Company: Bharati Shipyard Limited.; NSE : BHARTISHIP
On Rediff: Click here for Quotes, Financials and Other details
Industry Sector: Ship Building
CMP: Rs. 330; Price Target: Rs. 600 in 12-18 months; Downside: Can fall to Rs.260.
My Assessment: Buy on dips until 400, Book some profits at 500. Hold the rest for > 5 years (Always watch out for any developments that could affect the prospects).
Reasons to Buy (Opportunities):
.Global industry with huge potential for Indian players
. Good Management – First generation entrepreneurs, professional leadership.
. Solid order book (7.6 times FY08 Sales, pipeline till end of FY11)
. Scaled up very well in terms of capacity, product mix, geographical spread in the last 3 years.
. Available at attractive valuation of less than 9 P/E ratio.
Reasons to Stay Away (Risks):
. As a Midcap stock carries higher market risk – higher price volatility
. FCCB exposure - Equity dilution; Forex mark to market losses
. Uncertainty on government subsidy policy for ship building
. Ship building is cyclical, major global slowdown can have long downside.
Research:
Recent Research Report found on the Net: Click here – (12/08/08).
Valuation Trend:
Tail Piece: In May '08, ICICI Direct had a 12-15 months price target of Rs. 780.
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