Angel Sec on L&T - Target Rs 1809
Angel Securities has recommended accumulate rating on Larsen & Toubro, L&T with a target of Rs 1809, in its research report.
"L&T has always traded at a premium to Sensex valuations, and has outperformed the Sensex on a consistent basis, given its strong operating cash flows, superior return ratios (in excess of 20%) and excellent capital efficiency. In recent times (over the last 6 months), the stock's performance has been subdued, given poor quarterly performances and rich valuations that provided limited scope for disappointment. However, going ahead, we believe that L&T would outperform on the back of: 1) Strong quarterly numbers, resulting in the fading away of market concerns over execution, 2) Robust order book, 3) Recent underperformance giving an entry opportunity for long-term investors, and 4) 18% Earnings CAGR expected over FY2010-12E. Hence, we maintain an Accumulate on the stock, with a revised target price of Rs 1809 (Rs1,761 earlier). We have used the SOTP methodology and have valued L&T's Parent business at 20x FY2012E Earnings and its subsidiaries/investments at Rs 383 per share," says Angel Securities research report.
PINC on Patel Engineering - Target Rs 544: PINC
PINC Research is bullish on Patel Engineering and has recommended buy rating on the stock with a target of Rs 544, in its research report.
"Patel Engineering's (PEL) consolidated Q4FY10 results were a mixed bag with above-than-expected sales growth at 24.1% while EBITDA margin was lower-than-expected at 12.6%. A lower than expected depreciation and higher than expected interest cost netted PAT inline with expectation at Rs719mn. Given the better topline performance of 25.3% growth for FY10 and a healthy order book of Rs 100 billion (up 38% YoY), we upgrade our topline by 5.5% for FY11 and by 6% for FY12, leading to 3.8% upgrade in PAT for FY11 and 7.9% for FY12 respectively. We value the core business at 13x FY11E EPS of Rs 28.7; Road BOT at Rs 12.4; Real estate projects at Rs 55.4; land bank at Rs 67.1; and the power venture at Rs 35.7. We reiterate our 'BUY' recommendation on the stock with a target price of Rs 544," says PINC Research report.
