ICICI direct is bullish on Sadbhav Engineering has recommended buy rating on the stock with a target price of Rs 312 in its research report dated December 02, 2016.
Though SEL reported dismal execution in Q2FY17, we anticipate a pickup in execution in H2FY17. Furthermore, SEL is well placed to capture strong opportunities across sectors given its strong execution capabilities. We expect its topline, bottom line to grow at 12.2%, 18.2% CAGR, respectively, in FY16-18E. Hence, we maintain our BUY recommendation on the stock with an SOTP based revised target price of Rs 312. We have valued SEL’s 69% stake in SIPL at Rs 157/share and EPC business at Rs 155/share (8x FY18 EV/EBITDA implying 14.2x FY18 EPS).
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