Wednesday, 29 October 2008

Buy Everest Kanto, target of Rs 210: PINC

PINC Research has maintained its buy rating on Everest Kanto Cylinder with a target of Rs 210 in its October 24, 2008 research report. "Everest Kanto Cylinder Ltd’s (EKC) Q2FY09 results were in line with expectations as it reported a 73% YoY growth in net sales to Rs 2.2 billion on back of volume growth and full quarter contribution from CP Industries. OPM expanded by 72bps to 31.8% while net profits rose by 52% to Rs 432 million."

"The CMP of Rs 159 discounts FY10E EPS of Rs 23.8 by 6.7x. The stock trades at an EV/Sales of 1.4x and EV/EBIDTA of 5.2x FY10 estimates. Robust demand for CNG cylinders coupled with growing contribution from lucrative jumbo cylinders business is expected to provide sustained revenue growth and higher margins in the coming quarters. Thus, we maintain our ‘BUY’ recommendation with an 18-month price target of Rs 210," says PINC's research report.

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Source: Moneycontrol

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