Eicher Motors

Reco price: Rs 1354
Target price: Rs 1700

Eicher Motors' Operating performance is in line with sales at Rs 12.9bn (our est Rs 12.1 bn) while EBITDA is at Rs 1.3bn (in line). The higher other income & lower tax leads to APAT of Rs 763mn (~13% abv est.). The company targets ~15%/~30% mkt share in heavy duty/medium duty commercial vehicles in next 2-3 years.Also,engine business will start contributing from CY13.

We raise our CY11/12 EPS by 13%/14% to factor in higher volumes (+7.5%/7.6%), better product mix and lower RM cost pressure and  Remains a preferred play in the CV space. Raise our TP to Rs 1,700 (current business value – Rs 1,547, NPV of engine business – Rs 153). Key risk-sharp downturn in the industry. At CMP of Rs 1,354, the stock trades at PER of 13.1x/11.2x and EV/EBIDTA of 7.9x/5.8 x our CY11 and CY12 estimates respectively.

We raise our rating to BUY with a target price to Rs 1,700 - Emkay


ICICI Bank

Reco price: Rs 1038
Target price: Rs 1340

After consolidation over the past two years, ICICI Bank's focus shifted to loan growth,corporate and secured retail loans being key drivers. Over FY12 and FY13, the bank expects domestic business growth to be in line with the industry average with CASA ratio expected to remain at 40%+. Stable/improving margins, control over cost-to-income ratio (management guidance of 41% for FY12) and a fall in credit costs (1% in FY11;management guidance of 0.8%) will ensure RoA of ~1.5% over FY12 and FY13.

Strong CAR of 19.6% with tier-I ratio of ~13.4% will ensure dilution-free growth. Structural improvement on the liability side increases our comfort with improved ALM, fall in proportion of bulk deposits and a strong CASA ratio. Aggressive branch expansion (in FY10-11) and takeover of BoR will help ICICI Bank to keep its CASA share high and improve retail term deposits growth and fee income growth.

We expect ICICI BC to post EPS of INR56 in FY12 and INR66 in FY13. BV will be INR513 in FY12 and INR556 in FY13. ABV (adjusted for investment in subsidiaries) will be INR399 in FY12 and INR442 in FY13. We expect core RoE to improve to 14%+ by FY12 and ~15% in FY13. Adjusted for FY13 based subsidiary value at INR236/share (after 20% holding company discount), the stock trades at 1.8x AP/ABV FY13E and 12.1x AP/EPS.

We maintain Buy with an SOTP based target price of INR1,340 - Motilal Oswal


Nestle

Reco price: Rs 4349
Target price: Rs 3483

Nestle's top-line growth during the quarter was driven by value and volume growth. The company’s export sales growth stood at 11% yoy, whereas domestic sales growth stood at 21% yoy. Nestle faced raw-material price inflation pressure in milk solids, green coffee and oils and fats, which resulted in a 42bp yoy contraction in gross margin. Earnings grew by modest ~10%, impacted by high tax rate as the company’s Pantnagar plant’s 100% income tax holiday reduced to 30% as it completed five years of operation.

Post 1QCY2011 results, we maintain our revenue and earnings estimates. At the CMP, Nestle is trading at ~180% premium to the Sensex, significantly ahead of its five-year average historical premium at ~76%. We render caution on Nestle’s high premium to the Sensex on account of 1) gross margin pressures due to rising input costs and 2) competition in the high-growth noodles category from HUL, GSKCHL and ITC.

We maintain Reduce  with a revised target price of Rs 3,483 - Angel Broking