Market watch as on Feb 13, 2008

Money Today scans dozens of research reports from investment houses every fortnight to present you the six most relevant stock recommendations.

Print Edition: 06 Mar, 2008

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ACC

IL&FS Investsmart: “The company reported disappointing results in the fourth quarter of 2007 due to higher input costs and lower than expected realisations. Pressure on cement prices and an increase in input costs has had a bearing on profits. We maintain reduce rating.”

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Recommendation	SELL
Stock Price	Rs 739.4
One-year returns	-26.82%
Profit Margin	7.86%
Q3 PE ratio	32.2

HINDALCO

IL&FS Investsmart: “The company reported degrowth in net revenues during the third quarter of 2007-8, in line with the declining revenues of the aluminium and copper business. It trades at a P/E of 7.5 times 2008-9 estimated earnings. It is trading at a significant discount to its global peers. We maintain Buy rating.”

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Recommendation	BUY
Stock Price	Rs 149.55
One-year returns	4.73%
Profit Margin	-2.96%
Q3 PE ratio	33.8

NTPC

Reliance Money: “The third quarter performance remained below our expectation, largely due to higher provision towards staff and taxation. We believe the plants at Sipat and Kahalgaon would get fully commissioned during 2008-9 and will lead to rise in its average tariff. We maintain Buy with a price target of Rs 283.”

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Recommendation	BUY
Stock Price	Rs 187.8
One-year returns	29.65%
Profit Margin	18.43%
Q3 PE ratio	86.9

TATA MOTORS

IDBI Capital: “The company’s net sales grew by 4% YoY during the quarter, backed by 2% YoY growth in volumes and 2% YoY growth in net average realisations. We expect volumes to improve in the near-medium term with new launches. However, we expect margin pressures on account of rising raw material prices. We maintain Hold.”

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Recommendation	HOLD
Stock Price	Rs 714.8
One-year returns	-17.53%
Profit Margin	11.66%
Q3 PE ratio	55.2

PARSVNATH DEVELOPERS

Enam Securities: “The company declared revenues and PAT of Rs 460 crore and Rs 115 crore during the third quarter of 2007-8. It launched eight new projects and has tied up with Fortune Hotels to operate and manage 50 hotels over five years. We maintain Outperformer rating and price target of Rs 474.”

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Recommendation	BUY
Stock Price	Rs 259.95
One-year returns	-12.64%
Profit Margin	115.20%
Q3 PE ratio	41.9

HERO HONDA MOTORS

Prime Broking: “During the third quarter of 2007-8 net sales grew by 2.9% to Rs 2,740 crore, EBITDA rose 29.6% to Rs 430 crore owing to better input cost efficiencies, lower advertisement costs and improved product mix. We maintain a Buy and with a price target of Rs 790 based on 15 times 2008-9 estimated earnings.”

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Recommendation	BUY
Stock Price	Rs 724.45
One-year returns	0.57%
Profit Margin	0.95%
Q3 PE ratio	52.6

All stock prices as on February 13, 2008. EPS is not annualised for computing PE ratio. Profit margins are based on nine-month consolidated results for 2007-8. Some financial jargon: YoY = Year on Year; QoQ = Quarter on Quarter; EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortisation.