Stay invested in BHEL, says Thunuguntla

Thunuguntla told CNBC-TV18, "BHEL business prospects have been challenging because no new orders are coming up. It has been a while seeing any major orders coming. So in that sense the order book growth has been sluggish. If the interest rate cut also doesn't happen, overall Nifty can go back into the bearish patch meaning thereby the BHEL again can come under some pressure."

He further added, "I am not expecting Rs 316 but if there is any bonds towards Rs 280-290, one can sell. But if one is a fairly one year, two years kind of long-term investor, one can stay invested."

Buy Tata Motors; target of Rs 343: Motilal Oswal

Motilal Oswal is bullish on Tata Motors and has recommended buy rating on the stock with a target of Rs 343 in its March 30, 2012 research report.

"Tata Motors, Volume guidance by luxury carmakers remains positive allaying fear of muted volumes due to European crisis and China slowdown. While BMW indicated single digit growth in CY12, Mercedes Benz is targeting ~6% CAGR over CY11-15. Also, JLR's commencement of 3rd shift at Halewood plant, although adding limited volumes, is indication of strong demand for luxury vehicles, especially Evoque."

"Tata Motors (TTMT) indicated that JLR continues to do well in China and is not offering any meaningful discounts. In fact, Evoque's waiting period in China is over 3 months. TTMT also clarified that instances of higher discounts are restricted to models which are up for refresh. Further, JLR has entered into an equal JV with Chery Auto of China to develop, manufacture and sell certain JLR vehicles in China and at least one own-branded model. JLR would be investing ~GBP350m as its equity contribution in this JV. JLR is making R&D investments to plug gaps in its product portfolio. Post Evoque, it has multiple other products in the works, which will enable this. Over next 2-3 years it will be launching a) XF Sportbrake, b) New Defender, c) Compact luxury car, and d) Crossovers. JLR plans to increase its capex to GBP1.75b in FY13. It also indicated that operating and financial performance in 4QFY12 is in line with expectations, reflecting continuation of the favorable trends."

"Current FY13 estimates factor in slowdown in JLR volumes. Our FY13 volume estimate implies monthly runrate of 30,000. If we factor in current runrate of 33,000/month, our FY13 consolidated EPS would see 25% upgrade. TTMT currently trades at 6.8x FY13E consolidated EPS and 10.8x normalized consolidated EPS. The DVR stock trades at 3.8x FY13E consolidated EPS and 6.0x normalized consolidated EPS. Maintain Buy, with target price (FY13 SOTP-based) of INR343 for ordinary share and INR206 for DVR (40% discount to ordinary share)," says Motilal Oswal research report.

Buy Kansai Nerolac; target of Rs 1027: Firstcall Research

Firstcall Research is bullish on Kansai Nerolac Paints and has recommended buy rating on the stock with a target of Rs 1027 in its March 31, 2012 research report.

"Kansai Nerolac Paints Ltd. is the second largest coating company in India and market leader in Industrial Coatings. It's Industrial Coatings it has a wide range of products in the Automotive, Powder, General Industrial and High performance Coatings space. Nerolac paint, as it is popularly known, is an established brand in decorative paints. Kansai Nerolac Paints Ltd is a subsidiary of Japan based Kansai Paint Company Limited, which is one of the top ten coating companies in the world. The technological edge of Kansai helps us constantly innovate and come up with products that meet consumer need gaps."

"Kansai Nerolac Paints Ltd disclosed results for the quarter ended Dec 2011. Net sales for the quarter increased by 19% to Rs.6656.90 million as compared to Rs.5603.80 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.526.80 million from Rs.415.90 million in previous year same quarter. The Basic EPS of the company stood at Rs.9.78 for the quarter ended Dec 2011."

"At the current market price of Rs 909, the stock is trading at 21.19 x FY12E and 18.17 x FY13E respectively. Price to Book Value of the stock is expected to be at 4.19 x and 3.41 x respectively for FY12E and FY13E. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.42.89 and Rs.50.04 respectively. Company's manufacturing units have received ISO 9001-2000, ISO-14001 and OHSAS-18001 for its quality management. The Manufacturing operations extend across India and are located in Bawal in Haryana, Lote in Maharashtra, Jainpur in UP, Chennai and hosur in Tamil Nadu. Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 18% over 2010 to 2013E respectively. Company has technically collaborated with two companies Kansai Paint Co. and Oshima Kogyo Co. of Japan. On the basis of EV/EBITDA, the stock trades at 12.90 x for FY12E and 11.26 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 1027 for medium to long term investment," says Firstcall Research report.

