Brokers Call

IDBI Capital

Mahindra & Mahindra (Buy)

CMP: Rs 694.60

Target: Rs 813

Mahindra & Mahindra's (MM) Q1FY12 revenue was marginally ahead of our estimate, led by higher than expected realisation in the automotive segment, while EBITDA margin and PAT were largely in line. Automotive and farm equipment segments continue to perform well, led by strong volume traction. Strong performance on revenue and profitability front is commendable and reinforces our faith in the sustainability of the company's growth prospects. MM continues to be our preferred pick, led by its dominant position in the rural dependent segments of UVs and tractors, which we believe are the least competitive auto segments.

Anand Rathi

Aurobindo Pharma (Buy)

CMP: Rs 150.05

Target: Rs 269

1QFY12 results were broadly in line with our estimates. Revenue grew 16.8 per cent yoy to Rs 1,080 crore and adjusted PAT rose 40.7 per cent to Rs 110 crore. Though reported PAT was a negative Rs 120 crore, due to FCCB premium of Rs 320 crore. EBITDA margin was lower at 15.2 per cent vs our expectation of 18 per cent. We lower adjusted PAT estimates by 4 per cent for FY12-13 due to subdued margins. The company reported margin of 15.2 per cent, lower than our estimate of 18 per cent. We maintain our revenue estimates but lower FY12 and FY13 earnings estimates by 4.5 per cent and 4.7 per cent, respectively. We introduce FY14 estimates and expect 8 per cent revenue and 1.7 per cent PAT growth.

Elara Securities

EIH (Buy)

CMP: Rs 86.10

Target: Rs 105

The exclusively premium portfolio of EIH has been the key reason for the company posting 20 per cent top line versus average market growth of 15 per cent. The concentration of its hotels in Mumbai has also helped it post robust recoveries as the city continues to show strength. Lack of presence in high supply destinations such as Hyderabad, Pune and Chennai also worked in EIH's favour. The robust performance of EIH in Q1FY12 despite dip in occupancy rate and lower average room rates in most of tier-1 and tier-2 cities gives conviction on the stock. We believe EIH could continue its outperformance in numbers in the coming quarter.

Unicon

L & T (Accumulate)

CMP: Rs 1610.55

Target: Rs 1,930

Larsen & Toubro Ltd (L&T) Q1FY12 result came in line with Unicon's estimates. While top-line grew by 21 per cent on YoY basis to Rs 9,480 crore, profit after tax grew by 12 per cent. Management expects 75 basis points correction in its EBITDA margin going forward and maintains guidance of 15 per cent growth in its order-intake and 15-20 per cent in top-line for FY12. The operating profit at Rs 1,100 crore grew 12 per cent YoY with marginal decline in margin by 95 basis points due to higher cost of raw material, staff and sales and admin, when compared as percentage of sales.

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