IFIN

YES Bank (Buy)

CMP: Rs 342

Target: Rs 411

YES Bank (YES) has achieved five year CAGR of 46 per cent in balance sheet and 43 per cent each in advances and deposits respectively, by FY12. Going forward, diversification of business would assist the bank to rise up to the next level of the ‘big league’. We believe strong fee income, higher margins and lower credit cost would expand the RoA to 1.5 per cent in FY13E. YES has delivered strong performance since the beginning, in terms of business growth as compared to its peers. We like YES due to its superior operational efficiency, strong asset quality, compelling return ratios, higher coverage ratio, improvement and diversification of liability franchise and stable margins.

HDFC Securities

Solar Ind (Buy)

CMP: Rs 925

Target: Rs 1,004

Solar Industries India Ltd (SIIL) is a Nagpur-based manufacturer of industrial explosives, which are mainly used for mining and infrastructure projects. SIIL, which is the market leader in India, is likely to benefit from growth in the country’s mining sector and several new infrastructure projects. We like SIIL due to its strong market position, good operating efficiencies (backed by prudent raw material procurement policies and backward integration), and strong balance sheet. Further, SIIL has now expanded its geographical horizons to Zambia, Turkey and Nigeria where it’s manufacturing units are at different stages of development and operation.

(This article was published on June 21, 2012)
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