Apr 01, 2013, 11.35 AM IST | Source: Moneycontrol.com

Buy Swan Energy; target of Rs 142: Firstcall Research

Firstcall Research is bullish on Swan Energy and has recommended buy rating on the stock with a target price of Rs 142 in its March 29, 2013 research report.

Firstcall Research is bullish on Swan Energy and has recommended buy rating on the stock with a target price of Rs 142 in its March 29, 2013 research report.

“Swan energy ltd formerly known as Swan Mills was incorporated in the year 1909.The registered office of the company is at Sewree, Mumbai. The name of the company changed from 'Swan Mills ' to 'Swan Energy' with effect from December 16, 2008. Earlier, the Ajay Piramal group had entered into an alliance with the company`s promoters to develop around 1 million sq. ft. spread over central and north Mumbai. Besides trading in fabric, it has planned to put up a fabric processing unit in Gujarat for which land has been acquired.”

“The company’s net profit jumps to Rs.49.79 million against Rs.25.17 million in the corresponding quarter ending of previous year, an increase of 97.81percent. Revenue for the quarter rose 139.61percent to Rs.659.10 million from Rs.275.07 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.0.52 a share during the quarter, registering 97.85percent increase over previous year period. Profit before interest, depreciation and tax is Rs118.63 millions as against Rs.45.82 millions in the corresponding period of the previous year.”

“At the current market price of Rs.124.00, the stock P/E ratio is at 31.66 x FY13E and 23.23 x FY14E respectively.  Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.3.92 and Rs.5.34 respectively.  On the basis of EV/EBITDA, the stock trades at 14.02 x for FY13E and 9.62 x for FY14E.  Price to Book Value of the stock is expected to be 5.23 x and 4.27 x respectively for FY13E and FY14E.  We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘buy’ in this particular scrip with a target price of Rs.142 for medium to long term investment,” says Firstcall Research report. 

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