Accumulate Garware Offshore Services: Prabhudas Lilladher

Prabhudas Lilladher has recommended accumulate rating on Garware Offshore Services with a target of Rs 173, in its August 16, 2010 research report.

"Garware Offshore’s (Garware’s) revenues for the quarter witnessed a decline of 15% on a YoY basis and 15% on a sequential basis to Rs 485 million. Margins were also subdued at 40% as against 56% in Q1FY10, while PAT declined by 64.5% on a YoY basis and 16.8% on a sequential basis. The quarter was weak as out of its fleet of 12 vessels, four remained idle for three to four weeks each. These vessels were earlier deployed on short-term contracts. The other eight vessels are deployed on long-term charters and hence, were fully deployed during the quarter.Garware Offshore Services currently trades at PER of 7.3x FY11E and 5.5x FY12E and a P/BV of 1.1x FY11E and 1.0x FY12E. We are basing our Target Price on a PER of xFY12E which translates to Rs 173. We maintain our ‘Accumulate’ rating on the stock,” says Prabhudas Lilladher research report.

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