Buy Deepak Fertilizer; target of Rs 143: KRChoksey

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KRChoksey is bullish on Deepak Fertilizers and Petrochemicals and has recommended buy rating on the stock with a target of Rs 143, in its November 19, 2009 research report.

"We have positive view on Deepak Fertilizers & Petrochemicals mainly due to strong financial track record as well as dividend payout history. We believe the valuations of the company to improve further once the TAN capacity expansion is completed by Q3FY11E and also the improved availability of feedstock will result into increased revenue from fertilizer segment. The strong product portfolio of both chemicals & fertilizers and rich customer base clearly reflects the growth visibility. At the current market price of Rs 88 the company is trading at 5.0x FY10E EPS of Rs. 17.8 and 3.2x FY11E EPS of Rs.27.6 We have valued the company using earnings multiple. We initiate our coverage on the stock with a 'BUY' recommendation with a target price of Rs 143, implying an upside potential of 62.0%. At the target price, the stock would be valued at 8.0x FY10E EPS of Rs 17.8," says KRChoksey research report.

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