RELIANCE INFRASTRUCTURE
Reco price/date: Rs 500/December 6;
Current/Target price: Rs 512.4/Rs 600
The brokerage foresees a spate of positive news flow for Reliance Infrastructure as we enter 2013, mainly around commissioning of under-construction projects. This should revive investor confidence in the company’s execution capabilities. Reliance Infrastructure has a well-diversified infrastructure portfolio across the regulated power businesses, EPC and BOT assets (road, metro and transmission) and is foraying into cement manufacturing. The company has the least leveraged balance sheet (FY12 consolidated debt to equity of 0.75 times) among Indian infrastructure conglomerates under our coverage and is well placed to benefit from a policy-led revival in the capex cycle sentiment. The brokerage likes that management remains conservative in bidding for new BOT projects, given various systemic risks (it has not won any large new project over the past three years). Maintains Overweight.
JPMorgan India
PHOENIX MILLS
Reco price/date: Rs 233.5/December 5;
Current/Target price: Rs 235.6/Rs 274
Phoenix continues to be our top pick in India property, given strong profit growth (profits were up 38 per cent year-on-year in the September quarter) and consistent improvement in operating parameters of market cities (occupancies up to 75 per cent versus leasing at 85-90 per cent). About 80 per cent of NAV (net asset value) is on the ground and rental growth should bring down debt, which has peaked. We increase our target price (from Rs 255 earlier), incorporating an increase In the stake in the Bangalore market, roll forward net asset value to March 2014. Our target price is at a 12 per cent discount to our March 2014 NAV of Rs 310. Maintain 'Buy'.
Citi research
TATA MOTORS
Reco price/date: Rs 275 /December 5;
Current/Target price: Rs 280.20/Rs 325
Tata Motors maintains JLR volume guidance at 360,000 units for FY13, with 100,000 units of the Evoque and five-seven per cent growth in non-Evoque portfolio. JLR has multiple levers to improve its sustainable margins over the next two-three years. The India business continues to be under pressure. While there are no visible signs of improvement for medium and heavy commercial vehicles, discounts have reduced month-on-month since September. Though we are cutting our EPS estimates for FY13/FY14 by two per cent/3.4 per cent to Rs 32.5/Rs 39.3, building in slower ramp-up of the new RR and continued weakness in the domestic business, however, the impact is diluted by lower-than-expected depreciation and amortisation on the new Range Rover. The stock trades at 8.5x FY13E and 7.0x FY14E Consolidated EPS. Maintain 'Buy'.
Motilal Oswal Securities Ltd