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Analysts' corner

Source : BUSINESS_STANDARD
Last Updated: Tue, Mar 19, 2013 04:23 hrs
Chairman of Wipro Ltd Premji speaks during a news conference in the southern Indian city of Bangalore

WIPRO
Reco price/date: Rs 441/March 18;
Current/target price: Rs 433/NA
Wipro Infotech, the India and West Asia IT business unit of Wipro, has won a three-year strategic managed services contract from banking group Emirates NBD to deliver end-to-end service transition and transformational services. This includes maintaining the banking group's IT systems through a managed service framework, and comprehensive help desk and field support services. It will make the processes more streamlined, thereby allowing the bank to offer better services to its customers. Wipro will support, both physically and remotely, all Emirates NBD's offices in West Asia and many of its international offices through a remote support model. Wipro will also maintain and manage about 8,000 assets of the organisation. Maintain Neutral.



-Angel Broking

L&T
Reco price/date: Rs 1,510/March 18;
Current/target price: Rs 1,508/Rs 1,840
According to media reports, L&T Infrastructure Development Projects Ltd (IDPL) is in advanced negotiations to divest up to 20 per cent stake to marquee investors, including Khazanah, Mubadala Development Corporation and US-based fund Capital International. The infrastructure arm of L&T will raise up to Rs 2,500 crore by selling 20 per cent stake, thereby valuing the infrastructure company at around Rs 12,500 crore. Historically, investments in IDPL have been impacting the parent's return ratios as returns from these investments are back ended and are long gestation projects. If the stake goes through, it would take the pressure off the parent's balance sheet in the medium term. Analysts expect L&T to deliver top line growth of 16.2 per cent over FY12-14 and 9.2 per cent on the bottom line front. Maintain Buy.

-ICICI DIRECT

IDEA CELLULAR
Reco price/date: Rs 114/March 18;
Current/target price: Rs 113/Rs 105
Idea management believes the gap between current (34 paise) and headline (43 paise) voice revenue per minute (RPM) will continue to , as promotional offers keep declining at a faster clip with reducing competition (exits and scale down of operations by new operators). Though the addressable market opportunity for data revenue is 450-500 million subscribers, the current 3G penetration is less than 10 per cent. Declining handset prices (at inflexion point of $45-50) will ensure rapid growth in data usage. Axis values Idea at Rs 140 a share (seven times FY15 estimated EV/Ebitda), Rs 35 a share less for regulatory charges. Note the regulatory charges can reduce further on possible lower spectrum prices after the failure of the recent 900 MHz/1,800 MHz auctions. Maintain Hold.

-Axis securities

ADANI PORTS & SEZ
Reco price/date: Rs 138/March 18;
Adani Ports and Special Economic Zone (APSEZ) has created a diversified cargo portfolio, with a judicious mix of long-term contracts to cover fixed costs. Analysts believe, the company will continue to outperform in growth terms due to long-term contracts and capacity constraints at JNPT. The recent announcement to transfer majority holding in Abbot Point would significantly reduce the leverage overhang on the company. The combined benefits of port + SEZ + logistics to become a revenue spinner for the company and recent correction in stock price offer an attractive entry point. Maintain Buy.

-Antique Stock Broking

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