Broker Alert: Dump Voltas, Exide has the right mix

Not sure which stocks to pick up? Sweat not. Firstpost tries to cut down the clutter and makes your job easier by offering a snapshot of the stocks that are currently in play. Here is the list:

PINC Research has downgraded Voltasto a “sell” with a price target of Rs 91 per share compared with its current market price of Rs 117 per share. The company’s profitability is expected to be severely impacted in the financial year ending March 2012. Owing to the slowdown in order flows from the Middle East, the company has strategically decided to bid for new orders at lower margins of around 4-5 percent compared with 7-8 percent earlier. Also, its cooling division is facing increased pressure on margins as players are offering freebies and discounts to liquidate existing inventories. In view of the above-mentioned problems, PINC expects Voltas’ revenues to fall by 5 percent and net profits to dive at an even steeper pace of 26 percent for this financial year.

[caption id=“attachment_96423” align=“alignleft” width=“380” caption=“Page Industries, which handles the franchise of Jockey International in India, is expected to benefit from the Indian consumer’s shifting preference for branded undergarments. Reuters”]  [/caption]

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ICICI Securities is bullish on Page Industries with a target price of Rs 3,320 per share vis-a-vis its current market price of Rs 2,575. ICICI expects the company’s revenues to grow at a compounded annual growth rate (CAGR) of 32 percent while net profit is expected to rise 37 percent between March 2011 and March 2015. Page Industries handles the franchise of Jockey International in India and is expected to benefit from the Indian consumer’s shifting preference for branded undergarments, triggered by a rise in incomes and greater penetration of the organised retail sector. ICICI expects the domestic innerwear industry to grow at a CAGR of 13 percent between 2009-20.

PINC Research is bullish on Power Grid Corporation and has set a price target of Rs120 per share vis-a-vis its current market price of Rs 97. Power Grid has outlined an ambitious capex outlay: it plans to spend around Rs 20,000 crore a year during the 12th Plan to meet its capex target of Rs1.02 trillion. For the year ended March 2012, revenues are expected to increase by 22 percent and profits by 17 percent.

Edelweiss maintains a ‘Hold’ on Cadila Healthcare while reducing its target price to Rs 870 per share - the current price is Rs 769. Owing to a spillover of inventory from the March 2011 quarter, the company’s domestic growth traction has not improved and is expected to grow by 12 percent for the year ending March 2012 below industry standards. Also, absence of approvals for its products in the US and the one-off pressure from France to withdraw a few products are expected to have an impact on the company’s growth.

Deutsche Bank has upgraded Exide Industries to a “buy” with a price target of Rs 150 per share vis-a-vis its current market price of Rs 131. The brokerage house sees an improvement in the sales mix and market share in the automotive segment (65 percent of revenues); stability in the industrial segment (35 percent of revenues) after recent slides, and attractive valuations after the stock’s price decline make the stock an attractive bet. The current price implies a further fall in margins, which the brokerage believes is unlikely. Earnings before interest, tax and depreciation will be the key trigger.