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Buy Garware Offshore, target of Rs 254: India Infoline
India Infoline has maintained its buy rating on Garware Offshore with a target price of Rs 254. Garware Offshore Services Ltd (GOSL) reported 51.7% yoy and 25.9% qoq jump in income for operations for Q1 FY09. PAT jumped by 91.6% yoy to Rs 99 million.
India Infoline has maintained its buy rating on Garware Offshore with a target price of Rs 254 in its August 4, 2008 research report. "Garware Offshore Services Ltd (GOSL) reported 51.7% yoy and 25.9% qoq jump in income for operations for Q1 FY09. PAT jumped by 91.6% yoy to Rs 99 million. However, the company reported Rs155mn of foreign exchange fluctuation loss on its debt of Rs 2.6 billion (as on March 31, 2008) as rupee depreciated against USD by 7% leading to a loss after extra-ordinary items of Rs 55 million."
"Over the next couple of years, GOSL is adding five vessels to its fleet (one PSV, one construction barge and three 60-ton AHTSVs). With crude oil prices reeling above USD 125/bbl, there are increased investments in oil exploration and production activities. Higher crude oil prices have now made offshore projects including deepwater and ultra-deep water projects economically viable. This has translated into increased demand for offshore vessels. With shipyards flush with order book positions and shortage of EPC services, supplies would be delayed causing day rates to remain firm. GOSL, with its fleet addition, is well poised to gain significantly from the global dynamics. We maintain our BUY rating on the stock with a target price of Rs 254, upside of 30.9%," says India Infoline's research report.
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