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Mehta
Wockhardt Ltd
CMP: Rs 337
Target: Rs 500
Domestic pharmaceutical major Wockhardt is our favourite pick in the recent times; this counter is in action from last couple of weeks mainly on the back of restructuring activity which includes Danone bought the nutrition business. Wockhardt is putting maximum efforts to bring back the company on track from the sixth-seventh largest pharma company.
The stock has gained around 30 per cent in the last four trading days.
The recent news says that the company has received US Food and Drug Administration's approval to market generic Fluticasone nasal spray used for treating allergic nasal inflammation in the American market. Wockhardt will be manufacturing the nasal spray at its US facility in Illinois.
We are positive on the business prospects and re-structuring exercise, hence we recommended investors to add Wockhardt as a value stock for medium-term to long-term horizon.
IFIN
IndusInd Bank (Buy)
CMP: Rs 273
Target: Rs 330
IndusInd Bank's (IIB) net profit grew 34 per cent y-o-y to Rs 206 crore, above our expectation, driven by 19 per cent growth in NII, healthy 35 per cent growth in fee income, and 30 per cent growth in advances. CASA ratio stood at 27 per cent and NIM declined 10 bps sequentially to 3.25 per cent. CCB book grew 16 per cent y-o-y, led by strength in the C&I segment.
The CFD portfolio recorded substantial growth of 48 per cent, led by CV, 2/3 Wheeler and car loans. Although NIM declined in the past four quarters due to a rise in interest rates, we believe margin of 3.25 per cent is in line with industry average. Going forward, reversal in interest rates would lead to margin expansion.
We maintain ‘Buy' with target price of Rs 330 based on 2.8 x FY13E P/ABV (an upside of 26 per cent).
Ambit Capital
Tata Motors (Buy)
CMP: Rs 204
Target: Rs 220
We highlight Tata Motors as our top pick in the auto sector. With the domestic passenger car segment witnessing a revival of sorts in the last two months, the standalone business margin may surprise us and consensus positively in the results.
Similarly with strong demand from Emerging Markets (such as China) and for Range Rover Evoque, JLR volumes can also surprise on the positive side.
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