Institutional Activity

Although Merrill Lynch has maintained its neutral rating on TISCO at Rs 79, the earnings estimates for FY02 and FY03 have been revised downwards by 26 per cent and 36 per cent respectively. Net profit is now estimated at Rs 230 crore for the current fiscal, down 57 per cent compared with last fiscal.

For FY03, earnings are estimated at Rs 320 crore, up 36 per cent on an annual basis. The earnings cut reflects the possible delay in recovery of steel prices. Moreover, the deterioration in profit and cash flows will lead to higher borrowings and hence higher interest outgo during the next two years.

SBI Capital Markets has given a outperform recommendation on Britannia at Rs 509 with a 12-month target price of Rs 630. The stock is trading at a price-earnings ratio of 20.1x its FY02 estimated earnings.

In the past, declining growth, competitive pressure and additional excise duties have adversely impacted valuations. However, with some of its new products such as 50:50 Maska Chaska and Snax Timepass receiving an encouraging response from consumers, Britannia