BAJAJ AUTO
Reco price/date: Rs 1,790/September 26
Current/target price: Rs 1,794/NA
According to media reports, Nissan has called off its alliance with Baja Auto (BJAUT) to develop an ultra-low cost (ULC) car. In 2009, BJAUT had entered into an agreement with Renault-Nissan alliance to design, develop and manufacture the ULC car, which was intended to take on Tata Nano. Since then, BJAUT earlier this year the company unveiled the RE60, a mini-four wheeler for urban transportation to replace three-wheelers. While the Nissan-Renault alliance did not mention any reason for calling off the ULC car project, analysts believe it could be due to the revival of its own low cost car project under the Datsun brand. Meanwhile, BJAUT is planning to launch RE60 by the end of FY2013. Maintain Neutral
Angel Broking
TATA POWER
Reco price/date: Rs 103/September 26
Current/target price: Rs 103/Rs 125
Mundra project operating losses and falling global coal prices have kept the Tata Power stock range bound. Analysts expect marginal tariff relief at Mundra as highly probable and believe the stock offers upside despite lower coal prices. HSBC Global Research has raised its net profit estimates by 11 per cent for FY14 & Target price to Rs 125 (from Rs 108) on 25 paise higher tariff recovery expectation at Mundra. Analysts expect announcement of any tariff relief to act as catalyst for stock price movement. This is also a key risk because If this does not go through, the upside on the stock remains moderate at five per cent. Upgrade to Overweight from Neutral
HSBC Global Research
HEXAWARE TECHNOLOGIES
Reco price/date: Rs 123/September 26
Current/target price: Rs 120/Rs 140
Hexaware Technologies’ management expects September quarter to be in-line with initial guidance ($92.5-94 million). Margins are expected to be flat sequentially at 23 per cent despite onsite wage increments. Net profit is likely to be impacted by forex losses. Company continues to maintain it’s CY12 revenue guidance of $ 370 million which implies a three-six per cent sequential growth for the December 12 quarter. Hiring is on track with initial outlook. Company has signed two $ 10 million+deals in CY12 so far and continues to make investments in driving greater footprint within top 30 clients through dedicated account managers. Hexaware’s valuations of 11/10 times CY12/13 estimated earnings is decent given five per cent dividend yield. Downgrade to Accumulate from Buy
Emkay Global