Business Standard

Analysts' corner

IDBI Bank,Titan Industries & Pratibha Industries

BS Reporter 

IDBI Bank
Reco price: Rs 120
Target price: Rs 140

The government has agreed to infusion Rs 3,110 crore to aid the bank improve capital adequacy and expansion plans in future. It has also applied for increase in authorised capital, which would further give head room for raising capital for the bank and may come out with FPO in future for any capital requirement. The bank plans to continue its focus on infrastructure development which is traditionally its forte. It also plans for branch expansion of 300 branches to its existing network of 720 branches which will improve its franchise liability. The bank has sound asset quality with provision coverage of 75 per cent, well above RBI limit of 70 per cent. Maintain buy.

— Anand Rathi Research

Titan Industries
Reco price: Rs 2,501
Target price: Rs 3,000

Volume growth in Gold recovered since H1FY10 and registered nearly 45 per cent volume growth in the fourth quarter of FY10. Expect a healthy 14 per cent volume CAGR driven by stable gold prices and pick-up in consumer discretionary demand. Consequentially, expect sales and earnings CAGR of 20 per cent and 25 per cent, respectively for FY10-12E. Improving realisations, product mix, operating leverage along with improved profitability of other businesses, will lead to 80bps margin expansion in the next two years. Expect Titan to sustain the return on equity at around 40 per cent and witness a 3x increase in free cash flows in FY10-12E. The urban discretionary demand could continue to remain healthy; Titan will be the significant beneficiary of the demand momentum. The stock is trading at 33x FY12E EPS. Maintain buy.

— Prabhudas Lilladher

Pratibha Industries
Reco price: Rs 410
Target price: Rs 508

secured a built-operate-transfer (BOT) project on annuity basis from National Highway Authority of India (NHAI). The project involves two laning with paved shoulders of Bhopal-Sanchi section of national highway (NH)-86 for 53.7 km under National Highway Development Programme Phase-III. The company has also bagged three projects worth Rs 210 crore for the construction of residential and commercial complexes. In the first quarter of FY11, the company witnessed a strong order intake, bagging two engineering, production and construction (EPC) orders and two BOT projects, totaling to Rs 477 crore. The order inflow for FY10 stood at Rs 2,685 crore. The stock is trading at 8.7x and 6.5x its FY11E and FY12E earnings, respectively. Maintain buy.

— Sharekhan

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Analysts' corner

IDBI Bank,Titan Industries & Pratibha Industries

The government has agreed to infusion Rs 3,110 crore to aid the bank improve capital adequacy and expansion plans in future. It has also applied for increase in authorised capital, which would further give head room for raising capital for the bank and may come out with FPO in future for any capital requirement. The bank plans to continue its focus on infrastructure development which is traditionally its forte. It also plans for branch expansion of 300 branches to its existing network of 720 branches which will improve its franchise liability. The bank has sound asset quality with provision coverage of 75 per cent, well above RBI limit of 70 per cent. Maintain buy.

IDBI Bank
Reco price: Rs 120
Target price: Rs 140

The government has agreed to infusion Rs 3,110 crore to aid the bank improve capital adequacy and expansion plans in future. It has also applied for increase in authorised capital, which would further give head room for raising capital for the bank and may come out with FPO in future for any capital requirement. The bank plans to continue its focus on infrastructure development which is traditionally its forte. It also plans for branch expansion of 300 branches to its existing network of 720 branches which will improve its franchise liability. The bank has sound asset quality with provision coverage of 75 per cent, well above RBI limit of 70 per cent. Maintain buy.

— Anand Rathi Research

Titan Industries
Reco price: Rs 2,501
Target price: Rs 3,000

Volume growth in Gold recovered since H1FY10 and registered nearly 45 per cent volume growth in the fourth quarter of FY10. Expect a healthy 14 per cent volume CAGR driven by stable gold prices and pick-up in consumer discretionary demand. Consequentially, expect sales and earnings CAGR of 20 per cent and 25 per cent, respectively for FY10-12E. Improving realisations, product mix, operating leverage along with improved profitability of other businesses, will lead to 80bps margin expansion in the next two years. Expect Titan to sustain the return on equity at around 40 per cent and witness a 3x increase in free cash flows in FY10-12E. The urban discretionary demand could continue to remain healthy; Titan will be the significant beneficiary of the demand momentum. The stock is trading at 33x FY12E EPS. Maintain buy.

— Prabhudas Lilladher

Pratibha Industries
Reco price: Rs 410
Target price: Rs 508

secured a built-operate-transfer (BOT) project on annuity basis from National Highway Authority of India (NHAI). The project involves two laning with paved shoulders of Bhopal-Sanchi section of national highway (NH)-86 for 53.7 km under National Highway Development Programme Phase-III. The company has also bagged three projects worth Rs 210 crore for the construction of residential and commercial complexes. In the first quarter of FY11, the company witnessed a strong order intake, bagging two engineering, production and construction (EPC) orders and two BOT projects, totaling to Rs 477 crore. The order inflow for FY10 stood at Rs 2,685 crore. The stock is trading at 8.7x and 6.5x its FY11E and FY12E earnings, respectively. Maintain buy.

— Sharekhan

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