Call from Analysts

Investment Call by Sharekhan - 15.09.06

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ORG Informatics
Cluster: Emerging Star
Recommendation: Buy
Price target: Rs190
Current market price: Rs89

Price target revised to Rs190
The key takeaways from the latest annual report of ORG Informatics are given below.

Significant scale-up in operations: ORG Informatics’ consolidated revenues have grown at a compounded annual growth rate (CAGR) of 75.7% over the past three years. The management expects the mega orders bagged in the last fiscal and a healthy order pipeline to further boost its growth momentum in the current fiscal.

Improving profitability: The robust growth in revenue has been accompanied by consistent improvement in the operating profit margin (OPM) due to the reoriented business strategy to focus on the high-value solution and service business.

Better operational metrics: It generated free cash flow of Rs12.2 crore in FY2006. The return ratios have also improved dramatically with the return on average capital employed (RoACE) and return on average net worth (RoANW) at 37.5% and 43.2% respectively. The debt/equity ratio stood at comfortable level of 0.46 times.

Reduction in promoter holding is a concern: On the flip side, the promoter holding has declined by 10 lakh shares to 74.6 lakh equity shares (63.8% stake holding).

Re-iterate Buy recommendation: At the current market price the stock trades at 7.6x FY2007 and 5.6x FY2008 estimated earnings. We maintain our Buy recommendation on the stock with a revised price target of Rs190 (12x FY2008E earnings per share, including the convertible warrants in the equity base).



Tata Tea
Cluster: Apple Green
Recommendation: Buy
Price target: Rs970
Current market price: Rs764

Price target lowered to Rs970

Key points

Tata Tea Ltd (TTL) would be raising Rs420-460 crore through the preferential allotment of shares and warrants to its promoter, Tata Sons. We expect the allotment to result in equity dilution of 10-11% for TTL. However, it is not clear as to how much funds will be raised through direct equity and how much through warrants.
TTL requires Rs1,100 crore for various acquisitions that it has done over the past few months. We expect the company to raise the balance amount required by selling its investments in group companies as well as its North India Plantation Operations.

We expect TTL to raise short-term debt of Rs320-550 crore depending upon the amount of the warrants and their conversion period.
We have lowered our earnings per share (EPS) estimates for the stock to take into account the short-term debt along with the equity dilution. Accordingly we have revised our EPS estimates from Rs57 to Rs49.5 for FY2007 and from Rs64.5 to Rs59.5 for FY2008, ie a dilution of 13.4% and 7.7% respectively. We have not taken the numbers of Energy Brands Inc into account.

We expect the lack of clarity with regard to the stock’s earnings to continue till the management of the company clears the cloud over the funding structure for its inorganic expansion.

Taking both the above factors into account, we are lowering our price target on the stock to Rs970 per share.
Over the long term, we expect TTL to be a good candidate for re-rating as:
— it becomes a pure play on the branded fast moving consumer goods (FMCG) business, and
— it reduces its exposure to low-yielding investments in the group companies and invests in high-growth companies like Energy Brands Inc.

Wow Sarvesh

Thats nearly 15 posts in a row from you.

I only hope for your sake that others are benefiting from yr reccos. else it will be a case of water off the duck's back

Thanks anyway for yr efforts

AGILENT

Ive benefitted 4m ur indiabulls call . entered at 306 and sold at 370 within a few days . Keep the flow coming . Gr8 calls .

Harsh Sheth

HI ALL
I SHYAM NEW MEMBER TO THIS FORUM
I THINK I WOULD LIKE TO HIGHLIGHT IS ANAYLST ARE NOT GOD THAT EVERYTHING THEY SAY HAS TO BE TRUE SO WE SHOULD BE UNDERSTANDING THIS FACT.

