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Buy Mercator Lines, target of Rs 140: Karvy
Karvy Stock Broking has maintained its buy rating on Mercator Lines with a target price of Rs 140. Mercator lines (stand alone) is expected to report revenue growth of 88.3% YoY to Rs 2.64 billion on back of vessel addition during the year.
Karvy Stock Broking has maintained its buy rating on Mercator Lines with a target price of Rs 140 in its July 24, 2008 research report. "Mercator lines (stand alone) is expected to report revenue growth of 88.3% YoY to Rs 2.64 billion on back of vessel addition during the year. The company also acquired one Very Large Crude Carrier (VLCC) and one Dredger during the Q1FY09. However, we expect the marginal decline on QoQ basis due to loss in revenue days due to sale of one single hull VLCC to Singapore Subsidiary."
"We expect standalone net profit to increase by 10% to Rs1.26 bn in FY09 and by 26.7% to Rs 1.6 bn in FY10. We expect share of profit from (72.3%) subsidiary in Singapore and from offshore rig at Rs 2.24 bn FY09 and Rs 3.27 bn in FY10 in consolidated profits. We maintain our valuation target at 7xFY10 consolidated earnings with target price of Rs 140 and maintain BUY," says Karvy's research report.
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