STOCK RECOMMENDATION FROM NETWORTH STOCK BROKING: BUY MARG @ TARGET OF RS.256

Networth Stock Broking is bullish on Marg and has recommended buy rating on the stock with a target of Rs 256 in its May 19, 2011 research report.

RECOMMENDATION FROM ADITYA BIRLA MONEY : BUY BATA INDIA @ TARGET OF RS.490

Aditya Birla Money is bullish on Bata India and has recommended buy rating on the stock with a target of Rs 490 in its May 17, 2011 research report.

“Bata India has been rising in a well defined channel formed joining pivotal highs and lows. After a sharp run up from Rs 16 to 436 the stock had been consolidating in a range bound manner since last four weeks. Last week the stock has breached the consolidation range and resumed its uptrend indicating that prices could now head higher towards the upper band of the rising channel at 520. Weekly momentum though in over bought zone is rising thus supporting our bullish expectations.”

“The stock is trading above all the crucial moving averages (21, 55, 200) indicating that the short term trend is positive. Buy Bata India at CMP Rs 463.70 and on dips to Rs 453 for a target of Rs 490- 500 with stop placed below Rs 438 on closing basis,” says Aditya Birla Money research report. (source: moneycontrol.com)

STOCK RECOMMENDATION FROM ANGEL BROKING - BUY NIIT @ TARGET OF RS.68

Angel Broking is bullish on NIIT and has recommended buy rating on the stock with a target of Rs 68 in its May 11, 2011 research report.


“For 4QFY2011, NIIT’s results were in line with our expectations on the revenue front but were disappointing on the operational front. Revenue growth was driven by all businesses, but operational performance was dented due to the SLS business, which posted a 1,557bp yoy dip in EBITDA margin. Consolidated revenue came in at Rs324cr, up 9.8% yoy. Revenue from ILS-IT, SLS and CLS businesses increased by 6.7%, 16.5% and 9.5% yoy to Rs122cr, Rs37cr and Rs153cr, respectively. Revenue from new business grew by 27.2% yoy to Rs11.7cr. Blended EBITDA margin declined by 362bp yoy to 12.5% due to margin decline in all its business segments. EBITDA margin decline in the SLS segment was extensive at 1,557bp yoy to 7.5%. EBITDA margin of the ILS and CLS business segments declined by 205bp and 226bp yoy to 22.6% and 7.9%, respectively.”

“The hiring environment in the Indian IT sector is strengthening, as indicated by Indian IT players such as Infosys and TCS aiming to collectively hire ~1,05,000 people in FY2012. Thus, we expect ILS to record strong growth of 14% yoy in FY2012, with strengthening of the hiring environment expected to result in return in demand for vocational courses. With developed economies such as the US returning to growth, we expect the discretionary spend related to training outsourcing, learning products and managed training services to turn robust and expect 7% yoy growth in the CLS business. At the CMP, the stock is trading at EV/EBITDA of 4.3x FY2013E EBITDA, but the stake in NIIT Technologies provides for strong upside. Hence, we recommend Buy on the stock with a target price of Rs 68,” says Angel Broking research report.

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RECOMMENDATION FROM ANGEL BROKING - Buy Apollo Tyres; target of Rs 82

Angel Broking is bullish on Apollo Tyres and has recommended buy rating on the stock with a target of Rs 82 in its May 11, 2011 research report.

“For 4QFY2011, Apollo Tyres reported better-than-expected top line on a standalone as well as consolidated basis, driven by strong volume growth and higher prices. Standalone operating margin came below expectations due to a steep increase in natural rubber prices, while consolidated margin benefitted due to gain of Rs90cr on account of pension and inventory revaluations.”


“Standalone top line registered strong 34.2% yoy (23% qoq) growth to Rs1,762cr, led by higher volumes (up 14% yoy) and prices. After three straight quarters of declining volumes, the company reported higher volumes in 4QFY2011, led by pick-up in demand in the replacement segment. Operating margin declined considerably by 575bp yoy and 209bp qoq to 8.3% mainly due to the 60% yoy and 16% qoq increase in natural rubber cost. Thus, net profit recorded a sharp 43% yoy decline to Rs66cr, though sequentially it grew by 22.8%. Noticeably, higher other income and lower tax rate on account of MAT credits positively helped the company’s bottom line.”

“Consolidated net revenue grew by 27.4% yoy (15.2% qoq) to Rs2,730cr due to a 12% yoy increase in volumes and a 15.6% jump in average realisation. In 4QFY2011, revenue of South African and European operations grew by 31% and 10% yoy, respectively. Operating margin declined by 215bp yoy to 11.8%, but improved by 24bp qoq. Operating performance benefitted due to gain of Rs90cr on account of pension and inventory revaluations. Net profit grew by 9.6% yoy (59.4% qoq) to Rs193cr.”

“We remain positive on the tyre industry in view of the structural shift that the industry is going through. We expect the company to deliver a healthy revenue CAGR of 15.3% over FY2011–13E, as the production ramp up at the Chennai facility continues as scheduled. However, volatile raw-material prices are a concern, and we expect margins to remain under pressure. We estimate the company to post EPS of Rs10.3 in FY2013. We maintain our Buy view with a target price of Rs 82, valuing it at 8.0x FY2013E earnings,” says Angel Broking research report.

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