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KJMC Research
Canara Bank (Buy)
CMP: Rs 366
Target: Rs 434
We like Canara Bank (CBK), due to its better asset quality than its peers, higher RoE, strong track record in faster recovery of NPAs, wide branch network and better credit growth. Currently, the bank is having large network of 3,437 branches; added 181 branches in H1FY12 and is planning to add another 120 branches in H2FY12. Asset quality of the bank has remained stable despite moving to system based NPA recognition system. Bank has seen a strong track record in its recovery of NPAs since last four quarters which the management believes to continue going forward. Bank has well diversified loan book of Rs 2.2 trillion and is expected to grow at 20 per cent CAGR during FY11-13E which is above industry level estimates of 18 per cent.
Motilal Oswal
Zee Entertain. (Neutral)
CMP: Rs 118
Target: Rs 110
Post our recent company visit, we are keeping estimates unchanged. Our estimates imply 7 per cent ad revenue decline in 2HFY12 v/s 2 per cent decline in 1HFY12. We expect EPS growth of 4 per cent in FY12 and 10 per cent in FY13. Zee has till date made a buyback of 1.57 crore shares (v/s minimum of 1.26 crore shares) for a total outlay of Rs 190 crore (v/s maximum of Rs 70 crore). The average price of the buyback is Rs 116 (v/s maximum buyback price of Rs 126). Continued buy-back could provide downside support to the stock price.
Emkay Global
Persistent Systems (Hold)
CMP: Rs 321
Target: Rs 320
Persistent continues with it's focus on growing business through partnerships/'sell with (10 per cent of revenues currently) which per company comes at better than co margins as well. Aligning sales force accordingly as company targets to improve mining within existing client base for traditional OPD basis along with the thrust on new business areas. FY12 guidance lowered to $ 205-210 million (V/s $ 220 million earlier) as expected. EPS outlook revised to Rs 31.3-33. We lower $ rev estimates, however lower currency resets limit FY13E EPS cuts to 3 per cent to Rs 33.3. Valuations at 9x FY12/13 remain inexpensive but we see no positive catalysts.
Kotak Securities
Time Technoplast (Accumulate)
CMP: Rs 47
Target: Rs 55
We project earnings to decline 7 per cent in FY12 as the company would take MTM hit on rupee depreciation, higher overheads to new manufacturing units and higher interest cost (up 39 per cent in FY12). We project earnings to rebound in FY13 as the company's manufacturing units get ramped up. Delay in capacity expansion and commercialisation of new products. Currency fluctuation and pricing of key raw material like HDPE. At CMP, TTL is trading at P/E of 9.1x and 8.2x FY12 and FY13 earnings respectively. We arrive at a DCF-based target price of Rs 55 (Rs 62 earlier).
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