Friday, August 8, 2008

Investment Ideas: Great Offshore, Indoco Remedies, JSW Steel

Emkay Global Financial Services has maintained its buy rating on Great Offshore with a target price of Rs 710 in its August 4, 2008 research report. "Great Offshore’s (GOFF) Q1FY2009 pre-exceptional net profit at Rs 356 million is below our expectation primarily because of lower revenue continuation from high margin offshore segment and higher than expected repairs & maintenance cost for the quarter."
"We are not changing our earnings estimates for GOFF. The company has announced that it has called of its intention to acquire majority stake in Seadragon Offshore. Hence is absence of any near term upside from acqusition we are downgrading price target of GOFF to Rs 710. We have valued GOFF at 8X its FY2010 earnings of Rs 66 and added FY2010 estimated cash per share of Rs 180 on its book. Stock currently trades attractive valuations of 6.3X its FY2010 earnings and 3.74 X EV/EBIDTA. Maintain BUY," says Emkay Global Financial Services' research report.
Angel Broking has maintained its buy rating on Indoco Remedies with a revised 15-month target price of Rs 400 in its July 31, 2008 research report. "For 1QFY2009, the company posted Net Sales of Rs 109.5 crore (Rs 100.3 crore), a yoy growth of 9.1%. Growth during the period was mainly aided by Exports, which grew 16.1% and contributed 22.1% (20.8%) of overall sales. The company’s Domestic business, on the other hand, posted a yoy growth of 8.6% during the period, with Domestic Formulations registering a growth of 8.7%. Overall, the company ended with Profits of Rs 24.6 crore (Rs 22.1 crore)."
"At the CMP, the stock is trading at 6.1x FY2009E and 5.3x FY2010E Earnings, which we believe is attractive. Going ahead, we expect Topline to clock a CAGR of 15% over FY2007-10E primarily led by Exports. The growth in Exports would be on the back of better contribution from the Regulated markets to 22% of Sales during FY2010E (17% of Sales during FY2008) registering a CAGR of 36% over FY2007-10E. We have pruned our FY2009 and FY2010 estimates by 9.8% and 9.9%, respectively. We maintain a Buy on the stock, with a revised 15-month Target Price of Rs 400 (460)," says Angel's research report.
Emkay Global Financial Services Ltd has recommended buy rating on JSW Steel, with price target of Rs 1380, in its report dated 4th August, 2008.
“JSW Steel reported 1QFY09 results, which are significantly ahead of our estimates. Net sales stood at Rs 44.56 billion (yoy up 85.9%, qoq down 9.3%), EBITDA stood at Rs 8.15 billion. However, this includes forex loss of Rs 3.67 billion of which Rs 2.29 billion is on capital account translational loss. Adjusting for the notional Fx loss (including the impact on deferred tax on the same) EBITDA stood at Rs 10.4 billion (yoy up 46.5%, qoq down 1.5%) and APAT stood at Rs 4 billion (yoy up 35.7%, qoq up 30.1%). JSW reported Adjusted FDEPS of Rs 20. We believe a large part of this performance is attributable to the exports where we believe the realization is significantly higher as compared to the domestic markets. At CMP of Rs 797, the stock is trading at 8.6x FY09 and 5.7x our FY10 FDEPS estimate of Rs 93 and Rs 138 respectively. On EV/EBITDA, the stock currently trades at 5.7x and 4.3x FY09 and FY10 estimates. We maintain BUY on the stock with target price of Rs 1,380 which is 10x our FY10E consolidated FDEPS”.


The information in this publication is provided by is intended for use for Readers & Traders . Every effort is made to provide accurate information, but cannot guarantee the accuracy of the information or of the market analysis. This is a newsletter and is for informational purposes only. It is not a solicitation or offer to buy or sell futures. There is a high risk of loss in trading futures. You should not trade with money that you cannot afford to lose. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this newsletter. The past performance of any trading system or methodology is not necessarily indicative of future results.

free counter