Strong performance continues…
At CMP of Rs 438, Max India is trading at P/BV of 3.8x and 3.6x for FY15E and FY16E respectively. We have a HOLD rating on the stock with target price of Rs 329. We will revise our target price post the conference call which is scheduled for today at 3.30 PM. We had recommended buy on Max India in our report ‘Investment strategy …. Regardless of election outcome’ on 5th March 2014 at Rs 190 with target price of Rs 274 which was achieved on 20th May 2014 and upgraded further to 329 which was also achieved.
Above expectation performance; Maintain BUY with target price of Rs.34…
At CMP of Rs.28, the stock is trading at EV/EBITDA multiple of 5.4x FY15E and 4.4x FY16E estimates. In our view, the current valuations are significantly below 7.5x global peer average. On back of various available triggers (1) debt reduction, (2) margin expansion, (3) higher plant utilization, and (4) favourable business dynamics the stock is poised for re-rating. With revival in business cycle, we have assigned 5.9x EV/EBITDA multiple (21% discount to global peers) to arrive at FY16E based price target of Rs 34/share. Given the huge upside, we maintain BUY on the stock.
Mixed-Bag performance: International segment continue to report growth: Maintain BUY
At CMP of Rs.161 the stock is trading at P/E multiple of 23.0x FY15E and 20.1x FY16E Bloomberg earnings estimates. The growth in international business after many quarters of muted performance looks encouraging. The diversification into water, green tea, Starbuck, speciality tea business continues to deliver double-digit revenue growth. However, the expansion of EBITDA level losses in other segment is a negative development. The constant efforts to revive revenue mix, turnaround of all global subsidiaries, and new product launch should bode well on overall revenue and margin going-ahead. We maintain BUY with target price of Rs180 on stock.
Inline with expectations… maintain BUY with target price of Rs 620
KVB’s Q2FY15 results were inline with expectation with stable margins, healthy growth in operating income and pick up in other income along with stable asset quality. We believe KVB performance is likely to improve gradually with stable margins and return profile. At CMP of Rs 550, stock is trading at P/ABV of 1.7x and 1.6x for FY15E and FY16E respectively. As of now we maintain BUY rating with target price of Rs 620. However we will revise our estimates and target price post conference call with the management.
Mixed-Set of Performance; Maintain BUY with PT of Rs 1,680
At CMP of Rs 1,229, Nesco is trading at EV/EBITDA multiple of 9.6x FY15E & 8.3x FY16E estimates. We expect FY14-16E to see net profit CAGR of 34.8% during FY14-16E, on the back of increase in occupancy levels at their recently commenced IT Building III (to reach peak occupancy level of ~95% in FY15E). Also additional FSI for Exhibitions business should add to the profitability. Using Sum-of-the-parts based valuation model, we arrived at price target of Rs 1,680. Given the upside, we maintain BUY on the stock.
Attractive Valuation – Maintain BUY
At CMP of Rs.89, the stock is trading at 10.8x FY15E and 9.4x FY16E Bloomberg earnings estimates. The current valuation offers attractive discount relative to last three years average P/E multiples of 19.0x one-year forward earnings. The revival in flagship brands, premiumisation, and strong macro demand in tier-2 and tier-3 cities, remain positive for the stock. Further, the transformational deal of Diageo plc with United Spirits Limited could provide window of opportunity to Radico. We have a target price to Rs.165 (valuing 16.5x FY16E) with BUY on the stock.
Strong execution led to robust performance – Maintain BUY with TP of Rs.202
At CMP of Rs.182, AHL is trading at 20.8x FY15E and 6.7x FY16E, EV/EBITDA multiple. With substantial chunk of ongoing projects reaching revenue recognition threshold, we expect sharp improvement in revenue and profitability from here-on. We maintain our Sum-of-the-parts (SoTP) based target of Rs.202 with BUY rating on the stock.
Inline estimate; Maintain BUY with target price of Rs. 198
We expect GPIL to improve its operating profitability on the back of increase in capacity along with increase in product prices. Also, we expect its FY15 earnings to be higher due to higher sales volumes from the recent commissioning of additional 1.2mn tonne iron ore pellet plant. A key catalyst for the stock would be commencement of iron ore mining from Boria Tibu. At current market price of Rs. 156, the stock trades at FY16e PE of 5.2x and EV/EBITDA of 4.7x. We value standalone business Rs 150 and Ardent steel (subsidiary 75% stake) Rs. 48. We maintain BUY rating on the stock with target price of Rs. 198.
At CMP of Rs.61, Pennar Industries is trading at P/E multiple of 18.3x FY15E and 9.8x FY16E earnings estimate, which is well below 14.3x – three year historical average. We value this company at conservative PE multiple of 13x to FY16E EPS (Rs.6.2), which gives the target price of Rs 81. We maintain our BUY rating on the stock. We will come out with more details on Result post concall scheduled today (12th nov).