Stocks you can pick up this week

Zee Entertainment
CMP: Rs 293.80
Target price: Rs 354

Citigroup has raised Zee Entertainment’s price target to Rs 354 from Rs 277, while rating it a ‘buy’, as the stock is expected to increasingly reflect the company’s 2008-09 estimated earnings.

The investment bank estimates Zee’s earnings per share for 2007-08 at Rs 9.17, against Rs 5.55 reported in 2006-07. In 2008-09, the company’s EPS has been estimated at Rs 11.80. “Zee stock has outperformed the Sensex by 57% over the past 12 months, driven primarily by restructuring, that entailed de-merger of its distribution businesses, strong growth of addressable medium (set-top boxes), which will curb pay revenue leakages, and consistent improvement in viewer ratings,” Citi said in a note to clients.

State Bank of India
CMP: Rs 1,582
Target price: Rs 1,790

Motilal Oswal Securities has reiterated a ‘buy’ on SBI to factor in the value of subsidiaries and expected earnings growth over the next couple of years. “

Excluding the value of subsidiaries of Rs 733 per share of SBI, the stock trades at 0.9 times FY09E BV (estimated book value). We believe this makes the country’s largest bank a good value buy, considering the aggressive growth expected in assets as well as earnings over the next couple of years,” the Mumbai-based brokerage said in a note to its clients.

Motilal Oswal estimates SBI’s consolidated book value per share (BVPS) for 2007-08 at Rs 929, against Rs 808 reported in 2006-07. In 2008-09, the PSU bank’s BVPS is estimated at Rs 1,085.

Reliance Petro
CMP: Rs 115.45
Target price: Rs 154

Alchemy Share and Stockbrokers has initiated coverage on Reliance Petroleum with a ‘buy’ on expectations that the company’s upcoming refinery would deliver robust refining margins (difference in value between the products produced by a refinery and the value of the crude oil used to produce them). “

High margins are expected to accrue from strong demand for petroleum products outpacing additions in refining capacities,” the brokerage said in a report to clients.


Ipca Laboratories
CMP: Rs 771
Target price: Rs 1,013

SSKI Securities has initiated coverage on Ipca with an ‘outperformer’ and price target of Rs 1,013, as it believes it is one of the cheapest stocks in the pharma industry. “

While the stock has returned 182% in the past 12 months driven by a sharp recovery in profits in the previous quarters, we believe there is still significant upside left,” the institutional brokerage said. SSKI estimates Ipca’s earnings per share for 2007-08 at Rs 59.9, against Rs 49.9 reported in 2006-07. In 2008-09, the company’s EPS has been estimated at Rs 72.4.