Buy Ram Ratna Wires; target of Rs 29: Firstcall Research

Firstcall Research is bullish on Ram Ratna Wires and has recommended buy rating on the stock with a target of Rs 29 in its December 5, 2012 research report.
 
“Ram Ratna Wires Ltd was established in the year 1965. With a small electrical trading shop in the erstwhile city of Bombay. The company has strived hard to pursue simple ideas for better living. The company invest a lot of energies to ensure that the products are easier to use and reliable. Driven by innovations, transparency and trust; it always valued quality, better research, latest know-how, better usability and relations, developing and innovating products which truly make life easy and safe. Today, the products manufactured by Ram Ratna Group Companies have presence in over 73 countries around the world, where Ram Ratna operates in the spirit of 'local multinational'. Thriving on a spirit of mutual trust and respect towards the customers, collaborators and even competitors.”
 
“The Group is currently engaged in a range of activities which span right from electrical infrastructure, dyes & chemicals to even exports. The company proudly comprise of a thousand-plus team of highly skilled professionals, serving at 4 manufacturing hubs and 23 marketing offices in India. Internationally, it have presence in 73 countries across 5 continents. The company Manufactures, Power Utilities, EPC Contractors, Consultants and Specifiers,Traders and Importers, Trade Attaches, Academics & Students, Financial I institutions, Funding Bodies, Press and Media, and Policy makers. Elecrama 2012 paved way to Ram Ratna Group by offering unlimited business opportunities. Looking at the vast potential for growth in the B2B sector, Ram Ratna Group was pleased to become a part of Elecrama 2012. At the event many global companies were enthusiastically stepped at the stall. The Response got was tremendous.” 
 
“Ram Ratna Wires Ltd is flagship of the Group, is currently engaged in a range of activities which span right from electrical, infrastructure, dyes & chemicals to even exports, reported its financial results for the quarter ended 30 Sep, 2012. The Second quarter witnesses a healthy increase in overall sales as well as profitability on account enhanced manufacturing plants and with existing products. The company’s net profit steers to Rs.17.84 million against Rs.6.56 million in the corresponding quarter ending of previous year, an increase of 171.95%. Revenue for the quarter rose by 21.07% to Rs.1641.28 million from Rs.1355.67 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.0.81 a share during the quarter, registering at 171.95% increase over previous year period. Profit before interest, depreciation and tax is Rs.62.32 millions as against Rs.45.95 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs.26.05, the stock P/E ratio is at 7.94 x FY13E and 5.58 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.3.28 and Rs.4.67 respectively. Net Sales and Operating Profit of the company are expected to grow at a CAGR of 12% and 12% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 5.79 x for FY13E and 4.90 x for FY14E. Price to Book Value of the stock is expected to be at 1.04 x and 0.88 x respectively for FY13E and FY14E. The second quarter witnesses a healthy increase in overall sales as well as profitability on account of powerful combination of exciting products, an enhanced store network and robust infrastructural Support system. 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 29 for medium to long term investment,” says Firstcall Research report.

Read More