Religare Research has recommended a buy rating on Mercator Lines with a target price of Rs 160 in its June 16, 2008 research report. "On an expansion spree – fleet size doubled over last two years to 29 vessels with firm plans to ramp up to 33 vessels by December 2010. Also, an oil drilling jack up rig, scheduled for delivery in Q1FY09, has already been contracted for 3 years.Augmented fleet amid favourable day rate conditions to drive revenue and margins. Revenues expected to log 22.3% CAGR over FY08-FY10, with earnings CAGR of 28.6% and ROE of 30%."
"Attractively priced at P/E of 4.9x and P/BV of 1.1x on FY10E. Our valuation of Rs 160 is based on 1.2x current NAV. At our target price, the stock would trade at a P/E of 6.9x and P/BV of 1.6x, which is reasonable given the expanded fleet and strong earnings growth," says Religare's research report.
0 comments:
Post a Comment