Brokers' Call: V-Guard, BHEL, HDFC Bank

MOFSL Puts a Buy on V-Guard

Motilal Oswal has recommended a ‘Buy rating on VGuard with a target price of Rs621. Motilal estimate VGuard's revenue would increase by 27.1% and net profit by 28.6% over FY12-15E.

Given the strong product portfolio complimented by a sturdy brand and distribution network and increased focused on growing in non South market should help it gain market share and become a formidable pan India player over the next few years.

Given the asset light business model and improvement in working capital going forward, its RoCE and RoE will expand significantly from 27.3% and 26.6% in FY12 to 38.9% and 32.1% in FY15E, thereby making a strong case for rerating.

Angel Neutral on BHEL

Angel Broking has maintained a ‘Neutral’ rating on BHEL. BHEL’s tentative financial results for FY2013 are better than expectations.

Its top-line growth of 1.0% y-o-y to Rs50,015 crore, beats street estimates as well as Angel estimate of 3.6% y-o-y decline to -Rs47,801 crore.

Although, Net Profit declined by 8.6% y-o-y to Rs6,485cr, it was still better than expectations. The company also reported robust 42.6% y-o-y increase in order intake to Rs31,528 crore, taking the total order backlog to Rs115,000 crore.

HDFC Bank may Touch Rs675: JP Morgan

JP Morgan has reiterated its ‘Overweight’ rating on HDFC Bank with a target price of Rs675. Its resilience to a weak economy is the primary reason, and that will manifest itself in NIMs and credit costs in FY14.

The focus on quality should not crimp growth, and it will continue above-market growth (22-24%) over the next 3 years. “We think valuations are demanding, but rising RoAs