Buy stock of Yes Bank; target of Rs 469

"Yes Bank reported a strong performance for 4QFY2012. The bank’s net profit grew by 33.6% yoy to Rs 272cr, in-line with our estimates. Strong momentum in savings account deposits and maintenance of healthy asset quality were the key positive takeaways from the results. We recommend Buy on the stock."

"On a yoy basis, advances and deposit growth for the bank was below system-average at 10.5% and 7.0%, respectively. Credit substitutes portfolio for the bank, however, continued to grow at a strong pace (growth of 104.5% yoy). Savings deposits more than doubled sequentially to Rs 2,501cr, with incremental saving deposits per branch for the bank increasing significantly from Rs 1.0cr in 3QFY2012 to Rs 3.6cr for 4QFY2012. The significant traction in SA deposits helped the bank maintain its cost of funds sequentially, despite tight liquidity conditions that prevailed during most of the quarter and additional borrowings during 4QFY2012. The bank’s investment book as a proportion of interest-earning assets increased during 4QFY2012 on the back of healthy growth in credit substitutes, which led to sequentially flat yields on assets for the bank. Consequently, the bank’s NIM remained flat sequentially at 2.8%. During 4QFY2012, the bank’s non-interest income grew strongly by 26.0% qoq to Rs 266cr on account of strong growth in financial markets (up 42.4% qoq) and financial advisory (up 26.6% qoq) based fee income."

"Yes Bank has taken challenges of building a retail deposit base head-on, nearly doubling its branch network over the past 15 months to 356 branches and aggressively increasing savings rate to 7% as a smart customer-acquisition strategy. In our view, the bank is in a sweet spot, wherein retail franchise growth is likely to remain strong as large banks cede some market share to it rather than offering higher savings rates to their entire customer base. Even with retail growth prospects being stronger now, valuations at 1.8x FY2014E ABV are still cheaper than peers such as IndusInd Bank (2.4x FY2014 ABV) as well as its own historical median (2.5x over FY2007-FY2012), providing a favorable risk-return trade-off in our view. Hence, we recommend Buy on the stock with a target price of Rs 469," says Angel Broking research report.

Buy stock of FIEM Industries; target Rs 185

"FIEM Industries, has subsisting technical support from Ichikoh Industries, Japan (IOL)). IOL is a well-known name worldwide in automotive lighting, rear view mirrors & wiper blades and is a Tier 1 supplier to the major Japanese vehicle manufacturers such as Nissan Motor, Toyota Motor Corporation, Fuji Heavy Industries, Daihatsu Motor Co, Mazda Motor Corporation etc. FIEM has blue chip customers in domestic and global markets. In four wheeler segment, the clients are Tata Motors, Skoda Auto, Hyundai, Force Motors, Fiat, Chrysler, Sparex, etc. Customers in two wheeler segments are TVS, Honda, Suzuki, HMSL, Yamaha, Zadi, Piaggio, etc. The tractor clients include VST Tillers, M & M, International Tractors, HMT Tractors, Escorts, Preet Tractors and Tractors & Farms Equipment."

"FIEM has established 100% EOU at Hosur with latest technology. FIEM is trying its level best to leverage its relations with the existing customers for fulfilling their supply need in foreign markets. Its valuable customers also need components for their global requirement and trying to grab the orders and also succeeded in winning the award for global requirement of components for their customers. FIEM is not only focusing on OEMs but also approaching the top class Tier-1 suppliers, by marketing with low cost, high quality products. Exports during FY11 stood at Rs 12.5 crore."

"FIEM products under the brand name "FIEM" are well known in India for their exemplary quality and durability. FIEM continues to receive orders from its blue chip clients. The proximity of plants to its OEM customers offers logistic savings to valued customers and further enables FIEM to cut its inventory carrying costs and shorten the delivery time. At the CMP of Rs 142, the share is trading at a P/E of 8.3x on FY12E and 5.7x on FY13E. We recommend BUY with a target price of Rs 185 at which the share will trade at a P/E 7.5," says Sunidhi Securities research report

Buy stock of TCS; target of Rs 1370

"Established in 1968, Tata Consultancy Services (TCS), a member of the Tata Group is considered as the largest IT services firm in Asia based on its record of outstanding service, collaborative partnerships, innovation and corporate responsibility. TCS Ltd. is an Indian IT services, business solutions and outsourcing company headquartered in Mumbai, India. The service is delivered through its unique Global Network Delivery Model™ (GNDM), recognized as the benchmark of excellence in software development. TCS has over 2,26,751 of the world’s best-trained consultants in 42 countries. The company has generated consolidated revenues of US $8.2 billion for year ended March 31, 2011. It is the largest provider of information technology in Asia and second largest provider of business process outsourcing services in India."

"TCS Ltd has reported consolidated net profit of Rs 28949.30 million for the quarter ended on March 31, 2012 as against Rs 26229.50 million in the same quarter last year, an increase of 10.37%. It has reported net sales of Rs 132593.30 million for the quarter ended on March 31, 2012 as against Rs 101574.90 million in the same quarter last year, a rise of 30.54%. Total income grew by 28.43% to Rs.133579.50 million from Rs. 104010.70 million in the same quarter last year. During the quarter, it reported earnings of Rs 14.79 a share, registering 10.37% growth over prior year period. During the quarter, Net sales rose by 30.54% to Rs. 132593.30 million from Rs.101574.90 million in the same quarter last year and the Total Profit for the quarter ended March 2012 was Rs. 28949.30 million grew by 10.37% from Rs.26229.50 million compared to same quarter last year."

"At the current market price of Rs.1202.00, the stock is trading at 19.60 x FY13E and 16.91 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 61.31 and Rs. 71.08 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 20% and 15% over 2011 to 2014E respectively. _ On the basis of EV/EBITDA, the stock trades at 13.84 x for FY13E and 12.06 x for FY14E. Price to Book Value of the stock is expected to be at 5.66 x and 4.23 x respectively for FY13E and FY14E. 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 1370 for Medium to Long term investment,” says Firstcall Research report.

Buy stock of Sesa Goa; target Rs 212

"Sesa Goa consolidated revenue dip by ~23% Y-o-Y but still better than our expected degrowth of ~45%Y-o-Y on the back of mining ban in Karnataka impacted iron ore production. EBITDA declined by ~53% Y-o-Y more than our expectation (our estimate 50% fall). Revenue growth declined, better than our estimate: During the quarter, revenue of the company degrew by 23% Y-o-Y to Rs 27943mn in Q4FY’12 (our estimate Rs 19730mn) compared to Rs 36236mn in Q4FY’12 on the back of lower volume growth due to ban in Karnataka mining and mining lease expiration in Orissa."

"During the Q, production of saleable iron ore fell by 11%Y-o-Y to 4.9mn ton compared to 5.5mn ton of corresponding quarter of previous year where full sales contribution came from Goa. However, total saleable iron ore production declined by 4%Y-o-Y to 4.9mn ton in Q4FY12 compared to 5.1mn ton in Q4FY11. Total sales declined by 21%Y-o-Y to 5.2mn ton in Q4FY12 compared to 6.6mn ton in Q4FY11. Out of total sales, volume sales declined by 17%Y-o-Y to 4.9mn ton from Goa, 60%Y-o-Y fell at 0.2mn ton from Karnataka."

"Total expenditure of the company grew by 19%Y-o-Y as a percentage of sales to Rs 17974mn (our estimate Rs 9058mn) in Q4FY’12 compared to Rs 15052mn in Q4FY’11 out of which raw material cost, O&M expenses, employee cost and S&D cost increased by 9%, ~25%, ~32 and 61% respectively during the Q4.. Hence EBITDA declined by 52%Y-o-Y to Rs 9969mn (our estimate Rs 10671mn) in Q4FY12 compared to Rs 21183mn in Q4FY’11. PAT also fell more than expected by ~52% Y-o-Y to Rs 6963mn (our expectation Rs 8648mn) compared to Rs 14617mn in Q4FY11."

"EBITDAM fell by 3897bps to 35.6% (our estimate 54%) in Q4FY’12 compared to 58.4% in Q4FY’11. PBDTM and PBTM fell by 3344bps and 3740bps to 39.7% and 38.6% respectively on the back of higher total cost. PATM too declined to 24.9% (our estimate 42.9%) in Q4FY’12 compared to 40.3% in Q4FY’11. We value the company based on SOTP valuing based on conservative approach) its core operations on a FY13 EV/EBITDA multiple of 3x (earlier 4x) at Rs 127 and b) Cairn Investment based on market cap (discounted at 25%) at Rs 113. At our revised valuation our target price is maintained at Rs 212/share (adjusted Debt), the stock offers a potential upside of around ~15% from the current level; we recommend ‘Buy’ rating on the stock," says R K Global research report.

Buy IDBI Bank; target of Rs 131

“IDBI Bank, net profit up 23.15% to Rs. 2,032 Crore (previous year Rs. 1,650 Crore). NII grew by 6.46% to Rs. 4,545 Crore (previous year Rs. 4,269 Crore). Business up 16.02% to Rs. 3,91,651 Crore (previous year Rs. 3,37,584 Crore). Deposits increased by 16.63% to Rs. 2,10,493 Crore (previous year Rs. 1,80,486 Crore). Advances up by 15.32% to Rs.1,81,158 Crore (previous year Rs. 1,57,098 Crore). Total assets grew by 14.78% to Rs. 2,90,837 Crore (Previous year Rs. 2,53,377 Crore)”

“The bank’s assets quality is still the matter of concern, the NNPA and GNPA of the bank increased by 55 and 73bps YoY to 1.61% and 2.49% respectively. Capital Adequacy Ratio (CAR) stood at 14.58%. The Board of Directors has declared Final dividend of Rs 1.50 per share for the financial year 2011-12. At CMP Rs 103 the stock is trading at a P/ABV of 0.8x and 0.7x for FY13E and FY14E respectively. We have valued the bank at 0.9x on FY14E ABV of Rs. 145, yielding a potential upside of 27% and recommend "BUY" rating for a target of Rs. 131 (12-15 months),” says Magnum research report.

Buy Gujarat Gas; target of Rs 397

“Gujarat Gas Company, GGCL reported results which were broadly inline with our estimates. Top line for the quarter stood at Rs7.2bn, growth of 36.7%YoY, mainly on better realisation led by recent price hike in across the segment. EBITDA during the quarter was at Rs0.8 bn, decline of 30% YoY. During the quarter EBIDTA margin increased by 605bps QoQ and decline of 1005bps YoY to 10.5%, mainly due to high cost of raw material especially spot RLNG. Consequently company reported net profit of Rs.0.65bn, a decrease of 10.4% YoY. Natural gas volume sold during the quarter was 304mmscm, flat on YoY and decline of 3.2% sequentially.”

