Buy ESS DEE Aluminium; target of Rs 547: Firstcall Research

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Buy ESS DEE Aluminium; target of Rs 547: Firstcall Research

Firstcall Research is bullish on ESS DEE Aluminium and has recommended buy rating on the stock with a target of Rs 547 in its April 27, 2011 research report.

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Firstcall Research is bullish on ESS DEE Aluminium and has recommended buy rating on the stock with a target of Rs 547 in its April 27, 2011 research report.

"Ess Dee Aluminium (EDAL) is engaged in manufacturing of aluminium foil and poly vinyl chloride (PVC) based products. In the year 2004 the company set up aluminium foil manufacturing in Daman. Currently the EDAL owns 8 state of the art manufacturing plant spread across India. Ess Dee is a leading supplier of primary packaging materials. EDAL has clientele includes pharmaceutical companies and FMCG majors namely Ajanta Pharma, Cadila Pharmaceuticals, Dr. Reddy's Laboratories, Pidilite Industries, Reckitt Benckiser, Wockhardt, Kalindi Medicure, Hindustan Latex, Indico Remedies, Zydus Cadila, Ranbaxy Laboratories are amongst others The company also exports to customers located in Latin America, Africa, Middle East and South East Asia."

"ESS DEE Aluminium Ltd disclosed results for the quarter ended December 2010. Net sales for the quarter moved up 19% to Rs.1869.04 million as compared to Rs.1576.95 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs. 380.43 million from Rs.310.32 million in previous year same quarter. The Basic EPS of the company stood at Rs.11.87 for the quarter ended December 2010."

"Price to Book Value of the stock is expected to be at 2.68 x and 2.07 x respectively for FY11E and FY12E. On the basis of EV/EBITDA, the stock trades at 6.74 x for FY11E and 5.94 x for FY12E. Earning per share (EPS) of the company for the earnings for FY11E and FY12E is seen at Rs.46.56 and Rs.53.34 respectively. At the current market price of Rs 480, the stock is trading at 10.31 x FY11E and 9.00 x FY12E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 547 for medium to long term investment," says Firstcall Research report.

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