Buy BL Kashyap & Sons, target of Rs 1587: IIFL

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IIFL has maintained its buy rating on BL Kashyap & Sons with a revised target price of Rs 1587 in its July 1, 2008 research report. "Boosted by strong revenue growth in 4QFY08, B L Kashyap's net profit was ahead of our expectations, despite a 80bps contraction in margins. With an order book of Rs 30 billion and robust order inflow momentum, we expect earnings CAGR of 31% over FY08-10ii. This is significantly lower than management's indication, and reflects our concerns regarding uncertainty on the BPTP order."

"We have tweaked our earnings estimates to marginally increase our revenue estimates and cut our EBITDA margin assumptions by 10bps. This translates into 4% and 2% downward revisions in FY09 and FY10 earnings estimates, respectively. Accordingly, we cut our target price to Rs 1587 from Rs 1623. Maintain BUY," says IIFL's research report.

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