Accumulate Garware Offshore; tgt of Rs 132: P Lilladher

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Accumulate Garware Offshore; tgt of Rs 132: P Lilladher

Prabhudas Lilladher is bullish on Garware Offshore Services and has recommended accumulate rating on the stock with a target of Rs 132 in its February 14, 2011 research report.

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Prabhudas Lilladher is bullish on Garware Offshore Services and has recommended accumulate rating on the stock with a target of Rs 132 in its February 14, 2011 research report.

"Garware Offshore Services reported earnings above our estimates, Revenues stood at Rs 577 million, growth of 17% QoQ, however, down 10% YoY. The company reported strong margins at 53% compared to 38% in Q2 FY11. Consequently PAT grew 112% YoY and 254% QoQ to stand at Rs 153 million. The company had two assets in the spot market which had better utilizations during the quarter. This led to better than expected topline and margins. Besides, certain other cost savings which the company focused on led to stronger margins."

"The company took delivery of a new PSV at the end of the quarter whereby its fleet now stands at 13 vessels. This vessel is currently deployed in the spot market in the north sea. Of the remaining 12 assets, 10 were on long term charters in 3Q FY11, of which one has now completed its charter. Of the 2 vessels which in the spot market, one has bagged a 3 year contract with British Gas. On account of better than expected utilizations, certain vessels bagging long term contracts and renegotiation of interest rates downwards on certain high cost loans, we have increased our estimates for FY11 by 51% and for FY12 by 8%. The stock currently trades at a P/E of 7.4x FY11E and 6.5x FY12E. Our target price is based on a P/E multiple of 7.5x FY12E. We maintain 'Accumulate' with a target price of Rs 132," says Prabhudas Lilladher research report.

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To read the full report click on the attachment