52577 Investors following Sesa Goa. Share this News with them.
0
Like this story, share it with millions of investors on M3
Sell Sesa Goa, target of Rs 66: Reliance Money
Reliance Money has recommended a sell rating on Sesa Goa with a target price of Rs 66. The stock is currently trading at a P/E of 4.5x and EV/ EBIDTA of 1.5x for FY10E. Although, the company is quite cash rich, the growth prospects in the near future look capped considering a weaker Chinese market ahead.
Reliance Money has recommended a sell rating on Sesa Goa with a target price of Rs 66 in its December 26, 2008 research report. "We expect Sesa Goa to register a top line of Rs 46.6 billion (up 29.4% YoY), an EBIDTA of Rs 22.8 (Up by just 4.8% YoY) and adjusted EPS of Rs. 22.9 for FY09E and Rs 42.5 billion (down by 8.8% YoY), an EBIDTA of Rs 18.4 billion (YoY cut of 19%) and an adjusted of EPS of Rs 19 (17% reduction (YoY). We expect the EBIDTA margins to correct by 1150 bps (YoY) in FY09E to 48.9% and down by 550 bps (YoY) in FY10E to 43.4%."
"The stock is currently trading at a P/E of 4.5x and EV/ EBIDTA of 1.5x for FY10E. Although, the company is quite cash rich, the growth prospects in the near future look capped considering a weaker Chinese market ahead. We, hence, expect the stock to under perform and recommend a SELL with a price target of Rs 66 at which the stock would quote at 0.75x EV/EBIDTA on FY10E. The target price is at 22% below the CMP of Rs 84," says Reliance Money'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......
