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Sunday, October 14, 2007

Equity Tips for 15-Oct-2007

Varun Shipping
CMP: Rs 72.35
Target price: Rs 79.90

Related News:
ICICI Direct has assigned an ‘outperformer’ rating to Varun Shipping with a price target of Rs 79.90 in the next six months. While the company has undertaken a capex of around Rs 1,300 crore in the past two years for acquiring new vessels, it has also increased its emphasis on the buoyant offshore segment, acquiring two anchor handling tug vessels (AHTVs), the brokerage says.

“We expect the offshore segment to be a major thrust area and expect it to contribute 15-20% of revenues by FY09E,” the note by the brokerage house says, adding that Varun Shipping is the largest Indian player in the LPG carrier segment with a fleet of 12 LPG carriers. “Considering its prominent presence in the niche LPG carrier segment and strong foray in offshore business along with inexpensive valuations and its good dividend yield record, we rate the stock an outperformer,” says the report.


Nestle India
CMP: Rs 1,285
Target price: Rs 1,675

Related News:
Motilal Oswal Securities has maintained a ‘buy’ rating on Nestle India as it feels that the company is best positioned to capture the growth unfolding in the $70-billion processed food sector that is expected to grow at a CAGR of 20%. “The company has also reported a sharp turnaround in profitability due to sales growth acceleration in the first half of the current calendar year. Exports have performed exceptionally well, with 38.3% growth in sales, aided by a sharp increase in green coffee prices,” the brokerage house says in a note to clients.

“We expect the company to record adjusted PAT growth of 23% for CY08 and 24% for CY09. Strong free-cash flows, high payout ratio (75%), well entrenched brands, dominant market position in key categories and strong R&D support from Nestle SA will enable it to sustain premium valuations,” says the report.

ICSA India
CMP: Rs 1,661.60
Target price: Rs 2,575

Related News:

Bajaj Capital has recommended a ‘buy’ on ICSA India as it feels that the company will be a key beneficiary of the power sector reforms. The company enjoys monopoly in developing embedded products that help in automation of the distribution network, thereby identifying and reducing power distribution losses. “The products developed by the company also find application in other sectors including oil & gas, water, irrigation & mining, which have thrown open big opportunities for the company,” adds the report. The company has achieved a 5-year CAGR of 143.8% in net sales while the 4-year CAGR of net profit is pegged at 404.90%. “If everything goes well, the price is likely to appreciate to Rs 2,575, within 12-18 months,” adds the report.

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