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Standard Chartered
Ashoka Buildcon (Outperform)
CMP: Rs 238.5
Target: Rs 339
Ashok Buildcon had a seasonally slow quarter, with earnings remaining flat at Rs 16.8 crore and revenue rising 57 per cent to Rs 280 crore. Margin was impacted by interest expenses and depreciation on new projects. We expect seasonal pick-up in construction in H2 and margin booking on the completed road projects to help achieve our FY12 estimates. We maintain our conviction on Ashoka's growth story and maintain outperform.
Dolat Capital
Ahluwalia Contracts (Sell)
CMP: Rs 82.9
Target: Rs 46
We believe, ACIL's operating cash flow to be under pressure in FY-12 on account of stressed working capital cycle. The cash on books is depleting and fungible cash is expected to go down further. While financial leverage will be 0.6x, the composition of debt will be tilted towards high cost debt. We have estimated negative cash flow from operations for FY12, due to stronger than anticipated headwind which might put significant pressure on ACIL's cash flows. The return ratios are estimated to go down in FY-12 and FY-13.
IFCI Financial Services
Shiv-Vani Oil & Gas (Buy)
CMP: Rs 207.5
Target: Rs: 306
Since we initiated coverage on July 4, Shiv-Vani Oil stock has outperformed Sensex by 4 per cent. We maintain our buy rating on the stock. We have revised our earnings estimates to factor: 1) Rs/$ rate of 47.5 in FY12 and 46.5 in FY-13; and 2) Higher interest expenses. Consequently, we have lowered our FY-12 and FY-13 EPS by 6 per cent and 3 per cent, respectively. A key potential trigger for the stock would be announcement of large orders (SVOG recently bagged small orders worth Rs 200 crore from ONGC for three rigs) and re-payment of non-FCCB debt.
Emkay Global
JP Associates (Hold)
CMP: Rs 62.7
Target: Rs 66
On account of disappointing Q2FY12 numbers by cement, real estate and construction segments, we are downgrading our FY12E/13E earnings. We have reduced our construction execution significantly over the current and next year leading to overall reduction in earnings and target price. The downgrade complements our earlier downgrade that we did in our preview estimates. With downgrade in earnings we lower our target price to Rs 66 (earlier Rs 72).
Motilal Oswal
BHEL (Neutral)
CMP:Rs 284.65
Target: Rs 301
Despite YTD underperformance of 16 per cent, we believe BHEL's valuations will remain under pressure due to the following: (1) possible downside to our order intake assumptions for FY12/13 due to worsening external environment in the power sector, (2) downside risk to FY13 earnings estimates due to execution constraints and deteriorating working capital, and (3) uncertainty around its proposed follow-on public offer (FPO).
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