Fw: Investor's Eye: Update - IDBI Bank (Subsidiaries' merger marginally positive); Viewpoint - Techno Electric and Engineering (A wind of change)

Investor's Eye [December 06, 2010]  Sharekhan www.sharekhan.com Summary of Contents STOCK UPDATE  IDBI Bank Cluster: Cannonball Recommendation: Buy Price target: Rs210 Current market price: Rs167 Subsidiaries? merger marginally positive IDBI Bank has decided to merge two of its wholly owned subsidiaries, IDBI Home Finance and IDBI Gilts. According to the bank?s management, the merger is expected to get completed by the end of the FY2011. IDBI Home Finance is in the business of providing housing loans to individuals while IDBI Gilts provides primary dealership in fixed income securities. Earlier, the bank had tried to sell its housing finance subsidiary but the attempt was stalled as the business could not fetch required valuations. The management has now decided to merge IDBI Gilts with IDBI Home Finance as the former would post losses in the current rising interest rate scenario. We believe the merger will be slightly positive for the stock as it would lead to better synergy and help in the expansion of the bank?s retail business. However, given the smaller size of the two businesses we do not see any major impact of the merger on our financial estimates. We maintain our Buy recommendation on the stock with a price target of Rs210 for the stock. VIEWPOINT Techno Electric and Engineering Company A ?wind? of change Techno Electric and Engineering Company Ltd (TEE) is one of the leading players in the country providing balance of plant (BoP) services for power plants. It is capable of undertaking seven to eight packages out of a total 17 BoP packages. The company also undertakes electrical system contracts across generation, transmission and distribution space of up to 765kv rating. TEE also provides tailored power solutions for industries such as aluminium, steel, chemicals and petrochemicals. The engineering, procurement and construction (EPC) business of the company contributed approximately 80% to its revenue in FY2010. TEE?s current book stands at Rs1,200 crore, which is 1.7x its FY2010 revenue. Click here to read report: Investor's Eye   Regards, The Sharekhan Research Team myaccount@sharekhan.com  Manage your newsletter subscriptions