“Average sales realisation stood at Rs.23.8 /scm, growth of 38.6% YoY and 15% QoQ, led by hike in selling prices of Industrial Retail (from Avg. Rs.22/scm to Rs.24 /scm) and CNG segment (from Rs. 40.25/kg to Rs 43.9/kg). Current selling price of CNG stands at Rs.49.9/kg. During the quarter cost of gas (RM) has increased by 56.2% YoY and 7.6% QoQ to Rs.19.6/scm resulting in gross margin contraction of 9.1% YoY to Rs.4.2/scm, mainly due to depreciation of rupee which impacted the cost of gas. Also gross margin on QOQ has improved from Rs.2.5/scm to Rs.4.2/scm, on the back of hike in selling price across all the segments. However we believe margins would start picking up from Q2 CY12 onwards on the back of recent increase in prices of Industrial and CNG segment and softening in LNG prices currently to $13/mmbtu from $17-18/mmbtu earlier. Based on the agreement with the GSPC Gas Company will transfer its gas distribution assets in Vapi to GSPC gas in exchange for GSPC Gas CNG assets in Bharuch. Also GSPC gas will pay Rs.80-90mn as net consideration. Company has 30km pipeline infrastructure which incurred a total capex of Rs254mn. As of now this asset has negligible contribution towards revenue and profitability front. Overall deal is positive for company as swap of this asset will increase the total area under its operation in Bharuch. The company will take minimum six months to startup the operation in this area after getting the necessary approvals and other arrangement.”

“During the quarter company has faced margin pressure backed by high cost of RLNG, which constitute of almost 35% of the total raw material consumption. However we believe margins would start picking up from Q2 CY12 onwards on the back of recent increase in prices of Industrial and CNG segment and softening in LNG prices currently to $13/mmbtu from $17mmbtu earlier. However the recent news on proposed cap on gas marketing margin which is to be decided by PNGRB would keep the stock under pressure until any clarity emerges. Given the correction in the stock, we change our reco from Accumulate to Buy. Also on the basis of revised estimates we revise our TP to Rs 397, currently the stock trades at 12.3x CY13E EPS and 2.7x P/BV,” says Emkay Global Financial Services research report.

Buy Alembic Pharma; target of Rs 91

“For 4QFY2012, Alembic Pharma’s (Alembic) performance on the top-line front came in-line with our expectations. However, the company’s performance on the bottom-line front was below our expectations, on account of lower-than-expected OPM. However, we maintain our Buy view on the stock.”

“For 4QFY2012, Alembic reported revenue growth of 14.9% yoy to Rs338cr, with domestic formulation business growing by just 17% yoy. However, the exports segment grew by only 12.5% yoy, because of the decline in the international generics segment �" a major contributor to the exports segment. OPM for the quarter grew to 11.6% from 9.0% in 4QFY2011, though it came in lower than our expectations. During the quarter, the company’s net profit increased by 97.9% yoy to Rs20.3cr, below our expectations. Net profit growth was primarily driven by revenue growth and OPM expansion during the quarter.”

“Alembic’s growth and profitability profile has improved post the restructuring carried out by management. Over FY2012-14, we expect the company to post a CAGR of 13.9% and 14.6% in its sales and net profit, respectively. At the CMP, the stock is trading at attractive valuations. Hence, we maintain our Buy view on the stock with a target price of Rs91,” says Angel Broking research report.

Buy TCS; target Rs 1276

"Tata Consultancy Services (TCS), reported a modest set of numbers (for 4QFY2012), in-line with street’s expectations on the revenue and operating fronts. Management sounded confident of growing higher than the industry and expects FY2013 to be a normal year (as against Infosys, the guidance numbers of which indicated growth to be higher in 2HFY2012). Also, management indicated that revenue from BFSI will pick up from 1QFY2013 and signed three of the six large deals in the BFSI industry during the quarter. TCS continues to remain our preferred pick along with HCL Tech in the IT pack."

"For 4QFY2012, TCS posted revenue of US$2,648mn, up 2.4% qoq, on the back of volume growth of 3.2% qoq. However, the company’s pricing declined by 1.9% qoq. In INR terms, revenue came in at Rs 13,259cr, up 0.4% qoq. EBITDA and EBIT margin declined by 149bp qoq and 155bp qoq to 29.5% and 27.7%, respectively, due to increased SG&A expenses and INR appreciation against USD, which overshadowed the positive impact due to higher productivity. PAT for the quarter came in at Rs 2,932cr, aided by other income of Rs 108cr vs. Rs 92cr loss in 3QFY2012."

"Management indicated that it will hire 50,000 gross employees in FY2013 and has already extended offers to 43,600 campus graduates, which is a healthy number and gives confidence about the demand environment being witnessed by the company. TCS bagged six large deals in 4QFY2012. Management sounded confident of surpassing Nasscom’s industry growth guidance of 11-14% yoy for FY2013. Over FY2012-14E, we expect TCS’s revenue to post a 15.4% (USD terms) and 16.5% (INR terms) CAGR. The company has announced wage hike of 6-8% for offshore employees and 2-4% for onsite employees. On the EBITDA and PAT front, we expect the company to post 14.9% and 14.2% CAGR over FY2012-14E. At the CMP, the stock is trading at 14.9x FY2014E EPS. We value TCS at 18x FY2014E EPS of Rs 70.9 with a target price of Rs 1,276 and maintain our Buy rating on the stock," says Angel Broking research report.

Hold HCL Technologies; target Rs 535

"HCL Technologies (HCLT), India's fourth largest IT services exporter with services spanning pure software services as well as IT-enabled services reported ~1% sequential de-growth in revenues to Rs 52,156 mn but revenues grew ~2.5% in USD terms to USD1,048 mn for the third quarter ended Q3FY’12. Software services revenues de-grew ~1.6% to Rs 37,183 mn, Infrastructure services revenues grew ~2% to Rs 12,515 mn and BPO revenues grew ~3.15% to Rs 2,458 mn. Europe and rest of world led the growth among the geographies and Energy-Utilities-Public sector, Media, publishing & Entertainment and Healthcare in the vertical in USD terms."

