Top 5 BUYS - Edelweiss

[sunil]

Here are the Top 5 Stocks to BUY as released by influential Indian Brokerage - Edelweiss.

1. RELIANCE INDUSTRIES LTD
Current Price: Rs. 1063, Target Price: Rs. 1200


2. UNITECH LIMITED
Current Price: Rs. 73.5, Target Price: Rs. 123
Unitech has shown continued traction in volumes and execution. The improving cash flow is also reflected in the company’s reducing debt. The demerger of Unitech Infra is expected to accord additional growth opportunities. The stock is currently trading at a P/E of 19.0x and P/BV of 1.6x on FY11E basis and at a P/E of 11.5x and P/BV of 1.4x on FY12E basis. Given these attractive valuations and its growth prospects, we believe the stock offers upside potential in the near term.

3.DEEPAK FERTILISERS
Current Price: Rs. 137, Target Price: Rs. 172
At CMP of INR 137 (incl. dividend of INR 4.5), DEEFER is available at 7.4x and 5.6x consolidated P/E and at 4.6x and 3.6x consolidated EV/EBITDA of FY11E and FY12E, respectively and at 0.97x P/B on FY12E with ROE of 18.4%. Based on 4.5x FY12E EV/EBIDTA, we value DEEFER at INR 172 per share and recommend a 'BUY'.

4.LAKSHMI ENERGY & FOODS LIMITED
Current Price: Rs. 101, Target Price: Rs. 147
Given the company’s improving product mix and likelihood of concerns of FCI offtake subsiding, LAKENE’s outlook is positive. On the back of strong and steady profitability, along with high return ratios, valuations look attractive. LAKENE has historically traded in the one-year forward P/E band of 8–14x.
At CMP of INR 101, the company is trading at a P/E of 5.5x FY11E and 4.6x FY12E. Based on DCF, we arrive at a fair value of INR 147, and recommend a 'BUY' on the stock.
 
5.CESC LTD
Current Price: Rs. 374, Target Price: 458
In FY11, the Budge Budge expansion will add to earnings, while the Haldia and Chandrapur projects will come up by FY14. With likely PE investment in the retail subsidiary, we expect surplus cash to be retained for expanding the power project portfolio, which could lead to further upsides and re-rating. Our SOTP of INR 458 excluding Haldia 600 MW project, Spencer’s and the retail mall, highlights 22.5% upside. The stock is trading at P/E of 10.2x and 9.9x on FY11E and FY12E earnings, respectively, and P/B value of 1.1x and 1.0x FY11 and FY12 book value, respectively.