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Analysts' corner

Source : BUSINESS_STANDARD
Last Updated: Wed, May 08, 2013 20:52 hrs
Investors watch a display at a local share market in the northern Indian city of Chandigarh

GLAXOSMITHKLINE PHARMACEUTICALS
Reco price/date: Rs 2,398/May 7
Current/target price: Rs 2,338/Rs 2,110
GlaxoSmithKline Pharmaceuticals (Glaxo)'s Q1'CY13 results disappointed on both the top line and margins. The disappointment on revenue was due to supply chain constraints at manufacturing sites and supply constraints around vaccines, the management said.


However, given the supply constraints are expected to last another quarter and expected adverse impact of pricing policy for the domestic business, analysts believe earning downgrades remain a possibility. Given the recent run up in the stock, analysts believe there is little room for upside at current valuations. Maintain Neutral.
Nomura Equity Research

TV 18 BROADCAST
Reco price/date: Rs 67/May 6
Current/target price: Rs 30/Rs 34
TV18 Broadcast (TV18) is one of the largest media networks in the country. The company would be the biggest beneficiaries from digitisation of cable. Higher net subscription revenues and turnaround of loss-making channels would help boost TV18's Ebitda by 2.3x over FY13E-15E. We arrive at a fair value of Rs 34 a share implying 26x P/E on FY15E earnings considering turnaround in profits and possibility of becoming a net debt-negative company in FY2014E. The premium over other broadcasters such as Zee Entertainment and Sun TV is justified by TV18's strong growth profile and leadership in various genres like Colors in general entertainment segment (GEC), CNBC TV18 in Business segment, IBN7 and CNN IBN in the general news segment. Buy.
Centrum Wealth Research

BAJAJ CORPORATION
Reco price/date: Rs 235.65/May 6
Current/target price: Rs 273/Rs 285
Bajaj Corporation reported in-line Q4FY13 net sales/Ebitda/adjusted profit after tax growth of 25.3 per cent/53.4 per cent/44.4 per cent year-on-year led by strong 19 per cent volume growth and robust margins (from lower LLP and glass prices).

We raise FY14/FY15 earnings by 2-3 per cent on higher margins and revise our March 2014 target price from Rs 275. Maintain Buy on (a) continued double-digit volume growth; (b) stable, industry-leading margins backed by pricing power and premium positioning; (c) cash-rich balance sheet; and (d) attractive valuations at 19.2x/16.1x FY14/FY15E earnings. Maintain Buy.
Religare Institutional Research

ITNL
Reco price/date: Rs 180/May 8
Current/target price: Rs 175/Rs 230
For Q4FY13, on a consolidated basis, IL&FS Transportation Networks (ITNL) posted a mixed set of numbers with decent performance on the top line. However, bottom line was higher than analysts' estimates mainly due to lower tax provision provided during the quarter. The company reported consolidated revenue of Rs 1,931 crore, registering a decline of 2.9 per cent y-o-y. Ebitda margins declined sequentially by 106 basis points to 24.4 per cent, mainly due to higher revenue contribution from the low-margin engineering and construction segment during the quarter. ITNL reported subdued earnings growth of 2.1 per cent y-o-y to Rs 181 crore due to tax credit of Rs 9 crore in Q4FY13. Buy.

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