Analysts' corner

Larsen & Toubro, CESC & Cox & Kings

LARSEN & TOUBRO
Reco price: Rs 1,309;
Target price: Rs 1,437
Larsen and Toubro’s (L&T) estimated order inflow for FY12 stands at Rs 65,500 crore (reported) as against Rs 79,700 crore (actual) in FY11. The order inflow number (after including unreported orders) would stand at Rs 73,500 crore for FY12, which is an eight per cent de-growth YoY. This year has not been a complete washout with the performance on a high base remaining satisfactory. What needs to be seen now is how the gradual increase in the planned expenditure of the government pans out. Maintain accumulate.

Prabhudas Lilladhar

CESC
Reco price: Rs 272;
Target price: Rs 405
CESC, which is one of the most integrated utilities in the country, is trading at a significant discount to its book value and broad peer benchmark due to concerns of its loss-making retail arm. As the valuation of CESC has been adversely impacted by its retail business, analysts believe development in this space is crucial for the stock. Currently, the stock is trading at 0.6 times its FY12 and 0.5 times its FY13 standalone book value. Currently, Spencer’s is generating store-level profit and aims to achieve Ebitda-level profit in the next two years. Maintain buy.

Sharekhan

COX & KINGS
Reco price: Rs 161;
Target price: Rs 195
Cox & Kings (C&K) caters to the overall travel needs of Indian and international travellers. Opting for the inorganic route to grow exponentially, C&K has done seven acquisitions in the past six years (including the Holidaybreak Plc. acquisition), which has made it an integrated player globally with quality products and services. With its recent HBR acquisition, analysts expect return ratios to improve post-FY12 as it has provided synergies in terms of geographic diversification, widening its product portfolio and cross-selling opportunities, amid challenges in terms of effective integration. Initiate coverage with buy.

ICICI Securities