State Bank of India
CMP: Rs 1,636
Target Price: Rs 1,850

Enam Securities has retained its outperform rating on State Bank of India, while raising the price target for the stock to Rs 1,850, citing better than expected first-quarter earnings. “The combined net profit of SBI’s associate banks and subsidiaries has grown 119% year-on-year (Y-o-Y).

Also, the life insurance subsidiary has grown its new premiums by almost 66% Y-o-Y during Q1FY08 at a time when private players have grown their premiums only 33%,” the Enam note to clients said.

“Adjusting for valuations of the life insurance subsidiary (Rs 200/share), the stock quotes at 1.4 times FY08 (estimated) consolidated book value and 8.5 times FY08E consolidated earnings. We are raising our price target to Rs 1,850 to account for higher valuations from life insurance and better than expected earnings progression,” the note added.

DLF
CMP: Rs 602.30
Target Price: Rs 725

JP Morgan Securities has initiated coverage on DLF with an overweight rating and a net asset value (NAV)-based price target of Rs 725, saying the stock was likely to emerge as a proxy play on the real estate sector, given its execution scale, track record, and pan-India presence.

“DLF derives a significant portion of its value from its office/retail assets (62% of our NAV estimate). This makes it a beneficiary of potential yield compression, driven by sponsoring the listing of property REIT-like(real estate investment trusts) structures,” the JP Morgan note to clients said.

“DLF has a significant number of joint ventures in the hotels/construction and retail which we believe will decrease the risk of its development business and have material valuation upside potential,” the note added.

HUL
CMP: Rs 204.65
Target Price: Rs 254

Citigroup Global Markets has raised its price target for HUL to Rs 254 from Rs 235 earlier and has asked investors not to tender shares in the buyback programme because of an improvement in the company’s operating margins.

“HUL’s operating performance has shown a dramatic improvement in Q2 (April-June) despite losses associated with the new water business. EBITDA profit for Q2 growth of 23.5% is the highest for the past six years,” the Citigroup note to clients said.

“As we anticipated, after significant investment behind brands, HUL seems to be now in a position to scale back its ad spend, which is down 155 bps (basis points) this quarter. Adjusting for the new water losses, we estimate that the EBITDA for the core business would have grown by 30.5% year-on-year,” the note added.


State Bank of India
CMP: Rs 1,636
Target Price: Rs 1,850

Enam Securities has retained its outperform rating on State Bank of India, while raising the price target for the stock to Rs 1,850, citing better than expected first-quarter earnings. “The combined net profit of SBI’s associate banks and subsidiaries has grown 119% year-on-year (Y-o-Y).

Also, the life insurance subsidiary has grown its new premiums by almost 66% Y-o-Y during Q1FY08 at a time when private players have grown their premiums only 33%,” the Enam note to clients said.

“Adjusting for valuations of the life insurance subsidiary (Rs 200/share), the stock quotes at 1.4 times FY08 (estimated) consolidated book value and 8.5 times FY08E consolidated earnings. We are raising our price target to Rs 1,850 to account for higher valuations from life insurance and better than expected earnings progression,” the note added.

DLF
CMP: Rs 602.30
Target Price: Rs 725

JP Morgan Securities has initiated coverage on DLF with an overweight rating and a net asset value (NAV)-based price target of Rs 725, saying the stock was likely to emerge as a proxy play on the real estate sector, given its execution scale, track record, and pan-India presence.

“DLF derives a significant portion of its value from its office/retail assets (62% of our NAV estimate). This makes it a beneficiary of potential yield compression, driven by sponsoring the listing of property REIT-like(real estate investment trusts) structures,” the JP Morgan note to clients said.

“DLF has a significant number of joint ventures in the hotels/construction and retail which we believe will decrease the risk of its development business and have material valuation upside potential,” the note added.

HUL
CMP: Rs 204.65
Target Price: Rs 254

Citigroup Global Markets has raised its price target for HUL to Rs 254 from Rs 235 earlier and has asked investors not to tender shares in the buyback programme because of an improvement in the company’s operating margins.

“HUL’s operating performance has shown a dramatic improvement in Q2 (April-June) despite losses associated with the new water business. EBITDA profit for Q2 growth of 23.5% is the highest for the past six years,” the Citigroup note to clients said.

“As we anticipated, after significant investment behind brands, HUL seems to be now in a position to scale back its ad spend, which is down 155 bps (basis points) this quarter. Adjusting for the new water losses, we estimate that the EBITDA for the core business would have grown by 30.5% year-on-year,” the note added.