Business Standard

Analysts' corner

Hindustan Zinc, Ashok Leyland, Havells India & Whirlpool

SI Team  |  Mumbai 

HINDUSTAN ZINC
Reco price/date: Rs 115/June 19
Current/target price: Rs 116/Rs 137
(HZL) in its FY12 annual report highlights the expansion in its product making capacities, the accretion in reserves and its initiative towards green energy. In FY12, HZL managed to commission 0.1mtpa lead smelter, 350tpa silver refinery and ramped up its mining capacity at Sindesar Khurd to 2mtpa. However, during the year, grade of zinc metal in concentrate declined sharply to 11.98 per cent from 13.09 per cent at the Rampura Agucha mine (accounts for 88 per cent of total mined metal). With the commissioning of Phase II wind power projects, it has become one of India’s largest green energy producers. Maintain buy.

IIFL


Reco price/date: Rs 25/June 19
Current/target price: Rs 25/Rs 33
Ashok Leyland has won an order worth $6.5 million to export 88 AC buses from Bangladesh Road Transport Corporation (BRTC). The order comes under the Indian Line of Credit scheme offered for the improvement of urban transportation in that country. This is the second order for Ashok Leyland from Bangladesh. The company had earlier won an order worth $6 million to supply 50 vestibule buses to BRTC. Analysts expect the company to maintain its growth momentum (25 per cent growth in exports revenue in FY12) in the exports and expect exports to register a 15 per cent y-o-y growth in FY13. Maintain buy.

Angel Broking

HAVELLS INDIA
Reco price/date: Rs 535/June 19
Current/target price: Rs 538/Rs 612
Amidst tough times, (HAVL) management reiterated 15-20 per cent growth in the domestic business in FY13, as it looks to double appliances sales. Sylvania is expected to post margin in the seven-eight per cent range in Europe, even as currency impact is likely to put margins under pressure in Latin America. Profitability and new markets like Africa and China are Sylvania’s prime focus. With continued focus on profitability in Sylvania and expansion of product portfolio/geographical reach in the domestic business, analysts believe HAVL is on the right track. Edelweiss has increased growth assumptions by two-three per cent for FY13 and FY14 for the domestic business. Maintain buy.

Edelweiss Securities

WHIRLPOOL
Reco price/date: Rs 203/June 19
Current/target price: Rs 200/Rs 291
Analysts believe the company will register six per cent and 25 per cent growth in revenue in FY13 and FY14, respectively. Also, the net income is expected to grow by 14 per cent and 51 per cent in FY13 and FY14, respectively. Analysts believe the company will achieve positive volume and value growth in FY13 and FY14 due to innovation, pent-up demand and decreased dealer margins by Korean competitors. At current market price, the stock trades at 17.3 times and 11.4 times of FY13 and FY14 estimated earnings, respectively. Key risks include slower GDP growth, high inflation and high interest rates. Maintain buy.

Karvy Stock Broking

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Analysts' corner

Hindustan Zinc, Ashok Leyland, Havells India & Whirlpool

Hindustan Zinc (HZL) in its FY12 annual report highlights the expansion in its product making capacities, the accretion in reserves and its initiative towards green energy. In FY12, HZL managed to commission 0.1mtpa lead smelter, 350tpa silver refinery and ramped up its mining capacity at Sindesar Khurd to 2mtpa. However, during the year, grade of zinc metal in concentrate declined sharply to 11.98 per cent from 13.09 per cent at the Rampura Agucha mine (accounts for 88 per cent of total mined metal). With the commissioning of Phase II wind power projects, it has become one of India’s largest green energy producers. Maintain buy.

HINDUSTAN ZINC
Reco price/date: Rs 115/June 19
Current/target price: Rs 116/Rs 137
(HZL) in its FY12 annual report highlights the expansion in its product making capacities, the accretion in reserves and its initiative towards green energy. In FY12, HZL managed to commission 0.1mtpa lead smelter, 350tpa silver refinery and ramped up its mining capacity at Sindesar Khurd to 2mtpa. However, during the year, grade of zinc metal in concentrate declined sharply to 11.98 per cent from 13.09 per cent at the Rampura Agucha mine (accounts for 88 per cent of total mined metal). With the commissioning of Phase II wind power projects, it has become one of India’s largest green energy producers. Maintain buy.

IIFL


Reco price/date: Rs 25/June 19
Current/target price: Rs 25/Rs 33
Ashok Leyland has won an order worth $6.5 million to export 88 AC buses from Bangladesh Road Transport Corporation (BRTC). The order comes under the Indian Line of Credit scheme offered for the improvement of urban transportation in that country. This is the second order for Ashok Leyland from Bangladesh. The company had earlier won an order worth $6 million to supply 50 vestibule buses to BRTC. Analysts expect the company to maintain its growth momentum (25 per cent growth in exports revenue in FY12) in the exports and expect exports to register a 15 per cent y-o-y growth in FY13. Maintain buy.

Angel Broking

HAVELLS INDIA
Reco price/date: Rs 535/June 19
Current/target price: Rs 538/Rs 612
Amidst tough times, (HAVL) management reiterated 15-20 per cent growth in the domestic business in FY13, as it looks to double appliances sales. Sylvania is expected to post margin in the seven-eight per cent range in Europe, even as currency impact is likely to put margins under pressure in Latin America. Profitability and new markets like Africa and China are Sylvania’s prime focus. With continued focus on profitability in Sylvania and expansion of product portfolio/geographical reach in the domestic business, analysts believe HAVL is on the right track. Edelweiss has increased growth assumptions by two-three per cent for FY13 and FY14 for the domestic business. Maintain buy.

Edelweiss Securities

WHIRLPOOL
Reco price/date: Rs 203/June 19
Current/target price: Rs 200/Rs 291
Analysts believe the company will register six per cent and 25 per cent growth in revenue in FY13 and FY14, respectively. Also, the net income is expected to grow by 14 per cent and 51 per cent in FY13 and FY14, respectively. Analysts believe the company will achieve positive volume and value growth in FY13 and FY14 due to innovation, pent-up demand and decreased dealer margins by Korean competitors. At current market price, the stock trades at 17.3 times and 11.4 times of FY13 and FY14 estimated earnings, respectively. Key risks include slower GDP growth, high inflation and high interest rates. Maintain buy.

Karvy Stock Broking

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