Indian Equity Research and Investment Strategy
The ir-rationaly priced Cairn India scrip got listed on BSE and NSE today. It listed at a discount of 20% to offer price and the scrip is currently trading at Rs 130.
DalalStreet.Biz had put an avoid recommendation on Cairn energy IPO. Don’t be in a hurry to BUY Cairn as you should get the stock around Rs 100.
In another development DLF developers have filed a draft prospectus with SEBI for mega IPO.
Tags: Cairn, Energy Stocks, DLF IPO , IPO India
Citigroup wireless research group in its report is extremely bullish on the Indian wireless growth story. It has pegged the Indian mobile phone subscriber tele-density at 27% at the end of March-2009. It is not now that Citigroup has turned bullish on the Indian wireless space, but right from May-2006, its Asian Telecom head was very optimistic about Bharti Airtel Ltd.
Bharti Airtel Ltd: Buy/Low Risk (1L) with a target price of Rs750
According to Citi research, it estimates an FY06 – 09E EPS CAGR of 46.5% or more than double that of the broader market report and expects EPS of Rs 20.7, Rs 30.3 and Rs 37.5 for the FY ending March in 2007, 2008 and 2009 respectively. Valuations adjusted for growth (EV/EBITDA of 11.8x FY08E) still look reasonable. 12-month forward target price of Rs750 (previously Rs600) is based on DCF, which suggests a fair value of Rs749 as of March 2008 (rolled forward from March 2007). This is based on WACC of 10.8%, terminal growth rate of 3.5% and beta of 0.9 (implying a terminal EV/EBITDA multiple of 8.0x).
Additionally, most regulatory concerns are behind us and 3G recommendations, though discomforting, cannot derail the growth path, in our view. The strategic shareholding of SingTel, which the company has increased over time, leaves us comfortable with execution issues and new initiatives (such as electronic recharge, vendor tie-ups or a One Alliance partnership).
Reliance Communications Ltd: Buy/Medium Risk (1M) with a target price of Rs570.
According to Citi research, it estimates an FY06 – 09E EBITDA CAGR of 63.4% and expects EPS of Rs 13.7, Rs 20.8 and Rs 28.8 for the FY ending March in 2007, 2008 and 2009 respectively. RCOM’s 12-month target price of Rs570 is based on 11.2x FY09E EV/EBITDA, similar to the implied target EV/EBITDA for Bharti based on our DCF estimate.
RCOM’s valuation multiples are likely to closely track Bharti’s due to the liquidity overflow from the latter, notwithstanding the risk of technology transition. In addition, the risks associated with technology shift to GSM may get significantly mitigated in case RCOM makes a successful bid for Hutch Essar, besides according it a clear market leadership. As a secondary valuation methodology, we apply a target P/E of 27.5x FY08E for a fair value of Rs570.
Tags: Dalal Street, Telecom India, Emerging Market, Telecom Stocks
Here are some Investment Strategies for 2007 in Indian Stock Market.
Download – CLSA Investment Ideas for 2007. [PDF]
Also the performance and expectations from Indian Inc for Q3 [PDF] as reported by ASK Raymond James is here.
Tags: Invest India, Dalal Street, 2007 Investment Strategies, Q3 Results India
Here is a list of stock in the aggressive BUY list of HDFC securities.
Stock and their Target Prices are as mentioned below.
Ratnamani Metals 630
Punj Lloyd 1430
Dr. Reddys Labs 1000
AMTEK AUTO 400
WOCKHARDT 540
SKF INDIA 400
RANBAXY LABS. 525
BHEL 2975
Larsen & Toubro 1760
BAJAJ AUTO 3100
Tags: Dalal Street, Invest India, Stock Recommendation, Stock Research
Reliance Money, the retail stock broking arm of Anil Ambani group is planning for a two way authentication process of its customers to login to the portal.
What is two way authentication ?
1. Normal Login & Password.
2. Additionally, Reliance Money will provide a device which will generate a password and that has to be keyed into the login page within 20 seconds. You have to carry this device always with you.
Now, wait a minute why do we require such 2 way authentication mechanism ? Aren’t other broking houses providing services without it ? Such high security systems are usually implemented by corporates who have access to highly confidential and sensitive data.
Tags: Invest India, Dalal Street, Stock Broking, Reliance Money
We had already put a BUY recommendation of Aban Offshore when the price was Rs 1080 and it reached Rs 1700. Citigroup in its research report has put a similar target of Rs 1700 due to Aban’s bid for Sinvest.
Maruti reported stronger than expected sales in Dec-2006. Citi has revised its 12-month targetto Rs1,107 is based on 15x P/CEPS FY08E. Citi expects the cash earnings CAGR of c19.5% for FY06-08E. Maruti is now well positioned to emerge as Suzuki’s regional manufacturing hub over the longer term, which we view as a significantly positive because it would enable MUL to reduce its dependence on the local market.
Tags: Dalal Street, Indian Stocks, Share Market, Emerging Market