Published on Sat, Jun 28, 2008 at 10:10 | Source : Moneycontrol.com
Updated at Sat, Jun 28, 2008 at 12:21
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Grasim Industries a market performer: IIFL
IIFL has maintained its market performer rating on Grasim Industries with a target price of Rs 1982. In the cement business (80% of FY09ii revenue), the industry’s aggressive capacity expansions in the northern region would make it difficult for Grasim to increase volume sales much faster than industry growth.
IIFL has maintained its market performer rating on Grasim Industries with a target price of Rs 1982 in its June 27, 2008 research report. "We expect VSF prices to soften as supply tightness eases with global production capacity expanding by a third over 2009 and 2010. In the cement business (80% of FY09ii revenue), the industry's aggressive capacity expansions in the northern region would make it difficult for Grasim to increase volume sales much faster than industry growth."
"We cut our earnings estimate for FY09 by 8% and for FY10 by 11%. Grasim's current price translates to USD 102 per tonne of its FY10ii cement capacity, which is at a discount to current replacement cost of USD 140 per tonne. However, there are no near-term triggers; maintain MP with a DCF-based target priceof Rs 1,982 (down from Rs 2,200)," says IIFL's research report.
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