Accumulate Geodesic; target of Rs 130: Bonanza

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Accumulate Geodesic; target of Rs 130: Bonanza

Accumulate Geodesic with a target of Rs 130, says Bonanza research report.

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RELATED NEWS Buy Geodesic with stoploss of Rs 99: Gujral ALSO READ See previous views by Bonanza See what other Experts & Brokerages are saying about Geodesic See messages about Geodesic Geodesic BSE | NSE 30/05/12 Are Mutual Funds betting on Geodesic?

Bonanza research has recommended accumulate rating on Geodesic with a target of Rs 130, in its December 1, 2009 research report.

"Geodesic Ltd has a niche product line. The company has reported near 100% CAGR in top line and bottom-lines over the past five years. The company has increased its top line by acquiring companies and increasing its portfolio of products. It has also ear marked FCCB funds for more such acquisition abroad that would further fuel its top line and bottom-line. The company has announced that it would soon acquire a social networking company and the deal is in finalization stage. Company is also planning to set up a small facility for manufacturing Simputer in Roorkee. Company has worked on many e-governance pilot projects and hopes to bag orders from the government for the same. Company has been focusing on developing economies such as China and Latin America as new target markets with good growth potential. Company also plans to increase the dividend payout in the coming years."

"However, the company management has stated that pricing pressure for its products exists. We have estimated that company would report a growth of nearly 11% in its top line but pricing would continue to drag the bottom line for FY10. We expect the company to report growth in bottom-line FY11, fueled by new product launch and additional acquisitions. At current market price of Rs95 the company is trading at a forward earning multiple of 4.17x for Consolidated EPS of 22.79 in FY10. We recommend investors to accumulate the stock at Rs 100 for a target of Rs 130 in twelve months time. However, due to market volatility a downside of 10-15% cannot be ruled out from the recommended range," says Bonanza research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment