Buy Areva T&D, tgt Rs 1960: HEM Securities

HEM Securities has maintained buy rating on Areva T&D with target price of Rs  1960 in its July 10, 2008 report. "The company has been on a growth trajectory with its ongoing capex plans along with the rising order book. T&D demand in the country is on a rise and with the robustness in the power sector the company stands in a benefici-ary position. Areva also stands in a commendable position if the nuclear deal goes ahead due to its expertise in the field. On the risk front, the company may find it difficult to increase its margins in an inflationary regime fuel-ling its raw material costs and delay of its projects can affect the company adversely. Therefore, keeping in view the financial performance, robust demand in the T&D sector and nuclear capabilities of the company we initiate a BUY signal on the stock at CMP of Rs 1558 which is at 33.27 times to its earnings and 12.38 to its book value. We recommend a target price of Rs 1960 in medium to long term investment horizon expecting an appreciation of 25.80 per cent from the current levels" according to HEM Securities report