Buy Bosch; target of Rs 9356: Firstcall Research

Firstcall Research is bullish on Bosch and has recommended buy rating on the stock with a target of Rs 9356 in its April 2, 2012 research report.

"Bosch is a leading supplier of technology and services in the areas of automotive and industrial technology, consumer goods and building technology. Additionally, Bosch also has in India, the largest development centre, outside Germany, for end to end engineering and technology solutions. Bosch set up its manufacturing operations in 1953, and has grown over the years to 14 manufacturing sites and 3 development centers. The company is headquartered in Bangalore with manufacturing facilities at Bangalore, Naganathapura (near Bangalore), Nashik, Jaipur and Goa. The Bosch Group comprises Robert Bosch GmbH and its more than 350 subsidiaries and regional companies in some 60 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network are the foundation for further growth. In 2011, Bosch spent more than 4 billion Euros for research and development and applied for over 4,100 patents worldwide."

"Bosch Ltd. has reported net profit of Rs 2811.40 million for the quarter ended on December 31, 2011 as against Rs. 2105.30 million in the same quarter last year, an increase of 33.54%. It has reported net sales of Rs 20404.50 million for the quarter ended on December 31, 2011 as against Rs 18836.10 million in the same quarter last year, a rise of 8.33%. Total income grew by 10.23% to Rs 20948.30 million from Rs. 19003.50 million in the same quarter last year. During the quarter, it reported earnings of Rs 89.54 a share."

"At the current market price of Rs. 8135.50, the stock is trading at 19.19 x CY12E and 16.94 x CY13E respectively. Earning per share (EPS) of the company for the earnings for CY12E and CY13E is seen at Rs.423.91 and Rs.480.19 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 21% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 13.36 x for CY12E and 11.93 x for CY13E. Price to Book Value of the stock is expected to be at 4.22 x and 3.38 x respectively for CY12E and CY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 9356 for medium to long term investment," says Firstcall Research report.

Hold IVRCL; target of Rs 76: Nirmal Bang

Nirmal Bang has recommended hold rating on IVRCL with a target of Rs 76, in its April 3, 2012 research report.

"During the past three months, IVRCL stock has shown a significant run-up (160% from its bottom) and has achieved our earlier target price of Rs70. We have now revised our target price upwards from Rs70 to Rs76 to factor in the rise in the market price of subsidiaries IVRCLAH and HDO. However, we have downgraded our rating on IVRCL from Buy to Hold as we believe improvement in project execution and profitability would be key for further re-rating of the PE multiple and more upside in the share price. Meanwhile, developments on the Essel Group making any hostile bid for IVRCL would lead to short-term upside in the share price, which, we believe, may not be sustainable."

"The company has started FY13 with strong order inflows of Rs41bn comprising Rs32bn in the road space and Rs9bn in its power vertical (civil and structural work for NTPC power projects-Meja, Solapur & Mouda). The first road project is for upgradation of the four-lane national highway (NH-5) between Gundugolonu and Rajahmundry in Andhra Pradesh into six lanes on toll basis, with a project cost of Rs16.1bn. The other highway project is for conversion of the Patiala to Bhatinda section of NH-64 into four lanes on toll basis, with a project cost of Rs15.8bn. Both the highway projects have to be constructed within 30 months from the appointed date and the concession period for the projects is 24 years. For FY12, the company reported order inflows of Rs125bn (60% YoY) and an order backlog of Rs250bn (4.5x of FY11 revenue) as on 31 December 2011. Looking at the recent order inflow trend, we believe IVRCL will beat our order inflow estimate of Rs120bn for FY13. The Essel Group has acquired a 10.2% stake in IVRCL from the secondary market and has also informed the media about its intention to further increase its stake in the company. IVRCL's promoter, who held 11.2% in the company, is not interested in selling his stake. This has actually set the stage for a hostile takeover. Currently, the situation stands unchanged and further development of the takeover story in future would lead to short-term upside in the share price which we believe would not be sustainable."

Buy Cox & Kings; target of Rs 195: ICICIdirect.com

ICICIdirect.com is bullish on Cox & Kings and has recommended buy rating on the stock with a target of Rs 195 in its March 30, 2012 research report.

"Cox & Kings (C&K) is one of the leading and oldest (established in 1758) players in the travel & tourism industry that caters to the overall travel needs of Indian and international travellers. The company has a presence in more than 19 countries besides India through subsidiaries and JVs. Opting for the inorganic route to grow exponentially, C&K has done seven acquisitions in the past six years (including the Holidaybreak Plc. acquisition), which has made it an integrated player globally with quality products and services. With its recent HBR acquisition, we expect return ratios to improve post FY12E as it has provided synergies in terms of geographic diversification, widening its product portfolio and cross-selling opportunities, amid challenges in terms of effective integration."

