Buy Stovec Industries; target Rs 408: Firstcall Research
Firstcall Research is bullish on Stovec Industries and has recommended buy rating on the stock with a target price of Rs 408 in its March 01, 2013 research report.
March 05, 2013 / 11:01 IST
Firstcall Research is bullish on Stovec Industries and has recommended buy rating on the stock with a target price of Rs 408 in its March 01, 2013 research report.
"Stovec Industries is a technology and market leader for the supply of rotary – screen and printing machines and through continuous innovations and strong distribution network. During the quarter, the robust growth of Net Profit is increased by 100.00% to Rs. 26.18 millions. Stovec Industries has recommended the final dividend of Rs. 10.70 per share (107%) for the financial year ended December 31, 2012. Stovec Industries is planning to expand its high end textile machinery capacity from 30 per cent market share to 40 per cent in next one year with an investment of Rs. 2 crore. Stovec Industries has recently forayed into electro-form products which include manufacturing textile screens for sugar industries. Revenue for the quarter rose 15.31% to Rs.236.20 millions from Rs.204.84 millions, when compared with the prior year period. Net Sales & PAT of the company are expected to grow at a CAGR of 15% and 29% 2011 to 2014E respectively.The company’s net profit jumps to Rs.26.18 millions against Rs.13.09 millions in the corresponding quarter ending of previous year, an increase of 100.00%. Revenue for the quarter rose 15.31% to Rs.236.20 millions from Rs.204.84 millions, when compared with the prior year period. Reported earnings per share of the company stood at Rs.12.54 a share during the quarter, registering 100.00% increase over previous year period. Profit before interest, depreciation and tax is Rs.42.13 millions as against Rs.23.09 millions in the corresponding period of the previous year.Outlook and Conclusion: At the current market price of Rs.361.00, the stock P/E ratio is at 8.33 x CY13E and 7.35 x CY14E respectively. Earning per share (EPS) of the company for the earnings for CY13E and CY14E is seen at Rs.43.33 and Rs.49.14 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 29% 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.21 x for CY13E and 2.41 x for CY14E. Price to Book Value of the stock is expected to be at 1.43 x and 1.20 x respectively for CY13E and CY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend buy in this particular scrip with a target price of Rs 408 for Medium to Long term investment," says Firstcall Research report.Public holding more than 90% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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 
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