Analysts' corner

Cummins India, Apollo Hospitals & Maruti Suzuki

CUMMINS INDIA
Reco price/date: Rs 565/March 19;
Current/target price: Rs 557.8/Rs 600
Cummins India is a market leader in high horsepower engines. The company has healthy cash flow from operations and zero debt on balance sheet. It is creating strong asset base (infrastructure) through investments in Phaltan Mega site, India office campus and India technical center; which makes the company a prime beneficiary of revival in industrial capex. Cummins Inc Global is also focused on India as manufacturing hub for Low horse power Genset. The brokerage expects sales to grow at CAGR of 15 per cent FY14-FY16 and earnings grow of 16 per cent over FY14-16. It assign a P/E of 21 times FY16 estimated earnings and recommends accumulate.

-KR Choksey

APOLLO HOSPITALS
Reco price/date: Rs 883/March 19;
Current/target price: Rs 903.85/Rs 1,060
The brokerage recently hosted 'Apollo Hospitals Day' in Chennai. This included meeting senior management and site visits to main hospital, oncology, day surgery centers and new delivery formats (dental, dialysis clinics). Its interactions reinforced confidence in Apollo Hospitals and analysts believe efforts to strengthen its brand, new healthcare delivery initiatives, increase maturity of hospitals and a well-etched out expansion strategy should drive long-term growth for the company. It belives at 13 times FY16 estimated Ebitda the stock trades attractive. Upgrade to 'Buy'.

-Edelweiss Securities

MARUTI SUZUKI
Reco price/date: Rs 1,868/March 19;
Current/target price: Rs 1,885.6/Rs 2,150
A healthy product line up for MSIL over the next couple of years, small car (Celerio), a compact SUV (XA Alpha), a sedan (Ciaz), SX4 crossover and an LCV, provide new avenues of growth as they will help it gain market share in segments where it currently has low or no market share. Celerio and Ciaz would replace the A-star/Estilo and the SX4 respectively - segments where MSIL's existing products have failed to make a mark. On the other hand, the compact SUV and LCV are segments where MSIL has no presence. We believe even if urban recovery remains elusive, bridging of the portfolio gaps can help MSIL report growth and retain market share when growth revives. While the anticipated recovery in demand has still not materialised, earnings upgrade so far has largely been a result of Yen depreciation, even as volume estimates have been cut over time and discount /car have only gone up. Maintain accumulate.

-Emkay Global Financial Services