Broker's Call

Edelweiss

Siemens (Buy)

CMP: Rs 689

Target: Rs 849

A sustained focus by the German parent on Siemens India product portfolio over many years has made it the largest diversified industrial product company in the country. Our exchange with the top management further brightens our confidence in the long term growth prospects of Siemens India. Top management indicated its sustained focus to increase India's share in Siemens AG revenue pie by leveraging the domestic growth story and its position as a low cost hub. Short cycle businesses continue to grow while it is mega ticket projects that hold sway over both order inflow and profitability. While FY11 profitability was impacted by mega projects and cost overruns, we believe this could reverse going ahead given its focused product development. We maintain our ‘Buy' rating on SIEM with our TP of Rs 849.

Sushil Finance

Indian Bank (Buy)

CMP: Rs 189

Target: Rs 295

Indian Bank has managed to grow at a decent pace in the past few years and maintain a high quality asset profile. However, in light of challenging credit offtake conditions & considering its H1FY12 result, we have revised our NII growth estimates. In addition to this, we have also increased our estimates for NPA provisions on higher systemic risk on its loan book and investment depreciation and provisioning considering the sharp increase in the bond yields during H1FY12. The bank currently trades at an attractive valuation of 0.8x FY13E ABV and 4.3x FY13E Earnings. We believe the stock can trade at 1.2x P/ABV given its strong deposit franchise and decent asset quality. We maintain our ‘Buy' rating on the stock with a revised price target of Rs 295.

Kotak Securities

Escorts (Buy)

CMP: Rs 80

Target: Rs 157

Escorts 4QFY11 standalone numbers saw improvement at both the revenues at well as the operating profit level. However, exceptional loss during the quarter led to both Y-o-Y and Q-o-Q decline in net profits. Raw material prices too have stabilised which we believe should be positive for the margins as the full impact of price hikes taken during last year will come into play in FY12. Railway equipment business too saw substantial improvement in their margins in 4QFY11. After performing poorly in FY11, we expect the company's performance to improve in FY12 given favourable macro picture for tractor sales and poor last year's base. Normal monsoons and rising MSP's should keep the tractor demand strong in FY12. We, therefore, continue with our ‘Buy' rating and DCF based price target of Rs 157 on the stock.

IIFL

Karnataka Bank (Buy)

CMP: Rs 77

Target: Rs 87

Karnataka Bank has given an upside breakout after consolidating in rounding bottom formation which resembles bullish structure. Also, the stock gave a close above its short-term moving averages. Breakout is also seen in daily RSI after formation of rounding bottom, this provide supplementary evidence of sustainable up move in the counter and stock is likely to head towards Rs 88 in the medium term. We advise buying the stock above Rs 81.50 with stop loss of Rs 78.50 for an immediate target of Rs 87. (Duration 5 days).

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