Broker alert: Dunkin' Donuts to fatten Jubilant's gains

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•While retaining a ‘hold’ rating on TVS Motors, Emkay Global Financial Services has revised its target price upwards to Rs 72 per share vis-a-vis the current market price of Rs 65.55 per share, reflecting a gain of almost 10 percent. Due to a slightly better-than-expected financial performance in the September-ending quarter and a price hike on offerings in the domestic and export markets, Emkay has revised its growth forecast upwards for the auto company. It expects TVS Motors’ net profit to increase 40.5 percent on sales growth of 20.9 percent for the year ended March 2012.

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•Emkay is bullish on Jubilant FoodWorks and retains its ‘accumulate’ rating with a target price of Rs 900 per share compared with its current price of Rs 812 per share, indicating a growth potential of almost 11 percent. For the September-ending quarter, the company reported a 47 percent growth in net sales, driven by a strong 27 percent growth in same-store sales and the addition of 19 stores. The company seems to be in an expansion mode judging by the expansion of its Domino’s Pizza franchise outlets and introduction of the Dunkin’ Donut’s franchise. The first Domino’s store in Sri Lanka was launched in August, and the company to add around 20 stores in the next five years. It also plans to add around 100 Dunkin’ Donuts outlets over a five-year period across India.

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•MF Global maintains its “buy” recommendation on Engineers India Ltd (EIL) with a price target of Rs 384 per share. The stock’s current market price is Rs 240.7, which means there could be a growth of almost 60 percent. For the September-ending quarter, sales and profits grew by 39 percent and 22 percent year-on-year, respectively. EIL has a robust order book position (Rs 6,300 crore), of which Rs 500 crore was the order inflow in the first six months of financial 2012 (April-March). Overall, it expects the company’s earnings to grow at a compounded annual growth rate of 23 percent between March 2011 and March 2013.

•ICICI Direct is bullish on Dabur India and revised its price target upwards to Rs 120 per share vis-a-vis its current market price of Rs 100.25 per share. For the September-ending quarter, it clocked a sales growth of 29.8 percent year-on-year mainly due to the contribution of sales from the company’s overseas acquisitions (Hobi and Namaste). Profit margins also improved significantly due to a price hike across its product portfolio. Going forward, the brokerage expects Dabur’s international business to continue posting strong growth in revenues and margins as the company will set up manufacturing units in Nigeria and Sri Lanka to cater to the untapped markets of Africa and South India, respectively.