HDFC securities has maintained its buy rating on Amara Raja Batteries with a target price of Rs 245 in its June 11, 2008 research report. "We estimate ARBL to post 45.7% CAGR in revenues between FY07-10E on the back of capacity expansion, both in automotive and industrial segments. On the back of robust topline growth, Net profit growth is estimated at a CAGR of 51.4% between FY07-FY10E. We see ARBL as a major beneficiary of the robust domestic batteries market. The company has garnered a market share of 22%+ in automotive batteries and 27%+ in industrial batteries in the domestic space."
"ARBL’s strong presence in the batteries space helps us to build earnings CAGR of 51.4%+ (FY07-10E). At the same time, we find valuations for the company compelling at a PE multiple of 7.0x and 5.5x FY09E and FY10E earnings respectively, at which ARBL stands at a huge discount to Exide Industries. Also, we remain comfortable with ARBL’s EV/EBIDTA multiple of 4.8x FY09E EBITDA. We maintain our BUY rating and a target price of Rs 245, giving an upside of 55% from current levels. At our target price, the stock would trade at a PE multiple of 11x FY09E EPS," says HDFC securities' research report.
Wednesday, June 11, 2008
Stock Idea: Amara Raja Batteries
Markets Today
It was a strong pullback rally for the markets through the day after last few sluggish sessions. Huge buying seen in realty, banking, capital goods, power, technology, oil, pharma and metal stocks after got beaten down heavily for the last few days. Global cues have not played a much role today. The Sensex has remained above 15000 mark in an intraday trade. The Nifty had hovered around 4500 during the day but managed to close above that mark.
Ranbaxy Laboratries was one of the top traded counter among Reliance Industries, DLF, BHEL and Bharti Airtel as Ranbaxy has entered into big deal with Japanese pharmaceutical company, Daiichi Sankyo, which agreed to buy entire 35% stake of Promoters in the Ranbaxy. Daiichi is aiming to increase stake to 50.1%. The deal will close by March 2009. After this deal, Daiichi will make open offer at Rs 737 per share.
The Sensex closed at 15,185.32, up 1.99% or 296.07 points after hitting an intraday high of 15,225.81 and low of 15,009.48. The Nifty has touched a high/low of 4541.05 and 4468.05, respectively. It was up 1.66% or 73.8 points to settle at 4523.60.
Healthcare Index was up 0.8% to finish at 4,447.24. Pharma stocks like Orchid Chemical, Sun Pharma Adv, Aurobindo Pharma, Cipla, Sterling Bio, Matrix Labs, Pfizer and Dr Reddy's Labs have witnessed huge buying interest.
Realty Index has outperformed other indices in today's session and shown smart recovery as it had hit very badly in last few sessions. Index shot up 3.07% or 173.05 points to close at 5,803.66 on the back of buying in Omaxe, Akruti City, Peninsula Land, DLF, Puravankara Projects, HDIL and Unitech.
Capital Goods was another beaten down sector, which rebounded sharply. Index surged by 283.92 points or 2.44% to settle at 11,901.49 as buying seen in BHEL, Jyoti Structures, Crompton Greaves, Punj Lloyd, BEML and L&T.
Bankex jumped 2.27% or 156.09 points at 7,018.42. Banking stocks like Bank of India, Union Bank, HDFC Bank, Bank of Baroda, Axis Bank, SBI, Kotak Mahindra and ICICI Bank have gained.
Power stocks like NTPC, Reliance Infra, Tata Power and Suzlon Energy have got strengthened. Index charged up by 45.96 points or 1.76% at 2,652.92.
BSE IT Index ended at 4,357.43, up 1.72% due to strong buying in Tech Mahindra, Infosys, HCL Tech, TCS and Satyam.
Oil & gas stocks like Reliance Industries, Petronet LNG, Essar Oil, RNRL and IOC have closed in green due to which index inched up by 1.46% or 141.02 points at 9,832.24. However, selling seen in BPCL, Cairn India, HPCL and GAIL. Nymex Crude was trading above USD 134 per barrel.
Metal stocks like Guj NRE Coke, Hind , SAIL, Jindal Steel and Tata Steel have helped the index to close with gain of 134.88 points or 0.88% at 15,400.80.
Auto Index jumped 0.79% to settle at 4,152.31 on account of buying in Hero Honda, Hind Motors, Ashok Leyland, Bharat Forge, M&M and TVS Motor.
However, FMCG Index fell just 0.35% at 2,268.53 due to selling in United Spirits, Colgate, Britannia, ITC and Hindustan Unilever. However, other FMCG stocks like United Breweries, Marico, Dabur India, Nestle, Tata Tea and P&G closed in green.
