Buy Solar Industries; target of Rs 712: Firstcall Research

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Buy Solar Industries; target of Rs 712: Firstcall Research

Firstcall Research is bullish on Solar Industries India Limited and has recommended buy rating on the stock with a target of Rs 712 in its July 4, 2011 research report.

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Firstcall Research is bullish on Solar Industries India Limited and has recommended buy rating on the stock with a target of Rs 712 in its July 4, 2011 research report.

"Solar Industries India Limited, during the quarter ended, the robust growth of Net Profit is increased by 43.91% Rs 209.48 million. Company has approved the final dividend of 40% i.e. Rs  4 per share on equity share of Rs 10 each subject to the approval of shareholders. Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 22% over 2010 to 2013E respectively."

"Solar Industries India Ltd has posted net profit of Rs 209.48 million for the quarter ended on March 31, 2011 as against Rs 145.56 million in the same quarter last year, an increase of 43.91%. It has reported net sales of Rs 2021.11 million for the quarter ended on March 31, 2011 as against Rs 1565.30 million in the same quarter last year, a rise of 29.12%. Total income grew by 27.51% to Rs 2110.71 million from Rs 1655.31 million in the same quarter last year. During the quarter, it reported earnings of Rs 12.09 a share registering growth of 43.91%."

"At the current market price of Rs 630, the stock is trading at 11.53 x FY12E and 10.24 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs 54.62 and Rs 61.52 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 22% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 6.50 x for FY12E and 5.80 x for FY13E. Price to Book Value of the stock is expected to be at 2.66 x and 2.11 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 712 for Medium to Long term investment," says Firstcall research report.

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