vishnuvega
04-11-2007, 09:03 PM
HANUNG TOYS
Broking firm: PINC Research
Reco Price: Rs 186
Target Price: Rs 304
CMP: Rs 183
Upside: 66%
The firm expects Hanung Toys and Textiles to report an annual growth of around 63 per cent and 84 per cent in revenues and profits respectively between FY07 and FY09E, thanks to the benefits of the expansion.
The company is in the midst of its expansion plan of Rs 160 crore, which will almost triple its toy capacity to 35 million pieces by FY09 and increase its fabric processing and made-ups capacity seven fold and five fold to 41 million metres (FY08) and 6.6 million pieces (by FY08E) respectively.
Further its backward integration plans of setting up a new weaving plant with a capacity of 6.9 million metres will be completed by FY08.
Moreover, the company is partly hedged against the rupee appreciation as 40-45 per cent of revenues will come from the lucrative domestic market providing scope for margin expansion.
Besides the company provides strong earnings visibility with order book position of Rs 600 crore in soft toys and Rs 460 crore in home furnishings businesses executable over 3-4 years. The stock trades at a 9 times and 6 times for FY08 and FY09 respectively.
DECCAN CHRONICLE HOLDINGS
Broking firm: Networth Stock Broking
Reco Price: Rs 191
Target Price: Rs 275
CMP: Rs 181
Upside: 52%
Deccan Chronicle, the leading English daily news paper in Andhra Pradesh and Tamil Nadu, have reported strong growth of 82.7 per cent CAGR in sales FY05-07 on the back of strong growth in ad revenues and success of the Chennai edition and is expected to continue to strong growth of 37 per cent over FY07-09.
Further, the company enjoys highest EBITDA (earnings before interest, tax, depreciation and amortisation) & net profit margins of 46.7 per cent and 29.2 per cent respectively ( FY07) boosted by strong ad rates, lowest operating cost (due to modern printing facilities requiring minimal manpower). Realisation and margins are expected to improve further going forward due to focus on colour ads.
There could be potential value unlocking in future after the company's 100 per cent subsidiary, Odyssey, which is growing at a healthy pace achieves significant presence.
Odyssey is expected to reach 304 stores and 7.89 million square feet across the country from 1.1 million square feet at present. The stock trades at 14 times and 11 times respectively for FY08 and FY09 respectively.
VICEROY HOTELS
Broking firm: India Infoline
Reco Price: Rs 87
Target Price: Rs 135
CMP: Rs 88.75
Upside: 52%
Viceroy Hotels, predominantly based in Hyderabad with an expanded capacity of 297 rooms, is expected to benefit from the diversification into other areas in the southern market.
The company has plans to expand its presence in Bangalore (The Renaissance), Chennai (JW Marriott) and set up a new 175-room hotel in Hyderabad under the Courtyard brand by 2010.
These three new properties will together take its total room inventory to 1,072 by calendar year 2010. On an expanded room base at its Hyderabad Marriott hotel, the company is expected to post CAGR of 84.7 per cent in sales over the next two years with an even faster increase in profits over the same period.
Average room rates likely to show steady growth of 10-12 per cent over the next 2-3 years with no major additions to room inventory in Hyderabad and demand from IT and financial sector.
Further, the merger of nine of its promoter group companies with itself, should also help drive operating profits of the combined entity besides contributing 25-30 per cent to sales in FY08E. The stock trades at 25 times and 14 times for FY08 and FY09 estimated earnings respectively.
PIDILITE
Broking firm: HDFC Securities
Reco Price: Rs 190.2
Target Price: Rs 225 (3-4 quarters)
CMP: Rs 197.5
Upside: 14%
Pidilite Industries, with famous brands like Fevicol, Dr.Fixit and M-seal, is continuously expanding its product range through new product launches in its branded consumer & bazaar products and specialty industrial chemicals segments. The company is also a major exporter with presence and wide acceptance in more than 50 countries.
It has also been aggressive in its inorganic growth plans as it has acquired number of companies like Sargent Art Inc, Cyclo LLC and Pagel Concrete Technologies.
Further, the company's financial performance has been encouraging with consolidated sales and net profits growing a CAGR of 24 per cent and 22 per cent respectively between FY04-FY07. Among all its products like adhesives, construction, arts and specialty chemicals, growth in its arts segment has been one of the highest.
The only risk to the company's business is the high crude oil prices and appreciation in the rupee.
