Karvy Stock Broking has maintained buy rating on GE Shipping with target price of Rs 515 in its March 06, 2008 research report. "GE Shipping is India's largest private shipping company operating in the tanker, dry bulk and offshore segments with a fleet of 47 vessels. The company has developed robust business model with diverse revenue streams and mix of voyage (spot) and time charter contracts which improves earnings visibility in a cyclical industry. We expect strong fleet addition with committed capital expenditure of USD 1.25 billion (approx Rs 49.6 billion) in shipping and offshore segment to increase consolidated revenue and profits at CAGR of 26.1% and 15.1% respectively over next three years. We rate the stock as a BUY."

Valuations: At current market price of Rs 402, the stock is trading at 5.8xFY09E and 5.2xFY10E on an earnings of Rs. 69 and Rs. 77 respectively and 4.2x FY09E and 3.4xFY10E, EV/EBITDA. We have valued the company considering average of two methods; price to earnings multiple 7x on its earnings of FY10 given and 10% discount to NAV. We expect the re-rating in valuation with increasing exposure to high multiple offfshore segment. For NAV method, GE shipping has traded at a discount to approx 30% to 40% to its NAV in last three years. We believe the potential upside due to offshore subsidiary and leverage of operating skill through in-chartering is not captured. As a result, we have lowered the discount from approx 30% to 10%. We initiate our coverage on the company with BUY rating and a target price of Rs. 515." says Karvy Stock Broking research report.