Buy Shiv-Vani Oil; target of Rs 319: ICICIdirect.com

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Buy Shiv-Vani Oil; target of Rs 319: ICICIdirect.com

ICICIdirect.com is bullish on Shiv-Vani Oil and has recommended buy rating on the stock with a target of Rs 319 in its May 17, 2011 research report.

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ICICIdirect.com is bullish on Shiv-Vani Oil and has recommended buy rating on the stock with a target of Rs 319 in its May 17, 2011 research report.

"Shiv-Vani Oil declared Q4FY11 results above our estimates on account of higher execution of the order book. The revenues increased 37% to Rs 410.3 crore and net profits increased 32.5% YoY to Rs 62.2 crore. However, lack of order intake over the past few quarters led to decline in the order book to Rs 2,700 crore executable over the next two years. Seismic, drilling and CBM contributed Rs 100 crore, Rs 2,200 crore and Rs 400 crore, respectively to Shiv-Vani's order book. We have reduced our FY12E and FY13E EPS estimates to Rs 46.6 and Rs 49.1 due to lack of revenues visibility. The company has bid for orders worth Rs 3,000 crore but there has been delay in opening of the bids. On account of lower visibility on the revenues front, we are reducing our price target for Shiv-Vani Oil to Rs 319"

"Shiv Vani's order book has declined to Rs 2,700 crore (executable over next two years) due to lack of order intake over the past few quarters. This has reduced Shiv-vani's revenues visibilty, going forward. However, winning of new orders from ONGC may lead to re-rating for the stock. Shiv-Vani currently trades at 5.5x FY13E EPS of Rs 49.1 and at a EV/EBITDA multiple of 4.3x FY13E. We have valued Shiv-Vani at 5x FY13E EV/EBITDA, with a price target Rs 319," says ICICIdirect.com research report.

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