SKP Research has recommended to buy PSL with a target price of Rs 197 in its report dated November 16, 2009.
"PSL Ltd (PSL) is one of the largest HSAW pipe manufacturer with the installed capacity of 1.475 MTPA of pipes. The company have 13 HSAW pipe mills, 11 of which are located in five locations geographically spread throughout India and one each at UAE and USA. PSL also provide pipe coating and other ancillary products and services related to pipe industry. About 98% of the revenues of the company are derived from domestic market. At the current market price of Rs 147, the stock is trading at a P/E of 5.4x, 4.8x and 4.1x of FY10E FY11E and FY12E earnings of Rs 27.3 Rs 30.4 and Rs 35.9 respectively. We recommend BUY rating on the stock with a target price of Rs 197/- (34% upside) in 18 months implying a P/E multiple of 5.5x of FY12E earnings, "says SKP Research report.
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