Accumulate Sunil Hitech Engineers: JRG Securities

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Accumulate Sunil Hitech Engineers: JRG Securities

JRG Securities has recommended accumulate rating on Sunil Hitech Engineers with a target of Rs 236, in its August 26, 2010 research report.

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JRG Securities has recommended accumulate rating on Sunil Hitech Engineers with a target of Rs 236, in its August 26, 2010 research report.

"Sunil Hitech Engineers (SHEL) bagged several new orders of around Rs 200 crore which includes a construction job secured by a consortium for the Maharashtra Airport Development Corp. The current order backlog of the company stands at around Rs 1875 crore (more than 2.4X its FY 10 net sales of Rs 769 crore) providing healthy visibility w.r.t. future performance of the company. We recommended an "Accumulate" rating on SHEL in Jul, 09 at Rs 158 with an initial target of Rs 224 and later upgraded the same to Rs 268. Although the Q1, 11 financial numbers of the company were below estimates, we expect the company to record healthy growth in the future. SHEL is engaged in the Fabrication, Erection & Testing and in Commissioning of Bunkers, ESP's (Electrostatic Precipitator), Boilers, TG sets (Turbo Generator) in the Power Plants and is expected to be a huge beneficiary of the developments and the investment in the Power sector in India."

"At the prevailing market price of Rs 191, the stock is trading at 5.7X and 4.5 its FY 11E and FY 12E earnings. Moreover, company's current market cap per sales ratio stands at 0.30 (FY 10, net sales of Rs 769 crore); at a significant discount other listed peers. Though there has been some pressure w.r.t. Sales realization over the past few quarters we expect the same to smoothen over the coming quarters. We maintain our rating on the stock with a target price of Rs 236 in twelve months," says JRG Securities research report.

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