Monday, 27 October 2008

Buy Grasim Inds, target of Rs 1725: Motilal Oswal

Motilal Oswal has maintained its buy rating on Grasim Industries with a target of Rs 1725 in its October 23, 2008 research report. "Revenues grew 8.4% YoY to Rs 26.8 billion, driven by 17% growth in cement revenues and 45% growth in sponge iron revenues. However, higher other income and lower tax provisioning restricted PAT decline at 16% to R 4.2 billion."

"We are revising our earnings estimates downwards by 7.8% (to Rs 250) for FY09 and by 21.8% (to Rs 202) for FY10 to factor in higher cost push in cement and sponge iron, lower VSF demand and pricing, and change in cement pricing assumption. The stock is valued at 4.7x FY09E consolidated EPS, and EBITDA of 3.4x FY09E EV and USD 46/ton. We maintain Buy with a target price of Rs 1,725 (SOTP-based)," says Motilal Oswal's research report.

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Source: Moneycontrol

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