Midcap Index shot up by 1.42% at 6,190.72. In the midcap space, Fortis Healthcare, Orchid Chemical, PSL, Bombay Dyeing, Religare Enterp, United Breweries, Deccan Chronicles, Vishal Retail, Deccan Aviation, Sun Pharma Adv and Aurobindo Pharm advanced over 7%.
Small Cap Index was up 126.14 points or 1.72% to settle at 7,467.30. Small cap stocks like Zenotech Labs, Dynamatic Tech, Khaitan Electri, Natco Pharma, Kewal Kiran, JMC Projects, Guj Sidhee Cem, Ratnamani Metal, Fortis Financia, NIIT Tech, Emco and Midday Multi went up over 9%.
Turnover traded by the markets for the day stood at Rs 64249.93 crore. This includes Rs 13169.37 crore from NSE Cash segment, Rs 45775.86 crore from NSE F&O and Rs 5304.7 crore from BSE Cash segment.
Source: moneycontrol.com
Intraday Trading Calls for 11th June
Today's Intraday Stock Tips/Trading Calls:
ROLTA INDIA
PUNJ LLYOD
HCC
UNITECH LTD.
GMR INFRA
ABG SHIPYARD
For Levels and Targets CLICK HERE.
Others: Omaxe Ltd., Infosys, Satyam Computer, HCL Tech.
Hindustan Motors to launch new passenger car in October 2008. (Mint)Reliance Industries to produce oil from KG basin by August 2008. (Mint)BPCL to invest $200mn in overseas exploration. (Mint)IDFC to list $1.25bn India Infra Fund. (Mint)JSW Steel plans to borrow from export credit agencies to fund its $3.3bn expansion plan. (Mint)Grasim sells sponge iron unit from Rs10.3bn. (Mint)Vedanta plans to invest $20bn in India in next four years. (Mint)Idea Cellular to invest in Spice Communications network and technology upgrade. (BS)Bosch makes considering increasing offer price for delisting its Indian arm, Bosch Chassis Systems. (BL)TVS Motors plans power bikes to take on competition. (BS)Scooters India to make E-bikes. (BS)RCom-MTN combine may seek London listing. (BS)Omaxe forays into Dubai market. (BL)IDFC picks up 22% stake in Seaways Shipping. (BL)Tata Elxsi has planned a capex of Rs450mn and addition of 1,000 employees in 2008-09. (BL)Bharti Airtel to bring Apple’s 3G iPhone to India. (BL)Spice Telecom to unveil Braille mobile phone. (BL)UB Group says their IPL team, Royal Challengers have achieved breakeven in the first year of operations. (BL)Gati may hike freight rates by 7-10%. (BL)Tata Tea to develop new range of products, fortified water, functional water and enhanced water. (FE)Indiabulls Real Estate arm enters in MoU with government of Jharkhand for setting up 1,320MW power project. (FE)Tata Steel JV with Riversdale Mining in Mozambique to yield premium hard coking coal and thermal. (FE)Jet Airways enters into code-share agreement with Etihad Airways effective July 1, 2008. (FE)Gitanjali Gems raises stake in Fantasy Diamond Cuts Pvt Ltd to make its wholly owned unit. (FE)Gitanjali Gems merged two founder group companies Decent Securities & Finance and Eureka Finstock with itself. (FE)Aurobindo Pharma receives USFDA approval to manufacture and market Zaleplon Capsules. (FE)Bosch Chassis makes an offer of acquiring the public holding at a price not exceeding Rs600 per share. (FE)Godrej Appliance to foray into colour television market by August. (FE)Tata Motors seeking to raise US$1bn in debt or equity from the overseas market. (FE)Tata Motors looking to raise its borrowing limit to Rs200bn from the current Rs120bn. (FE)Idea willing to pay a premium of 10-15% over the current market price of Spice Communication. (FE)PNB to bid for stake in IFCI through a consortium. (FE)PNB to foray into credit card business within six months. (FE)BHEL, L&T, Crompton Greaves among major bidders for Rs180bn transmission strengthening and upgradation project. (FE)Financial Technologies promoted Power Exchange to launch its operation within a fortnight. (FE)Duncans Tea in talks with IOC to tap rural market. (FE)Bombay Dyeing to open its first retail store in Dubai. (ET)Bombay Dyeing tied up with Dubai-based luxury lifestyle retailer Revoli Group. (ET)Karuturi Global looks to acquisition in Europe and to foray into Horticulture. (ET)Dabur Pharma subsidy, to get accreditation from college of America next year. (ET) GTL promoters to hike their equity stake in the group’s telecom tower arm GTL Infrastructure to 68.29% from 43.29%. (ET)Middle East‘s Al Rostamani may buy 25% stake in GHCL for ~US$200mn. (ET)ONGC to tie-up with SCI to manufacture rigs. (ET)Bata India eyes franchise model to launch its upcoming retail stores. (ET)
Good Luck