Buy KSB Pumps; target of Rs 600: Sushil Finance

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Buy KSB Pumps; target of Rs 600: Sushil Finance

Sushil Finance is bullish on KSB Pumps and has recommended buy rating on the stock with a target of Rs 600 in it’s June 10, 2010 research report

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Sushil Finance is bullish on KSB Pumps and has recommended buy rating on the stock with a target of Rs 600 in it's June 10, 2010 research report.       

"KSB Pumps Ltd. (KSB) is engaged in the business of manufacturing of power driven pumps and industrial valves, which are used in various applications that range from building services to industrial processes, water engineering, mining & energy technology. KSB is also specialized in pumps for Ultra Mega Power Plant (UMPP) projects. It has manufacturing plants in Pimpri, Chinchwad, Vambori & Sinnar in Maharashtra, Coimbatore in Tamil Nadu, and Mala in Kerala."

"Demand for its pumps are expected to grow substantially given that the municipal waste disposal facilities of the Country need to be modernized and new sewage treatment plants are required. Moreover, the need of desalination of sea water is expected to increase very fast in India. KSB is very well placed and equipped with its special range products to cater the demand of this segment. Necessity of long distance water transportation would also drive the demand for KSB's pumps & valves. Going ahead, though KSB's margins are expected to be under pressure in CY10 as some projects could have been obtained at lower margins due to stiff completion, however with the recovery in economy & the overall business environment, we expect margins to be on track in CY11 with new order inflows." 

"At the CMP of Rs 433, KSB is a buy, the stock is available at an attractive valuation of 8.7x its FY12E EPS of Rs 50. We believe it can get valued at 12x its FY12E EPS implying a target price of Rs 600," says Sushil Finance research report.     

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To read the full report click on the attachment