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Last Updated : Sep 08, 2015 01:55 PM IST | Source: Moneycontrol.com

Buy Ramkrishna Forgings; target of Rs 715: Firstcall

Brokerage house Firstcall Research is bullish on Ramkrishna Forgings and has recommended buy rating on the stock with a target price of Rs 715 in its research report dated September 05, 2015.

 
 
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Firstcall Research's report on Ramkrishna Forgings

"The company’s a net profit Jumps to Rs. 176.99 million from Rs. 59.02 million in Q1 FY16. Net sales rose by 91.18% y-o-y of Rs. 2355.12 million in Q1 FY16 as compared to Rs. 1231.88 million in Q1 FY15. In Q1 FY16, EBITDA increased by 126.81% of Rs. 493.88 million against Rs. 217.75 million in the corresponding period of last year. The company has reported an EPS of Rs. 6.44 for the 1st quarter as against an EPS of Rs. 2.26 in the corresponding quarter of the previous year."

OUTLOOK AND CONCLUSION

At the current market price of Rs. 621.75, the stock P/E ratio is at 16.60 x FY16E and 13.37 x FY17E respectively.

Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.37.46 and Rs.46.51 respectively.

Net Sales and PAT of the company are expected to grow at a CAGR of 29% and 84% over 2014 to 2017E respectively.

On the basis of EV/EBITDA, the stock trades at 13.38 x for FY16E and 11.80 x for FY17E.

Price to Book Value of the stock is expected to be at 3.35 x and 2.71 x respectively for FY16E and FY17E.

"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 715 for Medium to Long term investment", says Firstcall Research Report.

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First Published on Sep 8, 2015 01:55 pm
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