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Buy KCP for long term: K Kotak
Kamlesh Kotak, Vice President - Research of Asian Markets Securities is of the view that one can buy KCP with long-term perspective. The company also has some real estate development, and some capex plans on the engineering front. The real estate arm and the sugar business in Vietnam would pick up significantly.
Kamlesh Kotak, Vice President - Research of Asian Markets Securities is of the view that one can buy KCP with long-term perspective.
Kotak told CNBC-TV18, "KCP is a diversified company having presence in engineering, cement, sugar and power. The company's growth has not been that great over the last two quarters. The company also has some real estate development, and some capex plans on the engineering front. If we look at the valuations, it is going dirt cheap at 4 times FY10 earnings. We have a sum-of-the-parts valuation of Rs 480 on the stock. It is purely a value buy for long-term investors who have to ride on FY09 earnings, which would not be great. But long-term the stock has immense potential."
He further added, "The real estate arm and the sugar business in Vietnam would pick up significantly. Only cement would remain flat till new expansion comes up. But overall, the company has got a strong and diversified business model, excellent engineering capabilities, and high EBITDA margins in the region of 30%. All in all, it is a value pick, and only for long-term investment."
Disclosure: Analyst doesn't hold the above stock but have recommended a buy to our clients.
