Aug 25, 2008 13:00
<p><font size="2">Maruti Suzuki is expected to perform satisfactorily despite rising interest rates and fuel prices. According to the broking houseâÂÂs analysis of passenger car demand pattern, it feels that while cost of ownership has gone up, rising income levels keep affordability steady. Strong new product pipeline and strengthening its presence in the sedan segment will help the car major to draw customers. The company is expected to post 10 to 11 per cent growth in domestic sales over the next three years. It has several operating levers for defending margins in a tough cost environment. The broking house believes that the company is at bottom end of historical valuation range at 9x one year rolling forward PE. It has maintained accumulate status for the companyâÂÂs stock at Rs 620-650.<p>***<p>Tata Elxsi Ltd is a technology company of the Tata Group. It delivers outsourced product design services, design and engineering, system integration services, and visual computing labs. Despite its weak Q1 numbers setting a dismal tone for FY09 growth prospects, the broking house expects revenues to grow at 30 per cent CAGR over FY08-10. Earnings are expected to grow at 18.5 per cent CAGR over the period FY08-10E. Stock specific triggers include new deals/signings for international/domestic 3-D animation movies towards the end of FY09. Given its niche positioning, strong management bandwidth and promising foray into 3-D animation production, we remain positive on companyâÂÂs prospects in the medium term and rate it a Market Performer.<p>***<p>Shri Lakshmi Cotsyn Ltd SLCL is one of the premier manufacturers of home furnishing products. During FY08, the company has completed capital expenditure in nylon, home furnishing and garment division. The company has forayed into the manufacture of armoured vehicles in partnership with the UK-based Armet Armoured Vehicles. It also plans to appoint 30 distributors and 1,000 retail multi-brand outlet by the end of December 08. The broking house expects company revenue to grow by 25 per cent in FY09. The margin is expected to improve by 130 basis points in FY09 on the back of backward integration and higher capacity utilisation. Thr broking house puts âÂÂBuyâ on the stock with a 12 months price target of Rs 220 based on P/ of 5x FY09 valuations.<p>ÃÂ