Brokerage House Recommendations

Nomura's Pick in Midcaps :

Triveni Engg :  

Basically if you look at Triveni, they have dominant market share in the turbine business, 0 to 30 megawatt. They have more than 50% market share there. Also, they have tied up with GE now to expand their range from 0 to 100 megawatt now.

The other trigger for this stock is that this business is going to be de-merged and listed as a separate entity. So, we think that lot of value unlocking will happen, once this business gets listed.

Despite Triveni having a sugar business, if you look at the implied valuation of the turbine business right now, it is trading at less than ten times one year forward and compared to the other players in the same space, which are trading at more than 20 times one year forward. So, we think that lot of value unlocking will happen, once this good quality business gets listed separately. 

The Q1 results were not good for the company but since its in the sugar sector also..probably the 1 month long run up from the lows of 96 to current levels have been on that counter.

(CMP 122.35, +4.25,+3.60%)

MCap : 3,155 Cr  P/E: -207.29 

Sterlite Technologies : If you look at that stock, the company will be the third largest producer of optical fiber in the world after the current expansion. They are expanding to 12 million kilometer now and kind of cash that business is generating, 35% earnings before interest, taxes, depreciation and amortization (EBITDA) margin, we think that that is not captured in the valuation right now.

A technology differentiation, world class competitive advantage in optical fiber and cash generating business, low debt and trading at 10.7 times FY12 earnings, we think there is some upside for that stock going forward.

(CMP 99.35, -2.85, -2.79%) 

MCap : 3640 Cr.  P/E:  13.83