Buy Solar Ind; target of Rs 656: Firstcall Research

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Buy Solar Ind; target of Rs 656: Firstcall Research

Firstcall Research is bullish on Solar Industries India and has recommended buy rating on the stock with a target of Rs 656 in its December 28, 2010 research report.

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Firstcall Research is bullish on Solar Industries India and has recommended buy rating on the stock with a target of Rs 656 in its December 28, 2010 research report.

"Solar Explosives, a solar group company was incorporated on February 24, 1995. It is one of the largest Indian Explosive manufacturing company .The name of Solar Explosives Limited got changed to Solar Industries India Limited. The Solar Group has a licensed & installed capacity of 175, 000 MT of Explosives, 140 million Detonators & 20 million meters of detonating fuse. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 22% over 2009 to 2012E respectively."

"During the quarter, the company has reported Net Profit increased Rs 171.03 million from Rs 122.50 million in previous year same quarter. Earning per share (EPS) of the company for the earnings for FY11E and FY12E is seen at Rs 41.27 and Rs 45.91 respectively. Price to Book Value of the stock is expected to be at 2.93 x and 2.37 x respectively for FY11E and FY12E. On the basis of EV/EBITDA, the stock trades at 7.81 x for FY11E and 7.01 x for FY12E."

"At the current market price of Rs 570, the stock is trading at 13.81 x FY11E and 12.41 x FY12E respectively. 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 656 for medium to long term investment," says Firstcall Research report. 

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To read the full report click on the attachment