Buy Welspun Gujarat, target of Rs 592: HDFC Securities

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HDFC Securities has maintained its buy rating on Welspun Gujarat Stahl Roh with a revised target of Rs 592 in its September 30, 2008 research report. "On a relative value basis, the stock is currently trading at 7.2x and 4.6x its expected FY09E and FY10x earnings. We expect it to re-rate positively and when coupled with the underlying earnings growth, should deliver significant out performance to investors in the long term."

"We therefore maintain our Strong BUY recommendation on the stock with a revised target price of Rs 592 (upside of 159%) from the earlier target of Rs 774 (Downward revision of 24%). This downward price target is partially due to our revised earnings estimates and also due to the derating in P/E multiple of the company and the market," says HDFC Securities' research report.

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