Accumulate Jindal Poly Films: Unicon Investment

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Accumulate Jindal Poly Films: Unicon Investment

Unicon Investment is bullish on Jindal Poly Films (JPFL) and has recommended accumulate rating on the stock with a target of Rs 620 in its December 31, 2010 research report.

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RELATED NEWS Buy GSPL; target of Rs 124: IIFL Buy ONGC; target of Rs 1330: IIFL Buy Bank of Baroda; target of Rs 1160: Emkay ALSO READ See previous views by Unicon Investment See what other Experts & Brokerages are saying about Jindal PolyFilm See messages about Jindal PolyFilm Jindal PolyFilm BSE | NSE 30/05/12 Are Mutual Funds betting on Jindal PolyFilm?

Unicon Investment is bullish on Jindal Poly Films (JPFL) and has recommended accumulate rating on the stock with a target of Rs 620 in its December 31, 2010 research report.

"Jindal Poly Films (JPFL), a part of B. C. Jindal Group, is one of the leading producers of flexible packaging films (BOPET and BOPP) in India and operates the world's largest single location facility for flexible packaging films at Nashik, Maharashtra."

"For FY10, JPFL had investments of INR 1.53 billion in subsidiaries and affiliates. It proposes to invest an additional INR 4.56 billion in an 1800- megawatt (MW) pit-head coal-based power project in Angul district, Orissa, through subsidiary. Revenue, being back ended in nature, we haven't factored in the value of this investment. Our back of the envelop calculation gives, value of INR 245 per share which provides an additional margin of safety. The management intends to list this subsidiary eventually."

"JPFL's expansion plans, strong balance sheet, healthy cash flows and expected sustainability of the buoyant BOPET film prices, make the company an attractive long term bet. At the CMP, stock trades at 4.5x its FY12e and 3.6x its FY13e earnings. Though, P/E remains quite attractive, considering the sharp run up in the stock price, revenue CAGR of 14% and earning CAGR of meager 1% over FY11-13e, we recommend Accumulate for target of INR 620 over next 24 months," says Unicon Investment research report.

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To read the full report click on the attachment