"HCL Tech. has reported revenues close to our estimation. Our revenue estimation of 51,728 mn stood in a variance of ~1% from its actual number Rs 52,156 mn. HCL has continued to demonstrate superior financial performance backed by a balanced business portfolio. The revenues this quarter are up ~2.5% while EBIT is up by ~8.6% over the last quarter. For 12-month period ended 31st March’12, USD revenues at US$4,035 mn grew by ~22%, EBIT at USD 618 mn grew by ~34% and GAAP EPS (diluted) at USD0.62 grew by ~38% over the corresponding period last year. A key strategic shift in the global IT Industry has been the leveling of the playing field between the Indian Origin Service Providers and the Global MNCs. It is encouraging to note that HCL has continued its growth trajectory even in this environment thanks to its globally competitive business model which is emerging as an attractive alternative to enterprises business worldwide. HCL added 52 new clients (57 QoQ) during the quarter taking the total active clients to 516 clients (516 QoQ). Revenues from top five clients was up 20bps to 16% (4.5% growth LTM), top ten clients revenue at 24.3%, up 10bps (3.5% growth LTM) and top twenty clients same at 33.9% (~3.2% growth LTM)."

"OPM stood at ~17.1% due to 284bps increase in direct costs to ~68.07% of sales and the resultant operating profits were down by ~5% from our expectation of Rs 42,110 mn. Operating margins were up by 110bps to 18.4% partly on account of 57bps decline in S, G& A costs to ~14.16% of sales and 50bps fall in direct expenses to 67.45% of sales and higher blended utilization excluding trainees. Net profit rose ~25% to Rs 6,026 mn, while NPM stood at ~12%, with an expansion of margin at 100bps. The recent outperformance that HCL Tech has been able to put up has given us the conviction that it is only a matter of time before HCL Tech is also considered a top-league player. At CMP, the stock trades at a P/E & P/BVPS of ~11.6x and ~3.4x of FY’13E EPS & BVPS. We re-rate HOLD, re-valuing to Rs 535 from our earlier TP of Rs 475 (a potential upside of ~7% from current levels), factored over a P/E & P/BVPS of ~12.1x and ~3.6x using FY’13E EPS of Rs 44 & BVPS of Rs 148. However, potential of strong upsides are limited in current frame," says R K Global research report.

Accumulate IDBI Bank; target Rs 117

"IDBI Bank reported a healthy performance for 4QFY2012. Net profit grew by 49.3% yoy to Rs 771cr, above our estimates, primarily due to lower provisioning expenses than estimated by us. Improvement in asset quality and NIM were the key highlights of the result. The bank’s loan book witnessed significant traction in 4QFY2012 on account of meeting year-end targets (particularly priority sector lending). The bank’s advances grew by 16.0% qoq (up 15.3% yoy) and deposits grew by 18.8% qoq (up 16.6% yoy). Growth in current and savings accounts was healthy at 33.6% yoy and 36.4% yoy, respectively. CASA ratio as of 4QFY2012 stood at 24.1% (19.7% in 3QFY2012). The bank’s NIM expanded by 18bp qoq during 4QFY2012 on account of lower cost of funds (down 26bp sequentially), primarily due to higher CASA floats (CA deposits up 77.4% qoq)."

"The bank relies heavily on bulk deposits for its funding (~55% of overall deposits as of 4QFY2012); however, the bank rolled over most of these deposits during January 2012 and escaped the high costs that prevailed during most of 4QFY2012. The bank’s commission-based fee income increased sharply during 4QFY2012 by 94.3% qoq (up 24.9% yoy), as the bank realized pending fee accruals (processing and syndication-based fee income) that got approved in 4QFY2012. For 4QFY2012, IDBI Bank’s asset quality surprised positively with slippage ratio declining to 1.0% in 4QFY23012 from 3.1% in 3QFY2012. Consequently, provisioning cost declined sharply by 32.6% qoq in 4QFY2012 to Rs 274cr (Rs 406cr in 3QFY2012). The bank restructured ~Rs 1,500cr worth of accounts during 4QFY2012, of which Rs 763cr relates to restructuring of Air India."

"Considering the bank’s healthy performance in 4QFY2012, we have lowered our provisioning expense estimates for FY2013 by 8.3% and increased our bottom-line estimates by 12.6%. We value the stock at 0.7x FY2014 ABV and, hence, recommend Accumulate on the stock with a target price of Rs 117,” says Angel Broking research report.

Buy Innoventive Industries; target Rs 169

"Innoventive Industries (IIL)’s engineering expertise in metallurgy, machining and forging and constant focus to develop cost-efficient solutions has enabled it to optimize resource use and effect process and product improvements, leading to cost competitiveness. IIL’s ability to do high product customization and its own inhouse tool room facilities has given it the nimble-footedness to deliver on stringent client requirements with fast turnaround time. This is leading to marquee customer addition across IIL’s verticals at a brisk rate. Going forward, exports would drive incremental growth. We expect exports to touch ~40-50% by FY14 from the current ~24%. Weak rupee outlook for the next few quarters would help too."

"IIL acquisition strategy revolves around (1) addition of domestic companies manufacturing niche products (2) buying out specialty trading houses in Europe / US to drive better utilisation of its expanding domestic capacity and earn distributor margins. Acquisition of Sankalp Forgings in India for the OCTG portfolio and Salem Steel in the US are part of this broad strategy. IIL’s shared equity ownership and organizational structure is akin to service sector companies - a rare thing in Indian manufacturing. The promoters are first generation technocrats with varied and rich experience in the industry. In the development of IIL as a niche products company exploiting the global cost cutting paradigm and IIL’s smart acquisition strategy, Mr. Chavan has shown good business vision and acumen. We believe these characteristics are essential to sustain growth and competitiveness and for transformation of a small business to a reasonable size business."

"CEW tubes, OCTG (Oil Country Tubular Goods) and membrane strips provide highly profitable growth prospects for IIL. We expect IIL’s revenues and profits to grow at a CAGR of 15.8% and 32.8% to Rs 11.0bn and Rs 1.3bn respectively over FY11-FY14E. We value IIL on a SOTP basis. Our March 2013 fair value for IIL comes to Rs 169 per share, which implies a potential upside of 43.8%. We, thus, initiate coverage on Innoventive Industries Ltd. (IIL) with a BUY rating," says Aditya Birla Money research report.

Sell Syndicate Bank

Sukhani told CNBC-TV18, "Syndicate Bank has made a bearish head and shoulder pattern, broken down below Rs 100 and there seems to be no reason to expect that this will be different, the chances are that it will come down to Rs 85 eventually which is a target. So Syndicate Banks breakdown yesterday tells us that there is much more downside."

He further added, "F&O can do a number of unusual things but within that caveat I think there is much more benefits in going short in most of these stocks than in going long. Syndicate Bank is a sell and any number of midcap stocks have made those distribution patterns and broken down."

"I would say the same of an Axis Bank because at Rs 1100 it’s made almost a picture perfect descending triangle and come down from that. That gives a target of Rs 950 for it. Again the same thing, these distribution patterns have some meaning. It’s very unlikely that 100 or 500 midcap stocks show a distribution pattern, breakdown and one fine morning revert back and reverse and don’t continue and don’t give a follow through. So, now there is a very clear message in the market, bands are breaking down, tracking down and that’s why Axis comes in the list."

Hold Coromandel Int; target of Rs 286

“Coromandel International reported revenues of Rs 27.5bn, 133% yoy marginally above est of Rs 25.6bn. Total fertiliser volumes for the quarter stood at 913000mt (incl. complex & urea imports), while complex fertiliser volumes stood at 733,000mt (incl. imported complex fertiliser excl. MoP). Own manufactured sales increased by 13%yoy to 473,000 mt in Q4FY12. Volume growth is mainly driven by company’s strategy to clear inventory due to drop in subsidy rates effective Apr’12.”

“Coromandel reported EBITDA of Rs 1.7bn, 150% yoy marginally lower than est due to lower margins of 6.1% against est of 7.0%. EBITDA has been adjusted for Rs 100mn loss on sale of fertiliser bonds. Despite EBITDA being marginally lower than est, APAT of Rs 770mn is significantly lower than est of Rs 1.05bn due to higher interest outgo & lower other income. Interest cost increased by 130%yoy to Rs 504mn due to increase in working capital loans. AEPS for the quarter stood at Rs 2.7 against est of Rs 3.7. Aggressive inventory clearance is followed by higher trade discounts and extended credit periods offered to debtors. It has adversely affected working capital requirement with increase in shrot term borrowings and debtors. With higher interest cost, we have tweaked our est for FY13 downward by 5%.”

“Though the company has posted strong topline growth this quarter due to aggressive inventory clearance, we remain cautious with expected pressure on topline growth in subsequent quarters. Availability of phos acid still remains a concern while price negotiation for phos acid is yet to be finalised for FY13. With pressure on agrochemicals business (Sabero Organics) we maintain HOLD rating with target price of Rs 286,” says Emkay Global Financial Services research report.

Hold TCS; target of Rs 1290

“TCS came out with their results which were inline with our expectation both on the topline as well as bottomline front. Revenues came at Rs.13259.3cr (a growth of 0.4% QoQ) while net profit came at Rs.2894.9cr (up by 3.3% QoQ). Volume growth was healthy at 3.2% which is similar to what was achieved in the previous quarter. Constant currency realization saw improvement close to 1% in Q3; however the appreciating rupee had a negative impact of ~1.9%.”

“Though TCS saw constant currency realization improve by close to 1% in Q3, the appreciating rupee had a negative impact of ~1.9%. EBIT thus declined by ~155bps. A lower utilisation of 80.6% v/s 82.0% in Q3 also impacted margins. With rampups expected in projects, the utilisation rate is expected to improve in coming quarters. Though TCS witnessed healthy growth in most of its verticals, BFSI however remained largely flat in Q4. The management attributes this to delay in a few discretionary projects that were expected to kick in. They however allayed fears of any down-turn in this segment by making it clear that they have already started to see ramp-ups in ongoing projects and the delayed deals is also expected to get started soon. Deal signing momentum in BFSI also remained strong with 3 deals signed in Q3 and hence they believe that there is no major scare in this segment and a healthy growth can definitely expect in FY13E. The management also indicated that the worst is over for the ailing telecom vertical. Their telecom deal basket has improved considerably in the last two quarters and hence going ahead it will also see healthy growth.”

“Geographically, both US, Europe is expected to do well in FY13E. The TCS management unlike the Infosys management executed confidence and indicated that they will do better than the 11- 14% industry growth given by NASSCOM. This came as a huge sigh of relief for the market and vindicated our belief that Infosys is suffering from ‘portfolio issues’ and the ills that are plaguing Infy currently cannot be generalized to the sector as a whole. The TCS management further indicated that a number of deals are getting ramped-up and they have infact not seen any ramp down so far in their deal portfolio. Their client mining also remained strong with their $50 and $100mn clients growing by 4 each in Q3.”

“We believe the ‘Infy-TCS valuation debate’ is over atleast for now as TCS has marched ahead of Infy with its inline Q4 result. The fact that TCS expects their revenue to be better than the industry compared to Infy’s lower than the industry makes us believe that the valuation difference is here to stay for some time. It was also a relief to see the management much more confident than the last quarter. Therefore, though we maintain our PE multiple of 21x for TCS for its FY13E EPS, we however reduce our profit estimates, as we believe it will have to endure higher cost pressure compared to our earlier estimate. We thereby reduce our target price to Rs.1290 from Rs.1340 per share and reduce our ‘BUY’ call to ‘HOLD’ on the stock. We also introduce FY14E estimates,” says Arihant capital markets research report.

