IFIN

Larsen & Toubro (Buy)

CMP: Rs 1,215

Target: Rs 1,418

We believe L&T is well positioned with a good mix of large and mid-sized orders. Strong presence across business verticals, focus of management to explore new geographies, a good quality of clients, strong technical and in-house expertise will result in likely cyclical upturn following the interest rate cut. Restructuring of operations and value created in subsidiaries through investments enhance the stock's inherent value. L&T will benefit over the longer term due to its deeply entrenched presence in defence.

Dolat Capital

Oriental Bank (Buy)

CMP: Rs 233

Target: Rs 355

In Q4 FY12, Oriental Bank of Commerce's net interest income (NII) grew by 5.4 per cent to Rs 1,070 crore — 5 per cent lower than our estimates. The bank's margins declined by 22bps Q-o-Q and 30bps YoY to 2.68 per cent; a negative surprise. The deviation at core income level and margin was primarily due to higher than expected increase in interest expenses. The bank's advances yield remained contained due to much higher slippages.

MSFL

Axis Bank (Buy)

CMP: Rs 1,102

Target: Rs 1,354

The operating profit of the bank is showing divergent trend with the advance growth given the cost pressures as well as softening fee income growth trend. Further, the margins could be held up given the build-up in PSL book. While Axis Bank's tier I ratio now stands at 9.45 per cent, the bank is likely to review its capital position in CYFY12 which again could stress the return ratios for the bank. We introduce our FY14 estimates and rollover our target price to FY14E multiples.

Business Line does not assume responsibility for the recommendations sourced from third party brokerages. Reports may be sent to >marketwatch@thehindu.co.in

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