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Buy Electro Steel Casting: Angel Broking
Angel Broking has maintained buy rating on Electro Steel Casting with target price of Rs 55. At the CMP of Rs 34, ECL is trading at a P/BV of 0.7x FY2010E
Angel Broking has maintained buy rating on Electrosteel Casting with target price of Rs 55, in its June 25, 2008 report. "We believe that the government's thrust on water and sewage infrastructure augurs well for ECL. Improving capacity utilisation of DI pipes and fittings, backward integration into key inputs like coking coal and iron ore will be the key positives for ECL's growth going ahead. However, we are downgrading our estimates owing to the higher-than-expected increase in costs, poor performance of the company in FY2008, delay in mining and expected losses on forex derivatives. At the CMP of Rs 34, ECL is trading at a P/BV of 0.7x FY2010E BV, which is attractive considering the company's backward integration plans and the government's thrust on water and sewage infrastructure. However, we have de-rated our multiple due to the significant overall de-rating of the peer set (as shown below) along with the adverse macros, which are affecting the overall sentiments in the market. Hence we maintain a Buy on the stock, with a revised Target Price of Rs 55 (Rs100)" according to Angel Broking report.
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