Brokerage Calls: Angel Broking says accumulate Tata Motors

Techno Electric & Engineering Co (TEE), a leading EPC contractor in the power value chain, is estimated to have a wind power capacity of ~298 MW by FY12 (from ~100MW) currently. We believe the diversification into wind energy is positive for the company as it provides an avenue to deploy the excess capital being generated by the EPC division. We value the wind power business at Rs 145 per share, while the EPC business is valued at Rs 285/sh, leading to a March ’12  target price of Rs 430 for the stock, maintain a Buys says Religare.

At Current price, State Bank of India trades at 3.4x to 2.8x and 2.8x to 2.2x FY11/12 standalone/consolidated ABV. Since, our last note on banking sector, “PSU Banks - shifting valuation base up”dated August 18, 2010, the valuations of all large PSU banks have moved up by 20% on P/ABV basis and so is the case with SBI. We are raising our P/ABV multiple for SBI consolidated banking operations to 1.8x and raising our TP of Rs3,000 (including subsidiary value). We have not included the impact of rights issue in our numbers which can add another Rs133/share to ABV implying an upside of 7% to our target price. We maintain our Reduce rating on the stock says Emkay.

Parabolic Drugs witnessed a revenue and PAT CAGR of 59% and 60% respectively during FY05 to FY10. H1 FY11 has also delivered a high 88.7% yoy PAT growth. Stock is trading at P/E of 4.8x FY12E. Valuations are compelling compared to peers with earnings CAGR of 37% during FY10-13E. We recommend a ‘Buy’ with a one-year horizon and Target price of Rs 98 says India Infloline.

We recommend an Accumulate on Tata Motors with target price of Rs 1458, with a revised Target Price of Rs 1,458 (1,214). We have valued the domestic core business at Rs 488 per share,implying 6.5x FY2012E EV/EBITDA and P/E of 13x FY2012E EPS. Our embedded value of the subsidiaries and investments in Tata Motors books (including JLR)works out to 970/share says Angel Broking.