Buy McNally Bharat; target Rs 116: Firstcall Research
Firstcall Research is bullish on McNally Bharat Engineering Company and has recommended buy rating on the stock with a target price of Rs 116 in its December 20, 2012 research report.
December 21, 2012 / 13:31 IST
Firstcall Research is bullish on McNally Bharat Engineering Company and has recommended buy rating on the stock with a target price of Rs 116 in its December 20, 2012 research report.
"McNally Bharat Engineering Company Ltd is one of the leading Engineering Companies in India engaged in providing turnkey solutions in the areas of Power, Steel, and Aluminum etc. McNally Bharat's fully owned subsidiary MBE Mineral Technologies Pte Ltd acquired 10 mn shares of Specialist Energy for 5 mn pounds taking McNally's holding in the company to 41.67% from 25%. McNally Bharat's has received an export order from South Africa for a Fluorspar Concentrator Plant for a total price of Rs. 280.07 Crores. During the quarter, the robust growth of Net Sales is increased by 3.13% to Rs. 5141.90 million. McNally Bharat's has received an order from ACC for Onshore Supply, Civil Construction and Installation & Erection of New Jamul Cement Plant for a value of Rs. 733.34 crores. McNally has received two orders for Construction of Educational Infrastructure Facility under Backward Region Grant Fund for a total price of Rs. 90.88 Crores. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 22% over 2011 to 2014E respectively.The Company is one of the leading Engineering Companies in India engaged in providing turnkey solutions reported its financial results for the quarter ended 30th Sep, 2012. The company's net profit decreased to Rs.85.50 million against Rs.107.20 million in the corresponding quarter ending of previous year, a decrease of 20.24%. Revenue for the quarter rose 3.13% to Rs.5141.90 million from Rs.4985.70 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.75 a share during the quarter, registering 20.24% decline over previous year period. Profit before interest, depreciation and tax is Rs.393.80 millions as against Rs.327.40 millions in the corresponding period of the previous year.Outlook and Conclusion: At the current market price of Rs.101.00, the stock P/E ratio is at 4.11 x FY13E and 3.65 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.24.58 and Rs.27.67 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 22% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 3.54 x for FY13E and 3.18 x for FY14E. Price to Book Value of the stock is expected to be at 0.78 x and 0.64 x respectively for FY13E and FY14E. We recommend 'BUY' in this particular scrip with a target price of Rs.116.00 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 
Read More
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
