Market watch - November 29, 2007

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

Print Edition: 29 Nov, 2007

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

STATE BANK OF INDIA

Enam Securities: "SBI's net profit grew 36% YoY in the second quarter, driven by a 42% jump in non-interest income and a drop in provisioning requirements. SBI quotes at 1.7 times 2008-9 consolidated BV and 9.9 times 2008-9 estimated earnings. We raise our price target by 23% and maintain sector Outperformer rating."

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Recommendation	BUY
Stock Price	Rs 2,263
One-year returns	105%
Profit Margin	53.2%
Q2 PE ratio	73.90

ABB

IDBI Capital: "ABB got orders worth Rs 166.8 crore during the third quarter of 2006-7, a 23% growth over the third quarter of 2005-6. We expect the strong growth momentum to continue in the fourth quarter of 2006-7 as well as in 2007-8. But its rich valuations factor in the strong growth momentum."(ABB’s financial year is Jan-Dec)

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Recommendation	HOLD
Stock Price	Rs 1,606
One-year returns	135.3%
Profit Margin	45.6%
Q2 PE ratio	294.08

ITC

India Infoline: "ITC revenues grew 14.2% YoY to Rs 3,270 crore during the second quarter of 2007-8. We expect its revenues to grow 18.6% and net profit 17.7% CAGR over the next two years. With the entry into the personal care category, we expect ITC to become a tough competitor for Hindustan Unilever."

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Recommendation	BUY
Stock Price	Rs 171
One-year returns	-9.6%
Profit Margin	16.7%
Q2 PE ratio	83.27

INDIAN HOTELS

India Infoline: "Indian Hotels reported a 15.7% YoY increase in sales in the second quarter. Operating margins improved by 420 basis points to 29%. Better cost control in the first half augurs well for the busy season ahead. We expect earnings CAGR of 19.6% over the next two years with a target price of Rs 160."

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Recommendation	BUY
Stock Price	Rs 140
One-year returns	-6.1%
Profit Margin	26.6%
Q2 PE ratio	159.26

MOSER BAER

Edelweiss Securities: "Moser Baer's second quarter numbers were disappointing, with revenues down 11% YoY to Rs 448 crore. But strong growth in the two startup businesses will change the profitability for the better over the next two years. Any weakness in the first half of 2007-8 is an opportunity to buy for the long term."

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Recommendation	BUY
Stock Price	Rs 269
One-year returns	58.4%
Profit Margin	-60.02%
Q2 PE ratio	1416.05

SATYAM COMPUTERS

Prabhudas Lilladher: "Satyam's revenues grew 11% QoQ while profits grew by 8.1% to Rs 409 crore in the second quarter. We expect Satyam to report profit growth of 19.7% in 2007-8 and 23.5% in 2008-9. Robust volume growth, better pricing and strong deals in the pipeline are the key drivers. Our target price is Rs 537."

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Recommendation	BUY
Stock Price	Rs 436
One-year returns	4.4%
Profit Margin	18.2%
Q2 PE ratio	69.87

All stock prices as on November 7. EPS is not annualised for computing PE ratio. Profit margins are based on half-yearly results for 2007-8. Some financial jargon: BV = Book Value; YoY = Year on Year; QoQ = Quarter on Quarter; EBITDA = Earnings before interest, tax, depreciation and amortisation.