Wednesday, 19 November 2008

Buy Gitanjali Gems for long term: S Chabria

Sanjay Chabria, Equity Analyst & Investment Consultant is of the view that one can buy Gitanjali Gems with long term perspective.

Chabria told CNBC-TV18, "Gitanjali Gems is an integrated diamond and jewellery manufacturer with some very good brands like Nakshatra, D'damas, Gili and Asmi. Over the last few years the company has developed world class scale in jewellery manufacturing. The company presently operates in two business segments, cut and polish diamonds and branded jewellery and retail. Going forward the company’s revenue mix is likely to tilt in favour of branded jewellery, which has higher margins and higher value additions."

He further added, "In terms of financials, for the half-year ended September 2008, the company has posted a net profit of Rs 90 crore of net sales of Rs 2,500 crore. So for FY09 the company is likely to report an EPS of around 23 and for FY08 the EPS was around rupees Rs 19. In terms of valuations the stock trades around 3.5 times FY08 earnings at around 2.8 times expected FY09 earnings. The stock appears as a good long-term buy."

Disclosure: Analyst doesn't hold the above stock but have recommended to his clients.

Source: Moneycontrol

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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.