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Last Updated : Mar 12, 2013 02:29 PM IST | Source: Moneycontrol.com

Buy Arcotech; target Rs 72: Firstcall Research

Firstcall Research is bullish on Arcotech and has recommended buy rating on the stock with a target price of Rs 72 in its March 11, 2013 research report.

 
 
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Firstcall Research is bullish on Arcotech and has recommended buy rating on the stock with a target price of Rs 72 in its March 11, 2013 research report.


"Arcotech has been promoted in 1981 for manufacturing internationally acceptable quality of Copper & Brass Strips and Foils. The company's net sales registered an 45.55% increase and stood at a record Rs. 995.21 million from Rs. 683.74 million over the corresponding quarter last year. The company's net profit registered a 82.58% increase and stood at a record Rs. 70.64 million from Rs. 38.69 million over the corresponding quarter last year. Arcotech Ltd has approved the proposal for issue on a preferential basis to the promoter upto 10,00,000 fully paid equity shares of the Company at a price of Rs. 51.00 per share. Company has taken up an expansion cum modernization plan which will increase its installed capacity to 24000 MTPA. Net Sales and PAT of the company are expected to grow at a CAGR of 34% and 37% over 2011 to 2014E respectively.


The company's net profit jumps to Rs.70.64 million against Rs.38.69 million in the corresponding quarter ending of previous year, an increase of 82.58%. Revenue for the quarter rose 45.55% to Rs.995.21 million from Rs 683.74 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.53 a share during the quarter, registering 82.58% increase over previous year period. Profit before interest, depreciation and tax is Rs.171.26 millions as against Rs.99.80 millions in the corresponding period of the previous year.


Outlook and Conclusion: At the current market price of Rs.64.00, the stock P/E ratio is at 4.99 x FY13E and 3.55 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.12.82 and Rs.18.05 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 34% and 37% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 2.35 x for FY13E and 1.80 x for FY14E. Price to Book Value of the stock is expected to be at 1.25 x and 0.92 x respectively for FY13E and FY14E. We recommend 'BUY' in this particular scrip with a target price of Rs 72 for Medium to Long term investment," says Firstcall Research report.


See which companies promoters have increased stake in last quarter?


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To read the full report click on the attachment



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First Published on Mar 12, 2013 01:49 pm
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