MONEY TODAY scans dozens of research reports from investment houses every fortnight to present you the six most relevant stock recommendations.
Recommendation HOLD Stock Price Rs 866 One-year returns 107.1% Profit Margin 53.4% Q1 PE ratio 135.6
IL&FS Investsmart: “Axis Bank’s operating profit increased sharply by 69% in the second quarter of 2007-8, despite an 11% increase in employee costs due to more branches.
The stock trades at 3.56 times 2007-8 ABV and 3.23 times 2008-9 ABV. The current valuations are fair and do not leave any investment opportunity.”
IGATE GLOBAL SOLUTIONS
Recommendation HOLD Stock Price Rs 356 One-year returns 63.6% Profit Margin 228.5% Q1 PE ratio 47.42
SSKI: “iGate’s revenues increased 0.7% in the second quarter, which is below expectations. We have downgraded 2007-8 and 2008-9 revenue estimates by 1.6% and 2.6% primarily due to rupee appreciation.
iGate has announced its intention to delist from Indian bourses. We maintain Neutral rating due to poor topline growth.”
Recommendation BUY Stock Price Rs 4,255 One-year returns 286.8% Profit Margin 83.4% Q1 PE ratio 332.71
SSKI: “Aban has reported better than expected second quarter results. Sales rose 28.3% YoY to Rs 165 crore. We have revised our consolidated earnings forecast for 2007-8 and 2008-9 to Rs 167 and Rs 486 respectively.
We maintain an Outperformer rating with a target price of Rs 4,377 (PE of 9 times 2008-9).”
POWER FINANCE CORP.
Recommendation BUY Stock Price Rs 214 Returns since listing* 92.1% Profit Margin 54.6% 54.6% Q3 PE ratio 87.11 87.11 *Listing date - 23 February 2007
Enam Securities: “PFC’s net profit growth at 23% in the second quarter was below expectations, largely due to Rs 23 crore forex loss on unhedged foreign borrowings.
Otherwise, core profits were better than our expectations. We remain bullish and maintain our sector Outperformer rating.”
Recommendation BUY Stock Price Rs 37 One-year returns -18.6% Profit Margin 2.4% Q1 PE ratio 61.83
Religare Research: “Ashok Leyland has cut its annual volume target by 13% for 2007-8 due to sluggish growth in domestic commercial vehicle sales.
We have therefore revised Ashok Leyland’s earnings downwards by 3% for 2007-8 and 4% for 2008-9. We expect a potential 17% upside from current levels.”
CONTAINER CORP. OF INDIA
Recommendation BUY Stock Price Rs 1,870 One-year returns -3.5% Profit Margin 1.5% PE ratio 69.82
Edelweiss Securities: “Concor’s second quarter results were below expectations, with sales registering 6.4% growth and net profits declining 8.1% YoY.
However, growth in domestic and export-import container traffic continues to be strong. We expect the firm’s underperformance to ease in the coming quarters.”