Moneycontrol
May 18, 2017 06:18 PM IST | Source: Moneycontrol.com

Hold Gandhi Special Tubes; target of Rs 335: ICICI Direct

ICICI Direct recommended hold rating on Gandhi Special Tubes with a target price of Rs 335 in its research report dated May 18, 2017.

Hold Gandhi Special Tubes; target of Rs 335: ICICI Direct

ICICI Direct's research report on Gandhi Special Tubes


The Indian Meteorological Department (IMD) has forecast near normal rainfall at 96% of LPA for upcoming monsoon season 2017. According to senior officials at the IMD, although there does exist neutral El Niño conditions (30% probability) in the Pacific Ocean, positive dipole movement in the Indian Ocean is expected to counter the Pacific move and result in normal monsoon in 2017.


Outlook


However, PAT is expected to remain largely flat in FY17-19E due to lower effective tax rate (20%) and higher other income in the base year i.e. FY17. We now value GST at Rs 335, i.e. 16x P/E on FY19E EPS of Rs 20.8/share and assign a HOLD recommendation.


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