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Hold Castrol India; target of Rs 379: Parag Parikh
Parag Parikh Financial Advisory Services has recommended hold rating on Castrol India with a target price of Rs 379. Castrol India has taken a price cut of Rs 10-12/- per litre, thereby reducing the lubricant prices by 6-7% across the product portfolio.
Parag Parikh Financial Advisory Services has recommended a hold rating on Castrol India with a target price of Rs 379 in its May 27, 2009 reports.
"Castrol India has taken a price cut of Rs 10-12/- per litre, thereby reducing the lubricant prices by 6-7% across the product portfolio. This was on account of a substantial price fall in base oil prices (50%). The full impact of the correction in raw material cost will be visible from Q2CY09 and would enable the margins to expand."
"Adding to the above factors, CIL has a strong brand value in the markets, going with distinctly superior delivery of products and excellent customer relations. At CMP of Rs 335/-, the scrip is trading at 14.2x CY09E earnings of Rs. 23.7/-. We recommend 'HOLD' on the stock with a target price of Rs. 379/- (16x CY09E earnings)," says Parag Parikh Financial Advisory Services' research report.
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