Business Standard

Analysts' corner

Infosys, Asian Paints, Tata Steel & JK Tyres and Industries

Related News

INFOSYS
Reco price/date: Rs 2,294/December 19;
Current/Target price: Rs 2,318/Rs 2,400
management has maintained that demand environment is uncertain with negligible visibility into clients’ CY13 budgets. Also, the budgets are not as sacrosanct as earlier and can change significantly over the course of the year. Analysts are still cautious on Infosys but incrementally more positive on industry. Barring hard-to-estimate effects of events like US fiscal cliff, analysts believe 2013/FY14 will likely be a better year for offshore IT industry than 2012/FY13 as the cycle turns. Comeback of more cyclical discretionary spending, legacy deals opening up in 2013, stability of client budgets could constitute the trigger points. Maintains Neutral.

JPMorgan Asia Pacific Equity Research

ASIAN PAINTS
Reco price/date: Rs 4,444/December 21;
Current/Target price: Rs 4,380/Rs 5,200
The management believes that demand conditions remain healthy albeit lower than the historical level of 20 per cent plus growth. Titanium dioxide prices (25 per cent of raw material costs), which had run up sharply, have fallen seven per cent yoy in the December quarter. This should offset the impact of rising monomer/other raw material costs and sustain gross margins at 40 per cent. Furthermore, history suggests the paint industry reduces production during demand slowdown, despite making sharp capacity additions. Concerns that the 30-150 per cent capacity addition across the industry would result in product flooding are misplaced. The firm is still evaluating the categories for its home décor foray. Buy.

IIFL

TATA STEEL
Reco price/date: Rs 432/December 21;
Current/Target price: Rs 428/Rs 498
Part or full divestiture of UK (TSEUK) operations will help Tata Steel (TSL) to reduce leverage (which is the impending need of the hour) and at the same time retain the more profitable operations in Netherlands. As long as the smelting margin of any integrated player is comparable to TSEUK, the lure of 50 per cent market share in UK can be enticing. TSEUK assets can suit a player with apt balance sheet strength to wait for an up-cycle and limited payback period. With considerations of $1-2 billion, analysts’ fair value of TSL can increase by 34-47 per cent. Any step towards divestments of loss making TSEUK assets can further increase our target price. Maintain 'Buy'.

ICICI Securities

JK TYRES AND INDUSTRIES
Reco price/date: Rs 121/December 24;
Current/Target price: Rs 120/Rs 165
(JKI) plans to expand the production capacity of its truck and bus radial (TBR) tyres at the Mysore plant with an investment of Rs 476.5 crore. Post the expansion plan, the TBR capacity at the Mysore plant will increase to 106 million tyres/year from current levels of 367,000 tyres/year. Analysts believe increasing capacity levels will enable the company to meet the rising demand for the TBR tyres. However, analysts believe that the company will have to incur additional debt to meet the expansion plans which would further stretch its balance sheet. Nonetheless, at 2.9 times FY14 estimated earnings, valuations remain attractive. Maintain Buy.

Angel Broking

Read more on:   
|
|
|

Read More

2013: Another year of steady rise

The domestic equity market in 2013 is likely to repeat the rise in 2012 and move up about 20 per cent. While reversal of the interest rate cycle ...

Quick Links

Market News

Where is market's peak?

The Reserve Bank of India's (RBI's) token rate cut of 25 basis points was enough to send the markets soaring. The Nifty has risen 6.7 per cent, ...

December saw open offers worth Rs 2,712 cr

Public shareholders in listed firms received open offers worth Rs 2,712 crore in December, the second highest so far this fiscal, with all the ...

Surat diamond bourse on fast track after hiccups

Land allotted, foundation laying ceremony soon

India retains fourth position in world steel order

With the ongoing expansions, it could take the position of the US within a couple of years, as the gap between the two is only around five mt

India's soymeal export set for 26-year low as Iran buys less

India's soymeal exports are set to hit a 26-year low in the year ending March as easing of sanctions against Iran allows the key buyer to opt ...

 

Back to Top