Pl forgive, but the so called analysts are no better than the daily starsign forecasts appearing in the newspapers

Ashwani Gujral
Buy IPCL with stop loss of Rs 285 for a target of Rs 355
Buy Bharti Airtel with stop loss of Rs 430 for a target of Rs 550

- E Mathew
Buy ICSA with a stop loss of Rs 691 for a short-term target of 900
Buy R K Forgings with a stop loss of Rs 110 for a short-term target of Rs 146

- Rajat K Bose
Buy TCS with stop loss below Rs 1012 for a target of Rs 1045
Buy Bharti Airtel with stop loss below Rs 453 for a target of Rs 480
P.S.These calls are dated 20/9/2006

Aswini Gujral is a quack TA while Mathew if everyone remembers was pulled up by Sebi.These two are patrnonised by CNBC for reasons best know to them,

Mohni and Sudharshan are good.

Please note that these are not my reco & i am not analyst. There are the calls given by analysts & brokerage house & i am posting these calls as in the site was prompting / reminding me that i have neither posted any message nor interacted with the members. Personally my exposure to market is very limited & as investor. I normally buy/sale at predefined level irrespective of the time frame.

Capita Suggests BUY Recommendation for Short Term


BUY : Tamil Nadu Newsprint and Papers at Rs 93
BSE Code : 531426
NSE Symbol: TNPL
Market Lot: 1
Tamil Nadu Newsprint and Papers is the largest producer of baggasse based paper in the world. Improved availability and lower cost of baggasse, better price realisations, higher level of production and benefits of excise duty reduction will sustain its growth going forward.
Actual adjusted EPS for March 2005 : Rs 5.5
Actual adjusted EPS for March 2006 : Rs 12.5
Projected adjusted EPS for March 2007 : Rs 15.9
Date: 23rd September 2006

Automobile Corporation of Goa
Automobile Corporation of Goa is one the largest bus body builders in India. The company is poised to deliver stupendous growth in the coming years. Buy with a price target of Rs 585. (Current Market Price: Rs 383)
Automobile Corporation of Goa (ACGL) is poised to deliver stupendous growth in the coming years. ACGL is one the largest bus body builder in India. In light of the huge surface transport projects being undertaken across India the company expects huge demand going forward from the Indian domestic market. Given the fragmented nature of Bus body building industry and the fact that ACGL is the largest organized player, it is expected to be a major beneficiary of the strong demand growth currently being experienced in the industry.
ACGL caters to the most of the bus body requirement of Tata Motors buses for exports. Tata Motors' demand for buses is expected to be more than 20,000 buses per annum. The company has started manufacturing several new models for Tata Motors like Tata Globus, Starbus and Star Skool. Significant increase in the CAPEX cycle in Middle East, emergence of African markets coupled with demand for CKD kits will ensure robust demand for the division.
The Company is working closely with Hispano (where Tata Motors has about 21% equity stake) to use Hispano's technology to build buses for the Indian markets which will help ACGL to upgrade its technology and help it build larger / higher end buses.
Given the huge demand of Tata Motors, ACGL is expected to increase its capacity to 10,000 buses per annum over the next 2-3 years. During FY2006, ACGL's production increased by 82% to 3004 buses, which is expected to further increase to 4000 buses in FY2007 & to 5000 buses in FY2008. ACGL has announced its plans to raise a sum not exceeding Rs 75 crore to fund its CAPEX plan through a rights issue, which is expected to come by the end of FY2007. The company is also expected to incur expenditure for shifting of lines of sheet metal division to a new facility in Pune.
ACGL is expected to report net sales growth of 35.4% and 20.2% to Rs 343.93 crore and Rs. 413.29 crore in FY2007E and FY2008E respectively. APAT growth of 38.5% & 23.6% to Rs 21.16 crore & 26.16 crore is expected in FY2007E & 2008E respectively. Market price of Rs 383 discounts FY2007E and FY2008E Earnings of Rs 42.8 and Rs 52.9 by 8.9x & 7.2x respectively. Based on these valuations the stock enjoys Buy rating with a price target of Rs 585, at which the stock will quote at PE 11x and EV/Cash Profit 10.