Edelweiss is bullish on Sadbhav Engineering has recommended buy rating on the stock with a target price of Rs 416 in its research report dated December 01, 2016.
While SEL’s performance during the quarter was impacted by project specific issues, we believe recovery is not far. Strong order book, robust BOT portfolio and best-in-class execution skills render SEL an attractive bet. We believe pick up in execution in the EPC arm is imminent, which along with strong cash flow generation in BOT subsidiary will drive re-rating of the stock. We maintain ‘BUY’ with SoTP-based target price of INR 416 (INR 189 from EPC at 15x FY18E P/E and balance from DCF valuation of BOT projects).
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