CLSA: Buy M&M -Strong 3Q results; target Rs875

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Strong 3Q results
M&M reported a strong 46% YoY growth in net profits in 3Q driven by strong
volume growth and relatively stable margins. Cost pressures are rising but
with strong growth outlook for both UVs and tractors, multiple new launches
and minimal incremental competition, M&M is best-placed to defend margins
at 15%. We maintain our FY11-13 profit forecasts but cut EPS by 3%
factoring in dilution from the ESOP trust share allotment. Our target price
drops to Rs875 (34% upside) on account of the dilution. M&M remains our top
pick in India Autos. Maintain BUY.

Citi Research: Indian Real Estate Time to Add Some Exposure; Buy Prestige

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Indian Real Estate
Time to Add Some Exposure; Initiate Coverage of Prestige at Buy
 Negatives priced in; Initiate Prestige at Buy/Medium Risk — Asset prices
are at highs; stock prices are at cyclical lows – we believe likely price cuts are
largely factored in, presenting an opportunity to start adding exposure. We
initiate Prestige at Buy/Medium risk – a play on Bangalore (our preferred micro
market with modest price increases, IT Services recovery helping commercial
demand/purchasing power), with a proven track record of execution. We
continue to be selective: we prefer DLF (quality land bank, good rental annuity
support), Prestige & Phoenix Mills. IBREL remains a high-risk pick in the sector.

Indiabulls Real Estates -Attractive Valuations, But A High Risk Pick:: Citi research

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Indiabulls Real Estates (INRL.BO)
Attractive Valuations, But A High Risk Pick
 Execution picking up, real estate business is showing numbers — The
real estate business has started contributing to revenues starting Q1FY11.
The company has launched several projects, which have garnered a good
response. Execution of ongoing projects is proceeding well. The stock trades
at ~50% discount to base NAV, which is attractive in our view, but it remains
a high risk play in the sector. An improving risk appetite and macro
environment could result in meaningful upside in the stock, in our view.

Citi:: Unitech - Reasonable on Valuations after the Fall but Overhang Remains

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Unitech (UNTE.BO)
Reasonable on Valuations after the Fall but Overhang Remains
 New Base NAV of Rs 85 vs Rs 113— Our new NAV adjusts for the
following: a) roll forward to Dec-11; b) built-in 50% discount to the telecom
business (vs earlier valuation) on the back of concerns; c) further delays to a
few projects; d) updated current prices and cost of construction; e) increased
cost of capital to 17.3% versus 13% earlier - this assumes debt costs at 12%,
long-term DE of 0.5, risk-free rate of ~8%, a market premium of 8% and tax
rate of 30%.

Citi research: DLF - Commercial Pick-Up A Big Plus

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DLF (DLF.BO)
Commercial Pick-Up A Big Plus
 What we like in DLF — DLF has a diversified and a superior land bank with
good city-centre exposure. Also, the commercial market is doing well - DLF
will end FY11 leasing ~5-6msf, one of the best years in terms of leasing. D/E
at ~0.79x is high; however, we believe DLF is capable of servicing such debt
levels, as the strong rental annuity of ~Rs 16bn should support.

IIP - Base effect pulls down IIP growth to 20-month low: Edelweiss

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The Index of Industrial Production (IIP) grew a paltry 1.6% in December against 3.6% in the previous month. While the monthly data remains volatile, the broader moderation in industrial activity is well observed in the 3MMA Y-o-Y data. Nonetheless, high base effect for the month clearly exaggerated the weakness in production, as sequential growth (M-o-M 3MMA SA) at ~1% was stronger than the trend in recent months. Pick up in exports in Q3FY11 seems to have supported industrial activity. Among the components of IIP, weakness in consumer non-durables persists, with production declining for the second straight month Y-o-Y, possibly reflecting the impact of high and sticky inflation. The durables category, on the other hand, has grown strongly, though growth momentum has moderated in recent months. Production of capital goods remains volatile, but the broader trend (on moving average basis) continues to depict meaningful moderation, particularly in the past three months. Overall, we believe that soft patch in industrial activity will continue in the coming months, with March seeing significant high base effect. While pick-up in exports augurs well for industrial activity, tightness in liquidity, rising interest rates and wage pressures pose a challenge. 

Prestige Estates, Initiate at Buy; TP of Rs 170:; Citi research

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Prestige Estates Projects Ltd (PREG.BO)
Proxy Play on Bangalore & Commercial
 Initiate at Buy with a TP of Rs 170 — Our bullish view is based on a)
strong execution track record; b) attractiveness of Bangalore market –
pricing should hold given moderate increases in the recent past and volumes
should be helped by the boom in IT services; c) attractive ~35% disc to NAV
– stock has underperformed Sensex by ~21% over the past three months.