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Buy Reliance Communications, target of Rs 604: Angel
Angel Broking has maintained its buy rating on Reliance Communications with a target price of Rs 604. Reliance Communications (RCOM) recorded a fairly disappointing performance in 1QFY2009, with its Top-line clocking growth of a mere 23.1% yoy.
Angel Broking has maintained its buy rating on Reliance Communications with a target price of Rs 604 in its August 1, 2008 research report. "Reliance Communications (RCOM) recorded a fairly disappointing performance in 1QFY2009, with its Top-line clocking growth of a mere 23.1% yoy. Owing to higher Interest income and Tax credits, RCOM's Bottom-line grew by a marginal 0.6% qoq in spite of the fall in EBITDA. On a yoy basis, Bottom-line grew by 23.9%."
"At the CMP, the stock is trading at a P/E of 12.8x FY2010E EPS, EV/EBITDA of 9.3x FY2010E EBITDA and EV/subscriber of USD 265.8 on our FY2010 subscriber estimates. On account of the poor performance witnessed this quarter and the subsequent downgrades in our estimates, we have downgraded our Target Price as well by 21% to Rs 604, including Rs 91 as the value of RCOM's towerco, Reliance Infratel. We maintain a Buy on the stock. However, it should be noted that unless the company reports a marked improvement in its performance going ahead and greater clarity is provided on issues with respect to its forex losses, the stock is likely to trade subdued," says Angel's research report.
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