Buy Balmer Lawire & Co, target Rs 630: Bajaj Capital

Bajaj Capital is bullish on Balmer Lawire & Company and has maintanied buy rating on the stock with target pirce of Rs 630.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead Masteryourmoney Earnings
moneycontrol.com

Home » News » Recommendations

Sep 25, 2007, 04.40 PM | Source: Moneycontrol.com

Buy Balmer Lawire & Co, target Rs 630: Bajaj Capital

Bajaj Capital is bullish on Balmer Lawire & Company and has maintanied buy rating on the stock with target pirce of Rs 630.

Like this story, share it with millions of investors on M3

Buy Balmer Lawire & Co, target Rs 630: Bajaj Capital

Bajaj Capital is bullish on Balmer Lawire & Company and has maintanied buy rating on the stock with target pirce of Rs 630.

Post Your Comments

Share Cancel

Bajaj Capital is bullish on Balmer Lawire & Company and has maintanied buy rating on the stock with target pirce of Rs 630.

 

Bajaj Capital research report on Balmer Lawire & Company

 

Balmer Lawrie is a Government of India company that operates as a diversified conglomerate with interests in logistics, industrial packaging, greases & lubricants, travel & tourism, leather chemicals, tea exports and turnkey projects. It enjoys market leadership in most of its core business segments capturing a high share of government and PSU businesses.

 

In the recent years, the company’s focus on the logistics division has led to a strong growth in its profitability. Though logistics contributes approx. 24% to the company’s total revenues, it delivers approx. 61% of its total EBIT. The company plans to focus on its core business and expand via organic and inorganic routes. Based on the organic route, the management is targeting Rs. 2000 cr. & Rs. 200 cr. in Revenues & Net Profits respectively by FY10E, implying a CAGR of 41.7% in earnings during FY07-10.

 

To attain market leadership in its core businesses, Balmer Lawrie plans to exit some of its non-core businesses such as tea blending and specialty containers. The company also plans to expand its offerings in key businesses to tap potential clients. Further, Balmer Lawrie’s nearly debt free status, comparatively cheap valuations and the possibility of divestment of Government’s stake make it an attractive value play.

 

Key Investment Arguments

 

Balmer Lawrie has a market cap of Rs. 754.4cr, average daily volume of 7433 shares for the last six months and net sales of Rs. 1338cr for the trailing twelve months ended 30th June 2007.

 

Its Operating profit and Net profit margins are at 9.5% and 5.5% resp. in FY07. The company has achieved a 5-year CAGR of 14.1% in net sales, 21.6% in EBITDA and 54.4% in net profits. Balmer Lawrie presently trades at a PE multiple of 10.4, Price to Book ratio of 2.8 and Price to Sales ratio of 0.6. Debt-equity ratio is virtually NIL at 0.4 for FY07.

 

Conclusion

 

On the basis of our research, we feel that this is a good stock to buy at the current market price of Rs. 463.10. If everything goes well, the price is likely to appreciate to Rs. 630.0, within a year or so, translating into a gain of about 36%.  

Ads by Google

Buy, Hold, Sell ? Hear it first on M3
Buy Balmer Lawire & Co, target Rs 630: Bajaj Capital
New Member
1 Follower

Price when posted: BSE: Rs607.10 ( 1.08 % ), NSE: Rs. 608.00 ( 0.82 % )

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login