Buy SKF, tgt Rs 308: justtrade.in

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Buy SKF, tgt Rs 308: justtrade.in

justtrade.in has maintained buy rating on SKF India with target price of Rs 308. Valuations seem to be cheap as compared to the consistent growth in the company’s revenues, profits and cash flows and its high Return on Networth.

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justtrade.in has maintained buy rating on SKF India with target price of Rs 308 in its July 03, 2008 report. "The company plans to invest over Rs 150 crore in setting up a new manufacturing site in Haridwar, Uttarakhand. Situated over an area of 40,000 square metres, the new bearing factory is likely to raise the existing ball bearing capacity of the company by more than one-third. The plant will be operational in Q4FY08 and is likely to employ over 300 people. Another new plant in Ahmedabad has already commenced its operation. This plant will cater to the requirements of its industrial products division. SKF trades at a PE multiple of 7.1 based on EPS for the TTM ended March 31, 2008, Price to Book ratio of 2.1 on 2007 book-value and Price to Sales ratio of 0.7 based on sales for TTM ended Mar 31, 2008. Valuations seem to be cheap as compared to the consistent growth in the company's revenues, profits and cash flows and its high Return on Networth. On the basis of our research, we feel that this is a good stock to buy at the current market price of Rs 218.45. If everything goes well, the price is likely to appreciate to Rs. 308.0, within 12-18 months, translating into a gain of about 41%" according to justtrade.in.