Religare - PNB, Shringar Cinema, Tulip IT,

Religare on PNB

We are positive on PNB considering that core operational performance remains
robust and the lower-than-expected profitability in FY07 was largely on account of
one-off items. Further, PNB’s initiative to create provisions towards AS-15 guidelines
ahead of their implementation would safeguard future profitability, while the BPLR
hike in April would protect margins. The robust growth in fee income is also a positive
sign. While the continuous increase in NPAs and the unexpected announcement of an
equity offering are concerns, we expect the bank to maintain its steady growth
trajectory in the coming year.

Recommend Buy with target of Rs 610

The stock currently trades at 1.3x on FY09E ABV. We recommend Buy on the stock

Religare on Shringar Cinemas

At the current level the stock is quoting at 15.9x and 10.1x its FY08 and FY09
expected earnings respectively. The following table depicts the comparative analysis
of various multiplex players.

DCF valuation yields fair value of Rs 75; HoldWe have undertaken a DCF valuation in order to capture the growth momentum of the company.
Our DCF model estimates a fair value of Rs 75/share for Shringar, based
initiated coverage; Hold on a terminal growth rate of 4%, beta of 1.01 and a weighted average cost of capital (WACC) of 15.1%. The stock has appreciated 17% since we initiated coverage on 22 May 2007. We now recommend a Hold with a target price of Rs 75.


Religare on Tulip IT


We have valued the company using a sum-of-the-parts (SOTP) valuation model that
An attractive long-term employs the two-stage discounted cash flow (DCF) and EV/EBIT multiple valuation investment; Buy methods. Taking the average of target prices arrived at using the two methods, we have a March 2008 target of Rs 932 for the stock. At the CMP of Rs 875, the upside is limited to 6%, but we believe the company offers a good opportunity for long-term investment. We recommend a Buy on the stock.