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Sep 02, 2008, 07.41 PM IST | Source: Moneycontrol.com

Buy Orient Abrasives,target Rs 36: Hem Securities

Hem Securities has recommended a buy rating on Orient Abrasives with a target of Rs 36. Orient Abrasives’ principal activity is to manufacture abrasive grains, refractory and monolithic products.

Hem Securities has recommended a buy rating on Orient Abrasives with a target of Rs 36 in its report on 30th Aug 2008. "Orient Abrasives’ principal activity is to manufacture abrasive grains, refractory and monolithic products. The Company operates in three segments namely Refractories and Monolithics, Oxide Grains and Bonded Abrasives. The company has posted excellent results for the quarter ended June 2008. On the other hand the expenditures have also increased by 20.92 per cent. Operating profit stood at Rs 207.70 million against Rs 66.29 million clocked in Q2FY08 portraying a whopping growth of 213.32 per cent and indicating the operational strength of the company."

"The Indian abrasives industry is characterized by diverse user industries, an insig-nificant threat from substitute products, adequate raw material availability and extensive application in the industry. the stock is trading at Rs 27 which is at 5.89 times to its earn-ings and 1.59 times to its book value of Rs 17.08. Since the stock seems to offer extremely good investment opportunities, we initiate a ‘BUY’ signal on the stock with a target price of Rs 36 in medium to long term investment horizon expecting an appreciation of about 33 % from the current level of Rs 27."  says Hem Securities' research report.  

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