 "Broker power: Buy Spicejet, Sun Pharma; Sell Suzlon")
Firstpost tries to make life simpler for you by giving you a snapshot of the stocks that you need to track:
•HSBC Global Research is bullish on Sun Pharma with a target price of Rs 670 per share against its current price of Rs 567, reflecting a growth of 19 percent. The company’s financial numbers beat street estimates as it reported a 59 percent jump in sales and an 80 percent jump in net profit for the March quarter. While the company’s sales growth guidance of 18-20 percent is comforting, HSBC says that there is an upside on the back of continued rupee weakness. Also, the appointment of Israel Makov, ex CEO of Teva Pharma, being appointed chairman of Sun Pharma is a strong move and should benefit the company.
•HSBC Research is underweight on Suzlon Energy with a target price of Rs 20 per share. It is currently trading at Rs 17.6 per share. While the company reported more-than-expected sharp fall (loss) in the bottom line to Rs 368 crore for the March quarter, it will require up to $300 million to meet its debt requirements for the year ended March 2013. The stock has fallen by 66.5 percent in the last one year.
•Kotak is bullish on SpiceJet with a target price of Rs 45 per share against its current price of Rs 28.7 per share, reflecting a growth of almost 60 percent. The reasons cited by the research firm are- first, the yields have improved significantly in the first quarter of the financial year ended March 2013, second is that oil prices are declining, third is that the promoters pumped in Rs 230 crore last financial year showing their commitment to the airline. Lastly its market share could improve as industry capacity would be flattish year-on-year.
[caption id=“attachment_328989” align=“alignleft” width=“380” caption=“Kotak is bullish on SpiceJet with a target price of Rs 45 per share against its current price of Rs 28.7 per share. AFP”]
[/caption]
•Kotak has suspended its rating and target price on Aban Offshore, citing lack of clarity on restructuring of debt and repayment schedule which are critical to the fair valuation of the company in light of stretched balance sheet. While the company’s net profit fell 25 percent in the March quarter, Kotak says low utilisation rates and high interest cost from its large debt burden are impacting cash flows required for repayment for debt. Overall, it has revised its earnings estimates for the company on the back of high interest cost and poor financial year ended March 2012 results.