Hold M&M Financial; tgt of Rs 756

“Mahindra and Mahindra Financial Services Ltd. (M&MFSL), the preferred provider of financing services in the rural and semi-urban areas recorded whopping 45% profitability growth YoY exceeding expectations at Rs. 228crs for Q4 on the back of strong core income growth and lower provisions driven by the traction in rural sales and the vehicle finance disbursements. The full year PAT also observed strong growth of 34% at Rs. 620 crores coupled with 37% annual increase in Assets under management (AUM) to Rs. 20643 crs owing to growth in addressable market and pick-up in economic activity.”

“MMFSL recorded robust disbursement growth of 35% for FY12 backed by continued strong performance in vehicle and tractor segment (together contributing 46% to the total AUMs) in rural and semi-urban markets. While the asset financing for the cars and UVs was maintained, the financing of CVs and construction equipment segment witnessed strong growth. We expect the company to clock loan growth at 30% CAGR for the period FY12-14E. The margins for the full year have come down to 10.3% in FY12 from 11.7% in FY11, while sequentially the NIMs improved for Q4FY12 on account of increase in lending rates by the bank and securitized earnings. However, going ahead, we do anticipate margin pressures with the reversal in rate cycle.”

“The Company successfully maintained a low NPA rate and controlled delinquencies on the back of strong recoveries. Normally, the asset quality performs much better in the fourth quarter because of huge collection drive and year-end pressures. The GNPAs came down to 3% in Q4 from 4% in the corresponding quarter previous year and the credit costs fell sharply by 71% to Rs 14crs on sequential basis. On conservative side, we factor in rise in NPLs owing to macro-economic concerns. The provision coverage at the year-end remained strong at 78% but down from 86% a year before. The strengths of the company lie in the buoyancy in volumes in rural market and automobile financing market, diversified product mix and increase in dealerships. The earnings momentum going ahead is largely dependent upon continued spending by the Govt. and monsoons. We continue to remain less aggressive wrt growth owing to monsoon contingency and likely decent in return ratios and would prefer to wait for meaningful earnings growth with quality for further rerating. Therefore, we maintain HOLD rating on the stock with Target price of Rs.756, valuing the company at 2.1X P/ABV FY13E,” says Arihant capital markets research report.

Hold Rallis India; target of Rs 120

“Rallis India reported consolidated revenues of Rs 2.2bn, -7% yoy, lower than est of Rs 2.8bn . On a standalone basis, revenues degrew by 14% yoy to Rs 2.0bn lower than est of Rs 2.6bn. Metahelix reported revenues of Rs 166mn during the quarter. Consol topline degrowth of 7% yoy is the first instance in the last 9 quarters when Rallis has reported degrowth in revenues. Standalone revenues degrew by 14% yoy (incl. Dahej). We believe pressure on farmers’ profitability due to declining farm incomes has shrunk the farmers’ kitty resulting into reduced consumption of agrochemicals.”

“Rallis reported consolidated EBITDA of Rs 124mn, -68%yoy, significantly lower than est of Rs 427mn. Consol EBITDA margin at 5.7% was lower than our est at 15.4%. On a standalone basis, Rallis reported EBITDA of Rs 132mn, -65% yoy with margins of 6.6% (lower than est of 16%). Consol APAT for the quarter stood at Rs 30mn, -86% yoy. APAT has been adjusted for Rs 44mn of FX gain & 71mn of cessation cost credit. Rallis declared final dividend of Rs 1.2/share. During the quarter, Rallis acquired additional stake of 15.43% in Metahelix taking its tally to 75.64% Rallis has entered into an agreement to acquire majority stake of 51% in Zero Waste Agro Organics Pvt Ltd (ZWAOPL), a Maharashtra based organic manure and soil conditioners manufacturing company. The acquisition is an all cash deal for Rs 290mn. Rallis will also have exclusive sales & marketing arrangements with ZWAOPL for domestic and int’l markets. Management expects revenue from this business to exceed Rs 1bn cumulative over 5 year period.”

“Shrinking farmers profitability due to declining farm incomes has impacted the consumption of agrochemicals in the domestic market. Rallis’s topline degrowth clearly indicates that there is pressure in the domestic market in the current scenario and onset of monsoons this kharif season is going to be a very crucial determinant of the future ahead. Maintain HOLD with target price of Rs 120,” says Emkay Global Financial Services research report.

Sell State Bank of India Future; target of Rs 2160

“SBI on the daily chart has been consolidating with lower tops and lower bottom and short term support for the stock placed at Rs2275 which was broken convincingly and below same the downward momentum is expected to aggravate further. Despite the repo rate cut by RBI, SBI has failed to react positively and close at days high which exhibits inherent weakness in the counter and stock has decent potential to slide down to Rs2150 in the near term. We recommend going short on SBI May Futures above Rs2,230 with stop loss of Rs2,265 for Target of Rs2,160. (Duration 7 days),” says IIFL research report.

Hold TCS

Singal told CNBC-TV18, “For TCS, our target price is Rs 1,150 so price is quoting almost there but naturally because this company in particular has done well within the sector then definitely there is always a buying inflow because people move within this sector to a specific company and it can inch up further. Our target price is at Rs 1150 with a hold rating actually.”

He further added, “Telecom sector has been into doldrums and each stock because of its own specific reasons �" like Bharti Airtel because of its Africa assets, Idea Cellular because of 2G license cancellation issue or RComm because of its low RoE tower business has been into issues. So, these stocks are really not giving any structural follow up buy or sell. So we are not really keeping good eye on this sector from a investment or trading point.”

Hold Larsen & Turbo

Vijay told CNBC-TV18, “Larsen & Turbo (L&T), one of their largest projects and the market is skittish that it reacts to any news, any assemble of news or source-based news even not factual news. The market just pulls the stock down especially the largecaps because it’s so easy to built short positions in them and then go out a couple of days later and make some profit.”

