Reco price/date: Rs 380/March 7;
Current/target price: Rs 385/Rs 489
We maintain our revenue estimates for Greenply over FY13E-FY15E. We expect net sales and profit CAGR of 15.5 per cent and 39.1 per cent over FY12-FY15E to Rs 2,630 crore and Rs 150 crore, respectively. We expect Ebitda margins to improve from 10.1 per cent in FY12 to 13 per cent in FY15E. We assume margins of Rs 9.3 per cent, 13.6 per cent and 22.5 per cent in its plywood, laminate and MDF business over FY13E-FY15E, respectively. We continue to remain optimistic on Greenply's overall growth prospects, especially for the MDF business, wide distribution network, strong brand equity and leadership position. Post the recent correction in the stock price, we upgrade our rating from accumulate to buy, with a target price of Rs 489 a share. We value the stock at 9x FY14E (five-year average) earnings.
GODREJ PROPERTIES LTD
Reco price/date: Rs 561.85/March 6;
Current/target price: Rs 560.80/Rs 590
Godrej Properties Limited's plan to sell a part of its Godrej BKC project bodes well for cash flow, even as cash might still be required near-term to meet project outflows. We estimate around 40 per cent of the total area would have to be sold to cover the incremental outflows on construction costs and FSI premium -" a tough task in the current market. Admittedly, operations are picking up on both project addition and launches but this, we believe, is largely priced in. Early monetisation of commercial assets remains a risk to our call. Maintain Hold.
Reco price/date: Rs 335/March 6;
Current/target price: Rs 331.95/Rs 361
After sustained underperformance (by around 15 per cent) over the past year, the risk-reward in GAIL is now more favourable. However, while negatives such as potential gas price hikes are largely priced in, near-term earnings growth remains muted and the upside from current levels seems limited. The analysts estimate their fair value could decline to around Rs 340 and our FY14-15E earnings could decline a further six-eight per cent if gas prices are hiked to $8 and there is no offset available through lower subsidies. At the current stock price of around Rs 335, we therefore believe this is largely already discounted. Reiterate Neutral.
Reco price/date: Rs 68/March 4;
Current/target price: Rs 70.95/Rs 80
We are upgrading Dish TV from neutral to buy on the back of improving industry fundamentals and tepid valuations. We believe that the industry's discipline (on increase in pack and STB rates) is sustainable as participants shift their focus from revenue growth to profitability. These changes will lead to Dish TV's growth being self-funded in FY14, thereby addressing concerns on equity dilution. We estimate Dish TV's Ebitda to grow at a 27 per cent CAGR from FY13-15E while valuations remain at the undemanding levels of 10.5x and 8.3x FY14 and FY15 EV/Ebitda. Our DCF implied target price changes to Rs 80; hence, we upgrade the stock to Buy.