"C&K has done seven acquisitions in the past six years (including HBR), which made C&K an integrated player globally with quality products and services. This series of acquisitions brought huge business volume on the book of C&K on a consolidated basis. This, in turn, increased C&K's bargaining power with vendors due to its large customer base and global presence. The overseas acquisition created value for the company with healthy growth in revenues (CAGR of 51% during FY07-11) and operating margins (i.e. at ~40%) during the same period. We foresee HBR as a good long term strategic fit for C&K as it has provided synergistic opportunities in terms of geographic diversification, widening its product portfolio and offering cross-selling opportunities. However, medium-term benefits are unlikely on account of a slowdown in UK and European region and seasonally weak first half (i.e. October-March) of HBR."

"At the CMP of Rs 161, C&K currently trades at 6.4x FY14E EV/EBITDA. The stock has traded at a two-year average band of 7-9x. This discounted valuation mainly factors in depreciating rupee as majority of C&K India's business is outbound & there is a slowdown in Europe. However, considering the steady & resilient nature of education & adventure business segment of HBR and strong growth momentum in India, we believe, current valuations overlook the long term synergy & growth potential. We have used SOTP valuation and arrived at a target price of Rs 195, in line with peer valuation (i.e. 7x FY14E EV/EBITDA), reflecting our conservative valuation approach. We are initiating coverage on C&K with a BUY rating," says ICICIdirect.com research report.

Buy Hyderabad Industries; target of Rs 430: Sunidhi Sec

Sunidhi Securities is bullish on Hyderabad Industries (HIL) and has recommended buy rating on the stock with a target of Rs 430 in its March 30, 2012 research report.

"Hyderabad Industries (HIL), a C K Birla Group was incorporated as Hyderabad Asbestos Cement in June 1946 and was renamed to the present one in 1985. HIL is into the business of producing building products, engineering goods and industrial products. Its first public issue was in 1946. HIL is the market leader in its segments. HIL markets its product AC and fibre cement sheets under the well-known brand "Charminar". HIL is also the largest manufacturer of calcium silicate, insulation blocks, pipe sections and jointing for gasketing, thereby meeting the critical needs of the fertilizer, engineering and chemical industries. It also makes aerocon prefab panels, autoclaved aerated concrete (AAC) blocks which find applications in the construction of residential quarters, malls, shopping complexes and office partitioning etc."

"During FY11, sales advanced by 2.8% to `726.2 crore but net profit fell by 43.6% to `50.6 crore. OP and NP margin stood at 13.4% and 7.0% against 22.3% and 12.7% respectively in the corresponding period last year. HIL was forced to briefly shut down its Dharuhera plant because of certain labour and regulatory issues, which resulted in decline in revenue from this segment. FY10 was an exceptional year in view of the decreased cost of production. EPS for FY11 stood at `67.4.The DER as at FY11 stood at 0.29:1 whereas the value of the gross block at `444.5 crore. During Q3FY12, sales rose 14.8% to `194.3 crore and net profit by 59.5% to `10.2 crore. (YoY). OPM and NPM stood at 10.5% and 5.2% compared to 8.5% and 3.8% respectively in Q3FY11. EPS for Q3FY12 stands at `13.6."

"From a mere roof manufacturing company, HIL has evolved into a multi product, green building products organization. It has gradually diversified from a one-product into other areas such as autoclaved aerated concrete (AAC) blocks, thermal insulation products and other products like prefabricated building panels, Hysil powder, spares and accessories etc. Over 50% of the Indian population still lives under thatched roofs (Kuccha roofing) and clay tiles. Thatched roof is not waterproof, and poses a fire hazard besides needing regular replacement. Tiled roof needs recurring maintenance and is also not safe. Hence security concern coupled with rising income level, the desire to shift from kuccha house to pucca house is increasing. Implementations of Government of India's infrastructure development projects have started gaining momentum. This together with other Government sponsored initiatives in providing homes and schools for the masses in general and the poor in particular is expected to increase demand for construction materials."

"A reasonably good monsoon expected in ensuing season and Government's continued thrust to provide adequate shelter to the rural poor by introducing programs like Indira Awas Yojna, Golden Jubilee Rural Housing Finance Scheme, Pradhan Mantri Adarsh Gram Yojna, Productive Housing in Rural Area and Rural Housing Fund will boost the demand for building products and increase the market potential for fibre cement sheets. At the CMP of `328, the share is trading at a P/E of 4.6x on FY12E. We recommend BUY with a target price of `430 at which the share will trade at a P/E of 6.0," says Sunidhi Securities research report.