Buy GMR Infra; target of Rs 95: Anand Rathi

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Anand Rathi Securities has recommended buy rating on GMR Infrastructure with a target of Rs 95, in its November 23, 2009 report.

 

"GMR Infrastructure is one of India's leading infrastructure developers, having a presence in the Airports, Power, Roads and Urban Infra sectors. GMR also has a bouquet of overseas assets/ investments, including airports, power plants and coal mines. Our Dec-10 target price of Rs 95 implies 40% upside. We believe that GMR stock can potentially double on a 3-year investment horizon. Our target price is derived using SOTP, with individual assets valued using DCF. Airports (incl. realty), power and road assets, respectively, account for 44%, 41% and 6% of our TP."

 

"The stock's premium valuations relative to peers, reflect GMR's superior LT growth-outlook, in our view. Key risks to our TP: Execution delays, regulatory disapproval for higher user charges in DIAL, govt. disapproval for the 'upfront deposit' structure in airport real estate, lower-than-expected merchant power tariffs, and potential listing of the energy business (GEL)."

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