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Buy MRO-TEK, target of Rs 92: Emkay Global
Emkay Global Financial Services has maintained its buy rating on MRO-TEK with a target price of Rs 92. MRO-Tek Ltd ended the first quarter with 29.6% YoY increase in revenues to Rs 314.4 million on account of about 10% revenue contribution from the company’s own manufactured products.
Emkay Global Financial Services has maintained its buy rating on MRO-TEK with a target price of Rs 92 in its August 5, 2008 research report. "MRO-Tek Ltd ended the first quarter with 29.6% YoY increase in revenues to Rs 314.4 million on account of about 10% revenue contribution from the company's own manufactured products. During the quarter, PAT declined by 12.5% YoY and 63.8% QoQ to Rs 19.4 million on account of Rs 11.6 million loss on exchange fluctuation."
"At current market price of Rs 52 , MRO-Tek discounts its FY09E and FY10E EPS by 5.8x and 3.8x respectively and thus available at an attractive valuation. But based on the overall macro scenario and the PE contraction taking place across large cap scrips, we follow a cautious and conservative approach in assigning a PE multiple to the scrip. After taking into account the earning downgrades and PE contraction, we maintain our BUY recommendation on the scrip with downgraded target price of Rs 92 (from Rs 128). At our target price, the scrip discounts FY09E and FY10E EPS by 10.3x and 6.6x respectively," says Emkay Global Financial Services' research report.
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