Buy Fame India, tgt Rs 53 : Karvy

Karvy research has maintained buy rating on Fame India with target price of Rs 53, in its July 17, 2008 report. "We expect Fame's topline to jump by 23% YoY and 29.2% QoQ in 1Q FY09. This will be majorly on the back of company's premium 6-screen property, Fame south city Kolkata. We expect the EBIDTA margins of the company to decline by 30 bps to 8.8% levels on account of decline in footfalls and lower occupancy rates. The major dampener, however will be the mark-to-market foreign exchange loss on FCCBs, which will be booked by the company on account of recent depreciation of rupee from Rs 40 / USD to Rs 43 / USD levels. We expect the loss to the tune of Rs 39 million. Consequently, we expect the company to report a net loss for the second consecutive quarter. We expect the net loss to be approximately Rs 39.5 million. Moving forward, we have incorporated the unaccounted forex loss in our FY09E earnings estimates. Consequently, we have reduced our bottom line estimates of the company for FY09E from Rs 160 million to Rs 131 million. Hence, we reduce our price target on the company from Rs 64 to Rs 53, rating the stock as an Buy at current levels" according to Karvy report.