continue to be the major driver of order intake. We maintain Accumulate with an target price of Rs.2022 (Rs.1957 earlier). Due to the limited upside, we recommend investors to utilize declines to accumulate the L&T stock
READ MORE »J KUMAR INFRAPROJECTS – Kotak Securities Research Report
J KUMAR INFRAPROJECTS reported excellent performance during Q1FY11 led by strong execution. Revenues reported 31% YoY growth while operating margins stood at 15.4%. Net profits registered a growth of 28% YoY. This was better than our estimates. Order inflow in Q1FY11 was muted and was only through extension of scope of work in existing projects. But J KUMAR INFRAPROJECTS expects to overcome the slow growth in order inflows seen in H1FY11 going forward
READ MORE »MAHINDRA & MAHINDRA FINANCIAL SERVICES – Kotak Securities Research Report
In the wake of healthy monsoon and improved agriculture growth, business growth outlook for MAHINDRA & MAHINDRA FINANCIAL SERVICES appears highly positive. A buoyant rural economy will significantly boost advances growth. Moreover, we are of the view that MAHINDRA & MAHINDRA FINANCIAL SERVICES‘s strong geographic spread with a branch network of 487 in rural and semi-urban regions will aid in swiftly scaling up its loan book. We are raising our advances growth estimates for MAHINDRA & MAHINDRA FINANCIAL SERVICES from 20% CAGR over FY11-12 to 25% CAGR to Rs.104.7bn and Rs.131.9bn in FY11 and FY12 respectively.
READ MORE »EVEREST KANTO CYLINDERS – Kotak Securities Research Report
EVEREST KANTO CYLINDERS has underperformed the markets over past four months as it has declined by 12% as against 5% rise in SENSEX during the same period. We feel this is due to concerns regarding its high cost inventory and lower off take form OEM segment. However now the high cost inventory is almost over and also the supplies to OEM have picked up. Thus we expect the stock of EVEREST KANTO CYLINDERS to get rerated going forward
READ MORE »Unity Infraprojects – Kotak Securities
Unity Infraprojects is well poised to maintain its growth trajectory and tap the upcoming opportunities in infrastructure segments. Company has highlighted its strategy which will help in sustaining its future growth. We present the key highlights below: Strategies to grow in future n De-risked business model – Unity Infraprojects has been able to grow its order book at a CAGR of 28% in past five years. The company was initially more a civil construction player but over a period of time, it has enhanced its presence across other verticals such as irrigation, water supply, transportation and engineering. Thus it now has a de-risked business model with a strong order book that provides revenue visibility for next 2 years. It would continue to focus on projects across segments to maintain diversified order book.
READ MORE »Greaves Cotton Ltd – Kotak Securities
Greaves Cotton is one of the largest makers of light diesel engines in the world. Over the years, the company’s focus on R&D has resulted in an efficient product which is gaining acceptance with OEMs. GCL has been made the sole supplier of engines to Tata Motors’ 4W LCV “Penguin”, which is in the launch phase. The company’s prime client, Piaggio (PVPL), has been a focused player in light transportation and has seen its 3W volumes grow 29% in 9M FY10. We believe higher demand from rural sector and increasing preference of light vehicles for intra-city transportation should drive growth in the 3-4W (sub 1 ton) auto segment. The company’s infrastructure equipment division is expected to turnaround in FY11. We feel GCL is an ideal stock to play the development of light cargo transportation in the country. Valuations at 12x is not demanding. BUY
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