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Buy Garware Wall Ropes, target of Rs 210: Religare
Religare has maintained its buy rating on Garware Wall Ropes with a target price of Rs 210. Garware Wall Ropes (GWRL) has reported lower-than-expected results for Q4FY08 owing to sluggish growth in the cordage segment.
Religare has maintained its buy rating on Garware Wall Ropes with a target price of Rs 210 in its June 13, 2008 research report. "Garware Wall Ropes (GWRL) has reported lower-than-expected results for Q4FY08 owing to sluggish growth in the cordage segment. Net sales increased 19% YoY to Rs 1.2 billion, 8% short of our estimate as the revenue share of the cordage business declined to 64% against the full-year average of 73%. Export sales have also been comparatively lower, comprising 33.4% of revenue in Q4FY08 as compared to 42% in FY07 and 36% in FY06. The EBITDA margin, at 13.2%, was 100bps lower than our estimate due to rising crude prices, which led to higher input costs for cordage products."
"We expect the company to record a 23% CAGR in topline during FY08-FY10 on the back of higher execution in the geo-synthetics business. We maintain a Buy call on the stock with a target of Rs 210. At CMP of Rs 94 the company would discount its FY09E EPS of Rs 13.9 by 6.8x which is reasonable vis-à-vis peers," says Religare's research report.
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