Buy Shakti Pumps; target of Rs 60: Firstcall Research

Firstcall Research is bullish on Shakti Pumps and has recommended buy rating on the stock with target of Rs 60 in its September 18, 2012 research report.

“Shakti Pumps (India) Ltd started in the year 1982 an restless urge to grow and a determination that was as strong as steel to be recognized as one of the most renowned names in the manufacture of stainless steel submersible pumps. Shakti is among the few pioneers in the world to produce 100% stainless steel submersible pumps and motors. It is rubbing its shoulders with best brands in the world thanks to the state-of-the art technology and innovation as its hallmarks. The main focus of the company is to manufacture best quality pumps which consume less energy, have long life and are easy to maintain. Considering energy efficiency features of our pumps, Bureau of Energy Efficiency (BEE) has granted us 5-star ratings to more than 260 of our pump models. The fineness in quality coupled with energy efficiency is the key that differentiates us from others to maintain leadership in global pump industry.”

“Shakti Pumps (India) Ltd India’s is the largest Manufacturer of Submersible pumps & motors with a wide range of innovative pumping solutions & Systems, reported its financial results for the quarter ended 30th June, 2012. The first quarter witness a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.29.69 million against Rs.27.14 million in the corresponding quarter ending of previous year, an increase of 9.40%. Revenue for the quarter increase 3.69% to Rs.430.59 million from Rs.415.26 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.3.48 a share during the quarter, registering 2.56% increase over previous year period. Profit before interest, depreciation and tax is Rs.71.32 millions as against Rs.68.65 millions in the corresponding period of the previous year.”

“At the current market price of Rs.52.50, the stock P/E ratio is at 4.31 x FY13E and 3.94 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.12.18 and Rs.13.33 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 25% and 12% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 2.04 x for FY13E and 1.83 x for FY14E. _ Price to Book Value of the stock is expected to be at 0.73 x and 0.62 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 60 for Medium to long term investment,” says Firstcall Research report.

Non-Institutions holding more than 90% in Indian cos

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