He further added, “The business conditions for L&T are improving in the sense in their two main verticals the surface transportation and in electrical equipment. One is seeing some investment traction. For example the NHAI has supposed to have issued more orders in the last two months than it has done ever in a 2 months period and even in power the Transmission and Distribution (T&D) segment is seeing more order flow after the state governments are bailing out the electricity boards. So a broad environmentally, the big negative that L&T had that it was- the Indian infrastructure was a disaster is slowly going away. So, I don’t see any great reason to sell L&T, but I would rather look for this quarter’s results and what the management is saying before I would like to increase my exposure to the stock. So as of now my view is stay put on L&T.”

Exit Idea Cellular on upside

Kulkarni told CNBC-TV18, "Incase of the telecom stocks Idea has been consistently falling from the levels of Rs 100-101 right upto Rs 75-76. Does it make a case to go long because of today’s recovery? No, I am afraid not because the weekly chart structure is quite disturbing and I would expect further selling pressure incase of Idea Cellular. So we are expecting that stock may go sub Rs 70 levels over the next 3-6 weeks going forward. So the recommendation would be that any rise in case of Idea Cellular should be used to move out of the stock."

He further added, " Bharti Airtel on the other hand has a support at around Rs 300 if it manages to close above Rs 300. If that does not sustain then you may see the levels of Rs 280 being tested once more in case of Bharti Airtel."

Exit Sesa Goa around Rs 200-210

Thunuguntla told CNBC-TV18, "Stay invested in Sesa Goa and whenever next wave of bounce comes maybe around Rs 200-210 or so book the profit and move on because Sesa Goa is facing a lot of challenges on the corporate governance side and lot of litigations related issues. So it may not be an exciting time to stay invested but whenever the next bounce comes try to exit."

The company's trailing 12-month (TTM) EPS was at Rs 39.50 per share. (Dec, 2011). The stock's price-to-earnings (P/E) ratio was 4.62. The latest book value of the company is Rs 133.34 per share. At current value, the price-to-book value of the company was 1.37. The dividend yield of the company was 1.92%.

Stay invested in TCS

Thunuguntla told CNBC-TV18, "One can easily keep TCS. I am sure one thing is going to happen is big hands and who have interest into Infosys earlier, I am sure they would like to re-change their portfolio into the TCS. I think it is appearing that from the posted image of IT industry of India Infosys will be giving it up to TCS. I think TCS will be clear beneficiary, you can easily stay invested."

The company's trailing 12-month (TTM) EPS was at Rs 38.68 per share. (Mar, 2012). The stock's price-to-earnings (P/E) ratio was 30.82. The latest book value of the company is Rs 155.61 per share. At current value, the price-to-book value of the company was 7.66. The dividend yield of the company was 1.17%.

Buy Hexaware Technologies

Sukhani told CNBC-TV18, "I track Hexaware closely because stocks that go on making one way moves are very attractive to traders. Hexaware remains a buy at every opportunity. The only reason I am asking traders to wait for small dips is you would get a better price otherwise I think Hexaware’s upside is still continuing and there is much more room ahead."

He further added, "I have traded in LT Foods & Kohinoor Foods many times and invariably lost money. The strategy is please don’t listen and please don’t watch them, please don’t catch them. They don’t work out. They move for one day and then they stay there for weeks, month altogether."

Sell Infosys on rally

Sukhani told CNBC-TV18, "I wouldn’t touch Tata Consultancy Services (TCS) for buying. It will come down quite dramatically and that will be the time for us to go long in it and for investors to buy it. HCL Technologies is the only one among the four where a buy is possible.”

He further added, “Infosys remains a sell on rallies. Technically, Infosys stopped falling and then hold on for not just a couple of days, for week altogether. So since that process has not started, I cannot make a call where it will stop. There is no sanctity to Rs 2,200. Earlier we used to talk about Rs 2,200 for State Bank of India (SBI), it fell all the way to Rs 1,700. So it is quite possible Infosys can follow the same track."

Buy Ambuja Cements; target Rs 205

“Ambuja Cements, net sales for Q1CY12 grew by 19.7% Y-o-Y to Rs 26,609 mn. This was mainly driven by higher volumes and better realisation. EBIDTA margins for Q1CY12 stood at 29% showing an increase of 80bps on Y-o-Y basis and 995bps on Q-o-Q basis. Net profit for Q1CY12 declined by 23.4% Y-o-Y to Rs 3,122 mn, the decline was attributable to change in depreciation method for fixed assets pertaining to captive power plant from Straight Line Method (SLM) to Written down value method (WDV). As a result of this, company has recognised an additional depreciation of Rs 2,890.8 mn. Amount relating to earlier years has been disclosed as exceptional item amounting to Rs 2,791.3 mn.”

“Blended realisation of cement per bag for Q1CY12 stood at Rs 220/bag showing a growth of 9.0% Y-o-Y. This was mainly on account of strong demand in the regions where Ambuja gets its major chunk of revenue (North (40%), West (40%) and East (20%)). Sales volumes for Q1CY12 grew by 9.8% on Y-o-Y basis to 6.05 mn MT. EBIDTA margins for Q1CY12 stood at 29% showing an increase of 80bps on Y-o-Y basis and 995bps on Q-o-Q basis. This was mainly on account of more than proportionate increase in realisation as against an increase in cost of production. On per bag basis the cost of production for Q1CY12 rose by 7.8% Y-o-Y to Rs 156, whereas realisation grew by 9% Y-o-Y to Rs 220. The power & fuel costs which accounted for 33.2% of the total expense rose by 18.5% Y-o-Y for Q1CY12 on per bag basis and the freight costs per bag also rose by 7.7% Y-o-Y for Q1CY12.”

