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Elara Securities
Cipla (Accumulate)
CMP: Rs 280
Target: Rs 300
The company's higher base in domestic market and upfront cost in new plants such as Indore facility could impact near-term cash flows. However, Cipla is confident of regaining growth in domestic market and expects boost in exports from partners' product in the US and EU markets. The management plans further expansion in rural and semi-urban markets where bulk of demand is for acute therapy drugs such as anti-infective, cough and cold, and PMS. Cipla also plans to foray into new therapeutic areas to maintain leadership in domestic market. With dearth of catalysts in near-term and comparative contraction of valuation multiple among leading peers, we decreases our target price to Rs 300, implying eight per cent upside.
Dolat Capital
Syndicate Bank (Buy)
CMP: Rs 101
Target: Rs 151
Syndicate Bank expects credit growth of 16-17 per cent YoY in FY12, as against our present estimate of 17 per cent to Rs 130 crore. We remain positive on the stock, but due to the management's continued stance of maintaining 30 per cent YoY PAT growth in FY12, we taper down our earnings estimates in FY12 and FY13 by 6.5 per cent and 5.9 per cent respectively and reduce our target price by 5.6 per cent to Rs 151. At current price, the stock quotes at 0.8x and 0.7x adjusted book value (ABV) FY12 and FY13 respectively and at attractive dividend yield of 5.0 per cent (on FY12's dividend). Based on our target price, the stock would trade at 1.0x ABV FY13.
CD Equisearch
BEML (Buy)
CMP: Rs 464
Target: Rs 550
Rising allocation of defence and railways in government expenditure plans will buoy BEML's order book. Realising this trend, the company has expanded capacities, launched new products and entered in technological tie -ups. Launch of metro train services in new Tier-I and Tier-II cities have the potential to pace business growth. BEML has expanded its capacity to garner more orders. The stock currently trades at 11.9 x FY12E EPS of Rs 36.69 and 10.3 x FY13E EPS of Rs 42.42.
Standard Chartered
P & G Hygiene (Underperform)
CMP: Rs 1,949
Target: Rs 1,634
Procter & Gamble Hygiene Healthcare's sales grew 23.6 per cent YoY to Rs 24.46 crore in 4Q FY11 vis-à-vis our estimate of Rs 23.5 crore. The higher-than-estimated growth was driven by robust performance in both feminine hygiene and healthcare segments. We have cut our FY13 EPS by 11 per cent since our initiation in January. However, despite below par results in the past three quarters, the stock is up seven per cent YTD (and is flat vis-à-vis the FMCG Index). We note that even on our bullish estimates (we expect operating profit growth of 52 per cent in FY12E), the stock trades at an irrational FY12 P/E of 33.5x. We maintain ‘Underperform' with a 12-month price target of Rs 1,634 (valuing it at 21x one-year-forward earnings).
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