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Buy Varun Shipping, target of Rs 90: Karvy
Karvy Stock Broking has maintained its buy rating on Varun Shipping with a revised target price of Rs 90. For Q1FY09, Varun Shipping ltd (VSL) reported revenue growth of 6.2%YoY (QoQ decline of 9%) to Rs 2 billion.
Karvy Stock Broking has maintained its buy rating on Varun Shipping with a revised target price of Rs 90 in its August 5, 2008 research report. "For Q1FY09, Varun Shipping ltd (VSL) reported revenue growth of 6.2%YoY (QoQ decline of 9%) to Rs 2 billion, which was lower by 16% than our estimates of Rs 2.3 bn. The lower capacity utilization in gas segment ( three vessels remained idle in Q1FY09 as against one in Q1FY08) and dry docking in offshore segment resulted in lower revenue growth for the company."
"At current price of Rs 69, the stock is trading at 6.3xFY2009E and 4.6xFY10 earnings and EV/EBIDTA it is trading at 6.4xFY09E and 4.6xFY10E. We maintain our valuation at 6xFY10 consolidated earnings. We have revised our target price from Rs 105 to Rs 90 and maintain Buy rating," says Karvy's research report.
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