“We maintain our target of Rs 205.7 arrived based both on EV/MT and EV/EBIDTA on a differential weightage, with a BUY rating on the stock. For the quarter ended March 31, 2012, Ambuja has reported topline growth of 19.7% which is slightly below our estimates of 22.5% Y-o-Y. However, at the EBIDTA level company has reported better numbers owing to lower increase in power & fuel costs and transportation costs as compared to ACC. Demand for cement is expected to remain strong in Q1FY13; however, owing to recent intervention by CCI on cartelisation we don’t expect a strong up tick in cement prices in Q1FY13. We believe that RBI’s move (50bps cut in repo) might trigger demand from housing and industrial segment in the near term. Also projects like DMIC (Delhi Mumbai industrial corridor) coupled with encouraging data on project implementation under public private partnership should help cement companies in the long run,” says GEPL Capital research report.

Buy HDFC Bank; target Rs 635

“HDFC Bank, net Profit after tax for the current quarter increased 30.4% YoY (1.6% QoQ) to Rs 14530.8 mn from Rs 11147.1 mn for Q4 FY11. The growth in PAT on YoY basis, despite higher operating expenses (driven by aggressive branch addition), was mainly driven by 19.3% YoY (32.0% QoQ) increase in the NII at Rs 33883.1 mn (led by robust growth in advances 22.2% YoY and 0.6% QoQ) and 18.8% YoY (5.1% QoQ) increase in other income. The main contributor to other income for the quarter was fees & commissions of Rs 12373 mn, which was up by 23.7% YoY. Besides this lower provisioning (decline of 30.8% YoY and 9.4% QoQ) during the quarter led by lower slippage further aided growth in net profit. Cost / Income ratio during the quarter increased by 175 bps YoY (298 bps QoQ) to 50.6% driven by aggressive branch and ATM expansions during the quarter.

Net Interest Margins during the quarter registered an increase of 10 bps sequentially to 4.2% on the back of higher average CASA balance during the quarter (the bank was the collecting banker for issuance of tax-free bonds for some of the issuers in Q4 FY12). Added to this the bank’s continued focus on retail lending due to attractive yields and run down of low yielding corporate loans has further aided in margin expansion.

Total business of the bank registered a robust growth of ~20.0% YoY (3.6% QoQ) as at Q4FY12. Deposits grew by 18.3% YoY (6.1% QoQ), whereas Net Advances grew by 22.2% YoY (0.6% QoQ). The advance book grew on the back of healthy 34% YoY (7% QoQ) growth in the retail book, while corporate advances book grew 11% YoY (decline of 6% QoQ). The share of retail book in the total advances improved to 54.8% against 50.1% YoY. Going forward, management expects corporate loan book to pick up pace and has guided for a credit growth of 19-22% for FY13.

Asset quality continued to remain stable with gross NPA at 1.01% (1.05% YoY, 1.03% QoQ) and net NPA at 0.18% (0.19% YoY, 0.20% QoQ). The bank’s slippage ratio for FY2012 was low at 0.98% (1.13% in FY11 and 2.66% in FY10). Restructured assets were also stable at 0.4% of gross advances in Q4FY12. Provision coverage based on specific provisions was at 82.4% higher by 207 bps sequentially despite lower provisioning during the quarter mainly led by lower slippages. Going forward, the management expects credit costs to rise from the current levels. The bank had opened 343 new branches in this quarter taking the total number of branches to 2544. The bank plans to add ~250 branches each year going forward.

The banks consistent strong performance despite challenging times reflects its strong and dynamic business model. We estimate HDFC Bank to report an EPS CAGR of 28.5% over FY11-FY14E. ABV is estimated to grow at 19.3% CAGR during the same period. The bank’s strong asset quality, superior return ratios, strong asset growth and adequate capitalization bodes well for its future growth. HDFC Bank has always commanded a premium valuations visà- vis its peers due to its track record of consistent growth in earnings and assets. The stock currently trades at 3.7x FY13E ABV and 3.0x FY14E ABV. Over the last five years, the bank has traded at a mean multiple of 3.5x its one year forward ABV. We believe the bank to continue to command premium valuations going forward. We retain our BUY rating with a March 13 target price of Rs 635.9 implying an upside of 15.4% from current levels,” says Aditya Birla Money research report.

Buy Reliance Industries; target of Rs 872

“For 4QFY2012, Reliance Industries (RIL) reported 17.2% yoy growth in its top line. However, EBITDA and PAT declined by 33.3% yoy and 21.2% yoy, respectively, due to a decline in KG-D6 gas production and lower gross refining margins (GRMs).”

“RIL’s net sales increased by 17.2% yoy to Rs 85,182cr, in-line with our estimate of Rs 84,669cr. However, EBITDA decreased by 33.3% yoy to Rs 6,563cr on account of lower profits from all its three main segments. GRM stood at US$7.6/bbl in 4QFY2012 compared to US$9.2/bbl in 4QFY2011 and US$6.8/bbl in 3QFY2012. Production from KG-D6 stood at 35mmscmd in 4QFY2012 compared to 41mmscmd in 3QFY2012 and 51mmscmd in 4QFY2011. Other income increased by 150.3% yoy to Rs 2,295cr and depreciation expenses decreased by 21.5% yoy to Rs 2,659cr. Hence, despite the 33.3% decline in EBITDA, PAT decreased by only 21.2% yoy to Rs 4,236cr (slightly above our estimate of Rs 4,177cr).”

“During 4QFY2012, RIL finalized its plan to set up a petcoke gasification plant for a capex of US$4bn. The company also downgraded its KG-D6 reserves by 12-15% due to reservoir complexity. RIL’s refining and petrochemical segments’ profits declined during 4QFY2012. Going forward, although there are some concerns on the KG basin gas output, we believe RIL along with BP will optimize its producing blocks in KG-D6. Moreover, the stock is currently trading at a PE of 11.1x FY2013E and 10.4x FY2014E, compared to its past five-year trading average of 17.0x forward PE. Thus, we maintain our Buy recommendation on RIL with an SOTP target price of Rs 872,” says Angel Broking research report.