markettrend766
29-09-2008, 06:25 AM
Company: Sterlite Ind. India Ltd
Broking House: Emkay
Current Price: Rs 447.20
Vedanta Resources has called off the Sterlite restructuring exercise in the wake of criticism from global investors. Thus, the same holding structure will be maintained for the time being till a new scheme is announced. The management is likely to announce the new restructuring scheme, which will merge all aluminum assets under one roof in the time to come. With this, Sterlite minority shareholders will enjoy the proportionate benefit of the entire expansion under Vedanta Alumina Ltd as earlier. Even after keeping the global base metal valuation, which have declined significantly over the past few months, in perspective, Sterlite stocks will benefit from the strong volume growth in zinc and lead business and likely closure of ASARCO deal by December. The broking house has revised its target price from Rs 952 to Rs 637, but continues to maintain a buy recommendation on the Sterlite stocks, which it believes will trade at EV/EBITDA of 3.2x FY10E.
Company: Reliance Power Ltd
Broking House: Geojit Financial
Current Price: Rs 161.40
Long-delay in resolving the gas sharing dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Limited (RNRL) is likely to affect the 10.3-GW planned power capacity of Reliance Power. The gas-based power project of Reliance Power was intended to meet the entire gas requirements from RNRL — a group company under the ADAG fold. However, the expected gas supply from RNRL continues to be in limbo as the dispute between RIL and RNRL is not yet over. RNRL claims that the company has an agreement with RIL to purchase 28 mmscmd of gas at $2.34 per mmbtu from the latter and is entitled to 40 per cent of all gas produced in excess of 40 mmscmd from RIL’s block in KG basin. However, RIL refused to supply gas to RNRL on grounds that the prices are too low.
Company: Larsen & Toubro
Broking House: Edelweiss
Current Price: Rs 2,468.25
To reduce its dependence on the domestic market, which is currently undergoing a slowdown, L&T has been expanding its presence in the Middle East. However, profitability in the Middle East is substantially lower than the domestic market. Further, L&T has invested Rs 1,700 crore in various subsidiaries over the past two years, the benefit of which is likely to come through later than expected. While L&T Finance and L&T Infrastructure Finance are likely to face tough interest rate environment, L&T Infotech might get impacted by the US slowdown. Moreover, to sustain its targeted order accretion growth at 30 per cent for FY09E and FY10E, L&T will have to increase its presence in the Middle East.
Broking House: Emkay
Current Price: Rs 447.20
Vedanta Resources has called off the Sterlite restructuring exercise in the wake of criticism from global investors. Thus, the same holding structure will be maintained for the time being till a new scheme is announced. The management is likely to announce the new restructuring scheme, which will merge all aluminum assets under one roof in the time to come. With this, Sterlite minority shareholders will enjoy the proportionate benefit of the entire expansion under Vedanta Alumina Ltd as earlier. Even after keeping the global base metal valuation, which have declined significantly over the past few months, in perspective, Sterlite stocks will benefit from the strong volume growth in zinc and lead business and likely closure of ASARCO deal by December. The broking house has revised its target price from Rs 952 to Rs 637, but continues to maintain a buy recommendation on the Sterlite stocks, which it believes will trade at EV/EBITDA of 3.2x FY10E.
Company: Reliance Power Ltd
Broking House: Geojit Financial
Current Price: Rs 161.40
Long-delay in resolving the gas sharing dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Limited (RNRL) is likely to affect the 10.3-GW planned power capacity of Reliance Power. The gas-based power project of Reliance Power was intended to meet the entire gas requirements from RNRL — a group company under the ADAG fold. However, the expected gas supply from RNRL continues to be in limbo as the dispute between RIL and RNRL is not yet over. RNRL claims that the company has an agreement with RIL to purchase 28 mmscmd of gas at $2.34 per mmbtu from the latter and is entitled to 40 per cent of all gas produced in excess of 40 mmscmd from RIL’s block in KG basin. However, RIL refused to supply gas to RNRL on grounds that the prices are too low.
Company: Larsen & Toubro
Broking House: Edelweiss
Current Price: Rs 2,468.25
To reduce its dependence on the domestic market, which is currently undergoing a slowdown, L&T has been expanding its presence in the Middle East. However, profitability in the Middle East is substantially lower than the domestic market. Further, L&T has invested Rs 1,700 crore in various subsidiaries over the past two years, the benefit of which is likely to come through later than expected. While L&T Finance and L&T Infrastructure Finance are likely to face tough interest rate environment, L&T Infotech might get impacted by the US slowdown. Moreover, to sustain its targeted order accretion growth at 30 per cent for FY09E and FY10E, L&T will have to increase its presence in the Middle East.