Analysts' corner

Jaiprakash Power Ventures, Manappuram Finance, Bosch & Dabur

JAIPRAKASH POWER VENTURES
Reco price/date: Rs 17/March 3;
Current/target price: Rs 14/Rs 36
Jaiprakash Power Ventures (JPVL) has finalised a deal to sell Karcham and BASPA-II hydropower plants to a consortium of investors. The brokerage believe the substantial cash flow from the sale is likely to be used to repay corporate debt, FCCB and fund remaining equity of JPVL's Nigrie and Bara projects, addressing the concerns of debt overburden and FCCB repayment. Moreover, the restart of Vishnuprayag by April and commissioning of Nigrie power plant by September (660 Mw in March and another 660 Mw in September) to act as additional triggers for the stock. Maintain Buy.

-IDFC Securities

MANAPPURAM FINANCE
Reco price/date: Rs 23/February 27;
Current/target price: Rs 22/Rs 28
Manappuram Finance, the second largest NBFC providing loans against gold in terms of assets under management (AUM), has been consolidating since the regulatory changes started in 2012. The latest regulations released by RBI, mandating 75 per cent loan-to-value (LTV) cap, improve the positioning of gold loan NBFCs against banks and unorganised players (compared to 60 per cent LTV cap guideline issued in September). Given the abundance of privately-held gold, regulatory clarity, and Manappuram Finance's wide reach, CRISIL Research is positive about company's business prospects. The grade is moderated by its dependence on a single line of business. CRISIL Research expects AUM growth to normalise at a three-year CAGR of five per cent to Rs 114 billion in FY16. Cost-to-income ratio is expected to improve due to sweating of assets and cost rationalisation. Net profit is estimated to increase at a compounded annual growth rate of 23 per cent during FY13-16.

-crisil research

BOSCH
Reco price/date: Rs 9,366/February 28;
Current/target price: Rs 9,209/Rs 8,950
Bosch's December quarter earnings declined 19 per cent y-o-y to Rs 140 crore, due to a 260 bps y-o-y margin decline on adverse currency movement. 2013 earnings declined only eight per cent y-o-y - commendable, in our view, given subdued demand. We lower our 2014E/15E earnings by 15 per cent/10 per cent, given a continued slowdown in its key segments and the lack of visibility on volume recovery, even in 2014. The stock appears fully valued at 20x 2015E earnings and 13.6x EV/Ebitda.

We maintain our rating, but lower our price target to Rs 8,950 (from Rs 9,200) - valued at 18x one-year forward earnings. Our earnings estimates could face further downside risk if the auto segment's sales deteriorate further from current levels. Maintain inline rating.

-Standard Chartered

DABUR
Reco price/date: Rs 173/March 3;
Current/target price: Rs 172.65/Rs 218
Dabur anticipates volume growth in the 8-12 per cent y-o-y range in FY15 (double digit if urban demand revives) riding innovations and novel distribution initiatives in chemist channels(project CORE). Hair oils, a mature category, remains a concern and is likely to grow slower than home and health segments; hence, Dabur is focusing on innovations like Vatika Enriched Coconut Oil with hibiscus,Vatika Olive Enriched Hair Oil. The company remains one of Edelweiss' preferred picks underpinned by its higher volume growth, innovations and aggressive distribution drive. Maintain Buy. Maintain Buy.

-Edelweiss Securities