Buy Texmaco, tgt Rs 2300: PINC

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PINC has maintained buy rating on Texmaco with target price of Rs 2300 in its May 20, 2008 report. "Texmaco Ltd's (Texmaco) Q4FY08 results were above expectations as it reported a 94% YoY increase in net sales to Rs2.1bn and a 177% jump in net profits to Rs305mn. OPM expanded 628bps to 21.2%. The growth was contributed by the heavy engineering segment comprising wagons, process engineering and hydromechanical equipment divisions The CMP of Rs 1,561 discounts FY10E EPS of Rs165.5 by 8.5x and trades at an EV/EBIDTA of 5.6x. We believe it provides an opportunity to capitalise on the buoyant demand for wagons and increasing investments in hydel projects. Thus, we revise our recommendation upward to 'BUY' with a 15-month price target of Rs 2,300" according to PINC research report.  

 

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