Institutional Activity

SBI Capital Markets has valued Hindustan Lever at Rs 251, much higher than the current market price of Rs 215. The 12-month price target has been set at Rs 245. Over the next two years, operating margins are expected to grow by 200 basis points to about 16.5 per cent due to improving efficiencies and realisations.

ASK-Raymond James Securities continues to be bullish on the ITC counter at Rs 679. A sustained growth in cigarette volumes combined with an improvement in the product mix is expected to drive ITC's profitability in FY2002.

Earnings are estimated to grow by 23 per cent in FY2002, netting an RoE (return on equity) of 32 per cent. The stock currently trades at 14 times estimated FY2002 earnings.

Merrill Lynch Securities is quite optimistic about the internal restructuring at Zee Telefilms and is recomending a long-term buy at Rs 132.80.

The stock has outperformed the market by 37 per cent (in one month) and 21 per cent (over three months), led by the liquidity-driven rally and speculation of a strategic stake sale. This movement can be viewed as common for a high-beta (1.75) stock like Zee. Earnings are estimated to grow by 27.9 per cent in FY2002.

Nalco is on the buy list of SSKI Securities at Rs 49.80. The approval of Nalco's merger with its 100 per cent subsidiary, International Aluminium Products, with itself will improve the company's presence in downstream value-added products. As a result, Nalco should also witness an improvement in its operating margins.

Despite depressed aluminum and alumina prices, the expansion of existing capacities will drive volume growth over the next two years, resulting in 15.5 per cent CAGR in earnings.

Merrill Lynch Securities has upgraded its intermediate-term rating on Tata Engineering (Telco) to accumulate from neutral at Rs 103.80, with a 12-month price target of Rs 123. This comes on the back of rising volumes in HCVs and cars, cost-cutting, and upside potential from CNG bus sales.