Analysts' corner

Last Updated: Thu, Dec 06, 2012 18:00 hrs

Reco price/date: Rs 1,100/Dec 3;
Current/Target price: Rs 1,119/Rs 1,250
Analysts expect loan book to see a growth of 17 per cent and 18.6 per cent for FY13 and FY14, respectively, with a stable NIM in the range of 3-3.1 per cent for these two years. Asset quality has been improving steadily, and analysts expect loan loss provisions (LLPs) to clock 67 basis points for FY13 and 54 basis points for FY14. ICICI Bank’s core equity capital remains one of the highest in the sector at 12.8 per cent. The bank will work towards repatriating excess capital from its international subsidiaries (above and beyond the dividends), subject to regulatory approvals. Catalysts: Lower loan-loss provisions and higher loan growth. Maintain 'Buy'.

Nomura Equity Research

Reco price/date: Rs 97 /Dec 4;
Current/Target price: Rs 100.75/Rs 147
Jaiprakash Associates has informed exchanges that it has received the second stage (final) forest clearance for its 2.5-mtpa Amelia (North) coal block. The approval is a key milestone for the commencement of the coal block and management expects to commence production by January 2013. This development is in line with management’s guidance for a December-January forest clearance for the coal block. The analysts value the company at 8x EV/Ebitda (lowest of past five years’—7.42x) on FY15E consolidated Ebitda for FY14E EV of Rs 85,600 crore. Adjusting for net debt at Rs 55,000 crore for FY14E, we arrive at a market cap of Rs 30,600 crore for FY14E or a per share price of Rs 147. Maintain 'Buy'.

Edelweiss Securities Limited

Reco price/date: Rs 40/Dec 4;
Current/Target price: Rs 39.95/Rs 45
The management of TVS Motor has re-iterated that the company is in talks with BMW's motorcycle division, BMW Motorrad for a technology tie-up and expects to finalise a partnership by end of FY13. Reports indicate that the partnership will likely involve a technology sharing pact and may also extend to joint marketing. Analysts see this as a positive development for the company as the pact will help the company acquire technological know-how to develop more powerful motorcycles and extend its premium product portfolio, where it currently has the Apache (160cc and 180cc). This tie-up is unlikely to alter the current positioning of the company in the domestic motorcycle industry in the near term as BMW currently offers products in the greater than 600cc category which has a very limited domestic market. Accumulate.

Angel Broking

Reco price/date: Rs 68/Dec 4;
Current/Target price: Rs 66.55/Rs 80
Alembic Pharma has around 22 per cent of its portfolio covered under DPCO; and with NLEM-2011, the coverage will increase to 35-38 per cent. The company’s strategy will be to push for volumes and market share expansion in their key large brands like Azithral (where it commands 35 per cent market share) and to make more combination drugs. While the new drug pricing policy will impact FY14 domestic revenues, export revenues should witness a strong growth as new capacity comes on-stream in Q4FY13. The analysts expect 7.1 per cent revenue impact on FY14 sales at Rs 1,687.2 crore (Rs 1,815.9 crore earlier estimate) and 9.1 per cent lower profits at Rs 167.6 crore (Rs 184.4 crore earlier estimate). They revise downwards their price target by seven per cent to Rs 80 (Rs 86 earlier) based on FY14E numbers, and recommend investors to hold.

Nirmal Bang Equity Research

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