Sunday 2 November 2008

Buy Bharati Shipyard; target of Rs 179: Angel

Angel Broking has recommended buy rating on the Bharati Shipyard with a target price of Rs 179 in its October 29, 2008 report.“Bharati is one of the leading companies in the Shipbuilding space in India. It has a healthy Order-book position and expects to augment it on getting more clarity on the possible delivery schedules that it can provide clients. The company is also ramping up its production capacity. The company envisages no problem in augmenting its Order book as it caters to the niche segment of off-shore vessels where demand continues to be strong on account of the attractive crude oil prices. Also, the company does not expect any order cancellations to happen as its charges all its customers 20% advance at the time of booking the order, and shipbuilding being a long drawn process involving 2-3 years, buyers have to make bookings with a long-term prospective.”

“We are downgrading our diluted EPS estimate for FY2010E to Rs44.7 (Rs49.4) on the back of expected increase in labour and other operating costs. We are downgrading our FY2010E Target PE multiple to 4x (7x previously) revised 18-month Target Price of Rs 179 (previously 12-month Target Price of Rs 346). However, at current levels, Bharati is trading at an attractive PE of 1.5x FY2010E Earnings and 0.2x FY2010E P/BV. We maintain a Buy in the stock,” says Angel's research report.

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Source: Moneycontrol

Posted by Harsh at 11:55

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