Buy Varun Shipping, target of Rs 61: Karvy

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Buy Varun Shipping, target of Rs 61: Karvy

Karvy Stock Broking has maintained its buy rating on Varun Shipping Company with a target price of Rs 61. The research firm expects consolidated revenue to increase by 2.2% to Rs 9.69 billion in FY10 and by 12.4% to Rs 10.9 billion in FY11.

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Karvy Stock Broking has maintained its buy rating on Varun Shipping Company with a target price of Rs 61 in its April 2, 2009 research report.

"The timely exit from drybulk segment in FY08 where freight rates have fallen by 85% since May 2008 and entry into promising deepwater support services
segment by acquiring high end anchor handling tugs (AHTS) are expected to help the company to grow operating profits in current turbulent time in shipping. The Company has significantly reduced cyclicality associated with the shipping industry with selection of low risk assets and building diversified fleet across three segments viz. the Liquefied Petroleum Gas i.e. LPG, crude and offshore."

"We expect consolidated revenue to increase by 2.2% to Rs 9.69 billion in FY10 and by 12.4% to Rs 10.9 billion in FY11 and net profit to decline by 10.7% to Rs 1.25 billion in FY10 and increase by 42.2% to Rs 1.77 billion in FY11. We maintain our valuation at 30% discount to NAV with target price of Rs 61 and maintain Buy rating," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. 

To read the full report click on the attachment......