What to buy

PIRAMAL HEALTHCARE
CMP: Rs 208.25 TARGET PRICE: Rs 335
CITIGROUP has maintained its 'buy' rating on Piramal Healthcare with a price target of Rs 335, as it believes the company is one of the best bets on custom manufacturing and branded formulations businesses in India. "PHC (Piramal Healthcare) plans to reconfigure its pharma solutions (CMG) facilities in order to improve efficiencies & profitability," the bank said in a report. "We view PHC's move to shut down the Huddersfield site as a positive, as it improves the profitability and return on investment (RoI) of the overall business. The expected 600-800 basis points improvement in EBIDTA margins would make up for the temporary loss of revenue & one-time shutdown cost," it noted.
GAIL
CMP: Rs 255.65 TARGET PRICE: Rs 315
MACQUARIE has raised its target price on Gail by 18% to Rs 315 to reflect its belief that the PSU will be the second largest beneficiary from Reliance Industries' recentlycommenced gas production. "Gail expects its transmission volumes to rise 1.5 times and marketing revenues to triple over the next three years. These businesses contribute to nearly half of gross profits," said a bank report.
SKF INDIA
CMP: Rs 156 TARGET PRICE: Rs 190
LKP Shares has rated SKF India a 'buy' with an 18-month price target of Rs 190 and believes a 15% correction in the stock from current levels would be a good opportunity to buy. "SKF India is now going ahead with its new 48-million ball bearings unit at Haridwar in Uttarkhand, adding close to 50% more capacity from 2010 (CY10) onwards at a cost of Rs 1.5 billion and would initially service twowheeler companies whose demand is expected to show a marginal rise due to the incremental demand from rural and semi-urban markets," the brokerage said. "The investment phase for the company this fiscal, along with the challenging environment, is expected to put pressure on the ROI as the benefits would start accruing only from next fiscal onwards," it added.
RCOM
CMP: Rs 218.10 TARGET PRICE: NA
CLSA has maintained its 'buy' rating on Reliance Communication after the telecom tribunal upheld the dual spectrum allocation policy, allowing RCOM to offer GSM mobile services. "The firm's GSM-subscriber ramp-up will make it eligible for incremental spectrum allocation in 1QFY10," said a bank report. "We expect a further boost to its valuation on higher revenue growth after the GSM-rollout builds," it said. "The 16% rally in the share price rally past month reflects the ramp-up of RCOM's GSM expansions and broad-basing of product offerings," it added.