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Buy Sintex, target of Rs 197: Emkay

Posted on: May 15th, 2009 and is filed under Brokerage Recommendations.

Emkay Global Financial Services has maintained its buy rating on Sintex with a price target of Rs 197 in its May 12, 2009 research report.

“Sintex reported a 9% yoy decline in Q4FY09 revenues to Rs 8.5 billion led by
commodity price deflation and muted volume growth. However, adjusted net
profit at Rs 1140 million was in line with expectations – attributed to higher than expected EBITDA margins, lower depreciation provision and lower tax incidence. For FY09, Sintex has reported earnings of Rs 23.5/share – in line with estimates.”

“We maintain our earnings estimate of Rs 24.8 and Rs 29.6 for FY10E and FY11E respectively. We continue to maintain positive bias on Sintex amidst – (1) strong balance sheet with cash in hand of Rs 15 billion, (2) ROE of 18%, (3) strong and multiple growth drivers and (4) attractive valuations. We maintain our ‘BUY’ rating with a revised price target of Rs 197 (earlier target of Rs 112) based on 1.2x 1-year rolling book value,” says Emkay Global Financial Services’ research report.

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