Buy Gati; target of Rs 90: Firstcall Research

“Gati net sales are expected to grow at a CAGR of 16% over FY09 to FY12E. At the market price of Rs 73.50, the stock is trading at 27.93 x and 20.80 x for FY11E and FY12E respectively. On the basis of EV/EBDITA, the stock trades at 7.14 x for FY11E and 6.87 x for FY12E. Price to book value of the company is expected to be at 2.12 x for FY11E and 1.92 x for FY12E respectively. EPS of the company is expected to be at Rs 2.67 and Rs 3.58 for the earnings of FY11E and FY12E respectively."

"The paid-up equity share capital of the company was increased during the year from Rs 169752100 to Rs 17O309800 on allotment of 278850 equity shares of Rs 2 each at a premium of Rs 29.20 per share under ESOS Plan on December 24, 2009. The Directors have recommended a dividend of Rs 0.40 per share (20%) for the year ended June 30, 2010. We recommend ‘BUY’ this stock with a target price of Rs 90 for medium term investment,” says Firstcall Research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.