Daily Buy Sept 24
Phillips Carbon CMP: Rs 175
Target Price: Rs 213
Angel Broking has initiated coverage on Phillips Carbon Black with a buy recommendation and 12-month price target of Rs 213. “We expect PCBL to grow at a CAGR of 9.8% in topline (net sales) and 78.8% in bottomline (net profit) over FY2007-09E. Growth in bottomline will primarily be aided by contribution from the power division as it will reduce costs as well as provide additional source of revenue with 85-90% EBITDA margin (operating margins),” the broking house said in a note to clients. Angel estimates Phillips’ EPS in 2007-08 at Rs 21.7, as against Rs 9.4 in 2006-07. In 2008-09, the company’s EPS is expected to be Rs 26.6.
Transport Corp CMP: Rs 128
Target Price: Rs 140
SSKI Securities has initiated coverage on Transport Corporation of India (TCI) with a buy rating and price target of Rs 140. “TCI is currently trading at 12.8 times FY09 earnings and 7.4 times FY09 EV/EBITDA (enterprise value/earnings before interest, taxation, depreciation and amortisation), which we believe is attractive, considering the sharp earnings growth trajectory and steep discount to peers,” the institutional brokerage said. “Further, to emerge as one of the largest SCS (supply chain solutions) providers, TCI is also investing heavily into warehouses and trucks, which will enable TCI’s SCS revenues to grow at 55% CAGR over FY07-09E,” it said.
Target Price: Rs 213
Angel Broking has initiated coverage on Phillips Carbon Black with a buy recommendation and 12-month price target of Rs 213. “We expect PCBL to grow at a CAGR of 9.8% in topline (net sales) and 78.8% in bottomline (net profit) over FY2007-09E. Growth in bottomline will primarily be aided by contribution from the power division as it will reduce costs as well as provide additional source of revenue with 85-90% EBITDA margin (operating margins),” the broking house said in a note to clients. Angel estimates Phillips’ EPS in 2007-08 at Rs 21.7, as against Rs 9.4 in 2006-07. In 2008-09, the company’s EPS is expected to be Rs 26.6.
Transport Corp CMP: Rs 128
Target Price: Rs 140
SSKI Securities has initiated coverage on Transport Corporation of India (TCI) with a buy rating and price target of Rs 140. “TCI is currently trading at 12.8 times FY09 earnings and 7.4 times FY09 EV/EBITDA (enterprise value/earnings before interest, taxation, depreciation and amortisation), which we believe is attractive, considering the sharp earnings growth trajectory and steep discount to peers,” the institutional brokerage said. “Further, to emerge as one of the largest SCS (supply chain solutions) providers, TCI is also investing heavily into warehouses and trucks, which will enable TCI’s SCS revenues to grow at 55% CAGR over FY07-09E,” it said.
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