Broker Alert: Buy biocon, DLF; sell Godrej Consumers, Siemens

Here’s a list of stock recommendations by various analysts/ brokerage houses

•HSBC is bullish on Biocon with a price target of Rs270 per share against its current price of Rs 237 per share. The brokerage firm says that while near-term performance may remain subdued due to continued threat of new entrants in atorvastatin ( a drug used for reducing cholestrol) in the US in May, recovery in bio pharma and cost cover is comforting. This coupled with the fact that the stock has corrected by 35 percent in the last six months has led to a revision in the stock outlook.

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•Kotak Securities has a reduce ratings on Godrej Consumers with a price target of Rs 540 per share ( it is currently trading at Rs 548 per share). While the March quarter results beat estimates (net profit grew 21 percent), they have downgraded the company due to the high valuations it currently enjoys and the fact that it is expecting its domestic growth to weaken going forward.

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•Bank of America Merril Lynch (BoAML) has an under perform rating on Siemens with a price target of Rs 615 per share. It is currently trading at Rs 766 per share. Three reasons have been cited for the rating-

1. Order inflows to be flat in FY12 as the major sectors targeted by Siemens are undergoing structural downtrend. It added that even receding cyclical headwind will not revive the capex cycle in FY12

2. Margins for the company’s SMART grid products to remain low

3. Revenue visibility reduces and this will impact earnings growth to 8 percent Compounded Annual Growth Rate (CAGR) for FY12-14 against 22 percent in FY08-11.

•HSBC has an overweight rating on DLF with a buy price of Rs 277 per share against its current price of Rs 192 per share. Reasons cited are:

1. DLF will focus on relaunching premium segment products, which should improve realisation

2. The company should post Rs1500 crore of free cash flows for the year ended March 2013 against estimate of negative Rs2000 crpre for the year ended March 2012 (expected)

3. The company may be able to reduce its debt as it will benefit most from a softer monetary stance as the current weak business can be turned around quickly as liquidity and interest rates ease over the next 6-12 months, which in turn should act as a share price catalyst.