PINC research has maintained buy rating on Himadri Chemicals and Industries with target price of Rs 769, 12-month investment prespective as per their report on December 04, 2007. "The company is in the midst of an aggressive capex plan of Rs16 billion, to be executed over FY07-10. Post successful completion of the same, its capacity would be as follows: CTP 0.7million mt ( 0.4 million mt in India and 0.3 million mt in China), Carbon Black: 50k mt, Advanced Carbon :400 mt. Plans are afoot to undertake an acquisition in China which would further enhance its CTP capacity.At the CMP of Rs636, the stock trades at an EV/EBITDA of 9.7x and P/E of 13.9x FY09E earnings. Considering the sharp scale up, adequate financial strength to implement its expansion, successful transition to a value added player, there is a high potential of net sales and net profits posting a CAGR of 53% and 63% respectively during FY09-11. Assuming a WACC of 13% and a terminal growth rate of 3% (in alignment with user industry i.e. Aluminium and Graphite Electrodes), we arrive at a DCF value of Rs769. Hence, we recommend a 'Buy' with a 12-months investment perspective" says PINC report.
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