Market Watch as on Dec 19, 2007

We scan dozens of research reports from investment houses every fortnight to present you the six most relevant stock recommendations.

Print Edition: 10 Jan, 2008

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DECCAN AVIATION

IL&FS Investsmart: "Deccan Aviation has taken various steps that will bring positive results over the next two years and help reduce its losses. The international route licence, available from August 2008, would open another avenue for the company. Deccan is a good for capital appreciation over the next few years."

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Recommendation	BUY
Stock Price	Rs 295
One-year returns	133.4%
Profit Margin	NA
Q2 PE ratio	NA

BHEL

IL&FS Investsmart:: "The power generation capacity is expected to increase by 1,50,000 MW over the next 10 years. Bhel, the market leader in power generating equipment, is well placed to capture this opportunity. It is expanding its capacity, which would help in faster execution of projects. Our target price: Rs 3,331."

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Recommendation	BUY
Stock Price	Rs 2,401
One-year returns	109.6%
Profit Margin	63.7%
Q2 PE ratio	170.91

CUMMINS INDIA

Enam Securities: "Cummins expects demand in the domestic market to grow 25% and export volumes to continue growing. Despite the appreciation in the rupee, overall margins are likely to be maintained driven by the growth in the domestic market. We maintain sector Outperformer rating with a revised target of Rs 585."

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Recommendation	BUY
Stock Price	Rs 394
One-year returns	51.2%
Profit Margin	15%
Q2 PE ratio	117.31

ISPAT INDUSTRIES

Religare Research: "Ispat Industries is the only steel producer in Maharashtra, which gives the company a substantial freight advantage over its peers. The company is restructuring its debt and is expected to reduce its interest cost by 80% till 2008-9. We recommend a buy rating with a target price of Rs 101."

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Recommendation	BUY
Stock Price	Rs 85
One-year returns	683.9%
Profit Margin	NA
Q2 PE ratio	778.18

ABG SHIPYARD

Angel Broking: "ABG Shipyard is expanding capacity to cash in on the growth in the shipbuilding industry. Its existing order book of Rs 7,121 crore is 6.6 times 2007-8 estimated revenues. We expect its topline to grow 45% and bottomline 51% over 2008-10 and upgrade the stock to accumulate with a 12-month price target of Rs 1,085."

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Recommendation	BUY
Stock Price	Rs 915
One-year returns	273.9%
Profit Margin	25.0%
Q2 PE ratio	136.6

APOLLO TYRES

Prime Broking: "Apollo is set to maintain its leadership in commercial vehicles and improve its share in the passenger car radial segment led by good replacement demand considering robust auto sales in the past 3-4 years and increased focus on passenger car radials. We recommend a strong Buy with a target of Rs 60."

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Recommendation	BUY
Stock Price	Rs 49
One-year returns	39.4%
Profit Margin	174.7%
Q2 PE ratio	44.82

All stock prices as on Dec 19. EPS is not annualised for computing PE ratio. Profit margins are based on half-yearly results for 2007-8. Some financial jargon: YoY=Year on Year; CAGR=Compounded annual growth rate; EBITDA=Earnings before interest, taxes, depreciation and amortisation.