Buy Diamond Power; target of Rs 124: Firstcall Research

Firstcall Research is bullish on Diamond Power Infrastructure and has recommended buy rating on the stock with a target of Rs 124 in its November 23, 2012 research report.

“Diamond Power Infrastructure Ltd started the manufacturing facility in the year 1970 has emerged as India’s largest and only integrated manufacturer of power transmission equipment and turnkey services provider (EPC) a vastly experienced team of professionals and the ability to pioneer newer technologies have earned us with a leadership position in the power transmission & distribution sector in India. The company has powering India’s growth with solutions across the entire value chain of power transmission and distribution and a product range that covers nearly 80% of the T&D infrastructure requirements.The breaking innovations of a company and a proactive approach to innovations that have exponentially grown our offerings of products and services. DPIL was established of providing integrated turnkey power distribution and transmission solutions. By investing in indigenous capabilities and through strategic acquisitions, we have further enabled inorganic growth in addition to building our strengths. Planning, designing and commissioning of turnkey transmission and distribution projects.”

“Diamond Power Infrastructure Ltd India’s largest and only integrated manufacturer of power transmission equipment and turnkey services provider, reported its financial results for the quarter ended 30th Sep, 2012. The Second quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.381.11 million against Rs.334.49 million in the corresponding quarter ending of previous year, an increase of 13.94%. Revenue for the quarter increase 42.85% to Rs.6515.85 million from Rs.4561.19 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.10.24 a share during the quarter, registering 13.94% increase over previous year period. Profit before interest, depreciation and tax is Rs.752.41 millions as against Rs.623.44 millions in the corresponding period of the previous year.”

“At the current market price of Rs 109, the stock P/E ratio is at 2.92 x FY13E and 2.64 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.37.88 and Rs.41.25 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 21% and 10% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 4.14 x for FY13E and 3.84 x for FY14E. Price to Book Value of the stock is expected to be at 0.54 x and 0.45 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 124 for medium to long term investment,” says Firstcall Research report. 

Non-Institutions 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

Read More