FinQuest Securities has maintained its buy rating on Dhampur Sugar Mills with a price target of Rs 110. It reported excellent set of numbers for 3QFY09 and 9MFY09. Net sales for 3QFY09 increased by 133.5% YoY to INR 2714.3 million and EBITDA margin improved by 560 bps YoY to 15.7%.
FinQuest Securities has maintained its buy rating on Dhampur Sugar Mills with a price target of Rs 110 in its report dated July 18, 2009.
"Dhampur Sugar Mills Ltd (DSML) reported excellent set of numbers for 3QFY09 and 9MFY09. Net sales for 3QFY09 increased by 133.5% YoY to Rs 2714.3 million and EBITDA margin improved by 560 bps YoY to 15.7%. The company posted PAT of Rs 111.4 million in 3QFY09 (against loss of Rs 235.4 million in 3QFY08). It has contracted to import 1.5 lakh tonnes of raw sugar and has already processed 0.18 lakh tonnes in 3QFY09."
"We believe the company will process total 0.88 lakh tonnes of raw sugar in 2HFY09 (as compared to earlier estimate of 0.25 lakh tonnes) and 0.65 lakh tonnes in FY10E (against earlier estimate of 0.75 lakh tonnes). At CMP, DSML is trading at 3.1x FY10E earnings and 3.1x FY10E EV/EBITDA. We believe valuation is cheap as compared to peers. We maintain 'BUY' recommendation with price target of Rs 110," says FinQuest Securities' report.
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