Wednesday, June 18, 2008

Stock Idea: Godawari Power & Ispat

Hem Securities has recommended a buy rating on Godawari Power & Ispat with a target price of Rs 371 in its June 17, 2008 research report. "The company stands waiting for forest clearance for the iron ore mines and once is through with the clearance shall boost the position of the company. The presently proposed JV with Ardent Steel shall also be a step forward towards strengthening of the company".
"GPIL has grown with a CAGR of 68.73% and 57.96% in its top line as well as bottom line from FY05 to FY08. The stock at the current market price of Rs 200 trades at 5.91 times to its earning per share of Rs 33.84 and 1.46 times to its book – value of Rs 136.83. The stock looks attrac-tive at the current valuation with the strong upside potential in the medium to long term investment horizon. Therefore, we are initiating ‘BUY’ signal on the stock with the target price of Rs 371 which is approximately 86% up from the current market price of Rs 200," says Hem's research report.


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