It has revised its rating from "Hold" to "Buy" with a revised 12-month target price is Rs 48. The rationale is as under:
"We see Dish TV at an inflexion point with OPM likely to move in to 20s as it contains content cost. We see increased competitive intensity, but see Dish maintaining around 20% incremental share. As entry level subscribers form a smaller share of total subscriber, we see improved ARPU as well. We are also impressed by the continuous reduction in subscriber acq. costs. We see limited requirement for any equity dilution given the improved FCF FY11E onwards and the low Debt/EBITDA of around 1.7x by FY11E. We recommend (from Hold) with a revised 12-month target price is Rs 48."
Bharat Forge (BFL)
It has recommended to "Buy" Bharat Forge. It believes Bharat Forge has potential upside of 35-40% from the current market price and thus recommend on the stock. The rationale is:
"BFL generates approx 32% of its revenue from the domestic market, largely in the CV segment. With higher planned infrastructural spend in FY11E and for coming years the outlook for CV sales remain robust. We believe that with the revival of CV business BFL"s domestic business looks properly placed for a up move. The US CV market (~15% of BFL"s consolidated revenue) has recently picked up momentum and sales of Class 8 Vehicles (HCV) in US are also picking up momentum. We believe that the worst for the US is over and with higher focus on Infrastructure in US the sales of CVs will continue to grow. As far as the company"s Europe sales are concerned, we have built a very marginal growth of 2-3% in FY11, which we believe is manageable given addition of new clients. BFL has also implemented restructuring process for the European subsidiaries that will reduce fixed costs by 20-30% benefiting the overall operating profit margin. We believe Bharat Forge has potential upside of 35-40% from the current market price and thus recommend on the stock".
It has recommended to "Buy" Apar Industries with price target of Rs 337 based on 0.35x market cap/net sales. The rationale is mentioned below:
"Apar is amongst the top 4 global manufacturers of transformer oils (market share 50%) and top 5 global manufacturers of power conductors (market share 20%) deriving 4/5th of its revenue from these 2 segments. We expect Apar to derive significant growth opportunities from capital expenditure in T&D network supporting new power generation capacities. We estimate sales volume and operating profit to compound at 15% and 34% p.a. respectively for the company during FY10-12E. We recommend on the stock with price target of Rs337 based on 0.35x Market Cap/Net Sales."
The broking firm has recommended to "Buy" Everest Industries with price target of Rs 380 at 8x FY11E EPS. The rationale is:
"With agriculture sector being of utmost priority of the Government to promote inclusive growth in the country, enhance rural incomes and sustain food security as emphasized by the Finance Minister in the Union budget 2010- 11speech, Everest Industries comes out as a clear beneficiary with nearly 3/4th of the revenue from rural areas. We recommend on the stock with price target of Rs380 at 8x FY11E EPS. We estimate total income and PAT to compound annually at 29% and 77% respectively during FY10-12.
Transformer & Rectifier (India)
It has recommended to "Buy" Transformer & Rectifier with price target of Rs 453 at 9xFY12E EPS.
"TRIL is engaged in transformer business having installed capacity of 23200 MVA. With recent capacity expansion, the company is well placed to capitalize on the ample business opportunities arising out of massive capacity addition in power and consequent investment in transmission. Order inflows during the quarter rose to 2.37 times to Rs 1166 million and the order book at the end of the quarter stood at Rs 2,757 million. Hence, we recommend on the stock with price target of Rs 453 at 9xFY12E EPS. We estimate total income and PAT to compound annually at 18%and 15% respectively during FY10-12E."