The stock trades at 21 times its estimated earnings for FY08 and the firm suggests to enter the stock in dips at Rs 173-184 levels
Broking firm: PINC Research
Reco Price: Rs 186
Target Price: Rs 304
CMP: Rs 183
Upside: 66%
The firm expects Hanung Toys and Textiles to report an annual growth of around 63 per cent and 84 per cent in revenues and profits respectively between FY07 and FY09E, thanks to the benefits of the expansion.
The company is in the midst of its expansion plan of Rs 160 crore, which will almost triple its toy capacity to 35 million pieces by FY09 and increase its fabric processing and made-ups capacity seven fold and five fold to 41 million metres (FY08) and 6.6 million pieces (by FY08E) respectively.
Further its backward integration plans of setting up a new weaving plant with a capacity of 6.9 million metres will be completed by FY08.
Moreover, the company is partly hedged against the rupee appreciation as 40-45 per cent of revenues will come from the lucrative domestic market providing scope for margin expansion.
Besides the company provides strong earnings visibility with order book position of Rs 600 crore in soft toys and Rs 460 crore in home furnishings businesses executable over 3-4 years. The stock trades at a 9 times and 6 times for FY08 and FY09 respectively.
DECCAN CHRONICLE HOLDINGS
Broking firm: Networth Stock Broking
Reco Price: Rs 191
Target Price: Rs 275
CMP: Rs 181
Upside: 52%
Deccan Chronicle, the leading English daily news paper in Andhra Pradesh and Tamil Nadu, have reported strong growth of 82.7 per cent CAGR in sales FY05-07 on the back of strong growth in ad revenues and success of the Chennai edition and is expected to continue to strong growth of 37 per cent over FY07-09.
Further, the company enjoys highest EBITDA (earnings before interest, tax, depreciation and amortisation) & net profit margins of 46.7 per cent and 29.2 per cent respectively ( FY07) boosted by strong ad rates, lowest operating cost (due to modern printing facilities requiring minimal manpower). Realisation and margins are expected to improve further going forward due to focus on colour ads.
There could be potential value unlocking in future after the company's 100 per cent subsidiary, Odyssey, which is growing at a healthy pace achieves significant presence.
Odyssey is expected to reach 304 stores and 7.89 million square feet across the country from 1.1 million square feet at present. The stock trades at 14 times and 11 times respectively for FY08 and FY09 respectively.
VICEROY HOTELS
Broking firm: India Infoline
Reco Price: Rs 87
Target Price: Rs 135
CMP: Rs 88.75
Upside: 52%
Viceroy Hotels, predominantly based in Hyderabad with an expanded capacity of 297 rooms, is expected to benefit from the diversification into other areas in the southern market.
The company has plans to expand its presence in Bangalore (The Renaissance), Chennai (JW Marriott) and set up a new 175-room hotel in Hyderabad under the Courtyard brand by 2010.
These three new properties will together take its total room inventory to 1,072 by calendar year 2010. On an expanded room base at its Hyderabad Marriott hotel, the company is expected to post CAGR of 84.7 per cent in sales over the next two years with an even faster increase in profits over the same period.
Average room rates likely to show steady growth of 10-12 per cent over the next 2-3 years with no major additions to room inventory in Hyderabad and demand from IT and financial sector.
Further, the merger of nine of its promoter group companies with itself, should also help drive operating profits of the combined entity besides contributing 25-30 per cent to sales in FY08E. The stock trades at 25 times and 14 times for FY08 and FY09 estimated earnings respectively.
PIDILITE
Broking firm: HDFC Securities
Reco Price: Rs 190.2
Target Price: Rs 225 (3-4 quarters)
CMP: Rs 197.5
Upside: 14%
Pidilite Industries, with famous brands like Fevicol, Dr.Fixit and M-seal, is continuously expanding its product range through new product launches in its branded consumer & bazaar products and specialty industrial chemicals segments. The company is also a major exporter with presence and wide acceptance in more than 50 countries.
It has also been aggressive in its inorganic growth plans as it has acquired number of companies like Sargent Art Inc, Cyclo LLC and Pagel Concrete Technologies.
Further, the company's financial performance has been encouraging with consolidated sales and net profits growing a CAGR of 24 per cent and 22 per cent respectively between FY04-FY07. Among all its products like adhesives, construction, arts and specialty chemicals, growth in its arts segment has been one of the highest.
The only risk to the company's business is the high crude oil prices and appreciation in the rupee.
The stock trades at 21 times its estimated earnings for FY08 and the firm suggests to enter the stock in dips at Rs 173-184 levels