Buy Chennai Petroleum, target of Rs 348: Hem Sec

Hem Securities has recommended a buy rating on Chennai Petroleum with a target of Rs 348 in its March 25, 2008 research report. "Chennai Petroleum is engaged in the business of petroleum refining, it is only refinery located in South India. The sector is on the path of growth with rising demand for petro- products supplemented by rise in international prices of petro-products in line with soaring crude oil prices. Therefore, we are bullish on the sector in medium to long-term with Chennai Petroleum being the best pick. The company plans to invest Rs 50 billion for revamping its Chennai refinery to enhance the quality of manufactured petroleum products".

"The company with huge projects in pipe line for capacity addition and burgeoning demand for petroleum products across the globe has opened new era of growth. The company with its diversified portfolio of petroleum products in the industry is expected to outperform its peers as well as industry. The stock at the current market price of Rs 264 will trade 4.06 times to its earnings and 1.15 times to its book value. The stock is expected to provide huge upside potential in medium to long term. Therefore, we are initiating ‘BUY’ signal on the stock with the target price of Rs 348 which is approximately 32% up from the current market price of Rs 264", says Hem Securities.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
 
For further details click on attachment.......