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Buy Binani Cement, target of Rs 94: SPA
SPA has recommended a buy rating on Binani Cement with a 12 months target price of Rs 94, a potential upside of 51%. At the CMP of Rs 62.35, the stock is available at 4.6x and 3.6x its earnings Rs 13.5 and Rs 17.2 in FY09E and FY10E respectively.
SPA has recommended a buy rating on Binani Cement with a 12 months target price of Rs 94, a potential upside of 51% in its April 4, 2008 research report. "We expect gross revenues to grow at a CAGR of 51.6% during period FY07-FY10E from Rs 7,820 million to Rs 27,229 million. We expect operating margins to be 30% in FY09E and 28% in FY10E inline with the industry. The company is in huge capacity expansion mode, it will double its global cement capacity from 6.0 mtpa in FY08 to 12.70 mtpa by end of FY11".
"At the CMP of Rs 62.35, the stock is available at 4.6x and 3.6x its earnings Rs 13.5 and Rs 17.2 in FY09E and FY10E respectively. On EV/EBIDTA basis, the stock is valued at 3.2x in FY09E and 1.9x in FY10E. We initiate our coverage with "Buy" recommendation and have arrived at our 12-month target price of Rs.94 based on target price multiple of 7x of FY09E earnings, with potential upside of 51%" says SPA's research report.
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