Moneycontrol
Dec 07, 2017 05:27 PM IST | Source: Moneycontrol.com

Buy Sadbhav Engineering; target of Rs 435: Motilal Oswal

Motilal Oswal is bullish on Sadbhav Engineering has recommended buy rating on the stock with a target price of Rs 435 in its research report dated November 30, 2017.

 
 
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Motilal Oswal's research report on Sadbhav Engineering

ADE sees robust business opportunity coming up in the road sector post the Bharatmala project announcement – the company expects annual awarding from the NHAI to be ~ INR800b in FY18 versus INR600b in the previous year. The company has maintained its standalone revenue guidance of INR38b /INR 45b for FY18/FY19, and expects the operating margin to be in the range of 11 -12%. Order inflow is expected to be ~INR70b for FY18. Management has reiterated its commitment to reduce debt incrementally by ~INR2b to INR12.5b by end -FY18.

Outlook

We maintain our Buy rating with an SOTP -based TP of INR435, valuing its EPC business at INR265 (16x its Dec’ 19E EPS of INR16.4) and its SIPL stake at INR170 (15% discount to CMP ).

For all recommendations report, click here

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