Emkay Research has maintained its buy rating on Nelcast with target price of Rs 230 in its May 8, 2008 research report. "Nelcast reported 37.2% YoY top line growth to Rs 1139.2 million for quarter ended March 2008 compared to corresponding quarter last year. For FY08, net sales reported growth of 16.6% YoY to Rs 3564.5 million as compared to Rs 3057.6 million in corresponding period last year. The company reported 10.1% YoY growth in EBDITA in Q4FY08 to Rs 127.1 million compared to corresponding quarter last year. For FY08, EBITDA witnessed growth of 18% YoY. Total expenditure witnessed increase of 43.8% YoY during the fourth quarter mainly due to increase in raw material costs and other expenses."
"The stock is currently trading at 4.3x FY09E EPS of Rs 25.6 and 3.7x FY10E EPS of Rs 29.9. It is trading at 2.6x FY09E and 1.9x FY10E EV/EBDITA. We believe these valuations are attractive and offer excellent long term investment opportunity considering its size, past track record, customer profile and its potential to improve its revenues and operating margins going forward. We maintain 'BUY' on the stock with target price of Rs 230," says Emkay's research report.
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Source: Moneycontrol.com
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