Buy Ugar Sugar, target of Rs 18: LKP Shares

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Buy Ugar Sugar, target of Rs 18: LKP Shares

LKP Shares has recommended a buy rating on Ugar Sugar Works with a target of Rs 18. Despite being a highly geared company the research firm believes that USW trading at 3xFY’10E earnings is a good trading bet.

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LKP Shares has recommended a buy rating on  Ugar Sugar Works with a target of Rs 18 in its January 16, 2009 research report. "USW derives more than 60% of its revenues from sugar, 30% from distillery and IMFL operations and 10% revenues from Power, which it sells to Tata Power Company at Rs 7 per unit (as against Rs 5 per unit last fiscal). Despite being a highly geared company we believe that USW trading at 3xFY'10E earnings is a good trading bet and investors can accumulate the stock at current levels with a medium-term price target of Rs 18 which is a good 50% price appreciation. We recommend a BUY on USW," says LKP Shares' research report.

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