Sushil Finance neutral on Pratibha Industries

Sushil Finance has maintained neutral rating on Pratibha Industries, in its November 7, 2012 research report.

“We had initiated coverage on Pratibha Industries with a ‘Buy’ recommendation on 6th January’12 at Rs.35 with an initial target of Rs.48 which we subsequently upgraded to Rs.56 considering the strong performance in the initial quarters. However, higher than anticipated capex in recent quarters coupled with increase in working capital has resulted in elevated debt levels which seem beyond our comfort zone (D/E - Stand.-1.5x & Consol – 2x). Rising debt has resulted in higher interest cost hampering the profitability of the Company.”

“Since our Initiating Report, the stock price has posted a high of Rs.58 and has achieved our revised target price of Rs.56. At CMP of Rs.50, it reflects a gain of ~43% from our initial recommendation vis-à-vis BSE-500 return of ~22%. Considering the outperformance & rising concerns over its debt levels, we are now changing our rating on the stock to Neutral and recommend our investors to book profits at the current price,” says Sushil Finance research report. 

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