Thursday 6 November 2008

Monnet Ispat an outperformer: HDFC Securities

HDFC Securities has upgraded its rating on Monnet Ispat & Energy from sell to outperformer, in its report dated November 5, 2008. "Due to sluggish volume growth coupled with weakening steel and sponge iron prices, we are revising FY09E and FY10E EPS by 23% and 28% downwards to Rs 43.3 and Rs 49.3 respectively from Rs 55.9 and Rs 68.8 earlier. Consequently, the EPS CAGR (FY08-10E) has decreased from 46% to 24%. However, due to steep correction in the stock price, the P/E multiple has come down from 9.0x FY09E and 7.3x FY10E to 3.6x and 3.2x respectively. Government interference is expected to provide a cushion to falling steel prices and help it to stabilize at current levels. Therefore, any further drop in raw material prices will have a positive impact on MIEL’s EPS. We are, thus, upgrading the stock to Outperformer from Sell," says HDFC Securities' report.

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Source: Moneycontrol

Posted by Harsh at 08:14

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