Buy Sandesh; target of Rs 316: Firstcall Research

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Buy Sandesh; target of Rs 316: Firstcall Research

Firstcall Research is bullish on Sandesh and has recommended buy rating on the stock with a target of Rs 316 in its June 13, 2011 research report.

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Firstcall Research is bullish on Sandesh and has recommended buy rating on the stock with a target of Rs 316 in its June 13, 2011 research report.

"Sandesh started its journey in the world of Journalism in 1923. Sandesh was a single edition newspaper published from Ahmedabad. During the quarter ended, the robust growth of Net Profit is increased by 139.09% Rs 83.13 million. Sandesh Ltd has declared Final Dividend @40% (Rs  4.00 per share) on paid up equity share capital of the Company subject to approval of the members. Net Sales and PAT of the company are expected to grow at a CAGR of 6% and 12% over 2010 to 2013E respectively."

"Sandesh Ltd has posted net profit of Rs 83.13 million for the quarter ended on March 31, 2011 as against Rs 34.77 million in the same quarter last year, an increase of 139.09%. It has reported net sales of Rs 616.04 million for the quarter ended on March 31, 2011 as against Rs 687.71 million in the same quarter last year, a decline of 10.42%. Total income declined by 5.92% to Rs 651.58 million from Rs 692.57 million in the same quarter last year. During the quarter, it reported earnings of Rs9.74 a share."

"At the current market price of Rs 280, the stock is trading at 4.99 x FY12E and 4.58 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs 56.16 and Rs 61.11 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 6% and 12% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 2.92 x for FY12E and 2.67 x for FY13E. Price to Book Value of the stock is expected to be at 0.69 x and 0.60 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 316 for Medium to Long term investment," says Firstcall research report.

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To read the full report click on the attachment