Big ticket-sales, launches makes DLF a star performer among brokers

Firstpost tries to make your life easier by offering you a list of stock recommendations from various brokerages houses. Here’s the list:

•Motilal Oswal is neutral on Reliance Communications with a target price of Rs85 per share compared to its current price of Rs 105. Here are some key points that could augur well for the company:

1. The potential unlocking in the tower business or strategic stake sale at the parent level would lead to de-leveraging and provide adequate resources to drive growth in Global System for Mobile Communication (GSM) and 3G.

2. Second is that it has won 3G spectrum in 13 circles and Motilal expects incremental 3G revenue growth to contribute around four percent of wireless revenue by 2013. Overall, it expects RCom to end the year with a two percent fall in revenues and 48 percent fall in net profit. Since the start of the year, the company stock has risen by almost 45 percent.

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•Motilal Oswal is also bullish on DLFwith a buy price of Rs 270 per share

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vis-a-vis its current price of Rs 257 a share, reflecting a growth of almost five percent. While the company’s financial performance for the December quarter was rather disappointing - revenues rose 18 percent, net profit had fallen by a steep 44.5 percent, its lowest profit since March 2009. However, Motilal believes that its recent launches and pick-up in sales are heartening. Also the big ticket sales like Aman resort, Mumbai Land, windmill business would be the next trigger as this would help the company in reducing its king size debt. Since the start of the year, its stock has risen 42 percent.

•Edelweiss has a hold rating on Voltas with a target price of Rs 105 per share compared to its current price of Rs 111 per share. While revenues grew 12 percent on the back of execution pick ups in Electro mechanical projects and services (EMPS) and volume growth in UCP segments, it incurred a loss of Rs 116 crore due to cost escalation in one of its international projects (Sidra Hospital). In spite of this, there are some upsides as the company may gain from international experience and tap opportunities from the ongoing infrastructure boom in India. Also the growth trend in the capital goods segment could augur well for the company. For the year ended March 2012, it is expected to report a 5.6 percent growth in revenues and 17 percent fall in net profit. Since the start of the year, the stock has risen 44 percent.

•KR Choksey is bullish on Steel Authority of India (SAIL) with a price target of Rs 132 per share vis-a-vis its current price of Rs 113.9 per share, reflecting a growth of 16 percent. Although the company’s results were impacted by the foreign exchange variation for the December quarter, Choksey maintains its buy recommendation as it expects the steel demand momentum to pick up in the coming months as projects in major sectors like railways, roads, power are expected to take off. For the year ended March 2012, revenues are expected to rise by nine percent while net profit is expected to fall by seven percent. Since the start of the year, the stock has risen by 38 percent.