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Buy Bhushan Steel, target of Rs 1,634: Motilal Oswal
Motilal Oswal has come out with a research report on Bhushan Steel. The research firm has maintained buy with a one-year target price of Rs 1,634, in its report dated November 13, 2009.
Motilal Oswal has come out with a research report on Bhushan Steel . The research firm has maintained buy with a one-year target price of Rs 1,634, in its report dated November 13, 2009.
"Bhushan Steel has a superior product mix due to a strong customer base of OEMs. EBITDA per ton margins have increased from Rs 5,000-7,000/tonne to Rs 8,000-10,000/tonne despite not having backward integration of HRC mills. Margins are likely to improve further with the backward integration of HRC mills. We have upgraded FY10 EPS to Rs127 (earlier Rs 104) due to increased visibility of the company's upstream project and stronger performance of its downstream division. We expect EPS to post growth of 59% CAGR over FY09-12. The stock is trading at an attractive PE of 5.8xFY11E and P/BV of 1.6xFY11E (RoE of 27.5%). Maintain buy with a one-year target price of Rs 1,634 based on P/BV of 2xFY11E", says Motilal Oswal.
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To read the full report click on the attachment.........
