markettrend766
15-12-2008, 06:32 AM
Company: RCOM
Broking House: Edelweiss
Current Price: Rs 249.20
Reliance Communications has a subdued earnings expectation over the next fiscal, high debt levels and execution risks on the impending GSM launch. On the wireless business front, however, the subscriber growth is likely to remain strong. Declining average revenue per user, coupled with the GSM services launch, however, pose a risk to the segment’s profitability. The broking house believes that impending 3G auction and subsequent network rollouts are expected to delay RCOM’s free cash flow positive status to 2010-11 as against the earlier expectations of attaining the same in the next fiscal. It adds that any equity stake sale in new or core-businesses may considerably ease firm’s liquidity position. It maintains an “Accumulate” on the stock.
Company: OnMobile Global Ltd
Broking House: Prabhudas
Current Price: Rs 221.95
OnMobile Global Ltd (OGL) provides products and services to a range of telecom operators and media companies like AOL, Disney, ESPN and Star. It has undertaken several strategic steps to transform itself into a leading VAS player. The company has capex plans of Rs 60 crore for this fiscal, the bulk of which will be spent on computer and electronic equipment that is used to enable the VAS applications. The broking house expects the company to register a 42 per cent CAGR during FY08-10. It believes that the company’s cross operator presence gives it an opportunity to cross sell. On assigning a Price to Book Value multiple of 2.2 to the 2009-10 expected book value of Rs.104.1, the broking house arrives at a target price of Rs 234 and initiates a “Buy on Declines” coverage on the stock.
Company: DLF Ltd
Broking House: Motilal Oswal
Current Price: Rs 276.70
With DLF Assets in the final stages of raising funds worth $450 by January 2009, this would lower DLF’s receivables and improve its liquidity. DLF currently has a debt/equity ratio of 0.6, which is likely to come down to 0.3-0.4 by 2009-10, aided by cash inflows from DAL, shift in strategy from lease to sale model and postponement of few capital intensive projects. This low gearing puts it in a strong position to benefit from the current downturn in the real estate sector. The sharp deterioration in the sector has forced the company to revise its planned launch of 35-40 million square feet (msf) of real estate projects in this fiscal down to 15msf. The broking house has lowered profit estimates for DLF by 11.5 per cent to Rs6,600 crore for 2008-09 and by 14 per cent to Rs5, 860 crore for FY10. However, it has put a ‘Buy’ rating on the stocks.
Broking House: Edelweiss
Current Price: Rs 249.20
Reliance Communications has a subdued earnings expectation over the next fiscal, high debt levels and execution risks on the impending GSM launch. On the wireless business front, however, the subscriber growth is likely to remain strong. Declining average revenue per user, coupled with the GSM services launch, however, pose a risk to the segment’s profitability. The broking house believes that impending 3G auction and subsequent network rollouts are expected to delay RCOM’s free cash flow positive status to 2010-11 as against the earlier expectations of attaining the same in the next fiscal. It adds that any equity stake sale in new or core-businesses may considerably ease firm’s liquidity position. It maintains an “Accumulate” on the stock.
Company: OnMobile Global Ltd
Broking House: Prabhudas
Current Price: Rs 221.95
OnMobile Global Ltd (OGL) provides products and services to a range of telecom operators and media companies like AOL, Disney, ESPN and Star. It has undertaken several strategic steps to transform itself into a leading VAS player. The company has capex plans of Rs 60 crore for this fiscal, the bulk of which will be spent on computer and electronic equipment that is used to enable the VAS applications. The broking house expects the company to register a 42 per cent CAGR during FY08-10. It believes that the company’s cross operator presence gives it an opportunity to cross sell. On assigning a Price to Book Value multiple of 2.2 to the 2009-10 expected book value of Rs.104.1, the broking house arrives at a target price of Rs 234 and initiates a “Buy on Declines” coverage on the stock.
Company: DLF Ltd
Broking House: Motilal Oswal
Current Price: Rs 276.70
With DLF Assets in the final stages of raising funds worth $450 by January 2009, this would lower DLF’s receivables and improve its liquidity. DLF currently has a debt/equity ratio of 0.6, which is likely to come down to 0.3-0.4 by 2009-10, aided by cash inflows from DAL, shift in strategy from lease to sale model and postponement of few capital intensive projects. This low gearing puts it in a strong position to benefit from the current downturn in the real estate sector. The sharp deterioration in the sector has forced the company to revise its planned launch of 35-40 million square feet (msf) of real estate projects in this fiscal down to 15msf. The broking house has lowered profit estimates for DLF by 11.5 per cent to Rs6,600 crore for 2008-09 and by 14 per cent to Rs5, 860 crore for FY10. However, it has put a ‘Buy’ rating on the stocks.