indiabull
07-12-2007, 08:02 AM
KJMC institutional research has maintained buy rating on Shree Cement with target price of Rs 1792 implying 12-month prespective having upside potential of 30% in its November 30, 2007 report. "Robust 104% growth in Net Sales to Rs 13680 million in FY07 as compared to Rs 6694 million in FY06. Adjusted Net profit of the company during FY07 increased to Rs 3765 million from Rs 184 million in FY06, a jump of over 1946%. During FY07, Operating margins of the company improved by 1157 bps to 44.7%,while adjusted net profit margins improved by 2477 bps to 27.5% during the same period. At CMP of Rs 1382, the stock trades at P/E of 11.3x and 9.2x FY08E and FY09E earnings of Rs 122.5 and Rs 149.4 respectively. On EV/EBIDTA basis, it trades at 6.3x and 4.6x FY08E and FY09E respectively. On EV/Tonne basis, the stock trades at USD 168.5 FY08E and USD 132.5 FY09E. We initiate coverage on SCL with a “BUY” recommendation and a 12-month target price of Rs 1792, based on 6x EV/EBIDTA.Our target price offers a potential return of 30% on CMP," says KJMC report.