Broker alert: Buy Coromandel, Jaiprakash; reduce Sesa Goa

Falling markets provide investors with a good opportunity to do some bottom-fishing. Firstpost tries to make life simpler by giving you a snapshot of the stocks that brokers are tracking.

Citi maintains its ‘buy/medium risk’ rating on Jaiprakash Associates with a price target of Rs 100 per share vis-a-vis its current price of Rs 65 per share, reflecting an upside potential of 52 percent. The report expects the company to become one of India’s top three cement companies, with a cement capacity of 37.6 million tonnes per annum (mtpa) in the next 10 years. Jaiprakash is a conglomerate with interests in engineering and construction, cement, hydroelectric projects, hotels and real estate.

Edelweiss maintains its ‘buy’ rating on Coromandel International with a price target of Rs 395 per share compared with its current market price of Rs 292.6 per share. While revenues for the year ending March 2012 are expected to grow 36.2 percent, earnings per share (EPS) are expected to swell nearly 34 percent. The brokerage firm is positive on the sector owing to strong prospects for its non-subsidy business and positive changes in the fertiliser sector.

Kotak Securities is bullish on Reliance Industries with a price target of Rs 1,000 per share against its current market price of Rs 752.65 per share. For its analysis, it has not factored in the exploration and production (E&P), retailing and special economic zone (SEZ) assets. Recent concerns over the E&P operations had a sharp impact on the stock, which has fallen by nearly 25 percent over the past one year. In contrast, the benchmark Sensex has tumbled 19 percent.

Centrum has a ‘buy’ rating on Hindustan Zinc with a price target of Rs 171 per share compared with the stock’s current price of Rs 121.6, reflecting an upside potential of 40 percent. Owing to its low-cost integrated structure - mining cost of $300/ tonne - it enjoys high operating margins and is relatively immune to the commodity down cycle. Also, an increase in zinc-lead sales, coupled with an increase in the silver output, augurs well for the company.

ICICI Securities has downgraded its rating on Sesa Goa to ‘reduce’ from ‘hold’ and maintains its bearish stance on the stock. Its stock price has now been revised to Rs 219 per share - its current market price is Rs 197.8 per share - from its earlier estimate of Rs 338 per share. This is mostly on account of a downward revision in the earnings of the company. For the year ending March 2012, ICICI Sec expects the company’s sales to fall by 10 percent and operating profit, by an even sharper 23 percent.