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Money Nov 14, 2011

Broker alert: Voltas needs a cold shoulder, but remain bullish on Lanco

By Firstbiz Editors

Midway through the earnings season, Firstpost tries to cut down the clutter and make life easier by offering a snapshot of the ratings that brokerages have on different stocks. Here is the list.

Over the past one year, Voltas has fallen by a whopping 63 percent. AFP

Prabhudas Lilladher maintains its 'reduce' rating on Voltas with a target price of Rs 86 per share. The stock's current price is Rs 93.95 per share. Due to increased competition in the international markets, the company has been forced to lower its bidding margin to 5 percent from 8 percent earlier to increase its chances of winning orders. For the financial year ending March 2012, the brokerage expects the company to clock a meager 0.7 percent growth in net sales, while profit after tax is expected to fall by a steep 35 percent. Over the past one year, the stock has fallen by a whopping 63 percent compared with the Sensex, which fell by 16.5 percent.

Emkay Research continues to retain its 'hold' rating on Cummins India with a price target of Rs 388 per share. The stock's current price is Rs 359.15 per share, reflecting a growth of almost 8 percent. For the September-ended quarter, the company reported a sharp 23 fall in net profits due to flat growth in revenues and higher operating expenses. For the year ending March 2012, Emkay has lowered its earnings per share estimate by 8 percent to Rs 19.6 on account of an adverse revenue mix and input cost pressures. Over the past one year, Cummins' shares have tumbled 36 percent.

HSBC Global Research is bullish on Cadila Healthcare with a price target of Rs 930 per share against its current price of Rs 736, reflecting a growth of 26 percent. For the September-ended quarter, net profit declined by a sharp 40 percent due to lower sales growth and higher staff costs; both expenses rose because of its recent acquisition of Nesher and Bremer Pharma. Despite reducing its earnings estimates for the years ending March 2012 and 2013, HSBC reiterates its 'overweight' view on the stock "as its fundamental drivers remain intact with growing niche business in the US". The stock has fallen by only 2 percent in the past one year.

UBS Investment Research continues to remain bullish on Lanco Infratech and has a price target of Rs 30 on the stock. The stock's current price is Rs 14.8, which means there is a possibility of an appreciation of more than 100 percent. The company has an order book of Rs 29,200 crore, 90 percent of which comes from power-related segment. Despite the troubles the power sector is facing, UBS expects the company to clock a 38.6 percent growth in revenues, although net profit is expected to fall 45 percent. Over the past one year, the stock has fallen more than 76.8 percent.

by Firstbiz Editors

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