Analysts' corner

DLF
Reco price: Rs 289
Target price: Rs 300

For the fourth quarter, DLF reported a revenue of Rs 1,990 crore — up 78 per cent. Net profit at Rs 420 crore was also up three-fold y-o-y. In addition, the company recorded robust Ebitda margins of 50 per cent. Revenues topped the brokerage’s expectation by six per cent. However, net profit was 13 per cent below estimates. Also, balance sheet debt has risen and may go up to 0.85 times on account of the purchase of a stake in FC Asia. The brokerage retains ‘sell’ on DLF as it believes management guidance on residential sales looks aggressive during 2010-11 and delays in project launches would impact cash flows. Retain sell.

— Ambit Capital

Bajaj Auto
Reco price: Rs 2,186
Target price: Rs 2,361

For Q4FY10, Bajaj Auto (BAL) clocked net sales of Rs 3,399 crore, up 80.5 per cent y-o-y. The top-line growth was entirely on the back of volume growth, which stood at 83.8 per cent y-o-y, while realisations growth was almost flat at 0.2 per cent y-o-y, primarily due to a higher contribution of low-end bikes in the sales mix. The Discover 100 and Pulsar were the primary game-changer brands. BAL also witnessed a substantial 768 bps y-o-y jump in its Ebitda margin to 22.9 per cent (15.2 per cent). On a quarter-on-quarter basis, too, the margin was up 90 bps, despite an increase in core raw material prices, on the back of better operating leverage. BAL’s bottom line for the quarter stood at Rs 529 crore (above estimates). Maintain accumulate.

— Angel Securities