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Prabhudas Lilladher
SJVN (Buy)
CMP: Rs 19
Target: Rs 22.4
We are turning positive on SJVN, primarily on the pretext of the deteriorating thermal power scenario, volatile market conditions and the company being the highest dividend yield (5-6 per cent) play. The company has a sound operating history and some near-term triggers which will give an impetus to the earnings growth. We expect an EPS and book value CAGR of seven per cent and nine per cent, respectively, over FY12E-15E. SJVN is a relatively steady and safe bet on account of a proven track record in terms of operations, a small but reliable capacity addition and a superior dividend yield of 5-6 per cent.
Angel Broking
Ashoka Buildcon (Buy)
CMP: Rs 199
Target: Rs 273
ABL needs to infuse equity worth Rs 1,100 cr (including Cuttack Angul project) for its under-construction/ development road BOT projects. Further, according to management, ABL is at an advanced stage of roping in a strategic investor for investment of Rs 700-800 crore in the holding company (eight road projects) and expects the deal to happen by the end of 1QFY2013. We believe conclusion of this deal would be positive for the company as it would not only aid ABL to put in current equity requirement, but also provide legroom for more wins in the future. However, valuation at which the deal is concluded would be an important thing to look out for.
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