Buy Praj Industries; target Rs 60: Nirmal Bang
Nirmal Bang is bullish on Praj Industries (PIL) and has recommended buy rating on the stock with a target price of Rs 60 in its August 14, 2013 research report.
August 14, 2013 / 13:30 IST
Nirmal Bang's report on Praj Industries (PIL)
"Praj Industries (PIL) Q1FY14 performance was below expectations with revenue de-growth of 13.6 percent yoy while PAT declined 77.4 percent yoy impacted by lower revenue. While the revenue during the quarter was impacted by the order entry timings in the previous fiscal, management shows confidence in recouping the lower revenue in H2FY14. Order ramp up in the past 2-3 quarters will reflect in execution cycle and translate into revenue growth in H2FY14.""Although the current business environment remains challenging, going forward, with capex revival and aggressive efforts for its new emerging businesses, order inflow momentum should pick up from H2FY14, aiding revenue growth in FY15. We expect margins and return ratios to improve with higher contribution from new businesses and internationalization. The almost-zero debt balance sheet, healthy cash and underperformance of the stock offers a good entry point to accumulate the stock. Any improvement in demand will lead to re-rating of PIL and successful commercialization of the 2nd generation ethanol plant would be a big trigger for the stock. At the CMP, the stock trades at 6.0x and 0.9x its FY15E PE and P/BV respectively. We advise investors to BUY the stock for a target price of Rs 60 with a 15-18 months view," says Nirmal Bang research report.Also Read: Hold Praj Industries; target Rs 35: ICICIdirect.comDisclaimer: 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. 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!
