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Buy Gujarat Mineral Development, tgt Rs 443: Hem
Hem Securities has maintained its buy rating on Gujarat Mineral Development Corporation with a target price of Rs 443. The stock looks attractive at the current valuation with the strong upside potential in the long term investment horizon.
Hem Securities has maintained its buy rating on Gujarat Mineral Development Corporation with a target price of Rs 443 in its June 18, 2008 research report. "Being the leading lignite merchant in the country, the company already stands in a pioneer position in the sky rocketing coal prices regime. With the allotment of coal blocks in Chattisgarh and Orissa, the company shall be able to feed 4750 MW power and if negotiations with PIPDC prove fruitful, the company will also be able to gener-ate maximum benefit from the block through its expertise."
"Also, the company's diversification into cement, power, SEZ and port arena is expected to increase future earnings visibility by securing captive coal customers through the proposed JVs. The stock at the current market price of Rs 304 trades at 18.31 times to its earning per share of Rs 16.60 and 4.55 times to its book - value of Rs 66.77. The stock looks attractive at the current valuation with the strong upside potential in the long term investment horizon. Therefore, we maintain 'BUY' signal on the stock with the target price of Rs 443 which is approximately 46% up from the current market price of Rs 304," says Hem's research report.
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