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HDFC Securities
Berger Paints (Buy)
CMP: Rs 136
Target: Rs 143
Berger Paints India Ltd (BPIL) is India's second largest paint company by revenue. BPIL has a strong distribution network and a reliable brand name, which entitle it to a 18 per cent market share by revenue among the top five peers. New products and increase in distribution network in Southern and Western regions of India could increase sales. BPIL's subsidiaries are finally fruiting as they now provide positively to PAT as compared to the negligible contribution in previous years. Subsidiary contribution and improvement in standalone business has made FY12 an extremely good year for the company. Good industry outlook and added capacities and distribution will help the company grow well in the near- to medium-term. We recommend buying the stock at the CMP and adding on dips to Rs 116 - Rs122 band for sequential targets of Rs 143 and Rs 156.
IDBI Capital
Tata Power (Buy)
CMP: Rs 89
Target: Rs 116
Tata Power Company Ltd (TPWR) reported Q4FY12 standalone revenue seven per cent ahead of our estimate at Rs 2,370 crore (+34 per cent y-o-y /+5 per cent q-o-q). Deviation was mainly due to higher than expected other operating income (Rs 190 crore) reported during Q4FY12. 46 per cent y-o-y/50 per cent q-o-q jump in other expenditure led to 200 bps y-o-y /68 bps q-o-q decline in EBITDA margin at 19 per cent (IDBIest 23 per cent). EBITDA at Rs 450 crore (+30 per cent y-o-y/-5 per cent q-o-q) was 13 per cent below our estimate. During Q4FY12, TPWR reported forex loss of Rs 110 crore on standalone basis. APAT at Rs2.2 bn came 26 per cent below our estimate. Consolidated APAT (adjusted for deferred stripping cost, forex loss and impairment provision) increased by 33 per cent y-o-y/17 per cent q-o-q to Rs 660 crore.
(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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