Sintex Industries

Recommendation: Buy Broking firm: Edelweiss Securities Reco price: Rs 329 CMP: Rs 329 Target price: NA

Sintex's acquisition of the automotive products business of Bright Brothers for Rs 149 crore is expected to give it an entry into the domestic plastic auto components market, especially in the lucrative passenger cars segment. It is also likely to give the company access to more customers in this industry.

Bright Brothers is a leading manufacturer of automotive injection molded plastic in India with an annual sales of Rs 150 crore( which has been growing at 20 per cent over the last two years ) with an EBITDA margin of 15 per cent as on FY07.

The company supplies a range of exterior and interior systems including front and rear bumper systems, green house systems, seating systems, acoustic management, and cockpit systems to the largest OEMs in India including Maruti, Hyundai, Tata, and M&M. The stock trades at 22 times and 15.3 times for FY08 and FY09 estimated earnings.

Union Bank of India

Recommendation: Buy Broking firm: Motilal Oswal Reco price: Rs 141 CMP: Rs 146 Target price: Rs 180 Upside: 23%

Motilal expects the Union bank of India's earnings to grow at a CAGR of 24 per cent over the next two years. Further it also expects return on assets(ROA) and return on equity (ROE) to improve to one peer cent and 22 per cent by FY09 from 0.9 per cent and 19 per cent in FY07 respectively. This will be led by improvement in net interest margins currently around three per cent levels and lower non-performing assets (below one per cent).

Moreover these targets look achievable as the --- Nair's term as chairman and managing director is extended till FY11 which means continuity in management strategies and processes. Further the stock is available at an attractive valuation of less than 1.5 times for FY09 estimated book value at the current market price.

Hotel Leelaventure

Recommendation: Buy Broking firm: UTI securities Reco price: Rs 44 CMP: Rs 45.25 Target price: Rs 70 Upside: 55%

Hotel Leela's upcoming properties at Hyderabad, Pune,Chennai and Delhi will open in 2010 and will more than double its existing room inventory to 2640 rooms. Over the next two years, the primary growth drivers for the company will be room refurbishments at Leela Kempinski, Mumbai and 105 room additions at Bangalore amid supply shortages & double-digit demand growth at both cities.

Further, the company's plan of developing an IT park project at Chennai is slated to open by March 2008 and would provide additional rental income of Rs. 130 crore FY09E onwards. The stock has underperformed for past six months but trades at a reasonable valuation of 13 times and 9 times for FY08 and FY09 estimated earnings.

Lakshmi Machine Works

Recommendation: Buy Broking firm: Ashika Stock Broking Reco price: Rs 3015 CMP: Rs 3198 Target price: Rs 3600 Upside: 12.6%

Lakshmi Machine Works is a huge beneficiary of the expected investments in the textile industry for achieving export targets and extension of technology Upgradation Fund (TUF) scheme. The company has 60 per cent market share in the domestic textile spinning machinery industry, which is expected to witness an investment of Rs 55000 crore (about 25 per cent share) out of total Rs 1.94 lakh crore until 2011-12.

Further, the government's announcement of extension of the TUF scheme for the next five years in the Union Budget of 2007-08 is another positive trigger.

Besides the company is expanding its capacity of 2.45 million by 43 per cent by FY08 and also spreading its reach beyond the domestic turf. Moreover, the company offers good visibility as its order book to sales ratio of about three is very comfortable. The stock trades at 14 times for FY08 estimated earnings.