Accumulate Suzlon Buy BGR Energy: Kotak Securities

Kotak Securities has recommended an Accumulate rating on Suzlon with a target price of Rs 88.

A report released on December 29 said: ” RWE Innogy and the REpower Systems Group has signed a Memorandum of Understanding (MoU), which provides for the negotiation of framework agreements with a volume of up to 1,900 megawatts. The stock is trading at 7.1x and 8.3x FY09 and FY10 earnings respectively. We maintain cautious stance on the company and recommend ACCUMULATE on the stock with a price target of Rs 88.”

BGR Energy

Kotak Securities has maintained its Buy rating on BGR Energy with a target price of Rs 310.

A report released on December 30 said: “With an order book of Rs 106bn, we expect revenues to grow at a CAGR of 49% between FY08-FY10. We expect operating margins to remain around 10% for FY09 and 9% for FY10. We incorporate higher working capital requirements and correspondingly higher borrowings. We thus estimate net profits to grow at a CAGR of 30% between FY08-FY10 as against our earlier estimate of 37% between FY08- FY10.

“At the current price of Rs.134, the stock is trading at quite attractive valuations. It is
available at 8.5x and 6.5x its FY09 and FY10 P/E multiples, respectively. Company is well set to tap the upcoming opportunities in power and oil and gas segment with its expertise as well as capacity expansion plans. We maintain our positive bias for the company based on its strong order book as well as capability to bag new orders. We continue to maintain BUY recommendation on the stock with a revised price target of Rs 310 as against Rs 349 earlier based on FY10 estimates.”

Souce: UTVi