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Revenue to flow in for Idea, Tata Motors

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

IDEA CELLULAR

Asit C. Mehta Investment Intermediates:

“Idea has registered growth higher than the industry and market leader Bharti Airtel in most circles. We expect revenues to register a CAGR of 32.5% for 2007-10. Our price target is Rs 147 based on 34 times 2008-9 estimated EPS. Any decline in price is an opportunity to buy.”

TATA MOTORS

Tower Capital and Securities:

“Tata Motors’ domestic commercial vehicle sales surged 39% during 2006-7 and it continued to lead the industry. The company has a strong earnings growth model. On the basis of sum of the parts method, the fair value of Tata Motors comes to Rs 800. We recommend hold on the stock.”

SUNDARAM FASTENERS

SSKI:

“Sundaram Fasteners’ fourth quarter 2006-7 results have been below expectations. Operating profit declined by 38.1% and net profit declined by 43%. We have lowered our revenue estimates by 8% each for 2007-8 and 2008-9. We are downgrading our recommendation on the stock from Neutral to Underperformer.”

GLENMARK PHARMACEUTICALS

Edelweiss Securities:

“Glenmark is expected to have an EPS CAGR of 45.2% in the base business and a CAGR of 38% with new chemical entity income for 2007-9E. At Rs 660, the stock trades at P/E of 16.3 times and 13.2 times on 2007-8 and 2008-9 earnings. We initiate coverage with a buy recommendation.”

INFOSYS TECHNOLOGIES

Prabhudas Lilladher:

“The rupee appreciation had a negative impact on first quarter 2007-8 revenues. We believe Infosys will be able to beat its guidance as long as the rupee doesn’t appreciate too sharply going forward. We maintain our outperformer rating on the stock with a 12-month target price of Rs 2,251.”

HDFC BANK

Edelweiss Securities:

“HDFC Bank’s first quarter 2007-8 numbers were in line with our estimates. We like the bank for its liability franchise and asset quality. We believe HDFC Bank is a safe bet compared to its peers and expect it to generate 15-16% return on equity in 2008-9E. We maintain our buy recommendation.”