Sharekhan has maintained its buy rating on Ceat with a revised price target of Rs 196 in its May 20, 2008 research report. "Ceat's Q4FY2008 results are ahead of our expectations, mainly on the sales front. The net sales of the company grew by 14.8% to Rs 646.2 crore in the quarter. The original equipment (OE) sales continued to decline whereas the replacement sales grew strongly by 28.2% in Q4FY2008. The operating profit margin (OPM) declined by 180 basis points to 6.0% as a result of a higher raw material cost. Consequently, the operating profit declined by 12.3% to Rs 38.5 crore."
"We maintain our positive view on Ceat, as the stock is trading at very cheap valuations. The volume growth could be higher than our expectations in view of the improvement in the OE volumes, the company's ability to pass on any further rise in input prices to its customers and the cooling off of the key raw material prices. At the current market price of Rs119 the stock is trading at 5.2x its FY2010 earnings of Rs24.5 and enterprise value (EV/earnings before interest, tax, depreciation and amortisation (EBITDA) of 2.8x. We maintain our Buy recommendation on Ceat with a revised price target of Rs 196," says Sharekhan's research report.
"We maintain our positive view on Ceat, as the stock is trading at very cheap valuations. The volume growth could be higher than our expectations in view of the improvement in the OE volumes, the company's ability to pass on any further rise in input prices to its customers and the cooling off of the key raw material prices. At the current market price of Rs119 the stock is trading at 5.2x its FY2010 earnings of Rs24.5 and enterprise value (EV/earnings before interest, tax, depreciation and amortisation (EBITDA) of 2.8x. We maintain our Buy recommendation on Ceat with a revised price target of Rs 196," says Sharekhan's research report.
Hem Securities has recommended a buy rating on Titan Industries with a target price of Rs 1630 in its May 20, 2008 research report. "The company has posted excellent results in the year 2008. Net sales have surged to Rs 3046 million showing a growth of 42.57%. The revenues from the jewellery and watches segment have been on a continuous uptrend. Net profit margins have been under pressure but the ongoing expansion plans of the company will enhance the profitability too. EPS for the year ended March 2008 comes out to Rs 33.24 against Rs 22.50 in 2007." "The company has posted a CAGR of 39.02% in the topline and 91.74% in the bottomline over a period of 3 years. The diversified range of products and strong brand presence in the market are expected to leverage its growth. New ventures like Titan eye+ and Gold plus are targeted to tap opportunities in the unexplored segments. The company’s foray into Precision engineering is also expected to become a significant contributor to the revenues in the coming years. Presently, the stock is trading at Rs 1212 which is at 36.46 times to its earnings and 12.07 times to its book value. Keeping in mind the prospects offered by the company, we initiate a ‘BUY’ signal on the stock with a target price of Rs 1630 in the medium to long term investment horizon, expecting an appreciation of 34%," says Hem's research report.
