Market watch, as on January 2, 2008

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

Print Edition: 24 Jan, 2008

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

GLOBAL VECTRA HELICORP

ICICI Direct: “Demand for offshore helicopter services is expected to be strong on the back of increased exploration and production activities in the oil and gas sector. This will boost demand for transporting crew and cargo. Our 12-month target price is Rs 214 and we rate the stock an Outperformer.”

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Recommendation	BUY
Stock Price	Rs 188
One-year returns	-22.2%
Profit Margin	218.1%
Q2 PE ratio	85.2

MONNET ISPAT AND ENERGY

Khandwala Research: “MIEL is the second largest coal-based sponge iron producer in the country. It is going for forward integration by setting up 1 MT integrated steelmaking facility. The company is also setting up a 1,000 MW power project. These would improve profit margin. Our target price is Rs 685.”

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Recommendation	BUY
Stock Price	Rs 647
One-year returns	228.6%
Profit Margin	57.2%
Q2 PE ratio	63.50

PANTALOON RETAIL

Indsec Securities and Finance: “Pantaloon has set out to increase retail space to 10-11 million sq ft from 6 million sq ft. It is now focusing on the value retail segment and general store formats. Management has set a revenue target of Rs 30,000 crore by 2011. These plans will give the desired boost to the top line."

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Recommendation	BUY
Stock Price	Rs 856
One-year returns	102.6%
Profit Margin	-11.3%
Q2 PE ratio	434.72

MIC ELECTRONICS

SBICAP Securities: “MIC Electronics is the only Indian company to have ‘design to manufacture’ capability in the field of LED video display systems. It also has a cost advantage over its international counterparts. It is sitting on an impressive order pipeline. We initiate coverage with a Buy rating and target price of Rs 1,010.”

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Recommendation	BUY
Stock Price	Rs 997
Return since date of listing (May 30, 2007)	194.9%
Profit margin	91.8%
Q2 PE ratio	203.91

ORIENTAL BANK OF COMMERCE

Anand Rathi: “The negative impact on profitability due to OBC’s merger with Global Trust Bank is nearing an end. It will write off all amalgamation expenses and losses in 2008-9. We expect earnings to grow on strong growth in the loan book and high growth in non-interest income. Our price target is Rs 365.”

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Recommendation	BUY
Stock Price	Rs 305
One-year returns	33.9%
Profit Margin	-8.5%
Q2 PE ratio	43.71

TATA CHEMICALS

Asit C Mehta: “Tata Chemicals’ advantage stems mainly from its soda ash business. Domestic demand is likely to grow at a CAGR of 6% over 2007-10. It is expanding its manufacturing capacity. It acquired Brunner Mond Group which is the fifth largest producer of soda ash in the world. Target price: Rs 444.”

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Recommendation	BUY
Stock Price	Rs 426
One-year returns	97.1%
Profit Margin	13.2%
Q2 PE ratio	64.40

All stock prices as on Jan 2. 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.